Powell v Supresencia
[2003] NSWCA 195
•18 July 2003
NEW SOUTH WALES COURT OF APPEAL
CITATION: POWELL v SUPRESENCIA [2003] NSWCA 195
FILE NUMBER(S):
40798/02
HEARING DATE(S): 19 June 2003
JUDGMENT DATE: 18/07/2003
PARTIES:
Murray Norman Powell - Appellant
Nenita Sabrin Supresencia - Respondent
JUDGMENT OF: Sheller JA Tobias JA Einstein J
LOWER COURT JURISDICTION: Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S): SC 3991/01
LOWER COURT JUDICIAL OFFICER: Berecry AM
COUNSEL:
R C McDougall QC/M T Bridger - Appellant
P Hallen SC/T L P Hodgson - Respondent
SOLICITORS:
Jack Rigg - Appellant
Keddies - Respondent
CATCHWORDS:
Family Law - De facto relationships - Statutory power to make orders adjusting property interests of parties - Matters to be considered in making adjustments - Property inherited by one party shortly before separation - Property (Relationships) Act 1984 s20
LEGISLATION CITED:
De Facto (Relationships) Act 1984
Family Law Act 1975 (Cth)
Property (Relationships) Act 1984
DECISION:
1 Appeal allowed
2 Set aside order 1 made by Acting Master Berecry on 30 August 2002
3 In lieu thereof the defendant to pay the plaintiff the sum of $616,000 and upon payment, the defendant be declared the owner of all property presently registered in his name or possessed by him
4 Confirm orders 2 and 3 made by Acting Master Berecry on 30 August 2002
5 The respondent to pay the appellant's costs of the appeal but to have a certificate under the Suitors' Fund Act 1951
6 The respondent's application for maintenance under s27 of the Act is remitted to the Equity Division for further consideration on the application of the respondent, if so advised.
JUDGMENT:
IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40798/02
SC 3991/01SHELLER JA
TOBIAS JA
EINSTEIN J
POWELL v SUPRESENCIA
Proceedings were brought by the respondent under the Property (Relationships) Act 1984. The Acting Master at first instance made orders in favour of the respondent pursuant to s20 of that Act. No orders for maintenance were made.
The respondent had made significant contributions as a homemaker and parent to the son of the parties. Her assets, however, were of little value and she had not made any financial contributions to the relationship during its course. Her evidence was that the appellant had not wanted her to work or to mix with other Philippino people in Australia or have contact with her family after the couple moved to Australia from the Philippines. As a result she was not able to develop social and work skills in Australia and, when the relationship dissolved, was left ill-equipped to support herself and with meagre resources. She took with her $134,000 worth of jewellery, much of which she sold or pawned to support herself.
The Acting Master made much of the fact that most of the financial contributions had been made by the appellant’s mother, who had given the appellant a weekly allowance and jewellery from time to time, made much. The appellant’s mother had died some three years before the end of the relationship, leaving to the appellant an estate of approximately $4 million. The Acting Master made recurrent remarks that the appellant’s contributions were not the product of his own exertion, that the appellant made little by way of personal financial contribution to the relationship and that since 1987, the financial contributions to the relationship were not made by either party but rather by the appellant’s mother directly to the appellant and therefore indirectly to the respondent.
HELD (Per Sheller JA, Tobias JA and Einstein J agreeing):
1.A party may only have the benefit of the fact that the other party succeeded to an estate if, the contributions of the parties apart, the Court may hold it just and equitable that the first party benefit from it: Wallace v Stanford (1995) 37 NSWLR 1 followed.
2.The needs and means of the parties will have general relevance, as subsidiary factors, only to the question of what is just and equitable having regard to the contributions of the parties: Evans v Marmont (1997) 42 NSWLR 70 followed.
3.Without limiting any of the matters to be taken into account when weighing the contributions made by the parties, circumstances that may be relevant in addition to those mentioned in s20 Property (Relationships) Act 1984 include the length of the relationship, any promise or expectations of marriage, and any opportunities lost by a party by reason of that party’s contributions: Evans v Marmont (1997) 42 NSWLR 70 followed.
4.Financial contributions to a relationship by a parent of a party will be taken to be a contribution made on behalf of the party who is the child of that parent unless there is evidence that establishes that it was not the intention of the parent to benefit only his or her child: Kessey v Kessey (1994) 18 Fam LR 149 applied.
5.In this case, the Acting Master did not correctly identify the appellant’s financial contributions to the acquisition, conservation or improvement of any property of the parties or to the financial resources of the parties or his contributions, financial or otherwise, to the welfare of the respondent and of the family including their son. Further, the Acting Master substantially downgraded or even ignored the financial contributions made by the appellant’s mother on his behalf to both income and capital.
(Per Einstein J):
6.Without limiting the matters that may be taken into account when weighing the contributions made in the capacity of homemaker or parent by either of the parties to the relationship, matters that it may be appropriate to consider include the role of caring for children; the care and companionship given to a spouse/de facto; the domestic work undertaken and time devoted to such tasks; the nature of the domestic work undertaken and whether such work frees up the time of the other partner to enable he or she to pursue their career and personal interests; the adaptation of the role of homemaker in light of changes in the circumstances of the family unit such as ill health; the making of aesthetic improvements to the home for the benefit of the happiness/comfort of the family; the efforts of the other partner to these homemaking tasks; the sacrifices made by the homemaker to the benefit of the household and the family; whether abuse or denigration of the homemaker made the fulfilment of the homemaker role more difficult.
Legislation cited:
De Facto (Relationships) Act 1984
Family Law Act 1975 (Cth)
Property (Relationships) Act 1984
Cases cited:
Black v Black (1991) 15 Fam LR 109
Bonnici v Bonnici (1992) FLR 92-272
Dwyer v Kaljo (1987) 11 Fam LR 785
Dwyer v Kaljo (1992) 27 NSWLR 728
Evans v Marmont (1997) 42 NSWLR 70
Farmer v Bramley (2000) Fam CA 165
Green v Robinson (1995) 36 NSWLR 96
Kessey v Kessey (1994) 18 Fam LR 149
Ledwos v Angilley [2001] NSWSC 618
Mallett v Mallet (1984) 156 CLR 605
Marando v Marando (1997) 21 Fam LR 841
Norbis v Norbis (1986) 161 CLR 513
Singer v Berghouse (1994) 181 CLR 201
Wallace v Stanford (1995) 37 NSWLR 1
ORDERS
1. Appeal allowed;
2.Set aside order 1 made by Acting Master Berecry on 30 August 2002;
3.In lieu thereof the defendant to pay the plaintiff the sum of $616,000 and upon payment, the defendant be declared the owner of all property presently registered in his name or possessed by him;
4.Confirm orders 2 and 3 made by Acting Master Berecry on 30 August 2002;
5.The respondent to pay the appellant’s costs of the appeal but to have a certificate under the Suitors’ Fund Act 1951.
6.The respondent’s application for maintenance under s27 of the Act is remitted to the Equity Division for further consideration on the application of the respondent, if so advised.
**********
IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40798/02
SC 3991/01SHELLER JA
TOBIAS JA
EINSTEIN JFriday, 18 July 2003
POWELL v SUPRESENCIA
Judgment
SHELLER JA:
Introduction
The appellant, Murray Norman Powell, appeals from a decision of Acting Master Berecry of 30 August 2002. The proceedings were brought by the respondent to the appeal, Nenita Sabrin Supresencia, under the Property (Relationships) Act 1984 (the Act). The Acting Master made orders in favour of the respondent pursuant to s20 of the Act. No orders for maintenance under s27 were made. The appeal is based upon submissions that the Acting Master failed correctly to apply s20 and in making his orders failed sufficiently to disclose his reasoning process.
Statutory power to adjust interests in property under the Act
The appellant and the respondent began living together in a de facto relationship in the middle of 1980. After a break of approximately six months during 1983 and 1984 the relationship continued until 5 May 2001 when the respondent left the parties’ residence. The expression “domestic relationship” in the Act includes a de facto relationship. Thomas Powell, who was born on 3 October 1981, was the only child of the relationship. The respondent began proceedings under the Act on 13 August 2001. Although the parties met in the Philippines in 1980 and during their co-habitation lived there until 1987 there is now no argument that the residential pre-requisites for making an order under s15 of the Act were satisfied.
In Part 3 of the Act “Proceedings for financial adjustment”, s14 “Applications for orders under this Part”, subsection (1) provides:
“Subject to this Part, a party to a domestic relationship may apply to a court for an order under this Part for the adjustment of interests with respect to the property of the parties to the relationship or either of them or for the granting of maintenance, or both.”
“Property” is defined in s3(1), unless the context or subject matter otherwise indicates or requires, as follows:
“Property, in relation to parties to a domestic relationship or either of them, includes real and personal property and any estate or interest (whether a present, future or contingent estate or interest) in real or personal property, and money, and any debt, and any cause of action for damages (including damages for personal injury), and any other chose in action, and any right with respect to property.”
Section 20(1) provides as follows:
“Application for adjustment
(1)On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to:
(a)the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and
(b)the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely:
(i)a child or the parties,
(ii)a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties.”
The expression “financial resources” in para (a) is defined in s3(1) of the Act in relation to parties to a domestic relationship or either of them, to include:
“(a)a prospective claim or entitlement in respect of a scheme, fund or arrangement under which superannuation, retirement or similar benefits are provided,
(b)property which, pursuant to the provisions of a discretionary trust, may become vested in or used or applied in or towards the purposes of the parties to the relationship or either of them,
(c)property, the alienation or disposition of which is wholly or partly under the control of the parties to the relationship or either of them and which is lawfully capable of being used or applied by or on behalf of the parties to the relationship or either of them in or towards their or his or her own purposes, and
(d) any other valuable benefit.”
Section 79 of the Family Law Act 1975 (Cth), which enables the Court exercising jurisdiction by virtue of that Act to alter the interests of the parties to a marriage in the parties’ property, contains in subs (4)(a), (b) and (c) a reference to contributions to be taken into account by the Court described in similar terms. In Norbis v Norbis (1986) 161 CLR 513 at 523 Mason and Deane JJ said:
“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.”
Section 20(1)(a) is directed to financial and non-financial contributions to the acquisition, conservation or improvement of the property of the parties or either of them or to their financial resources (compare s79(4)(a) and (b) of the Family Law Act). Section 20(1)(b) is substantially concerned with contributions to the welfare of the other party or of the family constituted by the parties.
On an application to adjust interests with respect to property the Court is empowered to make such order adjusting the interests of the parties in the property “as to it seems just and equitable” but having regard to the financial and non-financial contributions described in para (a) and the contributions described in para (b).
In Wallace v Stanford (1995) 37 NSWLR 1 Mahoney JA, with whose reasons I agreed, stated and explained the extent of this statutory power. In particular his Honour examined paras (a) and (b) to conclude that the power given by s20 was not at large (page 9G). Mahoney JA said (11C)
“[T]he remedy chosen was not the grant to the court of an unrestricted power to take property from one and give it to another; it was, in my opinion, a more restricted power conditioned by the ‘contributions’ referred to in par (a) and par (b).”
This view was supported by reference to the Law Reform Commission, Report on De facto Relationships, No 36 of 1983. Mahoney JA said (12D):
“…the effect which the Law Reform Commission saw the proposed legislation to have was one involving the ‘adjusting (of) the interests of the partners in the property’ to the extent that the contributions so made by the parties made it just and equitable to readjust them.”
His Honour regarded it as important that the Court, in the exercise of the power given, gave effect according to its terms to the social judgment which s20 embodied even though that might not accord with the views of some. The consequence Mahoney JA expressed as follows at 13F:
“It follows from this that, in determining whether an order should be made and what that order should be, the Court is, in the sense to which I shall refer, constrained by what have been the ‘contributions’ of the parties and the balance between them. The term ‘contributions’ has the meaning to which I have referred: it extends not merely to financial and non-financial contributions to property but to the more general contributions referred to in s20(1)(b). It is those contributions and their contribution to the property or financial resources of the parties and to their welfare to which consideration is limited. It is upon this basis that the Court is to determine what is just and equitable in the particular case.”
Coming to the case in point Mahoney JA said at 14A that four things at least required consideration:
“what have been the contributions of each party; what is the balance between those contributions; what account is to be taken of property to which one or the other has not, in the sense here relevant, contributed; and what, in the light of these, is just and equitable.”
His Honour categorised the relationship between the parties as of a kind expected between persons living where they lived and in the manner they lived, where the man went to work to derive income for the support of both of them and their child and attended to domestic tasks outside the house and on the property and went beyond this in constructing the house in which they lived, and the woman cared for the family and did not work outside the house. At 14E his Honour said that in a normal domestic relationship the contribution of the one or the other is not to be treated as inherently the greater. But the question remained how to measure, the one against the other, the contribution of a wage earner and a homemaker. In that case his Honour came to the conclusion that the balance of contribution did not lie in favour of the woman.
This brought Mahoney JA to the central issue of principle in the appeal, which is relevant to the facts of the present case: what account was to be taken of property inherited by the man? Mahoney JA said at 15C:
“In my opinion, Ms Wallace is not entitled to have, or to have value from, that property merely because Mr Stanford acquired it. The matter may be tested by an example. Assume that a woman has, by a lottery win, acquired $1 million the day before or the day after separation from a de facto relationship: what, if any, account is to be taken of that fact? There is, in such a case, no contribution to that sum by the other party to the relationship. (I put aside special cases, for example, joint ownership of the money used to buy the lottery ticket or joint ownership of the ticket.) Accordingly, the Court may order part of the woman’s winnings to go to the man’s benefit only if the fact that she has those winnings makes it ‘just and equitable’ to give part of them to him. In my opinion, the fact that she has such moneys is not, as such, a ground for making an order, which otherwise the Court would not have made. The winnings are a windfall which has no relationship to the exercise of the Court’s discretion.
This does not mean that the fact that a woman is, when the order comes to be made, richer rather than poorer cannot affect the order to be made. In some cases it may. Thus, one party may deserve to have an order but no order can be made because the other party has no property which can be ‘adjusted’ to provide it. The Court may determine not to do what would be futile.
The fact that one or both of the parties is rich may affect the order that is made in other ways or for other reasons. Dwyer v Kaljo was such a case. The man was very rich. He provided for the woman a rich man’s home, an expensive lifestyle, and expensive gifts. She, with the assistance of servants, managed the household. The contributions made by her were seen by the majority of the Court to exceed his. Her contributions were, in the relevant sense, ‘welfare’ contributions. They were, apparently, seen to exceed his to the extent that a large sum was necessary to ‘adjust’ their property interests. The basis on which this was calculated is not, in my respectful opinion, clear. But at least it appears that the award was calculated on the basis that the contribution to the welfare of a rich man of what his ‘partner’ does in keeping house for him is greater than that of a person in a less wealthy relationship. If that decision is to be followed, it may be necessary to see, in some cases, a rich lifestyle as different from a poor one. It may be that, in doing what is just and equitable, that is to be taken into account.”
In Bonnici v Bonnici (1992) FLC 92-272 at 79020 the Full Court of the Family Court said:
“The other party cannot be regarded as contributing significantly to an inheritance received very late in the relationship and certainly not after it has terminated, except in very unusual circumstances.”
Mahoney JA dissented in Dwyer v Kaljo (1992) 27 NSWLR 728. At first instance Hodgson J had ordered the defendant man to pay the plaintiff woman $50,000. The majority (Priestley and Handley JJA) upheld her appeal and increased the amount the man was to pay to $400,000.
At the end of his judgment at 16B in Wallace v Stanford dealing with Mr Stanford’s inheritance, Mahoney JA said:
“It remains, in the end, that Mr Stanford owned the land for some two or three years at the end of the relationship. If there be contributions involved, his was greater than hers. Accordingly, she may have the benefit of the fact that he succeeded to the land only if, contributions apart, the Court may hold it just and equitable that she benefit from it. In my opinion, to transfer to her a substantial benefit from the land would be to benefit her by virtue of a consideration other than that which, under the legislation, has been accepted as relevant. If the benefit is not given because of, or because of the balance of, her ‘contributions’ then it is given for another reason. To say that it is given as part of the process of determining what is just and equitable is, in my respectful opinion, merely to say that in determining what is just and equitable, the Court shall have regard to matters other than those specified in the section. For the reasons to which I have referred, this goes beyond what the statute has authorised.”
Because of conflicting authority, particularly between Dwyer v Kaljo and Wallace v Stanford, this Court was constituted by five members, Gleeson CJ, Mason P, Priestley JA, Meagher JA and McLelland CJ in Eq, in Evans v Marmont (1997) 42 NSWLR 70, a case that was concerned with the meaning and effect of s20 and its application to the facts and circumstances of that case. Again, the Court was divided. The majority was Gleeson CJ and McLelland CJ in Eq in a joint judgment with which on the construction of s20 Meagher JA agreed. At 74C in their joint judgment the Chief Justice and Chief Judge said that it could not be suggested that it was appropriate to value the contributions of a home maker or parent by reference to wage levels applicable to a domestic servant, or any other commercial provider of corresponding services or benefits and that it was established that it was important to give full and proper value to contributions of the kind referred to in para (b). Their Honours referred to Black v Black (1991) 15 Fam LR 109 in which Clarke JA said at 117-8:
“Under s20 the court is required to evaluate the contributions made by a de facto partner as homemaker or parent. A domestic servant is neither a homemaker nor a parent. It is true that a domestic servant provides some of the services of a homemaker and that evidence of the nature of that given in Mrs Blackman’s affidavit would tend to show the commercial value of those domestic services. But those services could not be equated with the contribution of a homemaker and parent. No doubt a homemaker will invariably perform some, at least, of the tasks of a domestic servant but her contribution to the family unit will usually be infinitely greater than that. In many cases she will be the uniting force and will provide the support, love and affection so necessary to maintain a happy family unit. Although it is impossible to generalise the contribution of a homemaker and parent will usually extend to the performance of a myriad of tasks far beyond the range of activities performed by a domestic servant.
…
It is established that the contributions referred to in s20(1)(b) of the Act should be recognised in a substantial and not a token way and that the purpose of the subsection is to give recognition to the position of a woman who, by her attention to the home and children, frees her partner to earn income and acquire assets (Mallett v Mallet at 623; Wilcock v Sain (1986) 11 Fam LR 302 at 309; [1986] DFC 95,040 at 75,453-4). This is not to say that a man may not make a significant contribution as homemaker and parent but that is not this case. In order to evaluate the particular contribution the court is, in my opinion, required carefully to examine the role played by the person who claims to have contributed as a homemaker and parent. Obviously where a woman has over a long period assumed virtually all the responsibility of maintaining the home and bringing up the children, has done so in a responsible and energetic manner, and has devoted most of her time to doing that and thus freed her partner to earn income to be used in the general betterment of the family, her contribution would have to be regarded as substantial and significant.
Whether her contribution should be regarded as less than, equal to or greater than the financial contribution by the wage earning partner must depend upon the circumstances of the case which undoubtedly include the length of the relationship, the nature of the wage earner’s contributions and the care, devotion and services of the homemaker.”
At 75 Gleeson CJ and McLelland CJ in Eq quoted from Hodgson J’s judgment in Dwyer v Kaljo (1987) 11 Fam LR 785 at 793. Although the factors referred to in para (a) and para (b) of s20(1) of the Act are fundamental factors influencing the judgment of the Court, they are not the only factors. Hodgson J said:
“In my view, if one considers the plaintiff’s contributions and nothing else, this cannot conceivably lead to any view on what is just and equitable in the circumstances. However, it seems to me that the other factors can have no independent bearing on, what is just and equitable. Their relevance is only by reason of such relevance as they may have to the question: what is just and equitable having regard to the plaintiff’s contributions?
In my view, some other factors will be relevant in this way in all cases. One such factor arises from the question whether the contributions of the plaintiff have been sufficiently compensated. The relevance of this question is confirmed by the terms of s17 of the Act. This in turn requires the court to reach some view of the value of the contributions of the plaintiff, and some view of the value of what the plaintiff has received in return.
In most cases, I think the financial circumstances of the parties will be relevant. Certainly, it is necessary for the court to ascertain what the property of the parties comprises at the time of the hearing, because it is to this that any adjustments of interest have to be made. Further, I think that in most cases the needs and means of the parties will have general relevance, as subsidiary factors, to the question of what is just and equitable having regard to the plaintiff’s contributions. However, as indicated earlier, I accept that the needs and means of the parties has no relevance except via its relevance to this question: in particular, the court cannot say that because the defendant has $11 million, and the plaintiff has something less than $50,000, for that reason it is just and equitable to make an adjustment.
Other circumstances which may be relevant include such matters as the length of the relationship, any promise or expectations of marriage, and also I think opportunities lost by the plaintiff by reason of the plaintiff’s contributions. This is by no means intended to be exhaustive. I do not think any limit can be set on what circumstances may be relevant, remembering always that the relevance must be to the question, what is just and equitable having regard to the plaintiff’s contributions.”
The Chief Justice and Chief Judge said that in general they agreed with these observations. They are important because they identify in any case the part played by the factors referred to in paras (a) and (b) and the part played in determining what is just and equitable in the circumstances (by those other factors). Further, they identify what some of those other “subsidiary” factors may be. The Chief Justice and Chief Judge said (75G):
“It would be unrealistic to attempt to evaluate contributions of the kinds referred to in par (a) and par (b) for the purpose of determining what is just and equitable having regard to those contributions, in isolation from the nature and incidents of the relationship as a whole, relevant aspects of which may well include factors of the kinds mentioned by Hodgson J.”
At 77E their Honours said that for the reasons they were about to give they were in general agreement with the views expressed by Mahoney JA in Dwyer v Kaljo and Wallace v Stanford in relation to the meaning and effect of s20.
Coming to the question of statutory construction the Chief Justice and Chief Judge said at 78F that one thing was clear. It was not the intention of the New South Wales Parliament in 1984 to equate de facto relationships with marriage or to make the same provisions with respect to de facto partners as the Family Law Act at the time, made with respect to married people. The differences between the provisions of those two pieces of legislation were “substantial, conspicuous, and deliberate”. Their Honours continued:
“There are at least two major reasons for the differences. The first relates to the limited purpose of the New South Wales Act, which will be explained below. The second relates to the essential legal nature of marriage, which is referred to in the Family Law Act (s43) as an institution, and which is given by that Act its common law meaning as being ‘the union of a man and woman to the exclusion of all others voluntarily entered into for life’. Marriage involves matters of legal status and public commitment. Included in the formal commitment undertaken by people who marry, and reflected in s72 of the Family Law Act, is a mutual undertaking by each party to maintain the other to the extent of their respective abilities and needs. No such commitment need be involved in a de facto relationship; hence the substantial differences between the way in which the two Acts address the subject of maintenance.
There is one further difference between the scheme of the De Facto Relationship Act and that of the Family Law Act, which it is convenient to mention at this stage. Part 4 of the De FactoRelationships Act deals with cohabitation and separation agreements. Provided such an agreement was entered into after proper legal advice, a Court may not, under Part 3, make an order contrary to such agreement (s47). This may be contrasted with the discretion proposed in the Family Court even when corresponding agreements are made cf In Marriage of Plut (1987) 11 FamLR 687. It also emphasises that the discretion given by s20 is not unfettered.”
Turning to the text of the statute, their Honours observed that the making of an order for the “adjustment” of interests with respect to property, interests “does not sound like an invitation to engage in an unbounded exercise in distributive justice.” Considerations of fault are nowhere mentioned. More significantly, there is no mention in the Act of matters relevant to means and needs of the kind referred to in the Family Law Act. Their Honours said:
“What is of present importance, however, is that, if the broad submission of senior counsel for the appellant is correct, the Act is silent on a matter which in many cases would be of paramount importance to a general inquiry as to the justice and equity of a proposed order under s20.”
Nor, compared with s75(2)(o) of the Family Law Act, was there anything which required or entitled the Court to take into account as a factor along side those referred to in paras (a) and (b), “any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account”.
“Most importantly, s20 specifies, in par (a) and par (b), the matters to which the court is to have regard. As was pointed out above, those matters will ordinarily have to be considered, and a judgment as to what is just and equitable having regard to those matters will ordinarily have to be made, in a context, and that context may well include factors of the kind referred to by Hodgson J at first instance in Dwyer v Kaljo. However, par (a) and par (b) prescribe the focal points by reference to which the discretionary judgment as to what seems just and equitable must be made. They are not merely two matters, or groups of matters, which take their place amongst any other relevant considerations. It is by having regard to those matters that the court may adjust property interests in a just and equitable manner.”
An orderly approach to the determination of an application under s20 is first to concentrate on those focal points and identify the contributions under para (a) to the acquisition, conservation or improvement of any property of the parties or either of them or to the financial resources of the parties or either of them and the contributions under para (b) made in the capacity of homemaker or parent by either of the parties to the welfare of the other party or to the welfare of the family constituted by the parties and, in this case, the child of the parties. In Farmer v Bramley (2000) Fam CA 165, Guest J at paras 186 and 188 pointed out that the equivalent in the Family Law Act of para (b) in the Act avoided the requirement to establish a direct or indirect nexus between property and the contribution to the welfare of the family. The homemaker contribution should be valued whether or not one could trace a connection with particular assets or demonstrate that the homemaker contribution represented an indirect contribution to the assets accrued or preserved in the course of the parties’ cohabitation.
An assumption of equality in value between financial contribution and welfare contribution is not always appropriate: Mallet v Mallet (1984) 156 CLR 605. However in that case at 625 Mason J said:
“Thus, the court must in a given case evaluate the respective contributions of husband and wife [under the relevant paragraphs] difficult though that may be in some cases. In undertaking this task it is open to the court to conclude on the materials before it that the indirect contribution of one party as homemaker or parent is equal to the financial contributions made to the acquisition of the matrimonial home on the footing that that party’s efforts as homemaker and parent have enable [sic] the other to earn an income by means of which the home was acquired and financed during the marriage. To sustain this conclusion the materials before the court will need to show an equality of contribution – that the efforts of the wife in her role were the equal of the husband in his.
No doubt a conclusion in favour of equality of contribution will be more readily reached where the property in issue is the matrimonial home or superannuation benefits or pension entitlements and the marriage is of long standing. It will be otherwise when the property in issue consists of assets acquired by one party whose ability and energy has enabled the establishment or conduct of an extensive business enterprise to which the other party has made no financial contribution and where that other party’s role does not extend beyond that of homemaker and parent.”
The task of identification and valuation complete, the Court comes to consider whether it should adjust the interests of the parties in the property in such manner as to the Court seems just and equitable having regard to the contributions identified within paras (a) and (b) and other factors of the kind identified by Hodgson J.
Acting Master’s reasons for judgment and orders
The Acting Master made the following orders:
“1.The defendant pay the plaintiff the sum of $766,000 and upon payment, the defendant be declared the owner of all property presently registered in his name or possessed by him.
2.The plaintiff be declared the sole owner of all items of jewellery and personal effects presently in her possession, custody and control.
3.The defendant pay the plaintiff’s costs.”
Most of the Acting Master’s findings of fact are not in dispute. I can summarise those necessary to understand this appeal and to describe the relationship between the parties. The respondent was born on 13 May 1956, the appellant on 16 May 1925. They met in the Philippines in 1980 in a bar where the respondent was working and which was run by her aunt. The respondent was a citizen of the Philippines. The appellant was living there permanently. He owned an apartment and had investments in that country. Shortly after they met they began living in a de facto relationship. At that time the respondent ceased to work. The appellant was not in the workforce and had not worked since 1970. He lived on his investments. The respondent said that the appellant wished her to cease work and look after him.
The parties had a reasonable standard of living in the Philippines. They had a motor vehicle, they ate at restaurants regularly. They were able to take overseas holidays. The Acting Master said they were able to do things that Philippine people with money were able to enjoy. They had maids to assist with the domestic chores, sometimes three maids but usually two, one of whom lived in.
After the birth of their son in October 1981 the respondent said she looked after the day-to-day needs of both the appellant and the child. Her role was that of a carer. She prepared meals, did the washing and helped clean the unit. The maids assisted with these functions. The appellant admitted that he did no household work. The respondent performed her household functions with the assistance of the maids. The respondent and the maids waited on the appellant “hand and foot”.
After the relationship broke down in 1983 the appellant flew to Sydney where he spent two months. From there he went to Samoa to secure a wife. This he achieved but the marriage in Samoa lasted only six weeks. He returned to the Philippines and began to cohabit with the respondent again. They continued to reside there until 1987 when they came to Australia and began to live in a rented flat in Randwick. This was their accommodation during the eleven years that followed. In Australia neither the respondent nor the appellant entered the workforce. The respondent said that the appellant did not want her going out to work as the appellant or his mother was able to provide them with funds as and when they needed them. The appellant’s desire was that the respondent look after the family. The respondent performed a caring role for the son, Thomas. The family continued to eat out regularly. The respondent cooked at home.
After their arrival in Australia the appellant’s mother provided an allowance, at first of $200, increasing incrementally up to $1,000 a week by some stage prior to 1998. Their lifestyle was frugal.
When they first arrived in Sydney the appellant visited his mother every day of the week. Later this was reduced to three or four times a week. He said this was the reason why he was not able to share in the domestic duties that needed to be done.
Their sleeping arrangements were described by the Acting Master as follows:
In the Philippines he had the bedroom to himself and the plaintiff slept on the floor in the lounge/dining area with the live-in maid. When Thomas was born, Thomas was placed in a cot and also slept in the lounge/dining room area. When the parties relocated to Australia, his evidence was that Thomas had the second bedroom, he had the main bedroom and the plaintiff continued to sleep on the floor in the lounge room. This continued right up to the date of separation. He was asked whether or not he made inquiries of the plaintiff about the reason of her sleeping on the floor in the lounge room and whether he had every offered to share the bed with her. His response to those questions was that he had never discussed those matters with the plaintiff. That response creates an impression of somebody who is uncaring and wants to have somebody at his beck and call to look after his needs with no emotional input being reciprocated by him.”
The respondent’s assets were of little value. At the beginning of the relationship the appellant’s assets consisted of an apartment in Manila valued at approximately $25,000 and investments valued at something between $75,000 and $100,000. The respondent’s evidence was that the appellant said on many occasions that he did not want her to form other friendships with other Philippine people or to continue to have contact with her family in the Philippines. Her evidence was that on those occasions when she did go out, she became very anxious because of the way in which the appellant had conducted himself in the past when she had been out. On returning home she had found the appellant to be threatening. He caused her anxiety to increase. She gave evidence of being locked out of the Randwick flat on one occasion.
She said that by and large whenever she left the flat or the unit she was accompanied by the appellant, on most occasions to do shopping or to buy a midday meal at a restaurant or café. On other occasions they went together to attend their son’s sporting fixtures or parents’ school functions. Other than on those occasions the respondent had no social life with anyone other than the appellant during the time they lived at Randwick. According to the evidence, the respondent’s friends or acquaintances in Sydney were few.
The appellant’s mother died in 1998 leaving an estate of approximately $4 million. The appellant was the sole beneficiary. The estate consisted of a unit in the Park Regis Building in Park Street, Sydney into which the parties moved, the contents of that unit and sums held in bank accounts. The cash component of the estate was approximately $3,250,000. The mother’s death occurred about three years before the separation of the parties.
As well as the weekly allowance, the appellant’s mother gave him jewellery from time to time either to retain and use as he saw fit or to sell and give the proceeds of the sale to the mother. At the date of separation the Acting Master said: “The parties held jewellery, which had a substantial value.” There was evidence about that value.
The Acting Master said:
“23At the time of separation, the assets of the parties were as follows. The plaintiff had jewellery to the value of approximately $134,000. The defendant’s assets were as follows:
(i) 351/27 Park Street, Sydney $800,000.00
(ii)Unit 23 Bayview Tower, Bayview
Street, Runaway Bay Qld $400,000.00
(iii)Esanda debenture policy number
122490029 $2,750,000.00
(iv) Monies with Commonwealth Bank
Limited $200,000.00(v) Ford Cougar motor vehicle
(vi) Honda Prelude motor vehicle
(vii) Hyundai coupe motor vehicle
(viii) Jewellery $250,000.00
(ix) Contents of two apartments $20,000.00
[a total of $4,420,000]
24Since separation, the defendant’s income has increased from $100,000 to a sum in excess of $135,000. The defendant since 2000 has been providing the son with an allowance of $350 per week. On his evidence, that allowance is continuing.
25At the time of separation, the defendant gave the plaintiff $1,000. The plaintiff took with her jewellery to the value of approximately $134,000. Since separation the plaintiff has worked for a period of three weeks as a nurse’s aide and for a short time in a restaurant of a friend for which she did not receive any remuneration. The plaintiff’s evidence is that she has had to sell or pawn most of the jewellery to enable her to live. Since separation she has either lived with friends or paid rent in shared accommodation. She has also had to provide for herself and meet bills. The evidence is, although this is contradicted by the defendant’s medical evidence, that the plaintiff suffers from depression brought about by the isolation that she felt as a result of the defendant’s attitude during the course of the relationship. Her evidence is that until she can overcome the depression, she does not have the self-confidence to go into the work place and to complete for jobs. She feels she is also at another disadvantage in that she is not equipped with any skills to go into the workforce.”
Since the separation the respondent had spent over $90,000, part of it in feeding a gambling habit.
The respondent conceded that during the course of the relationship she made no financial contributions to the relationship. The Acting Master said:
“The defendant made financial contributions throughout the course of the relationship, however, those contributions were not ones that could be regarded as being the product of his own exertion. At the commencement of the relationship he had an apartment in the Philippines and money invested. The amount of that money is in doubt, however, it would appear that it was somewhere between $75,000 and $100,000.”
A little further on, after referring to the appellant’s evidence of the allowance received from his mother, the frugal lifestyle of the parties and their eating out three or four times a week, the Acting Master said:
“In a sense the defendant made little by way of personal financial contribution to the relationship. By 1988 they had been living in rented accommodation for eleven years. They had not built up any personal assets or investments. They lived solely on the largesse of his mother. Not only did she provide him with a weekly allowance, but she also gave him pieces of jewellery for his own use. Some pieces of jewellery were sold and the money was used for living expenses. Other pieces of jewellery were retained. He also sold pieces of jewellery on his mother’s instructions and handed the proceeds of sale to her.”
The Acting Master quoted the definition of “Property” in s3(1) and observed that it was a broad definition. He said:
“In my view, it covers not only assets acquired or conserved during the relationship but is wide enough to include as property in relationship to a party any interest in an estate. Therefore, it would seem to me that once a party receives a legacy, that legacy would constitute property of the party for the purpose of this legislation.”
This brought the Acting Master to consider s20 and what it required of the Court on an application of this sort. He quoted from the judgment of Mahoney JA in Wallace v Stanford and particularly that part to the effect that the power given by s20 is not at large. The Acting Master said:
“To determine whether or not the inheritance should be taken into consideration one needs to look at the contributions made by the parties during their relationship and to balance each other’s contribution in respect to matters contained in s20 subsection (1)(a) and (b). In truth, certainly since 1987, the financial contributions to the relationship were not made by either party. Those contributions were provided [by] the defendant’s mother directly to the defendant and therefore indirectly to the plaintiff by the defendant’s mother.”
It is important at this point to remark that the contributions referred to in para (a) are to “the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them” and the contributions referred to in para (b) to “the welfare of the other party to the relationship or to the welfare of the family constituted by the parties” and their child.
In the written submissions filed on behalf of the appellant it was claimed that the financial contributions made by or on his behalf could be summarised as follows:
at the commencement of cohabitation in the Philippines an apartment and investments worth between $75,000 and $100,000;
income from his investments which enabled a reasonable standard of living to the parties in the Philippines until they came to Australia;
after arrival in Australia the money provided by the appellant’s mother as a weekly allowance which supported the parties and their child;
jewellery which the appellant sold and obtained funds for his own use;
accumulated savings by January 1997 from the above sources of $465,000; and
the inheritance and the product of it.
The appellant claimed that the Acting Master undervalued the overwhelming financial contributions made by or on behalf of the appellant throughout the entirety of the relevant period.
The Acting Master said:
“36Until 1998 the only financial contribution made by the defendant was the income and capital of his investment in the Philippines and the provision of accommodation in the apartment he owned. Thereafter, the parties acquired no assets until 1998 when the defendant’s mother died. At that point the defendant received the whole of his mother’s estate. The relationship continued for another three years after the death of the defendant’s mother. There is some evidence which would suggest that there were non financial contributions during this period by the plaintiff in respect of the Park Regis property and a property subsequently purchased at Runaway Bay in Queensland. However, it could not be said that these contributions were significant. Her evidence is that she cleaned the Park Regis unit and repainted it. The defendant did not concede that the unit needed cleaning but did concede that she spent a couple of weeks repainting the unit. He did not concede that she had a role in the purchase of curtains but in cross examination it became clear that whilst he provided the money for the purchase of the curtains and for someone to fit them that she chose the curtains.”
After further reference to the Runaway Bay property and vague evidence about it the Acting Master said:
“During this period of course the plaintiff continued to provide contributions in her capacity as a homemaker. On the defendant’s own evidence his role as a homemaker was at best minimal. It would appear that the only things the defendant did were to attend functions for their son when he was younger and to polish his shoes. I doubt very much whether he would have polished his son’s shoes during his teenage years.”
The Master referred to the respondent’s application for maintenance pursuant to s27 of the Act and its limited duration perforce of s30 and concluded that having regard to the quantum of the adjustment he thought appropriate pursuant to s20 the respondent would have sufficient funds to enable her to support herself adequately during any period in which she sought employment or retraining. Accordingly he did not think it appropriate to make an order that the appellant pay the respondent maintenance.
The reasons for judgment concluded as follows:
“41In my view, the plaintiff has made substantial contributions to the relationship which require an adjustment of their interests. Contributions as a homemaker should be recognised in a substantial way. See in Re: Marriage of Rolfe (1978) 25 ALR at 219, Mallet v Mallet at 636, Evans v Marmont. The plaintiff’s contributions as a homemaker were significantly greater than those of the defendant. Whilst she made no financial contributions to the acquisition or conservation of any property, she certainly made non financial contributions to a property. Most of those contributions were of a homemaker nature however the evidence is that she painted the Park Regis unit. There is no evidence by the defendant that he did anything in respect of the conservation or improvement of either the Manilla apartment or the Park Regis unit beyond making monies available for the purchase of curtains for the Park Regis unit.
42In my view, it would not be just and equitable for no provision to be made for the plaintiff. When one considers the length of the relationship, the fact that there was a child of the relationship, that the dominant partner in terms of homemaking and parenting was the plaintiff. It is, in my view, self evident that provision be made for her. During the twenty one year period, she devoted herself to his welfare and to that of their son Thomas. I accept her evidence that the defendant did not want her to mix with Philippino people in Australia or to have contact with her family. She was therefore, by and large, in isolation. Because of his attitude, she felt constrained about seeking employment and I accept her evidence, that he made it clear that he did not want her to go out to work. This is another example of her not being able to develop social and work skills in a foreign country. Now at the age of forty six, she finds herself ill equipped to support herself without assistance in Australia. On one side of the ledger, she has some but not much money left over from the sale and the pawning of the jewellery. The other side of the ledger is that the defendant has subsequently remarried and has assets close to $4,000,000. Included in those assets, are two homes in his own name, in addition he has purchased a home for his elder son in which his present wife lives and an investment fund of some $2,700,000.
43Any adjustment should be made on a global basis. Having regard to the plaintiff’s contributions to this relationship and to the meagre resources that she has at the present time, I am of the view, that there should be an adjustment made in favour of the plaintiff, in the sum of $900,000. Offset against this, should be the jewellery that she took when she left the relationship. I accept the methodology of valuation by Mr Abeshouse. However, I have averaged his valuation and the first alternative of the defendant’s value thus allowing $70,000 as the value of the jewellery. To that needs to be added $64,000 being the monies of the jewellery sold by Sothebys. Therefore, in my view, the adjustment to the $900,000 subtracting $134,000.”
Accordingly the Acting Master ordered the appellant to pay the plaintiff $766,000 and declared the respondent the sole owner of all jewellery and personal effects in her possession, custody and control.
Grounds of appeal
The appellant relies upon the following grounds in its amended notice of appeal:
“1.The Acting Master erred in:
(i)attaching relevance or weight to the appellant’s contributions not being the product of his own exertion (30.5) and that he made little by way of personal financial contribution to the relationship (32.8); and
(ii)in not disclosing what relevance or weight were to be attached to such findings.
2.The Acting Master erred in finding that the source of the jewellery as a contribution to the relationship was irrelevant when:
(i)he subsequently found such jewellery was indirectly contributed by the appellant through his mother; and
(ii)the evidence disclosed such jewellery was a significant asset found to be valued at approximately $134,000 and retained by the respondent.
…
4.The Acting Master erred in finding that the direct financial contributions of the appellant’s mother represented an indirect contribution by the appellant’s mother to the respondent.
5.The Acting Master erred in that he failed to attach any or any significant weight to the evidence that the property received by the appellant from his mother in her lifetime or inherited by the appellant from his mother in 1998 comprised the only property of the relationship at that time and was received by the appellant (i) not quite three years before the relationship between the parties terminated and (ii) when the respondent and the child of the relationship were fully supported by the appellant.
6.The Acting Master erred in finding the homemaker contributions of the respondent represented non-financial contributions to a property.
7.The Acting Master erred in the exercise of his discretion in finding that:
(a)the respondent made a substantial contribution to the relationship; and
(b)the respondent’s contribution as homemaker should be recognised in a substantial way
in attaching unspecified weight/relevance to:
(i)the employment prospects or capacity of the respondent;
(ii)health of the respondent;
(iii) the alleged meagre resources of the respondent.
8.The Acting Master erred in failing to take into account and evaluate the respective contributions of the appellant and respondent in order to determine whether the contributions of the respondent have been adequately compensated.
9.The Acting Master erred in
(a)awarding the respondent $900,000.00 by way of property adjustment and
(b)in failing to disclose the reasoning process to such judgement.
10.The Acting Master erred in that he failed to exercise his discretion judicially in that on the facts and circumstances of the case the result is plainly unjust and unreasonable.”
Discussion
On this appeal the Court was ably assisted by Mr McDougall QC and Ms Bridger for the appellant and Mr Hallen SC and Mr Hodgson for the respondent. In general terms and with due respect, the Acting Master did not adopt the approach to considering an application under s20(1) of the Act stipulated in the authorities. In particular, the Acting Master did not correctly identify the appellant’s financial contributions to the acquisition, conservation or improvement of any property of the parties or to the financial resources of the parties or his contributions, financial or otherwise, to the welfare of the respondent and of the family including their son.
Mr Hallen submitted that the Acting Master must have identified these contributions by the appellant because he said more than once that the respondent had made no financial contribution. This submission acknowledges the disparity of the contribution. However, the Acting Master’s recurrent remarks that the appellant’s contributions were not “the product of his own exertion” or that the appellant “made little by way of personal financial contribution to the relationship” or that “since 1987, the financial contributions to the relationship were not made by either party” or that “[t]hose contributions were provided [by] the defendant’s mother directly to the defendant and therefore indirectly to the plaintiff by the defendant’s mother”, indicate that the Acting Master very substantially down-graded or even ignored the financial contributions made by the appellant’s mother on his behalf to both income and capital. The Acting Master was bound to have regard to these contributions under either para (a) or para (b) and he failed to do so. In particular, the recurrent remarks of the Acting Master, to which I have referred, demonstrate that he gave no or no proper consideration to the fact that under para (a) of s20(1) a financial contribution of a party may be made “on behalf of” that party by, as here, the party’s parent. To discount that contribution, as the Acting Master, it seems, was at pains to do, involves error.
Thus Kessey v Kessey (1994) 18 Fam LR 149 the Full Court of the Family Court of Australia held that a contribution by a parent of a party to a marriage to the property of the marriage will be taken to be a contribution made by or on behalf of the party who is the child of the parent unless there is evidence which establishes that it was not the intention of the parent to benefit only his or her child. In this case, as in Kessey, there was nothing to suggest that the mother’s contributions were other than because of the relationship between her and the appellant. As I have observed the Acting Master’s emphasis upon the appellant’s absence from the work force cannot mean that the financial contributions he made can be discounted. It may be that when coming to consider what was just and equitable it was appropriate to take account of the impression the appellant gave to the Acting Master “of somebody who is uncaring and wants to have somebody at his beck and call to look after his needs with no emotional input being reciprocated by him.” But the fact remains that his financial contribution throughout the relationship (albeit through his mother) was substantial and the respondent’s financial contribution almost nothing.
In the last three paragraphs of the reasons for judgment, which I have quoted, there is no recognition of the appellant’s contributions, only emphasis on what the Acting Master described as the respondent’s “substantial contributions to the relationship which require an adjustment of their interests.” There is to be found no reasoning for this conclusion beyond the statements that in effect the appellant made little or no contribution, financial or otherwise. There is no better reasoning for the conclusion that it would not be just and equitable for no provision to be made for the respondent.
The Acting Master’s conclusion that “once a party receives a legacy, that legacy would constitute property of the party for the purpose of this legislation” takes no account of the approach that the Court should take to such an inheritance, which was discussed by Mahoney JA in Wallace v Stanford at 15-16.
I turn to the particular grounds of appeal.
Ground 1
It is apparent from what I have said that in my opinion this ground must be upheld. Certainly in the circumstances of this case, the exertion or otherwise of the appellant in earning his income is of no relevance in measuring his contribution. In some cases it may be of relevance in determining as a matter of justice and equity what, if any, adjustment of property should be made.
Ground 2
This ground must also be upheld. There seems no doubt on the findings that the jewellery received by the appellant from his mother during her lifetime was a financial contribution by him within the meaning of the law.
Ground 4
For reasons I have already given, this ground must be upheld. These were contributions by the appellant within the meaning of para (a).
Ground 5
The Acting Master does not seem to have considered this argument. If he rejected it, he gave no reason for doing so.
Ground 6
I do not think it necessary to express any opinion on this ground of appeal which in any event is of no importance.
Ground 7
I think it is correct to say that, properly approached, if the Acting Master so dealt with the respondent’s employment prospects, health and meagre resources, these were factors of the sort discussed by Hodgson J in Dwyer v Kaljo as subsidiary factors relevant to the ultimate exercise of discretion.
Ground 8
In my opinion, this ground of appeal succeeds. The Acting Master failed to take into account and evaluate the contributions of the appellant when considering whether the respondent had been adequately compensated. He was required to, but did not, conduct a balancing exercise taking account of the contribution by both parties under paras (a) and (b).
Ground 9
With due respect the reasoning process is flawed by the Acting Master’s failure to have regard to the appellant’s financial contributions within para (a). Again with due respect, it is not possible from the Acting Master’s reasoning to reach the conclusion he did. This ground of appeal must be upheld.
Ground 10
I do not think it necessary to add anything under this ground.
Conclusion
The appeal must be upheld and order 1 made by the Acting Master set aside.
Both parties submitted that if the appeal were to be upheld the matter should be remitted to the Equity Division for a new trial. In part this depended upon giving the respondent, if so advised, an opportunity to re-agitate her claim for maintenance under s27 of the Act. However, I am not persuaded that this Court is not able to decide what orders should be made on the respondent’s application under s20.
In the appellant’s written submissions, his financial contributions or those made on his behalf are described as I have set them out in paragraph 45. Included is the $4 million inheritance. In the passage already quoted from Wallace v Stanford at 15C Mahoney JA said that Ms Wallace was not entitled to have, or to have value from, the property inherited by Mr Stanford merely because he acquired it. She had made no contribution to that acquisition. In the present case the Court could order part of the appellant’s inheritance to go to the respondent’s benefit only if, although the appellant had inherited it during the last three years of the relationship, it was “just and equitable” to do so.
Some at least of the appellant’s inheritance had been contributed by him to the acquisition of the property of the parties namely, the unit at Park Street, Sydney and the unit at Runaway Bay together valued at $1.2 million. In addition, there is jewellery of $250,000 and contents of the two apartments valued at $20,000. Consistent with authority, the Court in approaching the question posed by s20(1) should treat the appellant as having made a total financial contribution of at least $1,470,000. I exclude the balance of the inheritance represented by the Esanda debenture and monies with the Commonwealth Bank Limited.
The critical question to be resolved in this matter is whether having regard to the financial contributions made by or on behalf of the parties to the acquisition, conservation or improvement of any of the property of the parties or to the financial resources of the parties and the contributions made in the capacity of homemakers or parents to the welfare of the family constituted by the parties, their interests with respect to their property should be adjusted taking account of the justice and equity of the matter. One way of approaching this question is that adopted by the Chief Justice and Chief Judge in Equity in Evans v Marmont at 85 when their Honours said:
“To put the matter slightly differently, the assets which the respondent brought to the relationship in 1977 do not account for the extent of the disparity between their respective assets at the end of the relationship.”
The appellant’s initial contribution was a financial contribution in the order of $100,000. At the time of the separation his financial contribution was at least $1,470,000. He gave the respondent $1,000 and she took with her jewellery to the value of approximately $134,000. She made no financial contribution to the relationship but according to the finding of the Acting Master made contributions as a homemaker significantly greater than those of the appellant. That continued for a period of nearly twenty years. As Gaudron J remarked in Singer v Berghouse (No 2) (1994) 181 CLR 201 at 228:
“The tendency of the courts to overlook or undervalue women’s work, whether in the home or in the paid workforce, has often been remarked upon. To my mind, that is what is involved in the failure to acknowledge the significant contribution involved when a wife gives up paid employment to be with and look after her husband. To put the present matter in terms appropriate to appellate review, the failure to acknowledge that by giving up her paid employment Mrs Singer made a significant contribution to her husband’s welfare amounted to a failure to have regard to a relevant circumstance – indeed, a very relevant circumstance.”
In order to determine whether an adjustment should be made and if so what adjustment, it is not possible to give the respondent’s contribution an exact value, particularly having regard to the fact that a substantial part of the appellant’s contribution came from an inheritance. I think it is appropriate to value the respondent’s welfare contribution as approximately equal and make a decision accordingly. But it must be acknowledged that the respondent’s contribution to the appellant’s welfare and the welfare of the family made up of the appellant, respondent and the child did not bring with it the usual return of companionship or what the Acting Master described as emotional input, from the appellant.
The Acting Master in paras 41 and 42 of his reasons, which I have quoted, referred to the respondent’s contributions to the Park Regis unit, and to the length of the relationship and described the respondent as the dominant partner in terms of homemaking and parenting. He said that the respondent devoted herself to the appellant’s welfare and to that of their son and accepted her evidence that the appellant did not want the respondent to mix with Philippino people in Australia or have contact with her family. By and large she was left in isolation. She felt constrained about seeking employment. The appellant made it clear that he did not want the respondent to go out to work. In that way she was denied the opportunity to make any financial contribution. She was not able to develop social and work skills in Australia and was left in her late 40s ill-equipped to support herself without assistance. She was left with meagre resources.
These are matters which lead me to think that the respondent’s contribution must be valued or compensated more highly than might otherwise have been the case. Even so, in all the circumstances I regard the award made by the Acting Master of $900,000 as excessive and beyond the reach of a sound exercise of discretion. In my opinion, the appropriate adjustment is in the sum of $750,000 which, less the amount of $134,000 subtracted by the Acting Master, should be paid by the appellant to the respondent.
Orders
I propose the following orders:
1. Appeal allowed;
2.Set aside order 1 made by Acting Master Berecry on 30 August 2002;
3.In lieu thereof the defendant to pay the plaintiff the sum of $616,000 and upon payment, the defendant be declared the owner of all property presently registered in his name or possessed by him;
4.Confirm orders 2 and 3 made by Acting Master Berecry on 30 August 2002;
5.The respondent to pay the appellant’s costs of the appeal but to have a certificate under the Suitors’ Fund Act 1951.
6.The respondent’s application for maintenance under s27 of the Act is remitted to the Equity Division for further consideration on the application of the respondent, if so advised.
TOBIAS JA: I agree with Sheller JA.
EINSTEIN J: The background facts as found by the Acting Master and the shortcomings in the proper application of the relevant principles by the Acting Master, have been carefully dealt with in the reasons for judgment of Sheller JA with which I agree. I also agree with the orders proposed by Sheller JA.
Matters to be dealt with
The only matters with which I propose to briefly deal, concern:
propositions clearly established in terms of the determination of what is "just and equitable" within the meaning of Section 20 (1) of the Property (Relationships) Act 1984 [“the Act”];
aspects of matters appropriate to be taken into account by the Court when weighing the contributions made in the capacity of homemaker or parent by either of the parties to the relationship, to the welfare of the other party to the relationship, or to the welfare of the family constituted by the parties and a child of the parties or a child accepted by them or either of them into the household of the parties;
the relevance and principled approach [in the proper exercise of the jurisdiction to make an adjustment order pursuant to section 20 (1)] to a situation where one of the parties to a de facto relationship has succeeded to an inheritance or other windfall.
Proper approach to determination of what is "just and equitable" within the meaning of Section 20 (1)
The following propositions appear to me to have been clearly established as a result of a number of the decisions referred to by Sheller JA, and significantly, following the clarification by the five-member Court decision in Evans v Marmont (1997) 42 NSWLR 70, of matters which had been somewhat inchoate prior to delivery of that decision:
paragraph (a) and paragraph (b) of Section 20 (1) prescribe the focal points by reference to which the discretionary judgment as to what seems just and equitable must be made. It is by having regard to those matters that the Court may adjust property interests in a just and equitable manner;
a judgment as to what is just and equitable having regard to those matters will ordinarily have to be made in a context;
the critical question is “What is just and equitable having regard to the plaintiff’s contributions?”
Without being exhaustive [it not being possible to set a limit on what circumstances may be relevant to the critical question], matters germane by reason of the context, to the answering of that question may include:
- the length of the relationship;
-any promise or expectations of marriage;
-opportunities lost by the plaintiff by reason of the plaintiff’s contributions
[cf Dwyer v Kaljo (1987) 11 Fam LR 785 at 793]
These matters are significant because they identify:
- the part played by the factors referred to in paragraphs (a) and (b); and
-the part played by reason of those factors, in determining what is just and equitable in the circumstances.
As the Chief Justice and Chief Judge said in Evans:
"It would be unrealistic to attempt to evaluate contributions of the kinds referred to in para (a) and para (b) for the purpose of determining what is just and equitable having regard to those contributions, in isolation from the nature and incidents of the relationship as a whole, relevant aspects of which may well include factors of the kinds mentioned by Hodgson J." (at 75)
Matters appropriate to be taken into account by the court when weighing the contributions made in the capacity of homemaker or parent
In Black v Black (1991) DFC 95-913 at 76,432 Clarke JA made the following observations:
“A domestic servant is neither a homemaker nor a parent. It is true that a domestic servant provides some of the services of a homemaker…But those services could not be equated with the contribution of a homemaker and parent. No doubt a homemaker will invariably perform some, at least, of the tasks of a domestic servant but her contribution to the family unit will usually be infinitely greater than that. In many cases she will be the uniting force and will provide the support, love and affection so necessary to maintain a happy family unit. Although it is impossible to generalise the contribution of a homemaker and parent will usually extend to the performance of a myriad of tasks far beyond the range of activities performed by a domestic servant.”
In Green v Robinson (1995) 36 NSWLR 96 at 118, Cole JA examined the definition of “homemaker” [in the context of the De Facto (Relationships) Act 1984]:
“The Macquarie Dictionary gives as its meaning:
(1)a person who manages a household and whose chief occupation is domestic work, as opposed to breadwinner;
(2)one who creates and maintains a comfortable and welcoming ambience for the members of their household.”
Cole JA preferred the second definition, and concluded:
“The concept of "homemaker" or "making of a home" has a different and wider connotation than housekeeping or maintaining a house. It involves the creation of an emotional ambience of stability.” (at 119)
Further, Cole JA made the following observation:
“However I do not think such money-making capacity is included in the expression "homemaker" where used in s 20(1)(b) because that aspect of the direct or indirect contribution by either de facto partner to the financial resources or property of the partners is addressed in s 20(1)(a).” (at 120)
In light of these definitions, the following matters may be appropriate considerations for the balancing exercise, although this list is not exhaustive:
the role of caring for children – emotionally, developmentally and in terms of attending to the day to day needs of the children;
the care and companionship given to a spouse/de facto;
the domestic work undertaken and the time devoted to such tasks – for example, whether the domestic work and family responsibility amounts to a full time role;
the nature of the domestic work undertaken – does the work undertaken substantially free up the time of the other partner to enable he or she to pursue their career or personal interests?
the adaptation of the role of the homemaker in light of changes in circumstances within the family unit – for example, one party caring for the other following ill health;
making aesthetic improvements to the home for the benefit of the happiness/comfort of the family;
the efforts of the other partner to these homemaker tasks;
the sacrifices made by the homemaker to the benefit of the household and the family (for example: foregoing of a career; foregoing the opportunity to study or undertake training; foregoing the chance to earn a living and/or acquire property);
whether abuse or denigration of the homemaker made fulfilling the homemaker role more difficult (see cases such as Marando v Marando (1997) FLC 92-754 at 84,168-84, 169; 21 Fam LR 841 at 851 per Gee J; Ledwos v Angilley [2001] NSWSC 618 at [39] – [54]).
The relevant context
It is clear from the reasons given by the Acting Master that in the balancing exercise required under section 20, he took into consideration against the background of the evidence which he accepted [giving some additional colour and adjectival information], the following matters:
The length of the relationship [a relationship of some 21 years broken only by about six months some three years after it commenced];
The fact that there was a child of the relationship [aged approximately 20 by the time of the parties ultimate separation in 2001];
The fact that the dominant partner in terms of homemaking and parenting had been the respondent [during the 21 year period, the Acting Master found that the respondent devoted herself to the welfare of the appellant and to that of their son - the appellant conceding that he performed no domestic duties around the house, had not supervised their son and had not taken a great interest in his welfare];
The lack of opportunity afforded to the respondent to develop social skills [the finding of the Acting Master was that the appellant did not want her to mix with Filipino people in Australia or to have contact with the family-leaving her therefore, by and large, in isolation and resulting in her not being able to develop social skills];
The lack of opportunity afforded to the respondent to equip herself with work skills [the finding of the Acting Master was that because of the appellant's attitude, she had felt constrained about seeking employment, he having made it clear to her that he did not want her to go out to work. The finding was that she was not able therefore to develop work skills in a foreign country, finding herself presently ill-equipped to support herself without assistance in Australia];
The meagre resources currently held by the plaintiff.
As earlier pointed out, ultimately the judgment as to what is just and equitable having regard to the focal points provided by section 20 (1) (a) and (b), has to take into account what may be regarded as a relevantly unusual context.
The respondent was aged 23 or 24 at the time the parties met, was living in the Philippines and had no children. She was working in a bar. At the time of their separation she was aged 45 and living in Australia and had a son. The period of the relationship provided her with security of high order, although not the security which a marriage would have provided. By reason of her substantial contributions as homemaker over the intervening 20 years she had given up critical years of her life to the relationship and to her son.
In the result on the evidence accepted by the Acting Master, the relevant context must be seen to have included a loss of substantial opportunities such as the opportunity:
-for her to obtain skills for employment;
-for her to obtain some form of employment and with the relevant experience;
-for her to acquire social skills.
Inheritance or receipt of winnings
An inheritance or receipt of winnings may or may not have a relationship to the exercise of the Court's discretion. Such inheritance or winnings received at any time and in particular very late in a relationship, does not, per se, justify the conclusion that the monies or assets so acquired necessarily or at all, have a relationship to the exercise of the Court’s discretion. Each case must be determined by the facts proven. The matter may raise a difficult question on the facts. However the Court’s undoubted responsibility is to determine such question.
The importance of the balancing exercise in facilitating justice and equity for both parties was made clear by the hypothetical example put to Mr McDougall QC by the Court, of a woman who cared for her de facto partner’s children from previous relationships, and his aged parents, but stood to receive nothing of the only property of the relationship, which was an inheritance held entirely by the man. Mr McDougall submitted that due to the deliberately narrow scope of section 20, the woman must receive nothing.
While the mere fact that there is disparity in wealth between the parties is not of itself a reason for adjustment, the circumstances [the above example being short of fuller detail] may on analysis be such that the non-financial contributions of the one party outweigh all forms of contribution of the other party.
The balancing exercise, when correctly carried out, ensures that the contributions of both parties will be given proper credit with due consideration to the scope of the section. That consideration will take into account the matrix of relevant factual information, including assets acquired by each party during the relationship [from whatever source shown to have a relationship to the exercise of the Court's discretion].
In this case the inheritance occurred towards the very end of the relationship; the death of the respondent's mother occurring approximately three years before the relationship ended. In my view Sheller JA has correctly applied the relevant principle namely that the Court could order part of the appellant's inheritance to go to the respondent's benefit only if, although the appellant had inherited it so late in the relationship, it was "just and equitable" to do so.
Conclusion
For the reasons given by Sheller JA there is no doubt but that the appeal must be upheld and order 1 made by the Acting Master set aside. That having been said, like Sheller JA, I am not persuaded that this Court is unable to decide what orders should be made on the respondent’s application under section 20.
I agree with the reasoning of Sheller JA in that some at least of the appellant's inheritance had been contributed by him to the acquisition of the property of the parties, it being just and equitable that the Court in approaching the section 20(1) issue, should for the reasons given by Sheller JA, treat the appellant as having made a total financial contribution of at least $1,470,000.
In my view a proper application of the principles set out above, for the reasons given in paragraphs 72-78 of the judgment of Sheller JA,
importantly taking into account the section 20 (1) (a) and (b) focal points [identifying the matters to which regard is to be had in determining what is just and equitable in terms of an appropriate adjustment of property interests];
further having regard to those matters in the relevant context
is to make the orders proposed by Sheller JA.
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LAST UPDATED: 18/07/2003
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