Poulos v Svoboda

[2005] NSWSC 364

Reported Decision: (2005) DFC 95-320

New South Wales

Supreme Court

CITATION:	Poulos v Svoboda [2005] NSWSC 364
HEARING DATE(S):	18/04/05 and 19/04/05
JUDGMENT DATE :	13 May 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	Master Macready
DECISION:	See para 71 and 72

CATCHWORDS:	Equity - specific performance - whether agreement entered into as a result of economic duress - whether plaintiff ready, willing and able to perform agreement for purchase - specific performance refused. - Family law - application under Property (Relationships) Act 1984 for adjustment of parties property interests - consideration of classification of funds provided by parents of a party - orders for adjustment.
LEGISLATION CITED:	Contracts Review Act Family Law Act 1975 (Cth) Property (Relationships) Act 1984
CASES CITED:	Cockerill v Westpac Banking Corporation (1996) 142 ALR 227 Codelfa Constructions Pty Ltd v State Rail Authority of NSW [1981-1982] 149 CLR 347 Commercial Bank of Australia v Amadio (1983) 151 CLR 447 Crescendo Management Pty Ltd v Westpac Banking Corporation (1998) 19 NSWLR 40 Green v Sommerville (1979) 141 CLR 594 In the Marriage of Gosper (1987) 90 FLR 1 In the Marriage of Kessey v Kessey (1994) 18 FLR 149 Mehmet v Benson (1964) 113 CLR 295 Norbis v Norbis (1985-1986) 161 CLR 513
PARTIES:	Philip Con Poulos v Petra Svoboda
FILE NUMBER(S):	SC 1172/2003
COUNSEL:	Miss E Cohen for plaintiff Mr W. Washington for defendant
SOLICITORS:	Hilton Lawyers for plaintiff Shana Radnan & Co for defendant

LOWER COURT JURISDICTION:

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Master Macready

Friday 13 May 2005

1172/ 2003 Phillip Con Poulos v Petra Svoboda

JUDGMENT

1 Master: This is the hearing of, inter alia, the plaintiff’s claim for adjustment of the parties property interests under s 20 of the Property (Relationships) Act 1984. The plaintiff also makes a claim for specific performance of an agreement between the parties for the sale of the plaintiff’s interest in the parties’ major asset. A Judge of the Court has referred the hearing of the proceedings to a Master of the Court. There was no child of the relationship between the parties.

2 There is no dispute that the parties lived together in a de facto relationship from January 1996 until August 2001. The parties agree to this effect in the pleadings. However it should be noted that there was a deterioration of the relationship from the end of 2000.

Short history of the relationship

3 The plaintiff was born on 24 August 1955 and the defendant on 4 November 1973. They met in 1995 when the defendant was an undergraduate student studying at the College of Fine Arts Darlinghurst. The plaintiff says that at that time he was working as a food salesman. They moved into a flat rented by the plaintiff at 3/27 Sutherland Street, Paddington for which she paid rent of $150 per week.

4 In mid 1997 the parties moved to further rented accommodation at Addison Road, Kensington. At the end of 1997 the defendant completed her first degree and in 1998 she commenced another degree at the National Art School.

5 In 1999 the parties obtained a loan approval for the purchase of a house, but it lapsed. A further loan approval for $212,000 was obtained in mid 2000. In June 2000 the parents of the plaintiff agreed to lend the plaintiff and defendant $60,000 towards a home purchase. There is some dispute as to whether the loan was to the plaintiff or both parties. However, both the plaintiff and the defendant apparently signed a document agreeing to repay this amount. At this time the defendant’s brother commenced to reside with the parties and paid rent of $150 per week.

6 In August 2000 the parties purchased the unit 4/64 Howard Street, Randwick as joint tenants for the sum of $265,000 plus expenses. They utilised the loan funds and the Westpac loan approval for $212,000.

7 On 18 September 2000 the plaintiff was involved in a car accident at work and suffered injuries to his knee, his shoulder and also suffered a whiplash injury. At some time after this accident, but before separation, the plaintiff sold his 4-wheel drive vehicle for an amount, which he says, was $10,000. He used those funds on mortgage payments and living expenses, as he was no longer able to work.

8 By December 2000 the parties’ relationship had substantially deteriorated but they continued to live together in the unit without a sexual relationship.

9 On 12 February 2001 the plaintiff won $12,298.95 in Lotto and seems to have used the majority of it for his own purposes. He drew the sum of $10,800 from the account in the 10 days after he deposited the proceeds into his account. Plainly this amount was not used for living expenses.

10 On 6 June 2001 the parties signed an agreement in these terms:

“6/6/01

Petra Svoboda
4/64 Howard St,
Randwick, 2031.
I, Petra Svoboda seek to have my name deleted from the Certificate of Title located at Lot 4 in Strata Plan 21109 at Randwick/Municipality of Randwick. This leaves Phillip Poulos the sole title holder. Upon this eventuating, Petra Svoboda will receive $9,100 within 6 weeks of the date of this letter. The amount of $9,100 includes all solicitors fees and strata fees owing on the property at 4/64 Howard St, Randwick, 2031.”

11 The amount of $9,100 was never paid even though there were then funds in the loan account that would have enabled the amount to be paid.

12 In August 2001 the defendant moved out of the premises and lived with her mother until December 2001. She then moved into her brother’s rented premises, where she pays rent of $125 per week. The plaintiff has continued to occupy the unit up until the hearing of the matter, by which time the bank was threatening to sell the property. He has made mortgage payments on an irregular basis leading to the present situation with the bank.

13 In early 2002 the unit in which the plaintiff had a share was sold. On 26 April 2002 he received as his share of the proceeds the sum of $111,264.99.

14 In 2003 the plaintiff settled his claim in respect of his accident and received $76,500. None of these funds were used by the plaintiff to make any reduction in the mortgage over the property.

15 The parties agree that at the time of the hearing the property has a value of $400,000. The amount of the loan at 6 April 2005 was an amount of $201,348.

Claim for specific performance

16 Before turning to the claim under the Property (Relationships) Act 1984 it is necessary to deal with the plaintiff’s claim for specific performance. The defendant initially raised defences relating to duress, Contracts Review Act, a lack of being ready, willing and able to perform the agreement and the validity of the agreement. In submissions she only pressed defences relating to duress and readiness to perform the agreement.

Economic duress

17 The evidence makes it perfectly plain that the plaintiff did not physically threaten the defendant and the defendant gave no such evidence. In these circumstances the claim that there was some coercion will depend upon whether there was any relevant economic duress.

18 In Commercial Bank of Australia v Amadio (1983) 151 CLR 447 at 474, Dean J said that duress looks to the quality of the consent or assent of the weaker party. In Cockerill v Westpac Banking Corp (1996) 142 ALR 227 Cooper J, in the Federal Court of Australia, explained that the starting point in ascertaining whether economic duress operates is:

“… to ask whether any applied pressure induced the alleged victim to enter into the contract. Without the application of pressure by one party which induces the other to enter into the contract, there is no basis for the operation of the doctrine.” [at 271]. It is sufficient to demonstrate that the illegitimate pressure was one of the reasons behind the person entering the agreement: see Crescendo Management Pty Ltd v Westpac Banking Corp (1988) 19 NSWLR 40 at 46 per McHugh JA.

19 In May 2000 the plaintiff and the defendant received a default notice. In June 2001, they received a further notice of default. The defendant suggests that the plaintiff’s failure to make payments to the home loan account constitutes duress. The defendant submits that when she raised the issue with the plaintiff after the first notice, he asserted that “It’s my money, I’ll do what I like.”

20 After the second notice the defendant contacted a friend who worked out how much she had paid and she then approached the plaintiff and raised the matter. She said that she had worked out that she had paid $9,100.00 towards the loan repayments. She was worried about losing her credit rating. She suggested to the plaintiff that he pay that amount and she would agree to have her name taken off the title. The plaintiff rejected the proposal saying that she was not going to get $9,100.00. About a week later the plaintiff agreed to pay the sum provided there was a written agreement. Both parties then collaborated in the preparation of the agreement and it was signed on the spot.

21 In the circumstances of the plaintiff’s active involvement in the proposal, it hardly seems appropriate to suggest that there had been a demand made upon her. The proposal was of her instigation because she was concerned about the plaintiff not meeting his part of the agreement to repay the mortgage and him adopting an attitude that he would do what the liked about the property because in effect his parents had contributed the main funds for its purchase.

22 There were many alternatives open to the defendant. She was in a relationship, which was deteriorating and unlikely to continue. Plainly, she could have left the relationship and taken advice as to how her financial affairs could be resolved. There is no evidence before me that the plaintiff put forward the agreement. Rather, it was the defendant who proposed the agreement to the plaintiff as a way out of her difficulties. Initially the plaintiff rejected the idea but a week later embraced it.

23 The basis of the defendant’s complaint was that the application of pressure consisted of the plaintiff's failure to pay promptly his share of the mortgage repayments. For this to constitute pressure by the plaintiff I would have thought that it would be necessary for his conduct to have been intended to place pressure on the defendant. There was cross-examination of the plaintiff about the state of the mortgage at the time the agreement was signed. It was in these terms:

“Q. Have a look at that. That is the document isn't it?
A. Yes.

Q. Just read it through to yourself and then if I could
have the document back (returned). Thank you. That
document has on its face that a payments was to be made of
$9100 within 6 weeks of the 6 June 2001, correct?
A. From there, yep, from that letter.

Q. And that was something which you understood?
A. We both understood.

Q. To impose upon you an obligations to pay $9100 within
6 weeks not 6 months, not 6 years?
A. No.

Q. But 6 weeks. That was by the, something like about
the 20 or 21 July 2001, right?
A. Whatever 6 weeks is, yes.

Q. And the fact is that you did not pay $9100 by around
about 21 July 2001 did you?
A. I didn't, no.

Q. And from them until now you have not paid to
Petra Svoboda $9100 have you?
A. Because she was not willing to accept it.

Q. I am asking you to answer my question. You have not
paid?
A. No not at all.

Q. Now if you go to the document X, exhibit X to
Ms Svoboda's affidavit. You, firstly you got the exhibit
X document in your hand of 6 June 2001?
A. Yes.

Q. It was then after you had the signed agreement in fact
on or about 15 June, 2001, there that was a payment made
into the bank account wasn't there?
A. What date?

Q. If you go to the page 58 of exhibit X?
A. Yes.

Q. You will see that on - in fact it is not the 6th -
there is a deposit on 15 June which then get reversed on
19 June and it deposit, a redeposit it seems on 28 June?
A. Yes that is right.

Q. So, it is the position isn't it, that you just allowed
this matter to remain, this mortgage to remain in the
default to remain in a situation where the mortgagee could
take action against both of you until such time as you had
Miss Svoboda sign up on the 6th and then you made an offer
$5,000 on the 15th, that is the position?

A. That is what it appears.

Q. Then you let it go into default again, in August,
didn't you? There was another demand made by Westpac in
August wants there?
A. There probably was. I have not seen that document.”

24 There appears to be a transcript error in the second last question above. The reference to an offer of $5,000 is clearly a reference to a payment of $5,000 as appears from the exhibit to which the parties were referring. The problem with the question is the obvious one, namely, that it in fact is two questions. In these circumstances it is difficult to work out to which of the questions the witnesses answer relates. Most likely it is the last.

25 Even if the answer were to be to the first question the admission really does not go to the full extent that would be necessary in order for me to be satisfied that the conduct of the plaintiff was intentional and have the purpose of putting pressure on the defendant to sign the document. It appears that this question has never been put in cross-examination.

26 There are of course other reasons why there could be arrears of the mortgage or why the plaintiff may not have paid his share. There is no other evidence that would point to the default occurring with the requisite intention. In these circumstances I do not think that the agreement came about as a result of economic duress applied by the plaintiff to the defendant.

Readiness of the plaintiff to complete the agreement

27 The agreement contemplates that the payment will be made to the defendant within six weeks of the date of the agreement. It also, I infer, contemplates the plaintiff obtaining the consent of the bank to the transfer. This is apparent from the fact that such a transfer would in practical terms require the consent of the mortgagee. A failure of the plaintiff to obtain such consent would put the mortgage in default, which is inconsistent with the plaintiff remaining as the sole titleholder. The more difficult question is whether it contemplates the plaintiff taking over the loan of the parties with a consequent release of the defendant from any liability on the mortgage. It is apparent from the discussions that the parties had at the time of executing the agreement that this, on the defendants part, was the case.

28 The first question is whether it is appropriate to have regard to these discussions or whether I am confined to the terms of the agreement. In Codelfa Constructions Pty Ltd v State Rail Authority of NSW [1981-1982] 149 CLR 347 at 352 Mason J expressed the rule as to the use of evidence of surrounding circumstances in these terms:

“The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they
were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.”

29 When one turns to the form of the letter plainly it is written by lay persons and not in technical language. In the first sentence the use of the word "deleted" is fairly straightforward. It is the conclusion in the second sentence that is in these terms "this leaves Phillip Poulos the sole title holder” which is of concern. A mortgage is secured on the title to a property and this was well known to both parties to the agreement. Does the expression in question, “sole title holder”, mean that the relevant person is solely responsible for the mortgage. Having regard to the language I think there is an ambiguity and accordingly it is appropriate to look at the surrounding circumstances.

30 The defendant gave evidence of the conversations in June 2001 in paragraph 87 of her affidavit. That paragraph and the conversation was as follows:

“After being notified of the June 2001 default I approached a friend of my mother Alden Gregory Fitzgerald to ask his help in working out how much I had paid on the mortgage. Soon after I had a conversation with Phillip at the unit to the following effect:-
Petra “the home loan is in default again, I’m worried that the bank will take action. I’m really worried that I might lose my credit rating and wont be able to get a loan in the future. I’ve worked out that I’ve paid about $9,100 towards the loan repayments. If you re-pay that to me and take over the loan completely so that only you are responsible for the bank debt and I am not going to be caught up in any more defaults. I will agree to having my name taken off the title.
Phillip “You’ve got to be kidding, you are not getting $9,1000.00”.

31 Although the plaintiff filed an affidavit in reply dealing with the defendant's affidavit the plaintiff did not answer the allegations in paragraph 87 of the defendant's affidavit. When he was cross-examined on the matter he prevaricated as to whether or not he would accept whether the conversation occurred. The plaintiff I found to be a very imprecise witness and a person who consistently avoided answering the question. In the circumstances I am satisfied that the defendant's account is accurate.

32 The defendant's account makes it perfectly plain that the parties contemplated the plaintiff buying out the defendant for $9,100 and that as part of that process the defendant would be released from the mortgage. This to my mind explains the ambiguity in the agreement. In these circumstances it was incumbent upon the plaintiff to obtain the consent of the bank to the release of the defendant from the mortgage as well as obtaining the consent of the bank to the transfer of the title.

33 In these circumstances it was obviously necessary for the plaintiff to take steps to obtain the approval of the mortgagee to the transfer and the release of the defendant from her liability under the mortgage. It is plain on the evidence that the plaintiff took no steps to see to these matters and did not attempt to pay out the defendant within the six weeks required by the agreement.

34 Indeed there was no attempt by the plaintiff to take any steps in relation to obtaining the mortgagee's consent at any stage up to and including the hearing. Although he says he lost touch with the defendant for a while after separation, plainly, once these proceedings commenced, any attempt to tender performance of the agreement could have utilised contact with the defendant's solicitors.

35 The only evidence in chief of an attempt to tender performance of the agreement by the plaintiff was that contained in his affidavit of 3 February 2004. At paragraph 42 he said:

“ I am happy to pay the $9,100 to the defendant on receipt of a transfer of the property 4/64 Howard St Randwick. ”

36 The plaintiff gave no evidence of his ability to pay the sum of $9,100.

37 In paragraph 94 of the defendant's affidavit she referred to the fact that the plaintiff had not paid her the sum of $9,100, nor had he renegotiated any borrowings to relieve her of her responsibility to the Westpac bank. In reply the plaintiff said the following:

“ I was unable to negotiate borrowings until the defendant's name was off the title. I am willing ready and able to take the defendant's name off the title and pay the money agreed to her. ”

38 There was no cross examination of the plaintiff on this aspect but it is plain from the agreement that it was necessary for there to be a transfer of the defendant's interest and a release of her liability at the same time. It could hardly be expected that the defendant would transfer away the title and wait for some time thereafter for the plaintiff to negotiate a release of her from the mortgage. It is clear that the proffered reason is specious, as the plaintiff plainly could have negotiated either a new mortgage with Westpac in his own name or a new mortgage with a different lender prior to transfer.

39 In Green v Sommerville (1979) 141 CLR 594, Mason J discussed the extent of performance required in these terms [at 610]:

“It is well settled that a plaintiff in a suit for specific performance is not required to show that he has strictly complied with all his obligations under the contract; it is enough that he has performed and is ready and willing to perform the substance of the contract ( Fullers' Theatres Ltd v Musgrove (1923) 31 CLR 524, at p 550).”

40 In Mehmet v Benson (1964) 113 CLR 295 , Barwick CJ said the following about readiness and willingness to perform [at 307]:

“The question as to whether or not the plaintiff has been and is ready and willing to perform the contract is one of substance not to be resolved in any technical or narrow sense. It is important to bear in mind what is the substantial thing for which the parties contract and what on the part of the plaintiff in a suit for specific performance are his essential obligations. “

41 In the present circumstances, the plaintiff’s substantial obligation under the agreement was to pay out the sum agreed to the defendant before 18 July 2001, and to take steps to obtain the approval of the mortgagee to affect the transfer and the release of the defendant from her liability under the mortgage. It is plain on the evidence that the plaintiff took no steps to advance either of the later two matters at any stage up to and including the hearing. These were substantial and important obligations on the plaintiff's part under the contract. In the circumstances I am satisfied that the plaintiff was not ready willing and able to complete the contract. Accordingly I would refuse specific performance of the agreement.

42 Although it does not arise because of my decision I note, in the event that I had granted specific performance, that I might well have had to consider the whole of the circumstances in respect of the agreement and the benefits provided for the defendant. A consideration of all these circumstances may have led to a view that it should be put to one side in assessing the appropriate adjustments in respect of the claim under the act.

Claim under the Property (Relationships) Act

43 It is useful as a starting point to address the property of the parties at the commencement and the conclusion of the relationship.

The property of the parties at the commencement of the relationship

44 At the commencement of the relationship the plaintiff had the following assets.

1. Pajero four wheel drive
2. BMW sedan
3. A share in a rented factory premises at 20 Anvil Road Seven Hills
4. Superannuation with AMP
5. Money with St George Bank

45 The value of these items does not appear in the evidence.

46 At the commencement of the relationship the defendant had her personal effects and her furniture in the flat.

Assets at the conclusion of the relationship

47 The defendant still had his share in the Seven Hills factory unit and the BMW sedan. He and the plaintiff owned the Randwick unit and the amount owing on the unit was $209,576.77. The parties still owed the sum of $60,000 to the plaintiff’s parents. The value of any of the units at this time does not appear in the evidence.

48 It is necessary to consider the various contributions by each party during the period of the relationship.

Financial contributions

49 It is useful to consider the income of each of the parties during the period of the relationship.

50 The defendant received income from casual employment and Austudy. Her taxable incomes for the relevant years were as follows:

The year ended 30 June 1997 $8,615

The year ended 30 June 1998 $7,609

The year ended 30 June 1999 $8,555

The year ended 30 June 2000 $7,982

The year ended 30 June2001 no evidence

51 The defendant also received assistance from her parents, who contributed to her course fees and the purchase of items such as a computer and a ceramic kiln.

52 The plaintiff’s income is a matter of some conjecture. Throughout the relationship he received a distribution from the partnership which owned the industrial unit at Seven Hills. The taxable income that he received according to his tax returns was as follows:

The year ended 30 Jun 1997 $6,722

The year ended 30 June 1998 $6,830

The year ended 30 Jun 1999 $8,392

The year ended 30 Jun 2000 no evidence

The year ended 30 Jun 2001 no evidence

53 The plaintiff's evidence as to his income in his affidavit in chief was non existent and in reply the plaintiff made reference to where he had been working but gave no details of the amount earned. In cross examination it became plain that none of the other income which he might have earned, either as a casual builders labourer or at other odd jobs, had been included in his income tax returns. The only income in the returns is the amount, which he received from the partnership in respect of the Seven Hills property. The plaintiff conceded that he did not work after September 2000 following his injury in the car accident.

54 In cross examination it became plain that even the claims made by the plaintiff as to these periods that he worked were not substantiated and indeed were refuted by the documentary evidence.

55 In these circumstances I do not accept that the plaintiff earned any relevantly substantial sums from this other employment.

56 The important area of contribution concerned the purchase of the unit at Randwick. The major contribution was the provision of the sum of $60,000 by the plaintiff’s parents. They did not give any evidence in the hearing before me. The defendant’s account of the conversations that occurred were set out in her affidavit in these terms:

44. The conversation was to the following effect,
Phillip: "we want to buy a unit. Can you help us with a loan? We need about another $60, 000.00. "
Con George Poulos: "Yes we can lend you both $60,000.00 for the purchase of a property. I would like both of you to sign a letter stating that I have lent you the money".
Phillip and Petra: "yes we will sign the letter"

45. I am aware of my own knowledge that shortly after this conversation I signed documents to open an account with AGC at which time Phillip said to me words to the effect “I am putting the $60,000 that my parents lent us into this account at AGC until we need it for the unit.”

57 In paragraph 2.44 of his affidavit of 16 June 2004 the plaintiff responded in these terms:

“I deny that my father said words to the effect "...we can lend you both $60,000...", but I do agree that when my father found out that the unit was to be in joint names he had us both sign a letter acknowledging the loan. I recall that at the time that we exchanged contracts the defendant's mother attended at the solicitor's office and said to me words to the effect in the presence of the defendant "I have come to make sure that Petra's name is on the Certificate of Title as Joint tenant."

58 The original letter was not in evidence but the defendant conceded, quite willingly, in cross-examination that both parties had signed it and that they still owed the money to his parents.

59 The difference between the parties on this issue needs to be resolved. As I have earlier said I found the plaintiff to be an unreliable witness. He consistently avoided answering the question and endeavoured to advocate his case. His evidence of his employment was contradicted by documentary evidence. The defendant gave her evidence in a straightforward way and supported her evidence by appropriate documentation. I can assume that the plaintiff’s parents evidence would not have assisted his case on this aspect. In the circumstances I accept the defendant’s version of what happened.

60 It is appropriate at this point to consider how the Court would regard the provision of the money as a result of the loan from the plaintiff’s parents. The question of gifts has been dealt with in a number of cases both in respect of this act and the Family Law Act 1975 (Cth). In the Marriage of Gosper (1987) 90 FLR 1, Mr Justice Fogarty analysed a number of Family Law cases before making a useful statement as to principle. At page 11 he said:

“Where there has been a gift or advance by a relative to one or both of the parties to the marriage the first step is to determine the ownership of that benefaction: … Confusion often arises at this point because, particularly with gifts of money or in kind, the evidence about it is confused and imprecise and the actual intention of the donor (the critical issue) may have been ill-defined. However, where the evidence enables the Court to determine that it is a gift to one or other or both of the parties that is an important finding. Normally where title to a property is transferred to one or both of the parties that would be the strongest indicator of the intention of the donor.”

61 Having regard to the facts in that case, that the gift of property was given jointly to the two parties, he went on to decide that there was an intention to give it to the parties jointly. He said at the conclusion of his review of the authorities:

“The critical case is where a relative of one of the parties gifts property to both of the parties to that marriage. Dependent upon the circumstances of the case it is, in my view, open to the Court in such a case to look at the actuality and treat that as a ‘financial contribution made directly ... on behalf of ‘the spouse relative (see for example Rainbird, Matthews, W Underwood, Abdullah, Freeman; cf. Cleary, Hogan J. in Freeman , and Antmann ).

In many such cases that gift was made only because of that relationship and in reality as a means of benefiting that relative in that marriage. It was made because she was a daughter of that family as was said in W's case (1980) 6 Fam LR 538 at 548.

It is clearly a ‘financial contribution' and one ‘made directly’ to the acquisition, conservation and improvement of property. In such cases it is open to the Court to conclude, if the facts justify it, that it was made ‘on behalf of’ one spouse.

In other cases the evidence, including evidence that the donor intended to benefit both spouses, may not justify that conclusion. If so, the application by the parties of that property to the marriage would, at least at that point, be an equal contribution by them.”

62 In In the Marriage ofKessey v Kessey (1994) 18 Fam LR 149; (1994) FLC 92-495, the full Court of the Family Court approved Fogarty J’s comprehensive review of the authorities and his conclusions in Gosper mentioned above. After referring to these conclusions the court said at [p 160]:

“It was submitted by counsel for the appellant husband that Gosper is distinguishable from the present case because Gosper was concerned with the matter of gifts and in the present case there is no evidence of a gift. In our opinion the application of the principles enunciated in Gosper should not be so limited. Rather, those principles should be regarded as being applicable in all cases where there has been an advance of money or property by a parent (or perhaps even by some other relative) of one of the parties, to one or both of the parties (or to their property), and the circumstances of the advance cannot be categorised as a loan, or as any other recognised commercial transaction. ”

63 In this case it is clear that I am not dealing with a gift but a loan of funds by the plaintiff's parents. Having regard to the defendant’s evidence, which I accept, and the loan agreement, I am satisfied that the plaintiff’s parents intended the loan to be a loan to both of the parties. In these circumstances it can be treated as a joint borrowing of the parties and not as a financial contribution made by the plaintiff.

64 The amount of the funds from the bank and the plaintiff’s parents totalled $272,000. The purchase price and stamp duty came to $272,800. The additional funds, excluding the solicitor’s costs, which were not paid, were thus $800. It was suggested in cross-examination of the plaintiff that there were some other contributions by the plaintiff and in particular reference was made by the plaintiff to an amount of $15,000. The plaintiff made no such claim in his affidavit evidence. However, an examination of the bank accounts and the evidence of the plaintiff do not suggest that he provided funds in this amount. In the absence of evidence by the defendant I am satisfied that the plaintiff paid the additional stamp duty of $800 and also the bank establishment fees which amounted to $1,203.

65 The loan repayments were made by amounts being paid into the loan account. The defendant made her deposits directly into the loan account and the plaintiff used the parties’ Classic Account as his own account. From this account he transferred monies to the loan account. The evidence of the defendant is that during the period of the mortgage she contributed between $100 and $150 per week to repayments of the mortgage. The actual weekly amount of the required repayments was $345. By the end of the relationship the mortgage balance was approximately $210,000. There had hardly been any reduction during the period of the relationship. This would tend to suggest that the plaintiff made the balance of the weekly payments of $220 per week. However it should be remembered that from time to time the plaintiff collected from the defendant's brother his rental of $150 per week.

66 The defendant’s brother gave evidence. I found him to be a satisfactory witness and I prefer his evidence to that of the plaintiff. He gave evidence that he moved into the flat in July 2000 and initially paid his rent to his sister on a fortnightly basis. He said that in October 2000 Phillip demanded that the rent be paid to him and that from then until the end of the relationship he paid his rent to the plaintiff.

67 It is not possible on the evidence to identify with precision how much was paid by way of rent or contribution to the mortgage by each of the three occupants of the house. Given the receipt of rent by the plaintiff from the defendant’s brother for a substantial part of the period and the lack of any reduction of any consequence in the amount of the loan it is appropriate to regard each of the parties as having contributed equally to maintaining the mortgage from their own resources and from the rent available to them, as owners, from the defendant's brother.

Non-financial contributions of the parties

68 There is no evidence from the parties as to homemaker contributions and there are no children from the parties’ relationship. In these circumstances there are no non-financial contributions to take into account.

Consideration of the application

69 In Norbis v Norbis (1985-1986) 161 CLR 513 at 523 the High Court said the following:-

"Although it is natural to assess financial contributions under s79 (4)(a) by reference to individual assets, it is also natural to assess the contribution 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, ie 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. It follows that the Full Court is quite entitled to prescribe that approach as a guideline in order to promote uniformity of approach within the Court. In saying this we are not to be understood as denying the legitimacy of the trial judge's ascertainment in the first instance of the financial contributions of the parties by reference to particular assets. It is difficult to conceive how the trial judge in many cases could otherwise take account of such contributions as he is required to by s 79 (4)(a) of the Act. In this respect we agree with the comment of Nygh J in G and G that, although mathematical precision is certainly not required, there is ordinarily a need to know the circumstances in which assets were acquired and the general extent of each party's contribution to them."

70 In the present case the plaintiff owned his unit at Seven Hills prior to the relationship and continued to own it at the conclusion of the relationship. There have been no contributions to that unit during the relationship and accordingly, in my view, it would be appropriate to put it to one side. One thus has to balance the other contributions of the parties, both financial and non-financial, in order to see what is an appropriate adjustment of the parties’ interests.

71 Prior to the parties purchasing the unit it seems that, in the period between January 1996 until June 1997, the defendant paid for all household supplies as well as her rent. Once they moved to rented accommodation in the middle of 1997, it seems that the parties contributed equally to rent and other living expenses.

72 Neither party contended that the agreement of 6 June 2001 was a separation agreement and in the circumstances I do not have regard to it in coming to a conclusion.

73 It is plain that the defendant made no further contributions to the mortgage after moving out in August 2001. There were some minor contributions by her brother until he moved out in December 2001. He paid rent to the plaintiff of $150 per week and there has been maintenance of the unit by the plaintiff at his own expense for the period from late 2001 till the present time. There is no evidence of the value of the unit at the date of separation and accordingly, one cannot know precisely what has been the increase in value attributable to the period after separation.

74 However, the property was purchased in August 2000 for $265,000 and hence the increase for the period from then until the hearing of some 4 ¾ years was in the order of $135,000. The plaintiff by his payments of the mortgage has supported the parties ownership of the unit for a little over ¾ of that period. The defendant, for her part, has had to live in rented accommodation. It is plain she had an entitlement to live in the unit being a joint owner but the circumstances were such that she had to move out. She estimated the cost of her accommodation elsewhere in the period at $40,250. The plaintiff has had the use of a two bedroom unit which was more than the parties needed. He received rent for one room at least for part of the period after separation and could, or may have, rented it thereafter.

75 It can be expected that after the discharge of the loans from Westpac and the plaintiff’s parents there will be $138,652 to be divided between the plaintiff and the defendant, less any selling expenses. In the circumstances I think an appropriate division between the parties is that the plaintiff should receive 2/3 and the defendant 1/3 of such net proceeds after the discharge of the loans and selling expenses.

76 The plaintiff suggests that he wishes to buy out the defendant although he has given no evidence as to his capacity to do so. In the event that the plaintiff has the capacity to buy out the defendant then the amount to be paid for a transfer of the defendant’s interest in the property is to be $46,217. As part of the transfer the plaintiff is to procure a discharge of the defendant from her obligations to Westpac and also procure a signed deed of release from his parents in respect of the parents’ loan.

77 I direct the parties to bring in short minutes and argue any question of costs.

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