Robertson v Fox
[2008] VSC 135
•24 April 2008
11
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
COMMON LAW DIVISION
No. 6191 of 2005
| NARELLE DAWN ROBERTSON | Plaintiff |
| v | |
| IAN LESLIE FOX | Defendant |
---
JUDGE: | CUMMINS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 17-22 October 2007, 21 November 2007 | |
DATE OF JUDGMENT: | 24 April 2008 | |
CASE MAY BE CITED AS: | Robertson v Fox | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 135 | |
---
PROPERTY – domestic partners – adjustment of interests – rural property – Part IX Property Law Act 1958 – s.285 Property Law Act 1958 – considerations applicable – orders made.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | C Northrop | Morrison and Sawers |
| For the Defendant | K MacFarlane | Andrew Spilva Stewart & Co |
------------------------------------------------------------
HIS HONOUR:
INTRODUCTION
This is a claim for orders for adjustment of interests pursuant to s.285 Property Law Act 1958. There is also a claim by the plaintiff for like relief pursuant to constructive trust. The defendant has made a counter-claim for declarations and orders as are just and equitable.
The parties lived in a domestic relationship for just on twenty years. They resided together from December 1984 to June 2004 save for a period of three months from August 1986. They resided together on the defendant’s farm property at Healy Road, Cobram. They never married. There are no children of the relationship. The plaintiff was born in 1949. She was 35 years of age when the relationship with the defendant commenced in 1984, 54 years at its cessation in 2004, and is now 58 years of age. The defendant was 34 years of age when the relationship commenced in 1984, 53 years at its cessation in 2004, and is now 57 years of age.
Both parties had children from previous relationships. The plaintiff had a daughter, who was 10 years of age at the commencement of the plaintiff’s relationship with the defendant in December 1984. The defendant at that time had three children, two sons who were then aged 12 and 9 years, and a daughter who then was aged six months.
Proceedings in this matter were commenced by filing of writ on 23 May 2005. Defence and counter-claim were filed on 29 August 2005. Defence to counter-claim was filed on 15 September 2005. The matter was heard in October 2007 with oral submissions, in addition to written submissions, being made in November 2007.
THE RELEVANT LAW
Section 285 Property Law Act 1958 provides:
(1) A court may make an order adjusting the interests of the domestic partners in the property of one or both of them that seems just and equitable to it having regard to—
(a) the financial and non-financial contributions made directly or indirectly by or on behalf of he domestic partners to the acquisition, conservation or improvement of any of the property or to the financial resources of one or both of the partners; and
(b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the domestic partners to the welfare of the other domestic partner or to the welfare of the family constituted by the partners and one or more of the following—
(i) a child of the partners;
(ii) a child accepted by one or both of the partners into their household, whether or not the child is a child of either of the partners; and
(c) any written agreement entered into by the domestic partners.
(2)A court may make the order whether or not it has declared the title or rights of a domestic partner in respect of the property.
In a case such as this, where the parties lived together for almost two decades, a holistic or global approach to assessment of contribution and adjustment of assets is appropriate. Such an approach was stated by Mason and Deane JJ. In Norbis v Norbis[1] at 523 thus:
“Although it is natural to assess financial contributions under s.79(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, i.e. on a global or, alternatively, on an "asset-by-asset" basis. Which of the two approaches is the more convenient will depend on the circumstances of the particular case. However, there is much to be said for the view that in most cases the global approach is the more convenient…
The assessment of the parties' entitlements before the making of an order is another question, quite distinct from the assessment of their contributions. As a matter of construction of s.79 [the trial judge] is right in saying that the section imposes no obligation on the Family Court to pursue in relation to this issue either the global approach or the asset-by-asset approach to the exclusion of the other. We do not understand the Full Court in the present case to suggest otherwise. What the Full Court asserts is that the global approach is the only "realistic", i.e., convenient, means of arriving at the entitlements of the parties. Again, it seems to us that it will depend on the circumstances of the particular case, though in the majority of cases the global approach will be the more convenient and for this reason the Full Court is entitled to prescribe its adoption as a guideline in the majority of cases. 'The Family Court has rightly criticized the practice of giving over-zealous attention to the ascertainment of the parties' contributions, and we take this opportunity of expressing our unqualified agreement with that criticism, noting at the same time that the ascertainment of the parties’ financial contributions necessarily entails reference to particular assets in the manner already indicated.”
That holistic approach is not deflected by the circumstance, set out in detail in below, that the parties substantially kept their assets separate during the relationship. As stated below, there was no agreement or significant discussion between the parties that their assets be separate; that is how their financial affairs were conducted. Both contributed income to support the household. Where both parties live together for a period such as two decades and both contribute personally and financially to the relationship, a holistic approach to assessment and adjustment of assets is to be preferred.
[1](1986) 161 CLR 513.
Further, it has been judicially accepted for some time that contribution as homemaker and parent is of real significance and is not to be undervalued financially. The relevant considerations are well stated by Master Macready in Parn v Parn[2] at [34] – [35] thus:
“There is nothing in the evidence in this case to suggest the plaintiff was anything other than an ordinary, competent homemaker and parent. There is nothing in the evidence to suggest that the defendant was anything other than an ordinary breadwinner given his position as a storeman. One commonly sees a situation where the parties, through their earnings, in most cases by the breadwinner alone, obtain a house and pay it off. The question which I have to resolve in this matter is whether in the context of a long relationship of 31 years’ duration contributions of the plaintiff as homemaker and parent are equal to the contributions of the defendant as a breadwinner who contributed most of his earnings (but not all) to the relationship and also brought into the relationship what became from time to time the family home. The plaintiff contributed her inheritance, which has effectively been taken by the defendant, but the amount is small compared to the other contributions in the case.
It must not be forgotten that there has been an enormous increase in the value of the property as a result of the passage of time the parties have been together with both contributing to their relationship. However this is not a case where the plaintiff has, by her homemaking efforts, allowed the defendant the opportunity to go out and earn money to purchase or pay off the home. It was a capital contribution of a home, which he owned free of debt at the start of the relationship. In the circumstances it seems to me that the long period of the relationship means that the proper division of the asset to recognise the contributions over the years is a division of 45 percent to the plaintiff and 55 percent to the defendant.”
[2](2003) DFC 95-270; [2003] NSWC110. See also Mallett v Mallett (1984) 156 CLR 605 per Gibbs CJ at 609 and Wilson J at 636.
The primary of paragraphs (a) and (b) of s.285(1) Property Law Act 1958 in ordering adjustment of interests is established not only by the terms of that section but by authority. In Evans v Marmont[3] Gleeson CJ and McLelland CJ in Eq. in relation to s.20 De Facto Relationships Act 1984 stated at 79:
[3](1997) 42 NSWLR 70
“There is nothing in s.20 of the Act, of the kind found in s.75(2)(o) of the Family Law Act, which requires or entitles a court to take into account as a factor alongside those referred to in par (a) and par (b), “any fact or circumstances which, in the opinion of the court, the justice of the case requires to be taken into account.”
Most importantly, s.20 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 incidence 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 consideration. It is by having regard to those matters that the court may adjust property interests in a just and equitable manner.”
Hodgson J had stated[4]:
“Other circumstances which may be relevant include such matters as the length of the relationship, any promise or expectation 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”.
[4](1987) II Fam.L.R. 785 at 793 and cited with general approval in the judgment of Gleeson CJ and McLelland CJ in Eq.
I apply the above principles in this case.
THE HISTORY
The plaintiff was 35 years of age, and the defendant 34, when they commenced their relationship in December 1984. Both had been previously married. The plaintiff was a primary school teacher. She had married in 1972 and there was one child of the marriage, a girl born in December 1974. The plaintiff was divorced in 1980. The defendant was a self-employed dairy farmer. He had married in 1971 and there were three children of the marriage, two boys born respectively in 1972 and 1975 and a girl born in 1984. The defendant and his then wife separated in October 1984. They divorced in 1987.
The parties first met in Melbourne in June 1984. The plaintiff sold her unit in suburban Melbourne in November 1984 and in December 1984 moved to the defendant’s Healy Road farm at Cobram where they commenced to reside together. The plaintiff brought domestic furniture with her from Melbourne to Cobram. The defendant and his wife had separated in October 1984 and his wife had removed the furniture from the home. From December 1984 until June 2004 the parties lived together, apart from a three month period from August 1986 when the defendant and his wife attempted a reconciliation. In 1987 the defendant and his wife effected an agreement under s.87 Family Law Act 1975 as to their financial rights and obligations. The daughter of the plaintiff resided with her father who remarried and she did not reside with the parties. The daughter of the defendant resided with the parties only for a period of six months. The sons of the defendant resided with the parties at the Healy Road property for some nine years. The plaintiff actively took part in the rearing of the defendant’s children.
Throughout the two decades of the relationship the plaintiff worked as a salaried primary school teacher and the defendant as a self-employed dairy farmer. Since June 2002 the defendant has also been employed as a real estate salesperson. The plaintiff routinely provided most of her income as a teacher to household and like expenses. The defendant routinely applied most of his income as a dairy farmer to farm expenses and building up farm assets and also to household expenses of power and insurance.
At the commencement of the relationship in December 1984 the plaintiff owned a suburban unit in Melbourne which she sold and for which she received $20,000 net proceeds, a Datsun motor car, household chattels and a non-vested interest in an employer-run superannuation fund. The defendant by himself or as a co-owner with his wife owned two adjacent allotments at Healy Road, Cobram upon which the dairy farming business was carried on, a herd of dairy cows, farming plant and equipment, a vehicle and Murray Goulburn shares. The assets were the subject of substantial encumbrance. In the Family Law proceedings the defendant deposed that his gross assets were $420,700 and his indebtedness $205,765 at November 1986.
During the relationship the defendant in 1985 purchased a third parcel of land adjoining the Healy Road farm property. In 2002 he sold the whole Healy Road farm together with livestock, plant and equipment for $1,932,000. In 1990 the parties, together with others, purchased some 300 acres at Mooroopna for $310,000, two –thirds of which acreage was sold for $321,486. In 2000 the parties bought out one of the co-proprietors as a consequence of which the plaintiff owns a quarter share of the property, the defendant a five-eighth share, with the balance owned by third parties. The Mooroopna property stands in a different category to the other properties, not only because it was purchased jointly with other parties but because its purchase was principally as an investment (sub-division) property rather than as a working property. Unfortunately for the parties the sub-division did not come to pass. In June 1998 the defendant purchased 640 acres of real estate in Corowa, NSW (a beef, not dairy, property) including dwelling house, silos and stockyards (“the Corowa farm property”) for $350,000 which property is registered in the defendant’s name. The plaintiff acted as surety for the Corowa purchase. She also signed joint loan applications with the defendant which did not proceed. In May 2002 the defendant purchased 30 acres in Cobram with a dwelling house thereon (“the Cobram home property”) for $309,917 which property is registered in the plaintiff’s name. The funds for the purchase of the Cobram home property were derived from the sale proceeds of the Cobram farm property. The sale of the Cobram farm property and the purchase of the Cobram East property signified a change in lifestyle for the defendant. No longer was he to be wholly tied to the dairy farm. He commenced working in real estate. The parties resided at the Cobram home property until their separation in June 2004 and the plaintiff continues to reside there. In July 2003 the defendant purchased a dairy farming property at Cobram East with dwellings and improvements (“the Cobram East farm property”). In or around July 2003 the defendant purchased dairy cows for the Cobram East farm property for $134,750 and since that time the defendant purchased further stock which was agisted in Victoria and New South Wales. Also, plant and equipment have been purchased by the defendant for the Cobram East farm property.
The defendant always has been a hard worker, devoting many long hours over many years to the maintenance and improvement of the farming business and assets. The plaintiff has worked assiduously as a local primary school teacher. The plaintiff also undertook her share of work on the farm, as well as maintained the household and the home garden. The plaintiff actively undertook the upbringing of the defendant’s two sons for almost a decade. The parties have lived responsibly.
The personal and financial incidents of the relationship of the parties reflect the longevity of the relationship and its committed character. The parties commenced cohabitation at the Healy Road farm in December 1984. In January 1985 the plaintiff made a loan of $20,000 to the defendant, being the entire proceeds of the sale of her suburban unit in Melbourne, to assist him in a financial settlement with his estranged wife, which the defendant repaid in 1986. The defendant’s two sons commenced living with the parties in early 1985. In August 1985 the plaintiff took long service leave to help renovate the farm house and assist on the farm. In the first half of 1986 the defendant’s daughter resided with the parties for six months. The parties separated for three months from August 1986 when the plaintiff moved to Bendigo and the defendant attempted a reconciliation with his wife. The parties then resumed cohabitation at the Healy Road property. From 1987 the plaintiff commenced teaching at a local primary school. In June 1987 the defendant and his estranged wife entered a s.87 agreement and were divorced in 1987. In October 1988 the defendant underwent surgery for cancer. The plaintiff took long service leave to care for him. In December 1989 the parties became engaged. The defendant’s older son left the parties’ home in 1991 and his younger son in 1995. The defendant encouraged his sons to give mothers’ day presents to the plaintiff. In 1991 the defendant made a will with the plaintiff and his three children as beneficiaries (exhibit N). In December 1997 the defendant gave the plaintiff an engagement card (exhibit F) and a wedding ring (T.52) at Christmas. Before me the defendant maintained the ring was a friendship ring only. I do not accept that evidence of the defendant. The plaintiff at the time shared her happiness at the receipt of the ring with the parties’ friends. The defendant did not then demur. It is too late to do so now. The ring was given in the context of a long-standing engagement. In 2000 the plaintiff made a loan of $20,000 to the defendant’s younger son which was repaid after the parties separated. In 2002 the Healy Road property was sold and the defendant commenced employment as a real estate representative. He commenced a relationship with a person in that industry which relationship is continuing. The defendant gave evidence that his relationship with the plaintiff started to deteriorate in the late 1990ies because of her alcohol consumption. The plaintiff denied excessive alcohol consumption and gave evidence that the relationship started to deteriorate in around 2003 because of suspected and later confirmed infidelity by the defendant. The parties separated in June 2004.
Throughout the almost two decades of the relationship both parties worked hard. The plaintiff brought her teaching earnings to the maintenance of the household. Although the defendant contributed to household living expenses, essentially the plaintiff paid for household living expenses and the defendant for outgoings including power and insurance. For all but some two years, the plaintiff’s disposable income exceeded that of the defendant (exhibit C). The plaintiff as an incident of her teaching employment received employer-funded superannuation. Although the defendant did not contribute to the fund it should be taken into account as part of the holistic financial situation of the parties[5]. Until 1999 the plaintiff did bookkeeping for the farming business. In January 1998 in relation to the Cobram farm purchase the plaintiff acted as surety. She also signed joint loan applications, although the joint loans did not proceed (exhibit E). In December 1998 the plaintiff gave the defendant $7000 to purchase heifers. It was clearly beneficial for the parties for taxation purposes that the defendant applied his farm income to farm expenses and did not bring it otherwise to account and that is what he did. Interest on loans was paid by the defendant out of farm income; principal was paid out of after-tax income. The defendant was enabled to pay principal on loans from after-tax income by the majority of household living expenses being paid by the plaintiff out of her after-tax income.
[5]Zegaras v Thomasevie [2003] VSC 150.
The defendant’s strength was his work on and management of the assets of the farming business. Principally it was he who made the decisions as to assets. The parties except to a small extent, notably the third Healy Road block and the Mooroopna property which property involved outside parties, did not share the legal ownership of the farm assets. Those assets were legally owned by the defendant. The Cobram East property was purchased in the plaintiff’s name in 2002. This was said on behalf of the defendant to be in signification of the separation of the parties’ assets. The plaintiff said in evidence that there was no such signification and that the placing of that property in her name was because the defendant said that she had always wanted something in her name and that was what he did. The property was nine kilometres out of Cobram on the Murray Valley Highway and where the Blonde Aquitaine cattle the defendant proposed to run would be visible from the road. There was no proposal discussed or agreement reached by the parties that their assets would be kept separate, and no conversation was deposed to that effect; it was the way it was done. The defendant’s ability to tend and build up the farm assets, while reflecting most favourably upon his work and application, was facilitated in substantial measure by the plaintiff bringing in income and being the homemaker.
The defendant paid the deposit and financed the borrowings to complete the purchase of the Corowa property. Likewise with the Katamatite farm. There was substantial commitments: $365,000 and $300,000 respectively. As I have stated more than once, the defendant worked long and hard in improving all the properties.
In 1999 the plaintiff’s mother died and the plaintiff inherited one half-share of her mother’s estate. The Estate comprised a home at Golden Square, Bendigo and bank account and shares, of a total value of $340,284. Some of that money was provided by the plaintiff to the defendant in December 2000 to increase the share in the Mooroopna property. The inheritance has been preserved in specie in order that the plaintiff could pass it from grandmother (the plaintiff’s mother) to granddaughter (the plaintiff’s daughter). I consider that the inheritance of the plaintiff from her mother, apart from the Mooroopna provision, and its investment by her should not be taken into account under s.285 as it was a windfall benefit received wholly independently of the relationship of the parties and solely in the plaintiff’s capacity as daughter.
FINDINGS
Comprehensive evidence was given before me by both the plaintiff and the defendant. I consider that both were truthful witnesses and are decent people. The two substantial differences in evidence between them related not to financial but to personal matters. The first such matter was whether in December 1997 the defendant gave the plaintiff a wedding ring. The second was the personal reasons for their separation. As to the question of the wedding ring, I accept the evidence of the plaintiff as to what was said between the parties and by the parties to others. Her evidence was consonant with the then situation of the parties. As to the reasons for the separation, I consider both parties told the truth according to their perceptions of the unravelling relationship and it is not appropriate for me to say further, other than I do not apportion fault to either party.
The appropriate date for assessment of real property assets and liabilities is the date of hearing[6] Separate consideration needs to be exercised as to personal property, as to which the date of separation is a fair and just time frame.
[6]Robertson v Austin [2003] VSC 80 at [51] – [53] per Nettle J (as he then was); Theodoropoulos v Theodosiou (1995) 38 NSWLR 424.
There is an alternative claim to that pursuant to s.285, sounding in constructive trust. In the end that claim was not pursued before me, sensibly. This is a Part IX matter. The defendant’s counter-claim seeks a declaration as to what amounts, if any, are owed to the plaintiff and to the defendant and such other orders as are just and equitable in the circumstances.
On behalf of the defendant it was argued strongly that the parties had always kept their finances separate to a very great extent and that such conduct bespoke an intention on their part to maintain separate financial spheres which the Court should not defeat under Part IX. I do not agree. The substantial separateness of the parties’ finances reflected the complimentarity of their positions and contributions. Each in their own way contributed. The defendant’s building up of assets was facilitated and indeed enabled because of the financial and personal contributions of the plaintiff. It was she who kept the family and the household going, which contribution freed the defendant to develop the assets. A partnership does not require equality of contribution in kind. This partnership was signified by complimentarity in which the contribution of each party, both financially and personally, was significant and underpinned the other. In the circumstance of such complimentarity over almost two decades and of the positions of the parties at the outset, during, and at the cessation of the relationship I consider that it is just and equitable that the assets of the parties be divided equally between them.
At the conclusion of the relationship in June 2004 the principal assets of the plaintiff (with valuations agreed or established) were the Cobram East property (value $375,000), the Mooroopna funds (28.6% of $190,000 being $54,390), superannuation entitlements ($380,437) and a motor vehicle ($16,000), totalling some $825,827.00. The principal assets of the defendant (with valuations agreed or established) were the Katamatite farm (net value after deduction of mortgage $972,000), the Corowa farm ($550,000), the Mooroopna funds (71.4% of $190,000 being $135,660), Incitec Pivot shares ($154,110), Murray-Goulburn Co-operative ($81,000), Elders account ($75,000), stock ($360,000) and plant and equipment ($70,000), totalling some $2,397,770. The combined pool of net assets was $3,233,597. A mathematical equal division is $1,616,799. An equal division of the net assets involves a transfer from the defendant to the plaintiff of $785,972. Appropriate adjustment needs to be made for real property value as at the date of trial, including expenditure by the defendant of some $138,000 on improvements to the properties, a commitment (at time of trial) of $440,000 on fodder and an increase in the value of the Katamatite property since separation of some $265,000. The value of the defendant’s superannuation at time of separation is not significant (around $4000). Discussion between counsel needs to be had – and in the event of lack of fruition, orders of the Court shall be made – as to the appropriate transfer of property or sale thereof to achieve parity between the parties in fulfilment of this judgment.
I shall hear counsel on these matters.
I shall also hear counsel on the matter of costs.
---
4
0