Newland and Rankin

[2017] FCCA 210

FEDERAL CIRCUIT COURT OF AUSTRALIA

NEWLAND & RANKIN [2017] FCCA 210

Catchwords:
FAMILY LAW – De facto property settlement – short relationship – superior contributions by the respondent.

Legislation:

Family Law Act 1975, ss.4AA, 75, 79, 90SB, 90SF, 90SM

Cases cited:
Norbis v Norbis (1986) FLC 91-712
McMahon and McMahon (1995) FLC 92-606

Applicant: MR NEWLAND

Respondent: MS RANKIN

File Number: DUC 16 of 2014

Judgment of: Judge Hughes

Hearing dates:

24, 25 & 26 June 2015, 21, 22

& 23 September 2015 and 18 December 2015

Date of Last Submission: 10 February 2016

Delivered at: Canberra

Delivered on: 9 February 2017

REPRESENTATION

Counsel for the Applicant: Mr Wong

Solicitors for the Applicant: Farrar Gesini Dunn

Counsel for the Respondent: Mr Hassall

Solicitors for the Respondent: Legal on London

ORDERS

1. The respondent is hereby declared to be the sole owner to the exclusion of the applicant of all remaining proceeds of sale of the Property Y property held on trust for the parties.

2. The respondent shall forthwith indemnify the applicant and keep him indemnified in relation to the (omitted) Bank loan in the joint names of the parties.

3. Otherwise, each party is declared to be the sole owner of all items of property and choses in action in their name or possession at the date of these orders.

4. All extant applications are dismissed.

IT IS NOTED that publication of this judgment under the pseudonym Newland & Rankin is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT CANBERRA

DUC 16 of 2014

MR NEWLAND

Applicant

And

MS RANKIN

Respondent

REASONS FOR JUDGMENT

Introduction

1. These are property proceedings following the end of a de facto relationship, the length of which is in dispute.  The applicant de facto husband’s evidence was that the relationship was for more than eight years. The respondent de facto wife said it was barely two years. 

Background

1. The applicant is a 58 year old (occupation omitted). He was born in the (country omitted) but lived in Australia for 10 years from 1986 and again from March 2003.  He became an Australian citizen in 1992.

2. The respondent is an (occupation omitted).  She was born in (country omitted) and migrated to Australia in 1987. She has run several businesses in the Canberra district, mostly with her sister, Ms S.  At the time of the trial the only business with which the respondent was still involved was a (business omitted) in (omitted).  The business is owned by a company in which the respondent and her sister are the only directors and shareholders.

3. The respondent is part of a large family and is very involved with the (nationality omitted) community in Canberra.  She has two children, Ms N, now aged 23 and Mr T, now aged 22 to her former partner, Mr L.  Although the respondent and Mr L were never legally married, they participated in a traditional (nationality omitted) wedding ceremony and regarded each other as husband and wife.  After their relationship ended in 1998, Mr L transferred a property at Property G to the respondent.  He and the respondent remained friends and continued to live together well after their marriage ended.  In 2001 they moved together with their children to (omitted), NSW, to run a (business omitted). The respondent returned to Canberra with the children in early 2003.  Mr L stayed in (omitted) to close the business and pack up their home returning to Canberra one or two months later when he again took up residence with the respondent.  He remained living with the respondent until early 2005 when he moved into separate accommodation in Property H.

The duration of the parties’ de facto relationship

1. The parties to these proceedings met in April 2003 at the respondent’s (business omitted) in (omitted) where the applicant was a customer. The applicant had recently returned from a trip to the (country omitted) and the respondent had recently returned from (omitted).  The parties became friendly and commenced a sexual relationship about a month after meeting.  The applicant said he was committed to the respondent from that time and, at one point in his evidence, said he regards this as the beginning of their de facto relationship.  The respondent described the relationship as that of friends who enjoyed a casual sexual relationship.  She said it was not until the middle of 2008 that their de facto relationship began.

2. When the respondent returned to Canberra from (omitted) in early 2003, she was unable to move back into the house she owned in Property G as it was tenanted.  The respondent helped her to write a letter to the real estate agent asking to have the tenants move out.  When the tenants moved out of the property the respondent, her former husband, Mr L, their children and the respondent’s sister, Ms P and Ms S’s son all moved with the respondent into the property.  The applicant was renting a flat in (omitted) at the time.

3. After the respondent’s former husband moved out of Property G in 2005, three of the respondent’s employees moved in.

4. In about May 2004 the applicant lost his job and decided to move to Sydney to study to become a (occupation omitted) and start a new career.  He asked if he could stay with her on a temporary basis before he moved to Sydney as he could not afford to keep renting his flat in (omitted).  The respondent discussed the matter with her former husband who made no objection.  The applicant gave up his flat in (omitted) and moved in with the respondent for a period which the respondent estimated was between six and eight weeks in 2004.  He then moved to Sydney.  The parties had a sexual relationship while he stayed with her but the respondent said there was no commitment to an ongoing relationship.  She said she would have liked a more committed relationship with the applicant but he made it clear that he was not interested in anything serious at that time.

5. The applicant’s evidence is that he moved into the respondent’s home at her invitation in September 2003.  He was challenged about that in cross-examination.  He agreed that in September 2003 he was dating a woman named Ms G but he denied having any serious relationship with her.  He said he regarded his relationship with the respondent as his “primary relationship”.  It was put to him that he did not commit to a relationship with the respondent when he moved into her home in 2004 because he had decided to commence a new career in a different city.  He said that his commitment to the respondent was solid but so was his commitment to changing his career which made it difficult for the parties to spend time together. 

6. In his affidavit filed on 14 November 2014 the applicant set out a list of documents which he said proved he was living at the respondent’s address from September 2003.[1]  However, the earliest of those documents is dated 7 May 2004 which is consistent with the respondent’s evidence about when he moved in. 

   [1] At paragraph 51

7. I accept the respondent’s evidence that the applicant stayed in the respondent’s home from about May 2004.  It is uncontroversial that he moved to Sydney in September 2004.  He said he still regarded himself as living with the respondent in Canberra and described himself as commuting to and from Sydney.  However he was studying full time and working in Sydney on weekends.  Subpoenaed records indicated that between September 2004 and May 2005 the applicant never accessed his bank account in the Canberra region.  He conceded that he may not have come to Canberra at all during that period.

8. Other subpoenaed documents indicated that the applicant advised the NSW Road Traffic Authority (RTA) on 29 November 2004 that he was living at an address in (omitted), NSW.  From November 2005 to July 2007 the RTA had an address for him at (omitted), NSW, and from July 2007 to September 2007 an address in (omitted), NSW. Those dates correspond with the applicant’s employment in Sydney.

9. From May 2004 the applicant used the respondent’s home as his mailing address for some purposes.  The respondent said he told her he wanted to have a stable address in case he needed to apply for a loan in the future.  She said she was content for him to use her address as had various other friends and family members over the years.

10. The applicant said he returned to Canberra approximately once a month.  The respondent said it was much less frequently. She said the parties saw each other occasionally and sometimes had sexual relations, including on a holiday to the (omitted) in January 2005.  She said the applicant came to Canberra occasionally but there were also periods of many months where they had no contact at all.  She said she assumed the applicant was seeing other women in Sydney and she felt free to see other men.  She said she occasionally went to Sydney, usually with a group of women and stayed at the (omitted).  She did not ever stay at the applicant’s home.  She usually invited the applicant to have lunch with her and gave him any mail that had come to her house.  During one such lunch the parties agreed to have their photograph taken by someone selling photographic keyrings.  They bought a keyring for each of them which contains a photograph of the parties smiling together. Although relied upon by the applicant, this does not assist in determining whether or not the parties were in a de facto relationship at the time.

The fire

1. On 16 November 2005 the respondent’s home in Property G was destroyed by fire.  The respondent was out walking with one of her sisters and came home to find the house alight.

2. The applicant relied on the events surrounding the incident to demonstrate the parties were in a committed de facto relationship at that time.  His initial evidence about it is set out in a chronology at annexure A to his affidavit filed on 14 November 2014.  In that chronology the applicant asserted the fire occurred in March 2006 and that he and the applicant were present when it began.  He said the insurance company accommodated the parties and the respondent’s children in a hotel until March 2006 when they all moved into temporary accommodation in an apartment in (omitted), ACT.

3. By the time he filed his trial affidavit on 4 June 2015 the applicant had corrected the date of the fire from March 2006 to 16 November 2005.  He also corrected his evidence to state that he was not present when the fire occurred as he was working in Sydney.  He said the respondent rang him in a nearly hysterical state and told him the house was on fire.  He said he asked first about the safety of all of the household members and then asked whether she had spoken to the insurance company.  He said that, at the respondent’s request, he spoke to the insurance company before driving to Canberra to support her.[2] 

   [2] Affidavit of applicant filed 4 June 2015 at paragraph 50

4. The respondent denied much of the applicant’s evidence about the fire. She said she did not call the applicant as soon as the fire broke out.  She said she called her ex-husband first of all, then her sister, Ms S, and then the godparents of her children.  She said she and her former husband called the insurance company, not the applicant, and arrangements were made with the insurance company for the family to stay in a hotel in the city.  The respondent said she called the applicant later in the day to tell him the news.  She said he was very sympathetic and asked if he could do anything to help. She told him that she would love him to come to visit as she felt depressed and would appreciate some support and he agreed to come.  She said the parties resumed their sexual relationship at that time but nothing else about the relationship changed and the applicant returned to Sydney shortly after the incident.

5. In his trial affidavit the applicant asserted that he liaised with the insurance company about obtaining temporary hotel accommodation for the family, including himself and then more permanent accommodation in an apartment in (omitted).  He deposed to specific conversations in which he alleged the respondent stated her desire to rent larger accommodation but he objected, saying “I’m not going to pay that much for rent!”[3] The respondent agreed that while he was visiting, the applicant helped her find the apartment in (omitted) for which she was grateful, but she denied that he ever lived there.  She denied the purported conversation about the rent as the rent was covered by the insurance company. 

   [3] Affidavit of applicant filed 4 June 2015 at paragraph 54

6. To thank him for his assistance the respondent bought the applicant a ticket to travel to (country omitted) with her and her family in January 2006.  She said that shortly before the trip the applicant changed his mind about coming which she took as an indication that he was not interested in a more substantial relationship with her.

7. After the fire the house was initially declared a crime scene because traces of mineral turpentine were detected in one of the bedrooms. The turpentine was ultimately explained by the fact that one of the respondent’s relatives occupying the particular bedroom was a tiler and used turpentine to remove silicon from his hands.

8. In his trial affidavit filed on 4 June 2015 the applicant said that when the parties were eventually permitted to access the building, he found his lawnmower petrol can in the master bedroom cupboard and became suspicious the fire had been deliberately lit.  During cross examination on 25 June 2015 the applicant was shown a report prepared by the Australian Federal Police in relation to the fire which became exhibit R3 in the proceedings.  He was unaware until then that the document existed. According to the report, the fire investigators concluded that the fire started in the master bedroom and was probably caused by an electric heater.

9. A further AFP case note dated 13 May 2006 came into evidence as exhibit R4 and contained the following conclusion:

   There is no evidence whatsoever to support a suggestion that either [redacted] or the owners have anything to do with this fire. The cause of the fire cannot be determined exactly and the heater and other electrical items cannot be ruled out.

   The available evidence is not sufficient to suggest this was in fact an arson.

10. The various AFP reports contain no mention of a petrol can despite the thorough investigation by both fire authorities and police.  The applicant said he did not tell police that he found the petrol can because he did not want to get the respondent into trouble.  He also said “I guess I had questions about Mr L’s level of honesty at that point and I didn’t want to sort of get into it”.[4]  This vague language which nevertheless cast aspersions on the respondent did not reflect well on the applicant. He was not prepared to state clearly that he believed the respondent had deliberately caused the fire but that was the clear inference. During cross examination he agreed that no one was charged in relation to the fire and that the insurance company paid the claim in full.

    [4] Transcript 25 June 2015 at page 90

11. I reject the applicant’s evidence about the petrol can as utterly implausible and designed to discredit the respondent.

12. In his trial affidavit the applicant said that he lost all of his personal possessions in the fire as they were stored in the house.  The respondent denied that.  She said he had no possessions in her house and, on the few occasions he came to visit, he even left his clothes in his car which she found odd. 

13. The applicant deposed to the parties planning the rebuild of the Property G house together.  The respondent said she engaged a building company and the applicant played no part in the planning, although he did provide help with reading and understanding letters from the building company from time to time.

14. In April 2006 the applicant travelled to the (country omitted).  He said he invited the respondent to come with him but she declined because she could not take time off work and did not like long haul flights.  The respondent said the applicant did not invite her but she asked if she could go with him when he said he was going to visit his parents as she wanted to meet them.  She said he told her that if she came she would have to stay with her brother and not with him at his parents’ home.  She said she obtained the necessary travel documents but when she rang the applicant to tell him, he told her that he was already at the airport.  She was hurt and took that as another sign that he felt no desire for a deeper relationship with her.

15. In August 2006 the applicant applied for a job in Western Australia.  The respondent was unaware of that until these proceedings commenced.  She said she was aware that he went on a six-week holiday to Western Australia at around that time and did not invite her. She said he attended the Christmas party held for her (business omitted) staff in 2006 but did not stay to spend Christmas with her.

16. In August 2007 the applicant obtained a job with the (employer omitted) in Canberra and resigned from his employment in Sydney.  The respondent again agreed to the applicant staying in her home until he moved into an apartment he had arranged to lease in (omitted).  She was still living in the apartment in (omitted) at the time, pending completion of the new home in Property G. The letter from the (employer omitted) offering the applicant the position is dated 27 August 2007.  On 25 September 2007 the applicant advised the NSW RTA that his residential address was in (omitted), NSW.  On the strength of that document the applicant conceded during cross examination that he had moved to (omitted) within a month of moving back to the ACT.

17. The parties’ sexual relationship resumed when the applicant stayed with the respondent in September 2007.  The respondent became pregnant.  She said she hoped this would be the beginning of a more serious relationship between the parties but when she told the applicant he said he was not ready for commitment and continued to make arrangements to move into his flat at (omitted).  She said he later told her that he had met another woman who also moved into the flat.  The respondent said she felt heartbroken and unsupported by the applicant and terminated the pregnancy.  She said this was a particularly distressing episode as the termination was contrary to her (religion omitted) principles.

18. During cross examination the applicant agreed he had a sexual relationship with another woman when he was living in (omitted).  He said he was quite open about it with the respondent.  He said he was simply confused about what he wanted at the time.  He asserted that this did not mean he was not in a de facto relationship with the respondent. Although exclusivity is not a requirement for a finding of the existence of a de facto relationship, I found the evidence of what occurred when the applicant returned to the Canberra district in August 2007 to be very persuasive of there being no de facto relationship between the parties at the time. 

19. In March 2008 the wife had an operation to remove an ovarian cyst.  There were some complications and she became very unwell after the surgery.  Her former husband assisted her with cooking, cleaning and taking care of the children.  The applicant visited her while she was recovering.

20. The applicant said that the illness of the respondent caused him to realise how important she was to him and that he wanted to commit to his relationship with her.  In April 2008 the parties went on a holiday together to (omitted).  The respondent said she still regarded the relationship as one of friends at that time.  She said they slept in separate beds and they had no sexual relations.  However, soon after the trip to (omitted) the applicant asked if he could move back into her home and live with her and the children.  She agreed and the applicant terminated his lease on the flat in (omitted).  The parties then began living together on a genuine domestic basis. The applicant received a refund of his bond for the (omitted) property in June 2008 which suggests he was living in (omitted) until about May 2008.  At one point during cross examination he conceded that was likely. At another point he said he thought he left earlier, in about March 2008, and that the flat was vacant for some time after he moved out.

1. Throughout the proceedings the applicant maintained that the de facto relationship of the parties began in 2003. He relied on the evidence of his parents, both of whom swore affidavits which were filed on 4 June 2015.  They both said that not long after their son returned to Australia from the (country omitted) in 2003 he told them that he had met a woman named Ms L at a (omitted). They said their son spoke about Ms L many times over subsequent years but it was not until they travelled to Australia in October 2008 that they finally met her. They stayed with the parties in the Property G property. They both said that the parties acted like a married couple, were affectionate with one another and shared the same bed during their visit.  Given the parties agree they were in a de facto relationship at the time of the visit in October 2008, the evidence of the applicant’s parents is not probative about when the de facto relationship began.

2. The applicant’s father said he remembered the respondent telephoning him and his wife from Australia in a very distressed state when she was pregnant with the applicant’s child.  This adds weight to the respondent’s evidence that she was rejected by the applicant and that they were not in a de facto relationship at that time.

3. The applicant also relied on the evidence of Mr P, a friend of his who is an (occupation omitted).  In his affidavit filed on 17 November 2014 Mr P said at paragraph 4 “On or about 2003 I had a conversation with Mr Newland that he had commenced a live in relationship with the respondent Ms Rankin”.

4. During his oral evidence he said that he regularly flew to Canberra between early 2003 and late 2004.  He said he remembered going to lunch at a (omitted) with the parties in early 2003.  Mr P also said that he and his partner stayed overnight with the parties at their home in 2008 and had dinner at the respondent’s (business omitted).  Again, that does not assist as it is common ground the parties commenced a sexual relationship in early 2003 and that they lived together in 2008.

5. The only independent evidence which supports a finding that there was a de facto relationship between the parties before 2008 was the applicant’s nomination of the respondent as the sole beneficiary of his interest in (omitted) Super as early as 2006. A complete set of (omitted) Super statements for the period 1 January 2006 to 31 December 2009 and a single statement for the period 1 January 2012 to 30 June 2012 were tendered in evidence and became exhibit A14 the proceedings.  The respondent was nominated as the beneficiary in each of those statements.  The applicant’s interest in the fund increased from $6,980 in January 2006 to $35,790 in June 2012. The superannuation interest is modest but the nomination indicates at least a level of affection felt by the applicant for the respondent.  It certainly lends weight to the applicant’s evidence about the commencement of the de facto relationship.  However, the weight of the evidence against a finding of a de facto relationship before 2008 is significant and ultimately more persuasive.

6. I find that the parties entered into a de facto relationship in April or May 2008 when the applicant moved into the home of the respondent and they made a commitment to a shared life together.

7. In May 2008 the parties together purchased a farming property called “Property A” near (omitted), NSW.  I will return to the details of its purchase and operation in due course.

8. In January 2009 the applicant resigned from his job at the (employer omitted) and began working for the (employer omitted) in (omitted).  He resigned from the position in June 2009.  The respondent said the applicant told her he resigned because he did not like the job.

9. In June 2009 the respondent and her sister opened a new (business omitted) in (omitted).  The applicant said he saw an advertisement in the paper for a (business omitted) which would be given “to the right person” for no charge.  The applicant said he arranged to meet the owner of the (business omitted) and negotiated a five year lease at no cost.  He also said he resigned from his job in order to work full time in the (business omitted).  The respondent said the owner agreed to lease the (business omitted) to her and her sister at no cost because of their experience as (occupations omitted).  She said the applicant helped them read and understand the lease documents and helped in the set-up of the (business omitted).  She said he was able to assist because he was unemployed rather than the other way round.  She said she and her sister ultimately paid him a $10,000 lump sum for his assistance.  The applicant agreed he was paid that sum.

10. The applicant said he worked at the (business omitted) seven nights a week to establish the business.  A year later in mid-2010 the respondent and her sister gave the (omitted) (business omitted) to another sister, Ms K.  The applicant asserted that the respondent sold it to her sister for $80,000 but that is denied by both the respondent and her sisters and there is no evidence to support such a finding. The (business omitted) was ultimately unsuccessful and closed in January 2015.

11. In September 2009 the parties purchased a second farming property called “Property Y” which was close to (omitted).  I will return to the details shortly.

12. At the end of March 2010 the parties travelled with the respondent’s children and members of her extended family to (country omitted) and (country omitted) for the wedding of the respondent’s nephew.  The respondent said the trip was a disaster, during which the applicant told her he could see no future in their relationship.  She said she was utterly devastated.  Her evidence was corroborated by the evidence of her sisters and her children who each said the respondent became extremely distressed during the trip and told them the applicant had ended the relationship.  Their evidence was persuasive and not affected by cross examination.

13. The respondent said the parties ceased living together upon their return to Australia and agreed to associate only as business partners until the farming properties could be sold.  She said the applicant left a few personal possessions at her home and continued to use it as a postal address but only attended the premises on a couple of occasions after their return to Australia in April 2010.

14. The applicant denied the relationship ended on the (country omitted) trip.  He said the first part of the trip was enjoyable but he then got the flu and was sick for several days.  He said it was difficult for him to communicate as he does not speak (language omitted) and he felt bored and isolated.  He said that when the family returned to Sydney in April 2010 he went to the farm the following day and began planting crops.  He said the relationship remained intact.  He gave an unconvincing explanation for why the parties never lived together following their return from (country omitted).  He said the relationship had begun to deteriorate in mid-2010 and he had decided to go back to work full-time.  He said the respondent objected to him working as a (occupation omitted) which had been his plan so he began to look for positions as a (occupation omitted) in regional areas because they were hard to find in Canberra.  In July 2010 he began working four days a week at an (employer omitted) near (omitted), NSW, and on 3 December 2010 he began work for a health centre in (omitted), NSW.  He said that throughout this period he commuted back to Canberra each weekend.  That was disputed and his evidence about it was unconvincing.

15. In July 2010 the parties changed the business structure to a partnership with a new ABN. The respondent said this was to reflect the parties’ changed personal situation.

16. In October 2010 the respondent decided to buy a new car and the applicant helped her to locate one in Sydney.  The parties stayed together in a hotel in Sydney for one night.  The respondent said this was a one-off occurrence.

17. In February 2011 the respondent held a party at her home and invited the applicant.  She said she still held out some hope at that time that the relationship might be rekindled.  She said the applicant attended the party but did not stay and there was no reconciliation of the relationship.

18. In August 2010 and August 2011 the parties and members of the respondent’s extended family sold (omitted) at the (business omitted) and stayed overnight at Property A.  The applicant claimed that on both occasions the parties slept in the same bed and had sexual relations.  That was denied by the respondent who said they were simply engaged in a business venture and the respondent was paid $3,000 each time for his work.  The applicant said he was paid nothing for helping to sell (omitted) at the (business omitted) but I found the respondent’s evidence about that more persuasive than his.  The respondent said that on the weekend of the (business omitted) in August 2011 the applicant told her that he had a new girlfriend, Ms M, whom he later married.  She said he showed her and her sister a picture of Ms M and told them he had met her in early 2011.

19. The applicant insisted that the parties’ de facto relationship ended in late 2011.  He said he did not begin his relationship with Ms M until January 2012 and that they began living together in (omitted) in December 2012.  However he did not call Ms M to give evidence and I am prepared to draw the inference that her evidence would not have assisted him. 

20. In September 2011 the respondent commenced a relationship with Mr M.  Mr M moved into her Property G property in November 2011.  He and the respondent participated in a traditional (nationality omitted) wedding ceremony in (omitted) 2012.

21. The behaviour of the parties upon their return to Australia from (country omitted) in April 2010 was consistent with the relationship having ended at that time. 

22. I find the de facto relationship of the parties began in April or May 2008 and ended in April 2010. They enjoyed a friendship for a much longer period, commencing in about March 2003 and continuing until the end of 2011. Between March 2003 and the beginning of the de facto relationship in early 2008 they enjoyed an intermittent casual sexual relationship and lived together in the respondent’s house for about two months in early 2003. That did not amount to a de facto relationship within the meaning of section 4AA of the Family Law Act 1975 as until mid-2008, the parties had no shared finances, acquired no property together and there was no mutual commitment to a shared life.  The parties were good friends, enjoyed each other’s company and provided practical and emotional assistance to each other when sought.  The lack of mutual commitment to a shared life was clearly demonstrated by the applicant’s rejection of the respondent when she was pregnant with his child in (omitted) 2007 and his pursuit of another relationship at that time. I am well satisfied on the evidence that the parties separated in (country omitted) in April 2010.

The parties’ property interests

1. The applicant said that when the parties met in July 2003 he owned a car worth $6,000, furniture worth $2,000, superannuation with a value of $2,000 and savings of $15,000.  If he is correct, the value of all of his assets amounted to $25,000.  At the same time he estimated the respondent’s assets were worth $790,000.[5]

   [5] Affidavit of applicant filed 4 June 2015 at paragraph 31 and 32

2. The respondent owned the Property G property which was unencumbered.  She had an interest in two real properties in (omitted), NSW, and owned the “(business omitted)” (business omitted) in (omitted) in partnership with her sister, Ms S.  She was also the sole director and shareholder of a company, (business omitted) which owned a property in (omitted), NSW.  The property was subject to a mortgage and was tenanted.

3. In December 2003 the respondent bought a property in Brisbane for $199,000.  The applicant made no financial contribution to the property but said he assisted the respondent by researching similar properties to compare prices and negotiated with the real estate agent about the price on behalf of the respondent.  That was denied by the respondent who said the applicant had nothing to do with the purchase.   

4. In January 2004 the respondent bought a unit in (omitted) for $140,000. The applicant made no financial contribution to the purchase.  He said he assisted the respondent by researching similar properties and assured the respondent that it was a bargain.  The applicant denied that. She said she bought the property directly from her friend, Mr R (“Mr R”) whom she had known since 1999.  She sold one of the properties she owned in (omitted), NSW, to fund the purchase.

5. In February 2008 the respondent purchased a unit in Property H.  The applicant made no contribution to that property.

6. When the parties were in (country omitted) in April 2010 the respondent bought some property.  The applicant said he encouraged the respondent to buy it, telling her he would buy it if she didn’t. He made no financial contribution to its purchase.

The farming properties

1. When the parties’ de facto relationship began in 2008, the applicant told the respondent he wanted to buy a farming property near (omitted), New South Wales, called “Property A”.  He told her he could not afford to buy it alone as the bank was not prepared to lend him sufficient funds.  The respondent agreed to invest in the property with him. 

2. Property A was purchased in joint names in May 2008 for $270,000.  The applicant paid $7,000 towards the deposit of $27,000 and the respondent paid $20,000. Settlement occurred on 25 August 2008.  Stamp duty and legal costs amounted to $9,575 and were paid by the respondent.  To pay the balance of the purchase price the respondent borrowed $258,000 from her company, (business omitted).  The company in turn borrowed the funds from (omitted) Bank, extending the existing mortgage in relation to the Property L property. The amount borrowed by the applicant was more than what was required to complete the purchase. The evidence about how the small excess ($5,430) was used is not clear.  The applicant said he took out a personal loan of $20,000 from which he used $7,000 for the deposit and the rest for start-up costs.  I accept there were a number of business start-up costs and that the extra money borrowed by both parties was used to pay them. 

3. The respondent’s initial out of pocket expenses of $29,575 were borne by her alone.  The parties each made repayments of $1,000 per month towards the respondent’s (omitted) Bank loan.  The applicant repaid his $20,000 loan from his salary and from the $10,000 lump sum payment he received for working in the (omitted) (business omitted).  

4. In June 2008 the applicant obtained an Australian Business Number (ABN) and registered as a sole trader conducting a business called “(business omitted)”.

5. In July 2008 the parties furnished the house on Property A with surplus furniture from the respondent’s Property G property and some items bought specifically for Property A.  The applicant did not challenge the respondent’s evidence that she paid $9,300 to furnish the property.

6. In April 2009 the parties agreed to refinance the respondent’s (omitted Bank) loan.  They borrowed in joint names a total of $300,000 from the (omitted) Bank comprising a standard loan of $250,000 and an offset loan of $50,000.  The funds were used to pay out the respondent’s loan and to buy farming equipment.  The offset loan was then used as the operating account for the farm business.  Both loans were secured by the respondent’s unit in Property H.

7. It is common ground that the applicant had full control of the farming accounts.  He operated the accounts through Internet banking and a cheque-book.  The respondent made no withdrawals from any of the accounts until February 2013, well after the parties had separated.  The applicant transferred money from the respondent’s personal accounts to the (omitted) Bank loan account.  He also sometimes transferred money from the respondent’s accounts into his personal (omitted) Bank account.  I will return to that issue later.

8. During 2009 the respondent borrowed $20,000 to purchase a (omitted) Wheel Loader for the farm. She borrowed the funds from what she called the “community pool share” which is some form of credit arrangement operating in the (country omitted) community.  She repaid the loan over two years from her own funds. She also paid for eight crop bins at a cost of $7,000 and paid $6,000 for the purchase of a Toyota (omitted) for the applicant.

9. In August 2009 the parties decided to purchase the second farming property, Property Y.  They signed the contract on 3 November 2009 and settlement occurred on 10 February 2010.  The purchase price was $400,000.  Stamp duty and legal costs amounted to $14,655.  The parties paid the deposit of $100,000 from the (omitted) Bank offset account but, to enable that to occur, the respondent made a series of deposits totalling $99,600 over the three month period between August 2009 and 3 November 2009.  Of the amounts deposited by the respondent into the offset account, $64,000 was borrowed from her brother in law, Mr P. 

10. In addition, the respondent paid $50,000 from her own funds into the conveyancing solicitor’s trust account. She then sold her Brisbane property and put the entire net proceeds of $266,933 towards the purchase of Property Y.  The parties increased their (omitted) Bank loan and repaid the $64,000 to the respondent’s brother in law. The total net contribution by the respondent to the purchase of Property Y therefore was as follows:

    Deposit   $    99,600

    Payment into trust account                          50,000

    Sale proceeds from Qld property           266,933

    Total     416,533

    Less joint repayment to brother in law    64,000

    Total net payment   by respondent             352,533

1. In summary, the total cost of the purchase including stamp duty and legal fees was $414,655.  The respondent contributed $352,533 from her own funds and the parties jointly contributed $62,122 of borrowed funds.

2. Both farming properties were used to grow (omitted) but never made a profit.  When the parties ended their relationship in 2010 they agreed to sell the properties.

3. For the financial year ending 30 June 2009 the applicant declared a taxable loss as a sole trader of $14,429.  He was paid a tax refund of $8,170 which he paid into the joint offset account.

4. For the 2010 financial year the applicant declared a taxable loss as a sole trader of $23,068 resulting in a refund to him of $2,485.  The evidence is not clear about how those funds were used.

5. For the 2011 financial year the applicant declared a taxable loss as a sole trader of $9,122.  He received a refund of $15,627 which he paid into his personal (omitted) Bank account.

6. For the 2012 financial year the applicant filed an amended tax return declaring a taxable income of $42,844.  By this stage the business structure was a partnership. The applicant received a refund of $7,150.88 which he kept.  The respondent received no tax refund.

7. The Property A property was sold with settlement in August 2011.  The sale price was $320,000, an increase of $50,000 on what the parties paid for it three years earlier.  The net proceeds of sale were $306,075.  The parties paid $19,956 into the (omitted) Bank account on 6 September 2011 and the balance, $286,119, into the mortgage account for the respondent’s Property L property in NSW.[6]  At that time the Property L property was no longer securing the loan as it had been refinanced by the (omitted) Bank loan secured by the respondent’s Property H property. Counsel for the applicant submitted that by receiving the sum of $286,119 and the respondent received the benefit of the entire $50,000 “profit” attributable to appreciation in the value of the Property A property.  However the purported $50,000 profit only takes into account the sale price and ignores the other costs of acquisition and the setting up of the business which, as set out earlier, amounted to $279,575, reducing the profit to $40,425.  It also ignores the fact that $19,556 was paid into the (omitted) Bank account, further reducing the “profit” received by the respondent to $20,469.

   [6] The aide-mémoire relied upon during submissions on 18 December 2015 by counsel for the respondent refers to an amount of $284,986.79 but this appears to be an arithmetic error.

1. The applicant said he found out the respondent was in a new relationship in October 2011.  The following month he sold farm equipment without consulting the respondent.  He said he achieved $50,000 from the sale which he deposited into the parties’ joint (omitted) Bank account.

2. The applicant said that after the sale of Property A he still travelled to work on Property Y each month and sometimes fortnightly.  He then obtained a job with New South Wales Health in (omitted) which was much closer to the farm than his previous job at (omitted).

3. In January 2012 the parties agreed to sell Property Y.  In October 2012, one half of the property was sold for $300,000 with settlement on 8 January 2013.  The parties agreed to use the proceeds to pay down the (omitted) Bank loans.  The net proceeds of sale were 286,147.  The parties paid $19,857 into the (omitted) Bank offset loan account on 14 January 2013, reducing the balance to nil, and the remaining $266,290 into the (omitted) Bank loan account, reducing the balance to approximately $31,200.

4. Several attempts to sell the remaining portion of Property Y were unsuccessful.

5. Between 21 and 23 January 2013 the applicant withdrew a total of $30,000 from the joint loan account without consulting the respondent.  He said he used the money to purchase a caravan to live in on the property and machinery and materials to make improvements to the property to enhance the prospects of selling it.  He said the block had limited access and he wanted to build an access road.  He said that in November 2013 a real estate agent told him that the sale of the property had fallen through because of lack of access.  He said he spent $19,500 on the purchase and transport of a wheel loader for that purpose.  He never built the access road.  He said he sold the wheel loader for $10,000 in July 2014.

6. In late January or early February 2013, the respondent found out about the $30,000 withdrawn by the applicant from the loan account.  The loan was secured against her Property H property.  On 12 February 2013, in order to protect her interests, she withdrew all of the available funds from the loan account, being $238,000.  The applicant said he was shocked by that as he was jointly responsible for the loan.  He told the respondent he would make no further loan repayments.  All loan repayments from March 2013 were made by the respondent.

7. On 19 and 20 February 2013 the applicant electronically transferred a total of $20,000 from the joint offset loan account (which had not been closed) to his personal account.  Each transfer was labelled “Farm expenses” but the applicant conceded he used the funds to pay legal fees.

8. On 20 February 2013 the respondent deposited $19,655.67 into the offset account and closed it.  On 7 March 2013 she repaid $100,000 into the loan account on the basis of an agreement between the parties that they would withdraw no further funds from the joint account without the consent of the other.

9. In February 2013 the applicant purchased a house in (omitted), New South Wales for $69,000.  He said he borrowed money from the (omitted) Bank to purchase it.  During evidence he conceded that some of the money withdrawn from the parties’ joint account in early 2013 was put towards the deposit and other expenses associated with the purchase.

10. The parties’ business partnership was dissolved on 31 March 2013.  The applicant then registered a new business as a sole trader.

11. For the 2013 financial year the applicant filed a tax return in which he declared a taxable loss of $14,869 relating to the partnership and $9,328 relating to the business he operated as a sole trader.  He chose to roll over the loss.  His estimated refund for that year is $1,086.  The respondent is estimated to have a tax debt for that financial year of $1,543.

12. For the 2014 financial year the applicant declared a taxable loss of $12,777 as a sole proprietor.  He elected to roll over that loss to future tax years.

13. In February and June 2014 the applicant planted crops without advising the respondent.  The harvest in November 2014 yielded $20,762.  The applicant kept those funds.  He said they did not cover the farm losses for the previous two years.

14. On (omitted) 2013 the applicant’s wife, Ms M, gave birth to their son, A.  In August 2014 the applicant and Ms M purchased a house in (omitted) for $230,000.  The applicant sold the (omitted) property for $115,000 and put the net proceeds towards the purchase of the (omitted) property.

15. In May 2015 the remaining portion of Property Y sold for $210,000. Settlement occurred on 8 July 2015. The net proceeds of sale were $200,664.  That sum is held in the trust account of the conveyancing solicitors pending the outcome of these proceedings.  By the time of the trial the amount had increased slightly to $203,000 in round terms.

16. The total sale price for both parcels of Property Y property was $510,000 which is $110,000 more than the parties paid for it.

The witnesses and credibility issues

1. The respondent was a credible witness.  She gave her evidence in a straightforward and unaffected manner and conceded reasonably.

2. The applicant was less impressive.  He made several unsuccessful attempts to attack the character and credibility of the respondent.  As discussed earlier he said he found a petrol can in the respondent’s bedroom after the fire at the Property G property.  He suggested several times that the respondent had a gambling problem but there is no cogent evidence of that and, even if it were true, it has no relevance to the proceedings.  The respondent said she enjoys gambling and goes to gambling venues from time to time for fun.  I accept her evidence.

3. The applicant said that shortly after the respondent became pregnant in late 2007 she told him that she got drunk and had a miscarriage.  That was vehemently denied by the respondent.  There is no plausible evidence that the respondent ever consumes alcohol to excess.  The respondent gave evidence that she terminated the pregnancy after being rejected by the applicant.  It was cruel to suggest she caused her own miscarriage through alcohol abuse.

4. I am satisfied the applicant’s evidence on these topics was deliberately false and designed to undermine the respondent’s credibility.  It had the opposite effect as it had no impact on my assessment of the respondent’s credibility but it caused me to be more circumspect about the applicant’s evidence in general.  Whenever the evidence of the applicant and respondent are in direct conflict on relevant matters, I prefer the evidence of the respondent.

5. The respondent relied upon the evidence of her former husband, Mr L.  In all material respects Mr L’s evidence supported that of the respondent. This included evidence about his observations of the nature of the relationship between the parties, issues concerning the Property G fire and the extent to which the applicant worked in the (omitted) (business omitted) and cared for the children.

6. The credit of Mr L was attacked on two grounds.  The first concerned an application for public housing made by him in December 2004. Mr L conceded in cross-examination that the application form he signed at that time stated that he was living at an address in (omitted) which is the address of one of the respondent’s sisters but, in fact, he never lived there.  A certificate pursuant to section 128 of the Commonwealth Evidence Act was issued for Mr L and he was required to answer further questions on that issue.  Mr L said that he was interviewed by an officer from the Department of Housing who completed the form using the answers he gave.  The form declared that he had custody of his children, that they lived in a one room basement and that he and the children had to leave the accommodation as the children were too noisy.  He told the Housing officer that he was paying $150 a week rent but said in evidence that that was not true and that he was actually still living with the respondent in the Property G property at the time.  He said he felt it was important to move on with his life and obtain separate accommodation and, effectively, that he was prepared to say anything to the Department in order to obtain housing.  I agree that the effect of his evidence is that he deliberately made false representations to the Department or allowed the Departmental officer to make assumptions which were not correct and that he was dishonest in doing so.  I agree that undermines his credibility generally.  Interestingly, during the cross examination of the respondent’s son, counsel for the applicant suggested that what Mr L put on the Housing application form was, in fact, accurate in that he lived with the respondent’s sister when he came back from (omitted), New South Wales, rather than with the respondent and that his dishonesty was in telling the Court otherwise. I am unable to determine that issue on the evidence before me. Clearly Mr L was dishonest either in the evidence he gave to the court or the information he provided to the Department. Either way his general credibility is undermined. Notwithstanding that, I accept that he and the respondent maintained a close friendship and enjoyed a cooperative co-parenting arrangement. I found his evidence about the nature of the relationship between the parties persuasive.

7. The second ground on which Mr L’s credit was attacked was his purported indebtedness to the respondent.  In January 2008 Mr L remarried in (country omitted).  The respondent helped him to bring his new wife to Australia in 2009 by guaranteeing her financial support to an amount of $40,000.  It was put to him that he owed the respondent a debt of gratitude and was consequently prepared to lie for her.  That was denied and the argument was not persuasive.

8. The respondent relied on the evidence of other family members.  Her sister, Ms S, affirmed an affidavit filed on 2 December 2014.  She deposed that she had been in business with her sister for 20 years and that together they operated the (business omitted) in (omitted).  She said she met the applicant in 2003 as he was a regular customer to the (business omitted).  She said that, as the relationship between her sister and the applicant developed, the applicant assisted informally at the (business omitted) from time to time and received free meals each time he visited.  She said neither she nor her sister relied on the applicant’s availability as he usually came for meals rather than to work and they staffed the (business omitted) in the usual way regardless of whether or not they expected him.

9. Ms Rankin said the applicant assisted to a greater extent in 2009 when she and her sister opened the second (business omitted) in (omitted) at a time when the applicant was unemployed.  She said he assisted with setting up the (business omitted) and was paid $10,000 for his time and effort.

10. Ms Rankin said that she and the respondent found it difficult to operate both (businesses omitted) and decided after two years to give the (omitted) business to their sister, Ms K, to try to make it profitable.

11. Ms Rankin said the applicant helped her brother in law prepare a review of a decision concerning his application to migrate to Australia.  When the $1,400 fee was refunded, it was given to the applicant to thank him for his assistance.

12. Ms S was a credible witness.

13. Another of the respondent’s sisters, Ms K, also gave evidence.  There were some significant practical problems relating to her evidence. The first was that a (language omitted) interpreter had been organised rather than a (language omitted) interpreter.  Ms S could understand (language omitted) but when she responded in (language omitted) she was not understood by the interpreter.  The exercise was abandoned and a (language omitted) interpreter was organised to assist by telephone.  That was less than ideal but enabled cross examination of the witness to proceed.

14. Ms S affirmed an affidavit on 1 December 2014 and another on 26 June 2015.  Nothing in the jurat of either affidavit suggests that an interpreter was used to assist in the preparation or affirming of the evidence.  Ms S said that she prepared her own statements in (language omitted) which were translated into English by one or more of her children and, when they had any difficulty, they called on Ms N, the daughter of the respondent, to assist and to “polish” the statement before giving it to the respondent’s lawyers. If that is so, it is most inappropriate given Ms N was also a witness in the proceedings.  The issue was seized upon by counsel for the applicant to attack the credibility of Ms S and Ms N.  When N gave evidence she said she checked her aunt’s document for grammatical errors only and made no change of substance to the statement.  In my view criticism should not be directed at Ms S or Ms N both of whom I accept were doing their best to assist the process.  The responsibility lay with the respondent’s solicitors who should have closely supervised the production of the affidavits in circumstances in which it is obvious that Ms S lacked sufficient English language skills to affirm the affidavits without an interpreter.  Ms S was asked whether an interpreter was provided when she met with the solicitor to sign the affidavit.  She said she took a friend with her to be a translator.  Clearly that was inadequate.

15. Ms S said in her first affidavit that the respondent sponsored her migration to Australia in 2008.  Upon her arrival she worked in the (business omitted) owned by her sisters.  She said she and her husband were very grateful for the respondent’s help and, in gratitude, her husband built a retaining wall at the respondent’s rebuilt home in Property G and laid garden pavers for her.  She said she recalled the applicant attending the property while the pavers were being laid and someone took a photo of him holding a paving brick.  She said she thought it was funny at the time.  However, during cross examination Ms S said she had no recollection of seeing the applicant on the day the pavers were laid.  She said the description she gave in her affidavit about how the photograph came about was her guessing or imagining how it might have happened.

16. Ms S deposed that when she worked in the (business omitted) she rarely saw the applicant.  She said that when he did come to the (business omitted) he would order a meal, chat with the family and then leave.

17. Ms S said that she and her husband travelled to the farm owned by the parties on numerous weekends to help with the farm work and often took their children with them.  She said there was usually at least one other family member in attendance who had come to work on the farm.  She said they were happy to assist as that is what family members do for each other.

18. Ms S said she was present on the holiday in (country omitted) when the parties separated.  She said she recalled the applicant stayed in the bedroom for much of the holiday and, halfway through the holiday her sister became extremely upset and told her that the applicant had ended their relationship.  She said as soon as the holiday was over the applicant moved to the farm.

19. Ms S assisted the parties sell (omitted) at the (business omitted) for several years, the last occasion being in August 2011.  She said she recalled the applicant showing her a photo of his new partner, Ms M, whom he said he had been dating since the end of 2010.

20. Ms S said that in July 2011 her two sisters, the respondent and Ms S, gave her the (business omitted) in (omitted) to run.  It was put to her in cross-examination that she paid $80,000 to the respondent for the business but she denied that.  She said she and her husband only opened the (business omitted) at night and worked elsewhere during the day.  She said the business was very quiet and was not trading well enough to continue the lease after it expired in January 2015. She said that, at that time, they simply closed the business and did not sell it.  It was put to her that the applicant worked in the (business omitted) for the first 12 months after it opened in June 2009.  Ms S said she was unable to comment on that as she was working at that time at the (omitted) (business omitted).

21. Ms S was asked about financial arrangements between her and the respondent.  She said that when she came to Australia in 2008 she brought with her $20,000 which he gave to the respondent to mind.  She said she then arranged for friends to bring other lump sums to Australia amounting in total to $120,000 which she asked the respondent to keep for her.  She said the source of the money was an inheritance of more than $1 million she and her sisters received from their parents.

22. Ms S said the respondent returned $120,000 to her in November or December 2013.  It was put to her that the money actually belonged to the respondent who also gave her $390,000 for the purchase of a property.  Ms S insisted that the $120,000 was hers and that she borrowed $380,000 from a bank to build a house.  She was asked why she borrowed the money in March 2014 when no house had been built by the time she gave evidence in September 2015. She was unable to satisfactorily explain that situation.

23. Counsel for the respondent ultimately sought to withdraw the evidence of Ms S given its poor quality.  However, counsel for the applicant sought to rely on that evidence and the manner in which it was given, submitting that it amounted to collusion and dishonesty on the part of the respondent and members of her family.  Given the difficulty the witness had with understanding the questions, the circumstances in which affidavits were prepared and the confusing nature of her evidence generally, I am not prepared to make a finding that Ms S was deliberately dishonest.  However, her evidence was most unsatisfactory and ultimately assisted neither party.

24. Both adult children of the respondent gave evidence.  Ms N was an impressive witness.  She was careful and considerate in her answers.  She denied giving any false evidence or influencing her aunt’s evidence in any way.

25. Mr T was also a credible witness although his presentation was much more reticent than his sister.  He said he remembered that the applicant took him on one occasion to the farm and, on another occasion took him and his cousin to the farm without any other adults.  To some extent this corroborated the applicant’s evidence that he had a caring role in relation to the children during the relationship.

26. Mr T said that he is currently working in the (employer omitted) and doing a (omitted) apprenticeship at his mother’s (business omitted).  He said he has been told he can take over the business in the future as long as he works hard at it.

27. Both Ms N and Mr T described an ambivalent relationship with the applicant whom they described as being in and out of their home at various times.  Neither spoke positively of him.  Both denied he had any significant role in their care including during the period of the de facto relationship from 2008 to 2010.  Their evidence, while credible, was not ultimately significant in my determination.

28. All of the witnesses called by the applicant were credible but, as discussed earlier, were unable to offer evidence probative of the issues in dispute.

Law in relation to de facto property settlement

1. Section 90SM of the Family Law Act 1975 empowers the Court to make orders altering the property interests of the parties to a de facto relationship if it is satisfied that in the circumstances of the case it is just and equitable to do so.[7]  To enliven the jurisdiction, the court must be satisfied that the length of the de facto relationship was at least two years or that there is a child of the relationship or that the applicant made substantial contributions to relevant property and a failure to make an order or declaration would result in serious injustice to them. [8]

   [7] Section 90SM(3)

   [8] Section 90SB Family Law Act 1975

2. As discussed, there was a significant dispute about the length of the parties’ de facto relationship. Section 4AA of the Family Law Act provides a definition of de facto relationship which includes the notion of a couple living together on a genuine domestic basis. The parties were friends from 2003 until 2010. Until 2008 they were also occasional lovers but there were months where they had no contact at all. Until 2008 there was no mutual commitment to a shared life, no financial dependence or interdependence and the parties owned no property together. All of that changed in 2008 when the parties made a commitment to a shared life, began living together in the respondent’s home on a genuine domestic basis and bought the farming properties together.

1. The precise length of the de facto relationship is not clear. It began in April or May 2008 and ended in April 2010.  The respondent took no jurisdictional issue concerning the length of the relationship and I am prepared to accept that the relationship lasted for two years.

2. Once the parties separated they no longer enjoyed the joint use of their property and each seeks an order altering their interests in it.  I am satisfied that it would be just and equitable for that to occur.

3. The first step in altering the parties’ property interests is to identify their respective legal and equitable interests.  There is no dispute about the value of most of those interests which are set out in the table below.  There was a dispute about the value of the property owned by the respondent in (country omitted), the value of her two cars and the amounts she claimed to owe to family members.  Ultimately, for reasons which will become clear, those matters will not affect my determination.  For the purpose of the exercise I have adopted the values asserted by the applicant and, for the amounts the respondent said she owed to family members, I have adopted the amounts asserted by her.

Applicant’s assets:	$
Property D (50%)	115,000
Contents	7,000
Total	122,000
Applicant’s liabilities:
(omitted) Bank Loan –Property D (50%)	104,000
(omitted) MasterCard	8,100
Total	112,100
Applicant’s net assets	9,900
Respondent’s assets:
Property G	900,000
Property L	677,000
Property W	210,000
Property H	420,000
(country omitted) properties	E150,000
(business omitted) (50% share)	75,000
Mercedes Benz	44,000
Honda (omitted)	6,000
Cash Savings	600,000
“Investment”	98,000
Contents	7,000
Total	3,187,000

Respondent’s liabilities:
Property L loan	70,250
Car loan	30,000
Debt to Mr M	25,000
Debt to Ms S	25,000
Debt to Ms K & Ms Y	380,000
(omitted) MasterCard	1,400
Total	531,650
Respondent’s net assets	2,655,350
Joint assets:
Proceeds of Sale of Property Y	203,000
Joint liabilities:
(omitted) Bank loan secured by Property H	193,514
Total net combined assets	9,486
Superannuation:
Applicant	62,602
Respondent	52,000
Total superannuation	114,602
Total combined assets and superannuation	2,789,338

1. In determining what specific orders should be made, the Court must have regard to the following:

   a)First, the contributions of the parties to the acquisition, conservation or improvement of the property and to the welfare of the family as provided in subsections 90SM(4)(a),(b) and (c) of the Family Law Act; and

   b)Secondly, the matters set out in the remaining subsections of 90SM(4) which incorporate section 90SF(3) of the Act. Those matters broadly require a consideration of the financial position and resources of the parties; their age and state of health; their necessary commitments in supporting themselves or any other person; and the effect of the relationship or of any proposed order on the earning capacity of either party.

“Global” versus “asset by asset” approach to contributions

1. Counsel for the respondent argued that, in determining the division of property, an asset by asset approach was preferable as most of the assets were owned by the respondent alone prior to the relationship and the applicant made no contribution to them.  The applicant argued that he made various non-financial contributions to the acquisition, preservation and improvement of the respondent’s property and to the welfare of the family and that, in those circumstances, a global approach to the assessment of contributions was more appropriate. 

2. In Norbis v Norbis (1986) FLC 91-712 the High Court of Australia considered the two approaches. Mason CJ and Deane J made the following observations (referring to the equivalent legislative provisions applicable to property division following the breakdown of a marriage):

   Although it is natural to assess financial contributions under sec.79(4)(a) by reference to individual assets, it is also natural to assess the contributions of a spouse as homemaker and parent either by reference to the whole of the parties’ property or to some part of that property. For ease of comparison and calculation it will be convenient in assessing the overall contributions of the parties at some stage to place the two types of contribution on the same basis, i.e. on a global or, alternatively, on an “asset-by-asset” basis. Which of the two approaches is the more convenient will depend on the circumstances of the particular case. However, there is much to be said for the view that in most cases the global approach is the more convenient.[9]

   [9] At page 75,168

3. In their joint judgment, Wilson and Dawson JJ commented that the global approach required no more than identifying all of the property interests of the parties and assessing their value before assessing whether any alteration of those interests should be made having regard to the provisions of section 79(4) and section 75(2). Their Honours commented that the global approach does not preclude individual assets being treated differently in the ultimate property division. They further commented as follows:

   If the parties’ interests in specific items of property differ or they have made differing contributions, it may be desirable to proceed upon an item by item basis in the division of the property between them. In such a case, justice and equity may best be served by treating the item separately for the purpose of determining the proportions in which they are to be divided, particularly if the overall division is to be affected by the transfer or retention of interests in individual assets, as was convenient in this case. It is true, as Nygh J. pointed out, that where this is done, at the end of the exercise a calculation of the overall proportions in which the total property has been divided may serve as a useful check to ensure that the result is not disproportionate as a whole.[10]

   [10] Norbis v Norbis (1986) FLC 91-712 at pages 75,173 to 75,174

4. In this case the de facto relationship was of very short duration, being barely two years.  During the relationship the parties inter-mingled their financial affairs only to the extent that they entered into joint loans to purchase the farms.  Otherwise they kept their finances entirely separate.  During the relationship the respondent permitted the applicant to operate her accounts.  The applicant benefited from that but made no contribution to the accounts.

5. The Full Court of the Family Court upheld an asset by asset approach in McMahon and McMahon (1995) FLC 92-606 in which Nicholson CJ, Ellis and Buckley JJ commented:

   The short duration of and the unhappy nature of the marriage, coupled with the parties’ strict division of assets and their method of dealing with them lent itself to an asset-by-asset approach, particularly where they had separately identified another group of assets as joint.[11]

   [11] McMahon and McMahon (1995) FLC 92-606 at page 82,043

6. Similarly in the current case, the relationship was of short duration, the parties each retained ownership of the property they had at the beginning of the relationship and the joint assets were separate and clearly identifiable.  Besides from the joint assets, neither party made any direct financial contribution to the assets of the other, apart from the respondent buying the applicant a car.  In those circumstances I am satisfied that an assessment of the contributions on an asset by asset basis is appropriate.

7. The applicant claimed that he made contributions to the acquisition, preservation and improvement of the respondent’s assets. He claimed credit for encouraging the respondent to buy real property in Brisbane in December 2003, in (omitted) in January 2004 and in (country omitted) in April 2010. The respondent denied the applicant had anything to do with her decision to purchase the properties but, even if true, his encouragement is not a meaningful contribution for the purposes of subsection 90SM(4).

8. The respondent claimed he contributed to an increase in the value of the respondent’s Property G property by helping to install paving in July 2008 and by installing new turf at the front of the house in October 2008 in preparation for a house warming party later that month.  Even if he is correct on both counts, it is a de minimus argument.  There is no evidence about the value of his labour on those occasions or about any increase in the value of the home as a result of it.  It would in any case seem to be a reasonable contribution on his part in recognition of the fact that he lived rent-free in the property for the whole of the relationship and for additional periods in 2004 and 2007, prior to the de facto relationship.

9. The applicant relied on contributions he made during the de facto relationship by attending to the parties’ domestic administration.  He said he organised and paid for life insurance, health insurance, home and contents insurance and car insurance.  He said he also paid bills for the respondent’s (business omitted).  However, all of the funds used to pay those bills were provided by the respondent.

10. The applicant claimed he made indirect financial contributions to the respondent’s (business omitted) in (omitted) .  He said he worked at the (business omitted) on Friday and Saturday of most weeks throughout the relationship, often doing (duties omitted).  I accept his evidence that he regularly attended the (business omitted).  However I also accept the evidence of the respondent and her sister, Ms S, that the applicant’s involvement made no difference to the business as the (business omitted) was fully staffed without reliance on him as he attended the (business omitted) for meals and for company as it suited him and he voluntarily assisted while in attendance if he chose.

11. The applicant said he made a major contribution to the (omitted) (business omitted) by consulting with the landlord about the inventory and conditions of the lease, by helping with the set-up of the (business omitted) and by working in it.  I am satisfied on the evidence that there was little to negotiate in relation to the inventory as the previous business had also been a (business omitted); that the applicant assisted with reading and understanding the lease documents and that he helped to set up the (business omitted).  I also accept that he assisted by (duties omitted).  He clearly contributed to this business venture.  However, he was paid $10,000 for his efforts, the (business omitted) was unsuccessful and was closed, and no part of the current property pool is attributable to it.

12. The applicant argued that he made contributions to the welfare of the family through his care of the respondent’s children.  He said that, although he was working full-time, he cared for them each evening while the respondent was working in the (business omitted).  He said he regularly collected them from school and encouraged their development.  The respondent’s children are not children of the de facto relationship and his care of them, therefore, is not relevant for the purpose of subsection 90SM(4)(c).  However, it could be relevant under subsection 90SF(3)(r) as a fact or circumstance which the justice of the case requires to be taken into account.  The respondent denied the applicant cared for the children other than to occasionally help them with particular tasks.  For example she said the applicant assisted her daughter with her college enrolment for which she was grateful but had very little involvement with the day-to-day care of the children.  She gave detailed evidence about the care arrangements for the children which did not involve the applicant. Her evidence was supported by her former husband and her sister, Ms S.

13. I accept the applicant was involved with the respondent’s children to some extent when he stayed in the respondent’s home in 2004 and 2007 and during the two years of the de facto relationship.  It is clear from the evidence of Mr T, for instance, that the respondent took him to Property A for a weekend on two occasions without the respondent.  However, the evidence as a whole suggests the involvement of the applicant in the care of the respondent’s children was limited.  This is reinforced by the written submissions of counsel for the applicant which, amongst other things, relied on a single instance of the applicant taking Ms N to a movie and a separate single instance of the applicant taking both children out to dinner and a movie.

14. I am not satisfied on the evidence that the applicant’s care of the respondents children constitutes a relevant contribution for the purposes of subsection 90SM(4) or a relevant factor pursuant to subsection 90SF(3)(r).

15. The applicant claimed he also made a contribution to the welfare of the family constituted by the parties by undertaking the majority of the household cleaning and cooking.  This was denied by the respondent and is inconsistent with the applicant’s evidence that, apart from his paid employment, he spent most of his spare time working on the farms. However, the evidence is insufficient for me to make a clear finding one way or the other.

16. I am satisfied on the evidence that no adjustment to the individual property interests of the respondent is warranted on account of contributions made by the applicant during the two-year relationship.

17. The respondent made no claim on any of the applicant’s property.

18. Turning to the joint assets of the parties, it is common ground that the overwhelming financial contribution to those assets was made by the respondent.  During the relationship she worked work full time in her (business omitted).  She drew on her assets to finance the purchase and operation of the farms.  She also worked on the farms from time to time.

19. The applicant was engaged in off farm full-time work until June 2009. In July 2010 he commenced working four days a week.  He worked at the farm on weekends and holidays.  Between June 2009 and July 2010 he worked on the farms and in the (omitted) (business omitted) and was otherwise financially supported by the respondent.

20. Although the assessment of contributions should not be a mathematical exercise, given the short duration of the relationship it is instructive to look in some detail at the financial contributions of the parties to the joint assets.

21. To purchase Property A and set up the business the respondent paid $29,575 in cash and borrowed $258,000 which was repaid from joint resources. The applicant contributed $20,000.

22. In addition, the respondent paid $9,300 to furnish the property and paid for a wheel loader, crop bins and a car for the applicant. 

23. The cost of acquisition of Property Y in February 2010 was $414,655.  As set out earlier the respondent contributed the sum of $352,533 and the balance of $62,122 came from jointly borrowed funds.  The applicant made no separate contribution to the purchase of Property Y.

24. In September 2011 the respondent received the net proceeds of sale of Property A, being the sum of $286,119.

25. The net financial contributions made solely by the respondent therefore are as follows:

    Deposit and purchase costs for Property A                 $   29,575

    Household furnishings for Property A   9,300

    Wheel loader   20,000

    Crop bins7,000

    Car for applicant    6,000

    Net contribution to purchase of Property Y       352,533

    Total424,408

    Less proceeds of sale of Property A  286,119

    Net financial contributions  by the respondent           138,289

26. After separation the applicant withdrew $50,000 from the joint accounts and the respondent withdrew $238,000.  The respondent subsequently repaid $119,656, leaving net funds withdrawn by her of $118,344.  Offsetting that against the financial contributions of $138,289 means that she made net contributions to the parties’ joint assets of $18,871.

27. In addition to the $50,000 he withdrew after separation the applicant received tax refunds of $15,627 in 2011 and $7,151 in 2012, both of which he retained and both of which arose from joint business losses.  The combined value of the cash he withdrew from the joint accounts and the post separation tax refunds is $72,778.  Subtracting the $20,000 he contributed to Property A results in a net benefit to the applicant from the joint venture of nearly $53,000.  He also carried forward losses from the 2013 and 2014 financial years from which he will benefit in the future.

28. In summary, at the end of the relationship the applicant received cash of almost $53,000 and future tax benefits.  The respondent recovered all but $19,000 (in round terms) of the contributions she made to the joint assets.  In broad brush and colloquial terms the applicant can be seen as leaving the relationship $72,000 “ahead” of the respondent.

29. In addition to her direct financial contributions, from August 2008 until April 2009 the respondent bore the full risk of the $258,000 loan as it was in her name and secured against her Property L property.  The loan was refinanced in joint names with (omitted) Bank in April 2009 but, even then, the respondent bore the greater risk as the loan was secured against her Property H property until the sale of the first parcel of Property Y in January 2013.

30. Apart from the $50,000 withdrawn by the applicant from the joint accounts in early 2013, the applicant transferred a total amount of $23,285 from the parties’ joint accounts into his personal accounts between 26 May 2009 and 8 April 2011.  Between 18 December 2011 and 6 May 2012 he withdrew $5,500 in cash from the joint accounts. Between 21 July 2009 and 13 February 2015 he transferred $27,965.75 from the parties’ joint accounts to his credit card.  He said many of the purchases he made on his credit card were related to the farming business but conceded some were for personal expenses.

31. The weight of the respondent’s financial contributions is offset to some extent by the physical labour contributed by the applicant to the farming properties, his management of the farming business and the financial contributions he made from his salary to repayment of the loan and other expenses associated with the farms.  However the respondent also made loan repayments throughout the relationship and post-separation.

32. The only asset left to divide comprises the net proceeds of sale from the second parcel of Property Y.  The sum of $203,000 is held on trust for the parties by the conveyancing solicitors.  The balance of the parties’ joint loan was $193,514 at the time the trial, leaving net funds of $9,486.  Clearly, the protracted litigation and the funds expended on it were grossly disproportionate. 

33. Neither party sought any alteration to the modest superannuation interests.

34. Given the very small value of the remaining asset and the history of financial contributions by the respondent, without which the joint assets could not have been purchased, the only just and equitable course is for the entire sum to go to the respondent on account of contributions.

Section 90SF(3) factors

1. The applicant is aged 58.  At the time of the trial he was working as a (occupation omitted) at a (employer omitted) in (omitted) and earning $82,299 per year.  He stated he was in good health apart from suffering from stress.  His wife was engaged in the full-time care of their son.

2. The applicant has assets with a value of less than $10,000.  He has few financial resources. At the time of the trial he had superannuation interests of $62,602.  He has responsibility for the financial support of his wife and child.  The financial circumstances and employment prospects of his wife are not known.  However, there is no evidence to suggest that the applicant is unable to adequately support himself and his dependants.

3. The respondent is aged 50. She is in good health. She has significant assets.  She married Mr M in (omitted) 2012.  Mr M is a permanent resident of Australia.  Until his retirement in July 2014 he was a member of the (omitted) and employed as an (occupation omitted) in the (employer omitted) in Canberra.  There is no direct evidence about his financial circumstances but he deposed to having renovated the respondent’s (business omitted) in (omitted) in 2012 as a gift to her.  I infer from that that he is financially comfortable.

1. The respondent clearly has vastly superior assets and financial resources to those of the applicant.  However, the disparity is not the result of anything that occurred during the parties’ relationship.  In my view none of the subsection 90SF(3) factors warrants an adjustment to the property distribution reached on the basis of contributions.

2. The applicant argued that a global approach ought to be taken in relation to the property division and that he should receive a distribution equal to 25 per cent of the combined asset pool.  His counsel submitted that his contributions warranted a 20 per cent adjustment to him with a further 5 per cent on account of the subsection 90SF(3) factors, given the great disparity in the financial circumstances of the parties.  That result would require a cash payment by the respondent to the applicant of about $800,000.

3. I reject those submissions.  There must be a principled basis for any alteration to the property interests of the parties.  A vast difference in the financial circumstances of the parties alone does not justify the transfer of property from one to the other.  For the reasons already given, I am satisfied that the only alteration of property should occur in relation to the joint assets.  I am also satisfied the respondent taking the one remaining asset is a just and equitable property distribution in the circumstances.

4. The funds held in the solicitor’s trust account will be allocated to the respondent and she will have responsibility to discharge the remaining (omitted) Bank loan in the parties’ joint names.  The balance of the funds after payment of the loan may be slightly more than $9,486 because the funds may have earned some interest and the respondent may have continued to make some payment towards the loan.  However, given the current low level of interest rates, any increase will be small and any reduction in the principle will reflect contributions by the respondent alone.  Neither of those factors affect my decision.

I certify that the preceding one hundred and seventy (170) paragraphs are a true copy of the reasons for judgment of Judge Hughes

Date:  9 February 2017