Matheson v Wallis

[2001] NSWSC 931

CITATION:	Matheson v Wallis [2001] NSWSC 931
FILE NUMBER(S):	SC 2648/99
HEARING DATE(S):	9, 10 July 2001 (Written submissions to 31 July 2001)
JUDGMENT DATE:	22 October 2001
PARTIES :	Jacqueline Sarah Matheson (Plaintiff) Leigh Wallis (Defendant)
JUDGMENT OF:	Master McLaughlin

COUNSEL :	P. Hastings QC, W. Tregilgas (Plaintiff) G. Gould (Defendant)
SOLICITORS:	Boyd Wooi Olsen Lawyers (Plaintiff) Attwaters Solicitors (Defendant)
CATCHWORDS:	Family Law - De facto relationship - Adjustment of interests of parties in property - Date of commencement of de facto relationship - Matters to be taken into account - Respective contributions of parties - Court should have regard to contributions made before commencement of de facto relationship - Evidence concerning present and likely future needs of the parties should be disregarded - Caution should be exercised in applying to claims by a de facto partner under section 20 of the Property (Relationships) Act 1984 (New South Wales) the principles which the Family Court of Australia applies to applications under section 79 of the Family Law Act 1975 (Commonwealth) - The Property (Relationships) Act looks to past contributions, whereas the Family Law Act looks also to present and future needs - Whether contributions made by one party to the children after termination of the relationship are contributions of the nature recognised by section 20(1)(b) of the Property (Relationships) Act - In considering the respective contributions of the parties the Court is not required to undertake a reductionist process analagous to the taking of partnership accounts, but should make a holistic value judgment - Conduct of Plaintiff in regard to chattels of Defendant.
LEGISLATION CITED:	Jurisdiction of Courts (Cross-vesting) Act 1987 Property (Relationships) Act 1984 Property (Relationships) Legislation Amendment Act 1999
CASES CITED:	Black v Black (1991) 15 FamLR 109 Davey v Lee (1990) 13 FamLR 688 Evans v Marmont (1997) 42 NSWLR 70 Foster v Evans (1997) DFC 95-193 Jones v Grech (2001) NSWCA 208 MacDonald v Stelzer (2000) NSWCA 302 Roy v Sturgeon (1986) 11 NSWLR 454 Wallace v Stanford (1995) 37 NSWLR 1
DECISION:	See paragraph 95

SUPREME COURT OF

NEW SOUTH WALES

EQUITY DIVISION

MASTER McLAUGHLIN

Monday, 22 October 2001

JUDGMENT

These are proceedings under the De Facto Relationships Act 1984 (now known as the Property (Relationships) Act 1984).

2    The proceedings were instituted in the Family Court of Australia at Newcastle by Application for Final Orders filed on 8 April 1999, the applicant to that application being Jacqueline Sarah Matheson, the present Plaintiff, and the respondent thereto being Leigh Wallis, the present Defendant.

3    Subsequently, by order made by consent on 27 April 1999 the Family Court, pursuant to section 5(4) of the Jurisdiction of Courts (Cross-vesting) 1987 (New South Wales), transferred the proceedings to the Supreme Court of New South Wales.

4    As I understand it, the Application in the Family Court then stood as the originating process in the Supreme Court. Subsequently, the Plaintiff filed an amended statement of claim on 17 December 1999. The Defendant filed a defence and cross-claim on 4 February 2000.

5    On 9 July 2001 at the commencement of the hearing the Plaintiff filed a further amended statement of claim and an amended defence to cross-claim.

6    It was not in dispute that the parties had been in a de facto relationship which terminated in November 1998. However, there was considerable dispute between the parties as to the date of the commencement of that relationship.

7    It was asserted by the Plaintiff that a de facto relationship between herself and the Defendant had commenced in November 1985, at a time when, according to the Plaintiff, she moved into residence in the Defendant’s property at 10 Parnell Place, Newcastle East. The Defendant, on the other hand, asserted that the de facto relationship did not commence until April 1992, when the parties moved into residence in a property at 315 Lambton Road, New Lambton, which had been purchased by the Plaintiff in March of that year.

8    It will, in due course, be necessary to resolve the foregoing dispute between the parties, and to establish the date upon which the de facto relationship commenced.

9    There were born to the parties during the course of the relationship two children, being James Leigh (born 10 July 1993), who is presently aged 8 years, and David Leigh (born 19 September 1996), who is presently aged 5 years. The Plaintiff has retained the custody and care of those two children since the separation of the parties. Orders have been made in the Family Court of Australia concerning access by the Defendant to those children and concerning payment of maintenance for them.

10 By her further amended statement of claim the Plaintiff seeks an order pursuant to section 20 of the De Facto Relationships Act, for the adjustment of the interests of the parties in property, as follows: an order for the payment by the Defendant to the Plaintiff of the sum of $400,000; an order that the furniture of the parties presently contained in the residence at 315 Lambton Road, New Lambton, be divided between the parties in the manner set forth in prayer 9.2 in the further amended statement of claim; an order that the plaintiff indemnify the Defendant in respect of the mortgage over the property at 90 Wolfe Street, Newcastle; an order that the Defendant secure the release of the Plaintiff’s obligations to the Commonwealth Bank pursuant to certain guarantees given by the Plaintiff in respect to a certain loan; a declaration, as between the parties, that each party have no further interest in any real property registered in the name of the other party; and certain consequential relief.

11    The substantive relief sought by the Defendant in his cross-claim is that the Plaintiff deliver up to the Defendant certain items of personalty and chattels referred to in the first schedule to the cross-claim; an order that the Plaintiff transfer her right, title and interest in the property situate at and known as 90 Wolfe Street, Newcastle to the Defendant, subject to the present encumbrance upon that property; an order that the Plaintiff pay to the Defendant the sum of $50,000 by way of property adjustment.

12    It should here be recorded that at the hearing the Plaintiff substantially reduced the amount of $400,000 which she was originally seeking in her amended statement of claim (the Plaintiff no longer asserting a beneficial entitlement to the house property at 90 Wolfe Street, Newcastle, and no longer opposing the transfer of that property to the Defendant, as sought in his cross claim). Further, that at the hearing the Defendant abandoned his claim for payment to him of $50,000. Further, in the manner which will be outlined later in this judgment, that the Plaintiff did not in any practical sense resist the relief sought by the Defendant in his cross-claim concerning the property listed in schedule 1 to that pleading.

13    I should also here state that I have had the benefit of receiving from Counsel for the respective parties written submissions and chronologies, which will be retained in the Court file.

14    The Plaintiff was born on 24 July 1961, and is presently forty years of age. She has never been married. The Defendant was born on 15 June 1951, and is presently fifty years of age. He has been married twice, and has also been in another de facto relationship (described as being of “some standing”).

15    According to the Plaintiff, the parties started going out socially in early 1983, and a sexual relationship commenced between them shortly thereafter. That sexual relationship continued until early 1998, although it will be appreciated that the parties were living separately for various periods from 1983 until at least 1992.

16    At the time when the parties met, the Plaintiff was employed as an industrial chemist by the New South Wales Electricity Commission (by which entity she had been employed since 1980) and she was working at the Vales Point Power Station. She was at that time residing in a rented property at Mulbinga Street, Charlestown, near Newcastle.

17    At the time when the parties met the Defendant was living in a house property owned by him at 8 Parry Street, Cooks Hill (which he had purchased in October 1980). Subsequently, in late 1983, the Defendant purchased a house property at 10 Parnell Place, Newcastle East, and moved into residence in that house property. Thereafter, the Plaintiff spent most weekends in that property, participating, with the Defendant, in the restoration and renovation of that property.

18    In 1985 the Plaintiff was residing in rented accommodation at Kitchener Parade, Newcastle, which she was sharing with a female friend.

19    For several months in late 1985 - early 1986 the Defendant, a journalist by profession was, on account of his employment, residing in Melbourne, where he was working. According to the Plaintiff, she spent three weeks with him in Melbourne during the New Year period. Upon his return to Newcastle from Melbourne the Defendant resumed residence at 10 Parnell Place, Newcastle East.

20    In early 1986 the Plaintiff moved into the Defendant’s residence at Parnell Place, where she remained for several months until she was in the course of her employment transferred to the Lidell Power Station, which transfer necessitated the removal of her residence from Newcastle to Singleton.

21    When the Plaintiff removed to Singleton, the Defendant removed to Sydney, although, as will later appear, they each resorted to Newcastle on weekends, and whilst they were both in that city they spent those weekends together.

22    In about August 1986 the Defendant undertook employment for a radio station in Sydney, which employment continued until the end of 1990. That employment resulted in the Defendant essentially residing in Sydney throughout most of the period from August 1986 until the end of 1990. At first he resided with a friend at Longueville, later in rented accommodation at Lavender Bay, and then in rented accommodation at Wollstonecraft.

23    When the Plaintiff’s period at the Lidell Power Station came to an end in October 1987 she was transferred in the course of her employment to the Pyrmont Power Station in Sydney, where she remained until early 1989. Whilst the Plaintiff was working in Sydney, she and the Defendant resided together in the rented accommodation at Lavender Bay and subsequently at Wollstonecraft to which I have already referred. Until the transfer of the Plaintiff to Sydney in 1987 it was the practice of the Defendant to return at weekends to his residence at Parnell Place, Newcastle East, where he was usually joined by the Plaintiff. The Defendant’s son Heath Leigh Wallis (who was born on 11 July 1970) was residing at Parnell Place throughout that period.

24    In early 1989 the Plaintiff returned to the Newcastle area, residing at New Lambton, whilst the Defendant remained in Sydney, until the end of 1990. He then removed to a farming property which he owned at Belbora (near Gloucester). That property, consisting of 400 acres, had been purchased by him in October 1987. After he commenced to reside primarily at Belbora, it was the practice of the Defendant to work in Sydney on weekends.

25    In 1991 the Plaintiff and the Defendant travelled overseas on what was described as a world trip, extending over a duration of three months. The Plaintiff and the Defendant each paid separately for their respective tickets and expenses. During the course of their travels they visited many countries. However, they parted company in London.

26    After their respective returns from their overseas travels the Plaintiff resided in a property at 18 Alfred Street, Newcastle East, whilst the Defendant resumed residence at Belbora. Thereafter they resumed seeing each other on a regular basis, and in April 1992 entered into residence together in a house property situate at and known as 315 Lambton Road, New Lambton, which had been acquired by the Plaintiff earlier in that year. It was whilst they were in residence at New Lambton that the parties decided to start a family.

27    Apart from his professional employment as a journalist, the interests of the Defendant were essentially in house renovation, his farm at Belbora, and investments.

28    It is appropriate that I should at this stage in my reasons for judgment proceed to a consideration of the disputed question of the date of the commencement of the de facto relationship between the parties. It will be appreciated, in this regard, that the date of commencement will have significant relevance, since the Court, in approaching the claim of the Plaintiff, will need to be aware of the assets and the financial and material circumstances of each party at the date of the commencement of the de facto relationship and at the date of the termination of that relationship.

29    When significant amendments (including the title of the Act) were in 1999 made to the De Facto Relationships Act by the Property (Relationships) Legislation Amendment Act 1999 a new definition of de facto relationship was inserted in the legislation. For the previous definition (contained in section 3(1)) there is now set forth a definition in section 4(1) as follows:

For the purposes of this Act, a de facto relationship is a relationship between two adult persons:
(a) who live together as a couple, and
(b) who are not married to one another or related by family.

30    Subsection (2) of section 4 provides,

In determining whether two persons are in a de facto relationship, all the circumstances of the relationship are to be taken into account, including such of the following matters as may be relevant to a particular case:

(a) the duration of the relationship,
(b) the nature and extent of common residence,
(c) whether or not a sexual relationship exists,
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties,
(e) the ownership, use and acquisition of property,
(f) the degree of mutual commitment to a shared life,
(g) the care and support of children,
(h) the performance of household duties,
(i) the reputation and public aspects of the relationship.

31    It is interesting to observe that the foregoing nine matters, which were part of the new section 4 inserted in the Act by the amending legislation of 1999, reflect (albeit not in precisely identical words) the ten factors referred to by Powell J (as he then was) in Roy v Sturgeon (1986) 11 NSWLR 454 at 459.

32    Subsection (3) of section 4 provides,

No finding in respect of any of the matters mentioned in subsection (2)(a)-(i), or in respect of any combination of them, is to be regarded as necessary for the existence of a de facto relationship, and a court determining whether such a relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.

33    In the instant case, it seems to me that the following matters are relevant to a determination of whether the de facto relationship existed throughout the period from November 1985 until April 1992.

34    It was not suggested by the Plaintiff that the parties were living together continuously until 1992. Indeed, from May 1986 until October 1987 the Plaintiff was in her employment transferred to the Lidell Power Station. Due to the distance of that establishment from Newcastle, where she had been previously residing, she lived in Singleton throughout the week and returned to reside with the Defendant at 10 Parnell Place, Newcastle East only at weekends; although, according to the Plaintiff, she was able to spend seven nights out of every fourteen with the Defendant in Newcastle. (That latter assertion was, however, disputed by the Defendant). Again, from early 1989 (when the Plaintiff returned to the Newcastle area and the Defendant continued to reside in Sydney) until the Defendant’s full-time employment ceased at the end of 1990 (when he removed to the Belbora property, returning to work in Sydney on weekends) the parties were not residing together continuously. However, after the Plaintiff’s return to the Newcastle area in early 1989 until the parties set forth on their travels in early 1991, they frequently spent time together at the premises at 208 Lambton Road, Lambton.

35    The Plaintiff on two occasions went on holidays without the Defendant to distant locations (to Perth in Western Australia and to Darwin in the Northern Territory).

36    Throughout the period from 1985 to 1992 each of the Plaintiff and the Defendant was involved in sexual relationships with other persons. The Plaintiff in 1987 became aware of the Defendant’s involvement in sexual relationships with other women. The Plaintiff herself from 1985 to 1990 had sexual encounters with persons other than the Defendant, being three such persons. She did not inform the Defendant at the time of those sexual encounters. It would appear that until 1992 the parties regarded themselves as being in what was referred to as “an open relationship”.

37    The fact that the Defendant before 1992 entertained (and manifested – for example in a letter which he did agree that he had, in fact, sent to the Plaintiff and concerning which he was extensively cross-examined) a strong romantic feeling for the Plaintiff, although of relevance, does not of itself establish the existence of a de facto relationship before April 1992.

38    The parties kept their finances separate throughout the relevant period. They did not conduct a joint bank account (other than an account opened at the time of the birth of their elder son James in 1990, for what was described as “baby purchases”. Each of the parties made an initial deposit of $1,000 into that account when it was established. The evidence does not disclose the present balance, if any, held in that account.)

39    It was only in 1992 that the parties decided to start a family, after they moved into the house property at 315 Lambton Road, New Lambton. Consequent upon that decision, there were born to the parties their two sons James and David.

40    In determining whether or not a de facto relationship of the nature described in section 4 of the Act existed between the Plaintiff and the Defendant from 1985 until 1992, it seems to me to be of particular significance that throughout that period the parties were not living together continuously. Indeed, for considerable periods they were not living together at all. (In this regard I recognise that the effect of subsection (3) of section 4 is that a common residence is not necessary for a finding of the existence of a de facto relationship).

41    Further, I consider it to be of significance that the nature of the relationship which obtained between them throughout that period does not appear to have involved any form of commitment, and appears to have accommodated each of the parties in at least sexual encounters (on the part of the Plaintiff) or sexual relationships (on the part of the Defendant) with other persons. There does not appear to have existed any particular degree of commitment between the Plaintiff and the Defendant until 1992, when the parties entered into residence in Lambton Road.

42    In my conclusion, whatever relationship obtained between the parties before April 1992, it was not a de facto relationship of the nature described in section 4 of the Act. I am satisfied, however, that such a de facto relationship existed between the parties from April 1992 until November 1998.

43 Section 20(1) of the Property (Relationships) Act provides,

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.

44    Throughout the period from the commencement of their acquaintance in early 1983 until the commencement of the de facto relationship in April 1992, the parties had been involved in the purchase, restoration and renovation, and subsequent sale of various properties.

45    The parties were in dispute as to the extent of their respective direct financial contributions towards the acquisition of various assets both before and during the period of their relationship, especially contributions made by the Plaintiff towards the purchase of various of the properties and towards the purchase of motor vehicles. I regarded the Plaintiff’s evidence on the latter topic (T9, T33) as being quite unsatisfactory, and I do not accept that she made the payments alleged in respect to those motor vehicles.

46    To the extent that it is necessary for me to express a view concerning the credit of the parties, I would here record that I regarded the Defendant as a more reliable witness that the Plaintiff. Further, as will in this judgment later appear, I considered the stand taken by the Plaintiff concerning the chattels of the Defendant and her evidence in this regard as reflecting poorly upon the credit of the Plaintiff. Accordingly, where the parties were in dispute on any significant matter and the oral evidence of the parties was unsupported by any other oral or documentary evidence, I have preferred the evidence of the Defendant to that of the Plaintiff.

47    It was admitted upon the pleadings that the following properties were purchased, as follows, in the name of the Plaintiff:

September 1985 18 Alfred Street, Newcastle East $51,000 (subject to a mortgage of about $45,000)

January 1989 3/62 Selwyn Street, Merewether

About $39,850 (subject to a mortgage for the entire amount)

March 1992 315 Lambton Road, New Lambton
$105,000 (subject to a mortgage for the entire amount)

September 1998 90 Wolfe Street, Newcastle

$220,000 (subject to a mortgage for the entire amount)

48    At the time of the commencement of their acquaintance the Defendant was the owner of a house property in Porter Street, Adelaide. That property was sold (in, I gather, about 1987) for $116,000. The Defendant used those proceeds of sale to purchase plant and equipment, as well as a motor vehicle, for use on the Belbora property.

49    At the commencement of the de facto relationship in April 1992 the following properties were owned in the name of the Defendant:

8 Parry Street, Cooks Hill
(purchased in October 1980 for $32,000, of which $15,000 was borrowed from the NSW Building Society)

10 Parnell Place, Newcastle East
(purchased in December 1983 for $35,000, of which $30,000 was borrowed from the NSW Building Society)

96 Bull Street, Cooks Hill
(purchased in August 1987 for $51,000, of which $46,000 was borrowed from Westpac Banking Corporation)

Portion 71, Belbora via Gloucester
(this 400 acre rural property was purchased in October 1987 for $70,000, the entirety of the purchase price being borrowed from the Commonwealth Bank of Australia)

72 Bull Street, Cooks Hill

(purchased in February 1989 for $96,000, the entirety of the purchase price being borrowed from the Advance Bank)

136 Grandview Road, New Lambton Heights
(purchased in March 1992 for $176,000, the entirety of the purchase price being borrowed from Westpac Banking Corporation)

(It should be noted that in two instances, being the purchase of 72 Bull Street in 1989 and the purchase of 98 Bull Street in September 1993, during the course of the de facto relationship, the Defendant borrowed amounts in excess of the purchase price of the relevant property, using the balance of such borrowings to refinance loans in relation to properties already owned by him.)

50    Each of the foregoing properties, apart from the rural estate at Belbora, was a residential property (although 72 Bull Street also contained commercial premises, used as a hair salon).

51    It was the practice of the parties after the acquisition of each of those residential properties to effect, in the manner to which I will shortly refer, restoration and improvements to such property.

52    Thereafter, it was the practice of the parties to install or maintain tenants in that property (unless, as in the case of 10 Parnell Place and 315 Lambton Road, the property was occupied by the parties themselves). The rent was then applied to meet the mortgage payments on that property, any shortfall being met by the funds of whichever party was the owner. (The property at 90 Wolfe Street was, however, an exception, in that, although it was registered in the name of the Plaintiff, all mortgage payments and other outgoings were paid by the Defendant.)

53    It was the Defendant who attended to the major part of the administration in respect to each of the residential properties, including finding tenants, arranging leases, ensuring payment of rent, as well as effecting continuing maintenance of the property.

54    In April 1992 the Defendant owned the foregoing properties (all of which - except the rural property at Belbora, which was unencumbered - were subject to mortgages), owned a motor vehicle (said to have a value of about $24,000), had savings of about $20,000 (being funds invested with the Commonwealth Bank of Australia and the New South Wales Building Society), owned a tractor and various items of plant and equipment located at Belbora, and owned the chattels listed in the first schedule to the cross-claim.

55    The Plaintiff placed considerable significance upon the contributions which she had made to the acquisition, conservation and improvement of each of the foregoing properties throughout the period from November 1985 until April 1992.

56 It is now settled law that the Court, in proceedings for the adjustment of interests in property pursuant to section 20 of the Property(Relationships) Act, should have regard to contributions of the nature described in subsection (1) of that section which were made before the commencement of the de facto relationship: see Evans v Marmont (1997) 42 NSWLR 70 at 75 per Gleeson CJ and McLelland CJ in Eq; MacDonald v Stelzer (2000) NSWCA 302; Jones v Grech (2001) NSWCA 208 at 24-26 per Davies AJA; 76-83 per Ipp AJA. In Jones v Grech Ipp AJA at 82 said that in his opinion “there is no difference in principle between contributions made before the de facto relationship commenced and those made thereafter. The Court may have regard to both.”

57    It did not appear to be seriously disputed by the Plaintiff that the physical contributions made by the Defendant to the restoration and renovation work on the various properties, both throughout the period of the de facto relationship and throughout the preceding six and a half years, were considerably greater than the physical contributions in that regard made by the Plaintiff herself. Nevertheless, it should be appreciated that the Plaintiff did, in fact, in a physical fashion assist the Defendant in performing that work upon the various properties. However, it was the Defendant who directed those restoration activities, and who performed the major part of the physical work himself.

58    It should also be appreciated that during the period before the commencement of the de facto relationship in April 1992 the Plaintiff made contributions towards the joint living expenses of the parties during those periods whilst they were actually residing together.

59    The Plaintiff took maternity leave in mid-1993, preceding the birth of her son James on 10 July of that year. She did not thereafter return to full-time employment. At the conclusion of her maternity leave in December 1993 the Plaintiff returned to employment for three days a week. In February 1996 the Plaintiff’s employment was terminated and she received a redundancy payment in a net amount of about $90,000. According to the Plaintiff $60,000 of that amount was used to purchase shares in the name of the Defendant, and $30,000 was used in the renovation of 315 Lambton Road, as well as in the purchase of furniture, furnishings, a computer and a part payment towards the purchase of a Ford Falcon stationwagon in the name of the Plaintiff.

60 After the commencement of the de facto relationship, and, in particular, after mid-1993 when the Plaintiff took maternity leave preceding the birth of James, the income of the Plaintiff was considerably less than that of the Defendant. Essentially, the mortgage payments on any property owned by either party from that time onwards became the responsibility of and were paid by the Defendant. The contributions of the Plaintiff from at least mid-1993 were chiefly contributions of the nature described in paragraph (b) of section 20(1) of the Act, being contributions “made in the capacity of homemaker or parent…to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and…a child of the parties…”.

61    In the instant case the foregoing contributions by the Plaintiff were of significance. The Defendant also made contributions in the capacity of parent, although, since for various periods after the birth of their children the Defendant was in full time employment, those contributions in his capacity as parent were less than the contributions by the Plaintiff in the capacity of parent. It will be appreciated, however, that for a period of two years after the birth of James, whilst the Plaintiff was in permanent employment (albeit only for three days a week), the Defendant was working only part-time or in a casual capacity, and was enabled to undertake the role described by his Counsel as that of “house-husband” in looking after James throughout that period. It was not, however, disputed by the Defendant that the Plaintiff had the primary responsibility as homemaker. The Defendant throughout the greater part of the relationship was the primary breadwinner for the family. It was not disputed by the Plaintiff that during those periods whilst the Defendant was in full-time employment his earnings were greater than those of the Plaintiff.

62    Contributions made in the capacity of homemaker or parent should not necessarily be treated as being of less significance or less value than financial and non-financial contributions made to the acquisition, conservation or improvement of any of the property of the parties.

63    In my conclusion, in the circumstances of the instant case, it is appropriate to equate the contributions made by the Plaintiff in her capacity of homemaker or parent during the period from April 1992 until the termination of the relationship in November 1998 with the contributions made by the Defendant to the acquisition, conservation or improvement of the property of the parties or either of them during the same period; and, similarly, to equate the contributions made by the Plaintiff to the acquisition, conservation or improvement of such property throughout that period with the contributions made by the Defendant in his capacity of homemaker or parent during the same period.

64    The Court must, as I have already observed, also take into consideration the contributions made by the parties in the period preceding the commencement of the de facto relationship in April 1992. Despite the assertions made by the Plaintiff as to equality of contributions in that earlier period, it seems to me that the contributions made by the Defendant in the period from 1983 until April 1992 (especially his financial contributions to the acquisition of properties – six were purchased in his name, three in the name of the Plaintiff – and his non-financial contributions to the conservation and improvement of the various properties purchased by the parties) were somewhat greater than those of the Plaintiff.

65    A very considerable quantity of evidence was placed before the Court concerning the financial and material circumstances of each party since the termination of the de facto relationship and to the date of the hearing.

66    It should be recognised that the purpose of the Act is remedial (see New South Wales Law Reform Commission Report on De Facto Relationships, quoted by Gleeson CJ and McLelland CJ in Eq in Evans v Marmont at 80-81; Jones v Grech, per Ipp AJA at 76). The discretion vested in the Court by section 20(1) of the Act is to be exercised “having regard to” the contributions of the nature described in paragraphs (a) and (b) of that subsection.

67    In Roy v Sturgeon Powell J (as he then was) said, at 464,

The fact that it is not the policy of the Act to elevate the status of a “de facto partner” to that of a party to a marriage, would in my view, be enough to caution one against too readily embracing the decisions of the Family Court of Australia as to the matters to which that Court might legitimately have regard when dealing with applications under section 79 of the Family Law Act 1975 (Commonwealth). That caution is, however, reinforced by the fact that there are differences between the language of section 20 of the Act on the one hand, and of section 75(2) and section 79(4) of the Family Law Act 1975 (Commonwealth) on the other, which differences are, in my view, significant.

68    Powell JA in Jones v Grech, at 12, quoted the foregoing passage from his judgment in Roy v Sturgeon, and emphasised that the statutory regime under the Property (Relationships) Act is different from that under the Family Law Act 1975 (Commonwealth). (See, also, Black v Black (1991) 15 FamLR 109, at 113 per Clarke JA; Wallace v Stanford (1995) 37 NSWLR 1 at 23 per Sheller JA; Evans v Marmont at 79-80 per Gleeson CJ and McLelland CJ in Eq.)

69 In exercising the foregoing discretion under 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 parties, and, in particular, the present needs of the Plaintiff, 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, but to have regard only to contributions of the nature set forth in the subsection.

70    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.

71    I propose, therefore, to disregard evidence concerning the present and likely future needs of the parties.

72    The Plaintiff, however, submitted that the Court should take into consideration the contributions made by her to the welfare of the children after the termination of the relationship. In this regard the Plaintiff sought to derive comfort from the decision of Bryson J in Foster v Evans (1997) DFC 95-193 at page 77,681, where His Honour referred to post-separation contributions to the “family”. Neither the decision of Bryson J in Foster v Evans, nor the other authorities relied upon by the Plaintiff in this regard, support the submission by Counsel for the Plaintiff that contributions made after the termination of the relationship by one partner to the welfare of the children of the relationship, but not to the welfare of the other partner, come within contributions of the nature recognised by section 20(1)(b) of the Act. That paragraph is quite specific in its reference to “the welfare of the family constituted by the parties and one or more of the following, namely: (i) a child of the parties…” (italics supplied).

73 In the instant case the contributions asserted and relied upon by the Plaintiff were made by her to the welfare of herself and the children – that is, to a unit constituted by only one of the parties and the children of the parties. Such a unit is not to be equated to “the family constituted by the parties and [the children] of the parties” referred to in subsection (b) of section 20(1).

74    Although, at least in theory, the possibility exists of one partner making contributions to a family unit consisting of himself (or herself) and the other partner and the children after the termination of the de facto relationship, that is clearly not the situation in the instant case, where the contributions relied upon by the Plaintiff in support of, or as enhancing, her claim, are contributions made by her not to the family constituted by herself, the Defendant, and their two children, but only made by her either to the children alone or to herself and the two children.

75 Accordingly, contributions made by the Plaintiff towards the maintenance of her children after the termination of the de facto relationship are not contributions falling within paragraph (b) of section 20(1), and thus are not contributions to which, by that subsection, the Court in the exercise of its discretion should have regard.

76    At the commencement of the de facto relationship in April 1992, the significant assets of the Plaintiff consisted of:

18 Alfred Street, Newcastle East
3-62 Selwyn Street, Merewether
315 Lambton Road, New Lambton

77    At the commencement of the relationship the significant assets of the Defendant consisted of:

8 Parry Street, Cooks Hill
10 Parnell Place, Newcastle East
96 Bull Street, Cooks Hill
Portion 71, Belbora
72 Bull Street, Cooks Hill
136 Grandview Road, New Lambton Heights

Other assets of the Defendant included the various items of personalty and chattels listed in he first schedule to the cross-claim.

78    At the termination of the relationship in November 1998 the Plaintiff had the following significant assets:

18 Alfred Street, Newcastle East
3/62 Selwyn Street, Merewether
315 Lambton Road, New Lambton
90 Wolfe Street, Newcastle

79    At the termination of the relationship the Defendant had the following significant assets:

8 Parry Street, Cooks Hill
10 Parnell Place, Newcastle East
96 Bull Street, Cooks Hill
98 Bull Street, Cooks Hill
72 Bull Street Cooks Hill
136 Grandview Road, New Lambton
Portion 71 Belbora

The various items of personalty and chattels listed in the first schedule to the cross-claim were still owned by the Defendant.

80    (It should here be recorded that the property at 98 Bull Street, Cooks Hill, was purchased by the Defendant during the course of the de facto relationship, in September 1993, for $148,000. An amount of $590,000 was borrowed from Westpac Banking Corporation, which borrowing financed the purchase of 98 Bull Street and refinanced loans in relation to 8 Parry Street, the Belbora property and 72 Bull Street.)

81    I have already referred to the fact that the Wolfe Street property was acquired in the dying days of the relationship. That property, although purchased in the name of the Plaintiff, was purchased without any financial contribution made by her. The totality of the mortgage payments and outgoings in respect to that property have been made by the Defendant.

82    It seems to me appropriate, therefore, that in considering the property owned by the parties at the termination of the relationship, the Wolfe Street property should be placed into a distinct category. Orders for the adjustment of the interests of the parties in property should include an order that the Plaintiff transfer the Wolfe Street property to the Defendant, subject to any encumbrances thereon, and that the Defendant should indemnify the Plaintiff in respect to any such encumbrances. The Plaintiff, ultimately, did not oppose the making of such an order (although in her Application for Final Orders filed in the Family Court of Australia at Newcastle on 8 April 1999 and in the subsequent pleadings filed by her in the Supreme Court the relief sought by the Plaintiff was to the effect that the Plaintiff would be entitled to retain the Wolfe Street property, and that the Defendant indemnify her in respect of the mortgage over that property). Even if the Plaintiff had not, in effect, ultimately consented to an order for the transfer of the Wolfe Street property to the Defendant, I am satisfied that the Defendant is entitled to such a transfer, subject to any encumbrances thereon, and that the Defendant should indemnify the Plaintiff in respect to any such encumbrances.

83 Further, it seems to me appropriate that the respective contributions of the parties of the nature described in section 20(1) of the Act should be reflected by an order which would give to the Plaintiff 45 percent of the total value of all the foregoing properties (including the Wolfe Street property), and would give to the Defendant 55 per cent of the total value of those properties.

84    It will be appreciated that the reason for my conclusion that the Defendant is entitled to a somewhat greater share of the total value of the various properties owned by himself and by the Plaintiff at the termination of the relationship is that, whilst (as I have already stated) the contributions of the parties during the course of the relationship largely equated each other, the contributions of the parties in the period preceding the commencement of the relationship in April 1992 were not equal, the contributions of the Defendant being greater than those of the Plaintiff. Those greater contributions were reflected in the fact that at the commencement of the relationship the Defendant was the owner of seven properties (having when purchased a total value of $428,000), whilst the Plaintiff was the owner of only three properties (having when purchased a total value of $195,850). Further, the Plaintiff had the benefit of the enhancement in the value of her properties resulting from the contributions of the Defendant to the conservation and improvement thereof.

85    In expressing that reason for my foregoing conclusion, I rely upon, and respectfully agree with, the following passage from the judgment of McLelland J (as he then was) in Davey v Lee (1990) 13 FamLR 688 at 689,

It is thus apparent that the court is not required under section 20 to undertake a reductionist process analogous to the taking of partnership accounts (notoriously one of the most time-consuming and expensive of litigious exercises) by examining every alleged “contribution” of the kinds described in the section with a view to putting a monetary value on it in order to reach an accounting balance one way or the other, which is to be then eliminated by the requisite financial adjustment. Rather the court is required to make a holistic value judgment in the exercise of discretionary power of a very general kind.

86    There is a further aspect of this matter to which I should refer. It has already been recorded that the Defendant by his cross-claim sought an order that the Plaintiff deliver up to him certain items of personalty and chattels referred to in the first schedule to the cross-claim. During the course of her cross-examination the Plaintiff was asked whether she was prepared to make all or any of those items available to the Defendant. Her response was “Not at this stage”. Upon being asked whether “there may be some time in the future that you might make them available to him”, the Plaintiff said, “Yes, I may.” The Plaintiff further acknowledged that those items had all belonged to the Defendant at the time when she met him, and for many years before they had met. However, the attitude of the Defendant as revealed in her answers under cross-examination on this topic appeared to be that she was making use of at least the items of furniture and that until she was able to afford to replace those items of furniture she proposed to retain them.

87    After the conclusion of the evidence, and during the course of submissions, the Plaintiff, through her Counsel, stated, and it was noted upon the transcript, that the Plaintiff makes no claim to the ownership of any of the items referred to in the first schedule to the Defendant’s cross-claim; further, that the Plaintiff asserts, however, that some of those items are no longer in her possession or under her control.

88    The foregoing statement made on behalf of the Plaintiff by her Counsel at the very end of the hearing was inconsistent with the clear impression given by the evidence of the Plaintiff under cross-examination, that, although she did not assert ownership of the items claimed by the Defendant, it was convenient for her to retain the use of them, and that she might return them to the Defendant at a time when she was able to acquire replacement items for her household. There was no suggestion in the Plaintiff’s evidence (either evidence in chief or responses under cross-examination) that she had disposed of any of those items – which she clearly acknowledged belonged to the Defendant – or that any of those items were no longer under her control.

89    It is appropriate, therefore, that an order should be made of the nature sought by the Defendant for the return to him of the chattels listed in the first schedule to the cross-claim, or, in the event that the Plaintiff is no longer in a position to return those chattels, that the Defendant should be paid appropriate monetary compensation for them.

90    Neither the stand by the Plaintiff that she would retain property to which she acknowledged she had no entitlement, merely because it suited her convenience to do so, nor her failure (either in her pleadings or in her affidavit evidence or in her oral evidence under cross-examination) to reveal that she no longer retained some of that property reflected well upon the credit of the Plaintiff.

91    The evidence concerning the valuation of the various properties at the date of the termination of the relationship was far from complete. The parties placed before the Court evidence (which, as I understand it, was not in dispute) as to the purchase price of each of the various properties, and the mortgages on those properties when the properties were purchased. They did not choose to place before the Court any evidence as to the value of those properties at the date of the termination of the de facto relationship in November 1998.

92    In consequence, therefore, the Court must do the best it can with the evidence which the parties have chosen to place before it. In these circumstances, therefore, it seems to me appropriate that I should accept the figures which have been set forth in the document prepared on behalf of the Defendant, and headed “Defendant’s Proposals as to Real Property”. That document will be retained in the Court file. The total net value of the various items of real property set forth in that document is $924,500 (the net value of the Plaintiff’s properties, other than Wolfe Street, being $212,500 and the net value of the Defendant’s properties, together with Wolfe Street, being $712,000; the Wolfe Street property is shown as having a value of $220,000). An application to that total figure of $924,500 of the formula of 45 percent to the Plaintiff and 55 percent to the Defendant would give to the Plaintiff an entitlement to $416,025, and to the Defendant an entitlement to $508,475. Therefore, in adjusting the interests of the parties in property, the Plaintiff should receive the difference between $416,025 and the net value of her properties (other than Wolfe Street), being $212,500 – that is, an amount of $203,525.

93    It will, however, be appreciated that, consequent upon the order of the Family Court of Australia made on 27 April 1999, the amount of $5,000 referred to in Order 15 thereof “shall be taken into account in any final settlement as to adjustment of property interests between the parties”. My understanding, therefore, of that order is that any order in the present proceedings for payment by the Defendant to the Plaintiff of a monetary amount must be reduced by $5,000, to reflect the foregoing order of the Family Court. It follows, therefore, that the amount of $203,525 must be reduced to an amount of $198,525.

94    I have not heard any submissions concerning costs. Since the Plaintiff, in my conclusion, is entitled to slightly less than half of the amount which she originally claimed, and since the Defendant has, apart from his entitlement to the delivery up of chattels, abandoned his claim for payment of a monetary sum to him by the Plaintiff, my present view is that there should be no order as to costs, to the intent that each party should bear her or his own costs of the proceedings. However, if either party wishes to make submissions as to the costs different from the tentative view which I have just expressed, an opportunity will be given to that party to do so.

95    Accordingly, unless within seven days of the date hereof, either party arranges with my Associate for the matter to be listed for argument as to costs, I make the following orders:

(1). I order that the Plaintiff transfer to the Defendant (subject to any encumbrances thereon) the property situate at and known as 90 Wolfe Street, Newcastle, and that the Defendant indemnify the Plaintiff in respect to any encumbrances or liabilities relating to that property.

(2). I order that the Defendant pay to the Plaintiff the sum of $198,525.

(3). I order that, within fourteen days of the date hereof, the Plaintiff deliver up to the Defendant the chattels referred to in the first schedule to the cross-claim.

(4). I order that, the event that the Plaintiff fails to deliver up to the Defendant each and every one of the chattels referred to in order 3 hereof, the Plaintiff, in respect to each such chattel not delivered up to the Defendant, within fourteen days of the date hereof, file and serve an affidavit setting forth with particularity and specificity the present whereabouts of each such chattel, and the reason why the Plaintiff has not delivered up that chattel to the Defendant.

(5). I order that the Plaintiff pay to the Defendant monetary compensation in respect to each such chattel referred to in order 3 hereof which the Plaintiff does not deliver up to the Defendant pursuant to that order, such monetary compensation to be in an amount to be assessed.

(6). I order that liberty be reserved to the Defendant in respect to the assessment of the monetary compensation referred to in order 5 hereof.

(7). I order that the cross-claim be otherwise dismissed.

(8). No order as to costs, to the intent that each party will bear her or his own costs of the proceedings.

(9). I order that liberty be reserved generally to the parties in respect to the implementation of the orders herein.

96    The exhibits may be returned.

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Last Modified: 10/25/2001