Miller & Trent
[2011] FMCAfam 324
•25 May 2011
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| MILLER & TRENT | [2011] FMCAfam 324 |
| FAMILY LAW – Property – De facto claim – time – declaration – words substantial contributions – serious injustice considered. |
| Family Law Act 1975, ss.4AA, 90RD, 90SB, 90SM Family Law Act 1997 (WA), ss.205X, 205ZG |
| V and K [2005] FCWA 80 Wentworth v Wentworth (1995) 37 NSWLR 703; [1995] ACL Rep 395 NSW 39 |
| Applicant: | MR MILLER |
| Respondent: | MS TRENT |
| File Number: | BRC 11892 of 2010 |
| Judgment of: | Coates FM |
| Hearing date: | 29 March 2011 |
| Date of Last Submission: | 1 April 2011 |
| Delivered at: | Brisbane |
| Delivered on: | 25 May 2011 |
REPRESENTATION
| Solicitors for the Applicant: | Self represented |
| Counsel for the Respondent: | Mr M Pieterse |
| Solicitors for the Respondent: | Briese Lawyers |
ORDERS
That pursuant to section 90RD(1) of the Family Law Act 1975 it is declared that a de facto relationship never existed between Mr Miller and Ms Trent for the purposes of this proceeding.
That the Application by Mr Miller be dismissed.
That costs be reserved.
IT IS NOTED that publication of this judgment under the pseudonym Miller & Trent is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 11892 of 2010
| MR MILLER |
Applicant
And
| MS TRENT |
Respondent
REASONS FOR JUDGMENT
This is a de facto property matter in which both parties seek or require declarations as to the existence of a de facto relationship - for the purposes of this proceeding.
The Family Law Act 1975 (“the Act”) recognises the difference between married and de facto relationships in that only some de facto financial matters attract rights under the Act.
The applicant was self-represented and his application was deficient to the extent of not referring to the basis of the application and the necessary thresholds involving de facto financial matters, however that deficiency may be put aside in that it was evident that he sought an alteration of property interests.
In this proceeding, the relationship, although capable of attracting the relevant geographical jurisdiction, did not occur over a statutory two year period, so the applicant Mr Miller needs to invoke a jurisdictional threshold.
I will use italics when referring to key words in the Act, when referring to interpretation of their meanings and when referring to various cases.
Because of the short relationship, the applicant requires a jurisdictional declaration under s.90RD of the Act that a de facto relationship existed between certain dates for the purposes of the proceeding.
This would create the required nexus between s.90RD and the orders for an alteration of property interests sought under s.90SB of the Act based on substantial contributions and that failure to make an order would result in a serious injustice (to him).
The extent of the settlement he sought was confusing because the application referred to 15 percent of the joint asset pool but then set out a formula to determine that share being:
“X = [NP x 15% – H] where:
X is the amount to be paid to the applicant;
NP is the net value of the total property and liabilities of the applicant and the respondent as at the date of trial of these proceedings;
H is the net value of the property and liabilities that the applicant will retain.”
A perusal of this formula and the schedule of the pool produced below appears to show that the amount sought in the application was more than 15 percent of the joint pool, because the formula allowed the applicant to retain his assets and liabilities, after 15 percent of the total was assessed. It appears to be an extra amount. In submissions the applicant clarified his position - that he sought only 15 percent of the total pool, meaning his retained assets would be counted in that figure and he only used the formula upon advice.
He also sought costs of and incidental to the proceedings.
As the applicant was not represented, I gave him assistance so I could understand his case, so that he could put issues to me and to alert him to objections against his evidence, seeking his explanations.
Despite the applicant stating he did not understand the law, I was satisfied that he understood the proceedings to the extent of:
a) What he wanted by way of property orders and that he was aware that the parties had not been in a relationship for two years or for periods totalling two years, and
b) That he was basing his claim on substantial contributions and a serious injustice would result if property orders were not made.
The respondent Ms Trent seeks orders dismissing the application.
That would be achieved by a declaration pursuant to s.90RD(1), that a de facto relationship did not exist for the purposes of these proceedings.
Although the respondent sought a dismissal of the application upon a declaration that the de facto relationship did not reach the required two year period of existence, with the Response indentifying s.90RD(2) as the operative section, for reasons stated below I decided that a declaration ought be made under s.90RD(1).
In the alternative the respondent sought security for costs.
She also sought that the applicant pay her costs on an indemnity basis.
She also sought any order deemed appropriate.
THE LAW
Because of agreement that the parties had been in a de facto relationship which complied with s.4AA of the Act, counsel for the respondent conceded that a declaration could be made in the applicant’s favour under s.90RD. From what follows, I do not accept that concession based on the facts.
Interpretation of words in s.90SB is crucial to the applicant’s case. I will set out the section in full, despite parts not being relevant to this particular proceeding, and note why all of the gateway requirements are not applicable here.
“S.90SB When this Division applies--length of relationship etc.
A court may make an order under section 90SE, 90SG or 90SM, or a declaration under section 90SL, in relation to a de facto relationship only if the court is satisfied:
(a)that the period, or the total of the periods, of the de facto relationship is at least 2 years; or
(b)that there is a child of the de facto relationship; or
(c)that:
(i)the party to the de facto relationship who applies for the order or declaration made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c); and
(ii)a failure to make the order or declaration would result in serious injustice to the applicant; or
(d)that the relationship is or was registered under a prescribed law of a State or Territory.”
There is agreement that the requisite time period of two years [s.90SB(a)] is not applicable. The parties lived together from 2 January 2009 until 8 March 2010, although the respondent states the separation occurred on 3 February 2010, but nothing turns on this difference of dates. Further, it appears the parties may have reconciled between June and September 2010, but even if that was the case the total time the parties lived in a de facto relationship was perhaps, 17 months.
There were no children of the relationship within terms of the Act [s.90SB(b)], so that ground is not applicable.
There was no relevant registration under a state law [s.90SB(d)].
The applicant is relying on s.90SB(c) and I will interpret the key words below.
Section 90SB(c) considerations are connected to s.90SM(4)(a), (b) and (c), which refers to the type of contributions which will be taken into account for an alteration of property interests. It states:
“90SM(4) [Matters to take into account] In considering what order (if any) should be made under this section in property settlement proceedings, the court must take into account:
(a)the financial contribution made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)otherwise in relation to any of that last‑mentioned property;
whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(b)the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the de facto relationship, or a child of the de facto relationship:
(i)to the acquisition, conservation or improvement of any of the property of the parties to the de facto relationship or either of them; or
(ii)otherwise in relation to any of that last‑mentioned property;
whether or not that last‑mentioned property has, since the making of the contribution, ceased to be the property of the parties to the de facto relationship or either of them; and
(c)the contribution made by a party to the de facto relationship to the welfare of the family constituted by the parties to the de facto relationship and any children of the de facto relationship, including any contribution made in the capacity of homemaker or parent;”
As for the necessary declarations, s.90RD allows for declarations of specified relationships for the purposes of the Act:
“Section 90RD Declarations about the existence of de facto relationships
(1)If:
(a)an application is made for an order under section 90SE, 90SG or 90SM a declaration under section 90SL; and
(b)a claim is made in support of the application, that a de facto relationship existed between the applicant and another person;
the court may, for the purposes of those proceedings (the primary proceedings), declare that a de facto relationship existed, or never existed, between those 2 persons.
(2)A declaration under subsection (1) of the existence of a de facto relationship may also declare any or all of the following:
(a)the period, or periods, of the de facto relationship for the purposes of paragraph 90SB(a);
(b)whether there is a child of the de facto relationship;
(c)whether one of the parties to the de facto relationship made substantial contributions of a kind mentioned in paragraph 90SM(4)(a), (b) or (c);
(d)when the de facto relationship ended;
(e)where each of the parties to the de facto relationship was ordinarily resident during the de facto relationship.”
As is readily apparent, s.90RD(1) gives the Court the power to make declarations that either a de facto relationship existed, and importantly, that one did not exist. These declarations can only be made for the purposes of the proceeding under consideration.
The provisions I have referred to recognise that a de facto relationship, especially a short one, is a different legal state when compared with a marriage and only enable the Act’s property jurisdiction in specified circumstances.
While the respondent’s initial material sought a declaration as to the time of the relationship, a better view would be that if the evidence supports such, a declaration could be made under s.90RD(1), that a de facto relationship for the purposes of this proceeding never existed. If such a declaration is made, that ends the proceeding.
The applicant’s evidence dictates that he must seek a declaration that the relationship existed between certain dates for the purposes of the proceedings, coupled with a s.90RD(2) factor, that he made substantial contributions, the necessary connection to s.90SB(c) which I referred to earlier.
FACTUAL MATTERS
The applicant basis his claims on contributions and injustice, but in specifically defining the elements of the relevant section, the Court has to be satisfied that the applicant made:
a)Substantial contributions, and
b)Serious injustice would (otherwise) result if the orders sought were not made.
The terms substantial contributions and serious injustice are not defined in the Act, but statutory interpretation dictates that the adjectives substantial and serious must be given meaning. At face value, the adjectives qualify and mean more than mere contributions or mere injustice.
These very specific issues are at the core of the applicant’s claims.
Before examining his claims, I will refer to objections to much of the applicant’s evidence. The point about objectionable material was fairly raised and I allowed the applicant an adjournment to consider the written submissions from counsel for the respondent.
The objection was that nearly every paragraph of the applicant’s long affidavit of 169 paragraphs was objectionable on the grounds that the evidence was inadmissible as opinion, hearsay, scandalous or vexatious comment.
In submission counsel for the respondent asked me to take into account the material and exclude inadmissible statements because it would otherwise take hours to go though the material line-by-line. I eventually acceded to that request as the applicant was incapable of making submissions on the objections in any meaningful evidential way and I could see no other evidence which, in context, would make the irrelevant statements relevant to the application.
Examples will illustrate the objections.
a)The applicant gave his opinion of the respondent’s character such as contained in paragraph 16 of his affidavit, where he stated that she is materialistic and resorts to deceptive tactics.
b)At paragraph 18 he said she projected a false appearance of honesty and decency.
c)At paragraph 24 he referred to (her) three “failed” marriages blaming her infidelity.
d)At paragraph 27 he said she purchased a [business] called [Business 1] in Queensland, merely to provide employment for a former de facto, Mr F.
e)At paragraph 29 he said the respondent embroiled him in her property dispute with her former husband, Dr B.
f)Other paragraphs contend or infer that she associates with criminals (paragraph 143), that her sexuality is questionable (paragraphs 30 and 31), that she openly flaunted herself at other men (paragraph 133) and that she is completely untrustworthy.
I alerted the unrepresented applicant to the type of material objected to allowing him an adjournment to answer the objections.
On explaining that such material was inadmissible, he stated that he gave his view of the respondent and while possibly taken aback about what was admissible and what was inadmissible, in my opinion he did not retreat from his views.
Much of the material was just scandalous. It is very clear that the applicant set out in his affidavit to vilify the respondent, but I cannot see that such vilification can be relevantly related to the application which he brought to court.
It is sometimes the case that litigants can be strongly questioned or embarrassed in court, especially about credit, without offending rules and provisions of Acts which set out to prevent offensive behaviour and statements, but any such development during a trial must appear to be relevant to the facts-in-issue and must not be an abuse of the court process or a display of personal animosity.
The tenor of the applicant’s affidavit in statement after statement is to put a picture before the court that the respondent is dishonest at large and such statements which are completely irrelevant to his claim cannot be allowed into the proceeding.
I raised with the applicant that such may be used in a costs application and no doubt triggered the written response seeking costs on an indemnity basis. As well, so much irrelevancy extended the material which had to be addressed in preparation for the matter.
He also said he had advice, but only procedural advice. That does not appear to be the case since he set out a formula as the basis of the alteration of interests and he knew he had not been in the relationship for two years. That indicates his advice was more than procedural.
For the purposes of this decision, I will disregard the objectionable material without going through the applicant’s affidavit line-by-line. To do such would add extra costs the respondent’s case.
The applicant’s case is that he made substantial contributions to the relationship, mostly with non-financial contributions, by adding value to the respondent’s businesses, by improving the properties they lived in and by assisting with family welfare. If an order is not made, then he will suffer serious injustice.
I agree with paragraph 23 of the written submissions by counsel for the respondent which I will paraphrase, as to the substantial contributions alleged by the applicant:-
a)From paragraph 46 of the applicant’s affidavit that he “suggested” and “implemented strategies” to raise the profile of the [omitted] business and improve the profitability;
b)At paragraph 51 - performing some building works at Property S (a residence);
c)Paragraph 59 – building improvements at Property N (a residence);
d)Paragraph 63 – caring for livestock;
e)Paragraphs 70, 74, 81 and 87 – training horses;
f)Paragraphs 109 to 128 - contributions to the welfare of the family for example such as cooking and driving the respondent’s children to school and giving “constructive suggestions” (paragraph 151) about improving the house and garden; and
g)Attempting to settle or settling neighbourhood disputes and business disputes.
There are more assertions but those identified sufficiently outline the applicant’s case, taking into account all of his assertions and recognising that his case is that he did an immense amount of work of the type mentioned for the respondent.
These contributions on the submissions of the respondent’s counsel must be put into context, which is that they occurred over a period of between fourteen to sixteen months.
I am satisfied that the applicant’s assertions, of his personal suggestions, interventions, building works, training of horses, and assistance going to the welfare of the family would be classified as contributions, if found to be made.
But whether they were made or not, as well as the detail of the disputes I noted in each party’s material, are trial issues. That is not what is being examined here. What has to be determined is whether, on the evidence presented, the applicant can show that anything he did could be classified as:
a)Substantial contributions, and
b)Serious injustice would (otherwise) result if the orders sought were not made.
If he can do that, then the percentage value of contributions will be decided at trial.
Counsel for the respondent referred me to V and K [2005] FCWA 80, a decision of Holden CJ of the Family Court of Western Australia, a court which has been deciding de facto property issues since the year 2000, who stated at paragraph 21:-
“Notwithstanding I am of the view that contribution to domestic duties in circumstances such as exist in this case where there were no dependant children and over a short period of time ought not be seen to be substantial. In my view, substantial means something more than usual or ordinary. In my view, s.205XB(ii) is aimed at more exceptional circumstances where serious injustice may be caused by the application of ss(i).”
Holden CJ’s view can only be applicable if the wording of the Family Law Act 1997 (WA) is similar to the Family Law Act 1975 (Commonwealth):
The relevant wording of s.205X of the Western Australian Act states:
“Despite section 36(5), before making an order under this Division a court must be satisfied –
(a) …; and
(b) Substantial contributions of the kind referred to in section 205ZG(4)(a), (b) or (c) have been made in the State by the applicant.”
The relevant wording of s.205ZG(4) of the Western Australian Act states:
“In considering what order (if any) should be made under this section in proceedings with respect to any property of de factor partners, or either of them, the court must take into account -
(a) The financial contribution made directly or indirectly by or on behalf of a de facto partner to the de facto relationship or a child of the de facto relationship to the acquisition, conservation or improvement of any of the property of the de facto partners, or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the de facto partners or either of them;
(b) The contribution (other than a financial contribution) made directly or indirectly by or on behalf of a de facto partner or a child of the de facto relationship to the acquisition, conservation or improvement of any of the property of the de facto partners or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the de facto partners or either of them;
(c) the contribution made by a de facto partner to the welfare of the family constituted by the de facto partners and any children of the de facto partners including contribution made in the capacity of homemaker or parent;”
I am satisfied that this wording is similar to that found in s.90SB and 90SM of the Commonwealth Family Law Act 1975.
As well as Holden CJ’s description, other sources of meaning of the words may be considered.
The Macquarie Encyclopedic Dictionary, in defining the adjective substantial, refers among other things, to an ample or considerable amount as well as something having real worth or value. The Concise Oxford Dictionary refers to having real importance or value and to a considerable amount.
A similar interpretation has been applied to the word in a different area of law, but one which pertains to a quantifiable or assessable situation. In Wentworth v Wentworth (1995) 37 NSWLR 703; [1995] ACL Rep 395 NSW 39, a consideration of s.8 of the Family Provision Act 1982 (NSW), the court held that the word substantial means not illusory, something considerable or large. Although referring to a substantial detrimental change under that Act, the word substantial is given an ordinary usage meaning discoverable in dictionaries and in my view a similar meaning to that held in V and K.
In considering then the dictionary meanings with Holden CJ’s explanation, I am satisfied that:
a) The Western Australian and the Commonwealth Acts refer to the word substantial with the same or similar meaning, and
b) The Chief Justice’s reference is the apt and useful test for determining such questions under both the Western Australian and Commonwealth Acts.
So the legal issue posed by counsel for the respondent is one of determining the applicant’s claim that contributions were more than usual or ordinary or were contributions having real worth, value or importance and that a serious injustice may result.
The Act recognises that an injustice may occur and so sets a higher test being a serious injustice. The word serious in this context, taken from the Concise Oxford Dictionary, must mean not slight. The Macquarie Encyclopedic Dictionary uses the words weighty or important. These meanings show a difference by marked degree from a mere injustice.
The evidence then must show the resulting serious injustice if a declaration is not made.
In my view the applicant gives no evidence of how any of his contributions resulted in an increase to the value of the respondent’s business interests, her livestock including horses or the shop [Business 1]. Nor does he give evidence of what the increase of business was and what contribution was attributable to his skill and effort. Such is required in this proceeding to rely on substantial contributions.
He began his version of events in relation to [Business 1] by stating that the business was run down and was mismanaged by the respondent.
In the manner he presented his evidence, I could not discern that he had any knowledge or expertise to show that his contributions added some form of exceptional or out of the ordinary value to the business interests, including the shop and livestock holdings.
His personal opinion is not akin to a valuation.
While a valuation would obviously assist in identifying the applicant’s alleged contributions, he gave no evidence of what the baseline would be to begin a valuation, keeping in mind that the [omitted] business was a going concern when the respondent purchased it and that she was the active manager. He stated that he was aware the business was in decline, but that description does not go to proof of the real state of affairs. It is mere opinion and is inadmissible. To value actual work performed is one thing, to value suggestions and direction to staff is another but in any case, there was no evidence of the basis from which a valuation would made.
The applicant makes similar statements about the training of horses belonging to the respondent, about improvements he made as a builder and in helping the respondent to settle her disputes. That he built some structures was not stated in such a way that I could determine that there was a substantial contribution as opposed to a contribution or in fact just paid work, because he was employed by the respondent for a time.
His imprecise description is the case for most of his assertions of adding value to the pool.
The applicant stated the respondent involved him in her property dispute with her former husband but the evidence was not presented in a manner which would leave me to conclude that he was coerced in some manner. He seems to have been willing to involve himself in issues otherwise not his concern. Nor can I say that such assistance could be classified as coming within the meaning of s.90SM. She had lawyers who gave her what would appear to be relevant legal advice with regard to the property proceedings with Dr B.
I cannot see how the evidence would lead to a decision that his contributions to family welfare, such as cooking or driving the respondent’s children to school were out of the ordinary.
The fundamental legal issue for the applicant on his evidence, is how to determine or conclude that his contributions were substantial and otherwise a serious injustice would result?
He agreed in submissions that his contributions were mostly non-financial.
He has the onus of bringing these contributions into the range that they would be considered to be substantial and that otherwise a serious injustice would be the result if no order was made.
Further, he has to show that the contributions were directly related to what is required in s.90SM(4) (a), (b) and (c).
The property pool has relevance here. I will reproduce it from paragraph 155 of the applicant’s affidavit:
ASSETS
OWNERSHIP
VALUE
Real property situated at Property B
Ms Trent
E$530,000
Property N (including equestrian arena located on the property)
Ms Trent
E$660,000
[Business 2]
[A] Family Trust (Ms Trent)
E$1,200,000
[Business 3]
Ms Trent
$430,000
Real property situated at Property P
Mr Miller
$60,000
Shares
Ms Trent
E$60,000
Interest in horses:
mares and foals, thoroughbred and warm blood
saddlerysaddlery
Ms Trent
Ms Trent
Mr Miller
$50,000
$5,000
$7,500
Interest in horses:
‘[S]’
Other horses
Mr Miller
$30,000
$20,000
Land cruiser motor vehicle, white 06
Ms Trent
$35,000
Ford Sedan motor vehicle, blue 08
Ms Trent
$10,000
Holden Utility motor vehicle, blue 07
Mr Miller
$29,000
Otto Tuzza Horse float, white 09
Ms Trent
$19,000
Two (2) tractors and implements, Ford, Massey Ferguson
Ms Trent
E$25,000
Honda 4 wheel bike, red
Nathan car trailer, grey
Two (2) 6x4 trailers, green
Izusu tray top truck, white 92
Custom Builders Trailer, black
Building tools, electrical, air, hand
Ms Trent
Ms Trent
Ms Trent
Ms Trent
Mr Miller
Mr Miller
$4,000
$3,000
$1,000
$8,000
$7,000
E$15,000
Arrears owing (unpaid contractor work carried out)
Mr Miller
$29,000
Cash savings
Ms Trent
$30,000
Cash savings
Mr Miller
$9,000
LIABILITIES
OWNERSHIP
VALUE
Mortgage with NAB house including car finance-BMW.X3
Ms Trent
E$619,000
Tribunal debts to client
Mr Miller
E$16,000
Outstanding tax liability
Mr Miller
E$14,000
NET NON-SUPERANNUATION POOL
$2,625,500
SUPERANNUATION
OWNERSHIP
VALUE
[A] Superannuation entitlements
[A] Family Trust (Ms Trent)
[E] Family Trust (Ms Trent)
$450,000
$235,000
$130,000
Superannuation entitlements held with Sunsuper
Mr Miller
E$20,000
NET SUPERANNUATION ASSET POOL
$835,000
TOTAL NET ASSET POOL
$3,460,500
Putting aside possible disputes about the size of the pool and a horse called [S], on the applicant’s own evidence it is not disputed that the majority of the assets were brought to the relationship by the respondent and remain in her possession.
In my view, the applicant’s evidence does not disclose a single outstanding asset which he contributed or that the respondent retained assets which did not belong to her to begin with, apart from the horse [S]. Nor does his evidence indicate that the respondent make use of any of his assets as in the taking or receiving of a substantial contribution, nor did his schedule disclose any joint ownership of assets through shared investment.
As the case centres on the applicant’s non-financial contributions, he then has to produce evidence that these contributions added some type of real, or considerable value to the respondent’s property within terms of s.90SM or our of the ordinary contributions to the welfare of the family.
There is evidence that the ownership of the horse [S] is in dispute, but even if the applicant now owns that horse, its value with his total assets is no where near the property contributed by the respondent.
There are many other disputes over issues such as whether the respondent transferred monies in and out of the applicant’s accounts, employment disputes and over a quantity of red cedar timber which the applicant alleges the respondent obtained from him by duress in calling police, but the timber is not even listed in his version of the asset pool.
In my view only some of these issues go to allegations supporting claims of contributions and claims of how each party acted in relation to the alleged de facto assets. Only some claims go to the de facto property dispute as issues such as non-payment for contract employment, listed in the applicant’s asset schedule which I have reproduced, do not seem to fit within s.90SM as contributions. That aside, the non-financial contributions must be given appropriate weight, that is not just token weight, and any acts or omissions may be examined in the mandatory justice and equity consideration.
But they are trial issues and the preliminary issue is that the applicant has to produce evidence to satisfy the test of having made substantial contributions, described as “ …more than usual or ordinary”…or “exceptional circumstances where serious injustice may be caused”, as identified by Holden CJ in V and K? I think the word illusory identified in Wentworth is useful in recognising that mere contributions should not be regarded as being substantial contributions, substantial contributions being of a greater nature than mere or ordinary contributions.
The Act recognises that such contributions in a very short relationship could be classified as substantial where a serious injustice would result if orders were not made. The concept can probably be more easily understood if for example there were significant financial contributions by the applicant. I could also envisage circumstances which would be regarded as significant non-financial contributions as well but such must be so substantial, that is more than usual or ordinary that they would stand out as against mere contributions.
Viewing the pool from this aspect highlights counsel’s submission that a substantial contribution out of the ordinary cannot be determined in a vacuum and so the pre-relationship ownership of the various assets and entities and their values must be taken into account.
Nor does the applicant address what or how serious injustice would result if I did not make orders in his favour.
That is the second element he must address because while it could be argued that a finding of substantial contribution would infer an injustice, human affairs are so varied that perhaps there could be a substantial contribution made, but in all the circumstances failure to make an order would not result in serious injustice. Such may be a rare case, but the concept of the injustice must be addressed in unison with the substantialness of the contribution. It was not in this case.
The wording of the Act takes into account short relationships of less than two years in that substantial contributions or serious injustice can enable the jurisdiction of the court but the legislature was very careful to ensure that people do not bring all claims simply because they have lived together for a short period, short being for a period less than two years.
There may be another way of examining the applicant’s claim to determine whether he has a case.
The applicant claims 15 percent of the pool, which on his figures would see a payment to him of $519,000.00, the alleged pool being $3,400,000.00.
If the relationship had reached the two year mark and the facts alleged did not change, can he actually show that he can claim or that he would receive 15 percent or more of an asset pool most of which the respondent bought to the relationship?
While an assessment of the possible division of property without testing the evidence is to some extent a hypothetical exercise, any division of course must be made on a justice and equity basis. But because the order altering the property must be just and equitable, as well as the percentage division, it follows that this aspect of justice and equity is not the same as a person suffering a serious injustice, because a claim was not allowed to proceed.
As a general observation a two year relationship may not warrant a
15 percent adjustment even if it was found the applicant had made all of the contributions he claimed, keeping in mind the respondent employed the applicant for a period of time. But the facts in this particular proceeding do not indicate why, if he could pursue the matter, a 15 percent alteration of interests would be warranted or would be just and equitable. Even an employment dispute where the respondent allegedly operated his bank account, does not appear to be relevant to the settlement asked for.
Although trying to hypothesize to come to a result allowing the applicant to press his claim, the evidence does not show he would have a reasonable prospect of success.
Perhaps I do not need to go this far given the legal parameters ascribed to de facto property matters in a very short relationship of up to
17 months, but in fairness I have attempted to determine from the evidence the applicant’s prospects if a trial went ahead and whether there is a connection between a serious injustice and a decision to alter property on a just and equitable basis.
I am asked by the respondent to make a declaration that the parties were in a de facto relationship as defined in s.4AA of the Act for a stated period which is less than the minimum two year period.
I think it is the wrong declaration. Because of the wording of s.90RD, such a declaration only has utility if the property application is based on a short relationship and a substantial contribution was made which can be linked to substantial contributions and a serious unjustness under s.90SB.
I cannot make a negative declaration that there were not substantial contributions, however, the wording of the section specifically allows for a declaration that a de facto relationship for the purpose of these proceedings did not exist.
If such is made, then it is irrelevant if the relationship otherwise complied with the definition in s.4AA or whether gateway requirements were otherwise met, because the Act specifies when and how de facto property rights are created.
I also cannot see any purpose in the respondent’s call for a declaration that a de facto relationship existed for a period of less than two years.
As I identified early, because the applicant does not meet the evidential test of showing an arguable case that he made substantial contributions and that a serious injustice would result if I did not make orders in his favour, I conclude that a de facto relationship did not exist for the purpose of these proceedings. I will make such a declaration and dismiss the application. But even if I made a declaration for the applicant that he made substantial contributions under s.90RD(2), he did not meet the test under s.90SB of showing such were substantial contributions and a serious injustice would result if I did not make orders.
Because I am not making a declaration in the applicant’s favour and because I have determined that he has no reasonable prospect of success, there is no need to consider whether a security for costs order ought be made against him.
Both parties sought costs orders so I will reserve costs.
I certify that the preceding one hundred and five (105) paragraphs are a true copy of the reasons for judgment of Coates FM
Date: 25 May 2011
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