ROWLANDS & ARDEN
[2016] FCCA 2993
•23 November 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ROWLANDS & ARDEN | [2016] FCCA 2993 |
| Catchwords: FAMILY LAW – De Facto relationship –– whether it is just and equitable to adjust the property interests of the parties – whether the Applicant working in the Respondent’s business is a contribution or whether it is balanced by his paying for the Applicant’s expenses in their entirety. |
| Legislation: Family Law Act 1975, ss.90SF(3), 90SM, 4AA, 90SB, 90RD(1) |
| Cases cited: Bevan & Bevan [2013] FamCAFC 116 Stanford v Stanford (2012) FLC 93-495 |
| Applicant: | MS ROWLANDS |
| Respondent: | MR ARDEN |
| File Number: | DGC 80 of 2015 |
| Judgment of: | Judge Small |
| Hearing date: | 23 June 2016 |
| Date of Last Submission: | 23 June 2016 |
| Delivered at: | Morwell |
| Delivered on: | 23 November 2016 |
REPRESENTATION
| Counsel for the Applicant: | Self-represented |
| Solicitors for the Applicant: | Self-represented |
| Counsel for the Respondent: | Mr Gates of Counsel |
| Solicitors for the Respondent: | Warren Graham & Murphy |
THE COURT DECLARES THAT:
Pursuant to s.90RD(1) of the Family Law Act1975, the Court declares that the parties were in a de facto relationship between April 2010 and February 2014.
AND THE COURT ORDERS THAT:
Within twenty-eight (28) days the Respondent shall pay to the Applicant the sum of $5,432.30 (“the payment”).
Contemporaneously with the payment the Applicant shall relinquish all her right title and interest in any property registered in the name of the Respondent and shall withdraw any caveat she has lodged against any of the real properties owned by the Respondent.
If the Respondent fails to make the payment by the due date then he shall do all such acts and things and sign all such documents as might be necessary to place the property known as and situate at Property M, New South Wales (“the real property”) on the market for sale, and the proceeds of sale shall be applied as follows:
(a)Firstly, to pay all costs and commissions of the sale;
(b)Secondly, to discharge the mortgage over the real property;
(c)Thirdly, to make the payment to the Applicant, together with interest accrued at the rate of 10% per annum from the due date to the date of payment; and
(d)Fourthly, the remainder to the Respondent.
Should the Respondent fail to comply with paragraph 4 hereof then pursuant to s.106A of the Family Law Act 1975 a Registrar of the Federal Circuit Court of Australia at Melbourne shall be appointed to sign any and all such documents on his behalf as may be necessary to give effect to these orders, and the Registrar shall be satisfied as to his or her authority under this order upon the Applicant or her legal representative filing an Affidavit setting out the Respondent’s failure to comply.
Unless otherwise specified in these orders and save for the purposes of enforcing any monies due under these any subsequent orders:
(a)Each party shall be solely entitled to the exclusion of the other to all other property (including choses-in-action) in the possession of such party as at the date of these orders;
(b)Monies standing to the credit of the parties in any joint bank account shall be divided equally between the parties;
(c)Insurance policies remain the sole property of the owner named thereon;
(d)Each party shall be solely liable for and indemnify the other against any liability encumbering any item of property to which that party is entitled pursuant to these orders;
(e)Each party forgoes any claim they may have to any inheritances or superannuation entitlements to which the other party is entitled to either presently or in the future; and
(f)Any joint tenancy of the parties in any real or personal estate is hereby expressly severed.
IT IS NOTED that publication of this judgment under the pseudonym Rowlands & Arden is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
DGC 80 of 2015
| MS ROWLANDS |
Applicant
And
| MR ARDEN |
Respondent
REASONS FOR JUDGMENT
Introduction
These are property and spousal maintenance proceedings arising from the breakdown of the relationship between the Applicant Ms Rowlands (“Ms Rowlands”) and the Respondent Mr Arden (“Mr Arden”).
Ms Rowlands seeks a property settlement and spousal maintenance under ss.90SM and 90SF(3) of the Family Law Act 1975 (“the Act”), maintaining that the parties lived in a de facto relationship between 2010 and 2014.
Specifically, she seeks orders that Mr Arden pay her the sum of $240,000.00 net of tax and “pocket money” he gave her during the relationship, that payment being wages she says she earned working in (businesses omitted) owned by him during the relationship.
Mr Arden wants the court to dismiss Ms Rowlands’ application.
The issues to be decided are:
A.Did the parties live in a de facto relationship as defined in the Act?
B.If so, is it just and equitable to adjust their property interests?
C.If it is just and equitable, what is the property to be divided between them?
D.What were the contributions of the parties to that property?
E.Should the parties’ contribution-based entitlements to the property be adjusted on the basis of the matters set out in s.90SF(3) of the Act.
F.On the basis of the answers to the above questions, what orders should the court make in order to arrive at a just and equitable outcome?
Background
Ms Rowlands is now 49 years old, having been born in Australia on (omitted) 1967.
Mr Arden is 48 Years old having been born in (country omitted) on (omitted) 1968. He migrated to Australia with his parents as a child.
The parties met in (omitted) 2010 and commenced living together in April of the same year.
The parties lived between (omitted), (omitted) and (omitted), working in (businesses omitted) owned by Mr Arden.
Ms Rowlands says she worked full-time in those (businesses omitted) for four years and that she was never paid a wage for that work.
Mr Arden’s case is that he employed (employees omitted) to work in the (businesses omitted) and that Ms Rowlands’ attendance at the (businesses omitted) was casual and her contribution to the business minimal.
It is Ms Rowlands’ case that the relationship ended in February 2014 when she moved out of the unit that the parties had been renting before Mr Arden bought it in mid-2013.
Mr Arden maintains that the relationship ended in January 2013, although he acknowledges that the parties continued to live under the same roof until Ms Rowlands left in February 2014.
Ms Rowlands lives in Melbourne and is occupied as a carer for her mother, for which she receives a carer’s allowance from Centrelink.
Mr Arden lives in (omitted), New South Wales, and continues to be self-employed, operating (businesses omitted) and investing in property.
Procedural History
This matter commenced when Ms Rowlands filed her Initiating Application, her affidavit in support, and a sworn financial statement on 13 January 2015.
Mr Arden filed his Response, an affidavit in support and a sworn financial statement on 20 March 2015.
The matter was first returnable before Judge Phipps on 23 March 2015 in the Duty List at the Morwell circuit sittings, where His Honour adjourned the matter to the June Circuit and ordered the parties to attend a Conciliation Conference.
The matter came before me for the first time on 15 June 2015 in Morwell where further procedural orders were made by consent and I set the matter down for trial for the November circuit in the week commencing 15 November 2015.
That date was later vacated and the matter was relisted for trial in the February circuit.
On 29 February 2016, the matter came before me at Morwell, when the trial date was vacated and the parties entered into consent orders in relation to discovery. The matter was then set down for trial at the June circuit.
On 23 June 2016 the parties came before me for Trial and the proceedings were heard entirely that day. Ms Rowlands represented herself and Mr Gates of Counsel represented the Respondent.
The witnesses were the parties alone and judgment was reserved at the end of trial.
Before judgment was reserved, an order was made by consent for the sale of one of Mr Arden’s properties, the proceeds of that sale to be applied to reduce his overall mortgage debt.
The Issues and the Evidence
A. Did the parties live in a de facto relationship at law?
The reason this question must be answered is that unless the parties were married or lived in a de facto relationship as defined by the Family Law Act 1975 (“the Act”), this court does not have jurisdiction to determine property disputes between them[1].
[1] Norton & Locke (2013) FLC 93-567; Holden & Wolff (2014) Fam CAFC 224
The Law
Section 4AA of the Act states:-
(1) A person is in a de facto relationship with another person if:
(a) the persons are not legally married to each other; and
(b) the persons are not related by family (see subsection (6)); and
(c) having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Paragraph (c) has effect subject to subsection (5).
(2) Those circumstances may include any or all of the following:
(a) the duration of the relationship;
(b) the nature and extent of their common residence;
(c) whether a sexual relationship exists;
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between them;
(e) the ownership, use and acquisition of their property;
(f) the degree of mutual commitment to a shared life;
(g) whether the relationship is or was registered under a prescribed law of a State or Territory as a prescribed kind of relationship;
(h) the care and support of children;
(i) the reputation and public aspects of the relationship.
(3) No particular finding in relation to any circumstance is to be regarded as necessary in deciding whether the persons have a de facto relationship.
(4) A court determining whether a de facto relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
(5) For the purposes of this Act:
(a) a de facto relationship can exist between 2 persons of different sexes and between 2 persons of the same sex; and
(b) a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.
It is conceded by both parties that they never married and are not related as family members, so the question then becomes whether, “having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis”.
The court’s power to make orders in relation to property disputes between de facto partners is found in s.90SB of the Act, which states as follows:
A court may make an order under section 90SE, 90SG, or 90SM or a declaration under section 90SL, in relation to a de facto relationship only if the court is satisfied:
(a) that the period, or the total of the periods, of the de facto relationship is at least two years; or
(b) that there is a child of the de facto relationship; or
(c) that:
(i) the party to the de facto relationship who applies for the order or declaration made substantial contributions of a kind mentioned in paragraph 90 SM(4)(a), (b) or (c); and
(ii) a failure to make the order or declaration would result in a serious injustice to the applicant; or
(d) that the relationship is or was registered under a prescribed law of a state or territory.
I note that in this case the court is being asked to make an order for property settlement under s.90SM of the Act and spousal maintenance orders under s.90SF(3).
In this case, it is conceded by both parties that their relationship existed between at least April 2010 and January 2013, a period of more than two years. Thus the requirements of s.90SB(a) are satisfied and the court has power to make the orders sought.
It is also common ground that the parties lived together at several addresses and that theirs was a sexual relationship.
Nor is there any dispute about the fact that Ms Rowlands was entirely financially dependent on Mr Arden for the entire period of the cohabitation and that she received no income from any other source during that period.
While they did not and do not own property together, the property where they lived together for some of the relationship at Property M, New South Wales was purchased by Mr Arden in mid-2013. At that time, the parties had been occupying the property as tenants for some six months although it was leased in Mr Arden’s name alone and he alone paid the rent.
The dispute between the parties about the date of separation becomes important in this context, as if they separated in January 2013 as alleged by Mr Arden, his purchase of that property occurred post separation.
However if they separated in February 2014, as alleged by Ms Rowlands, the property was purchased during the relationship.
I will return to that issue later in these Reasons.
The question of whether the parties had a mutual commitment to a shared life is also in some dispute, as Ms Rowlands’ evidence is that she, at least, was so committed, while Mr Arden’s evidence is somewhat equivocal, on the one hand saying that he considered the relationship to be more casual, and on the other deposing in his affidavit material that Ms Rowlands was his “domestic partner” as opposed to his employee.
He also stated clearly in his oral evidence, when asked why any work Ms Rowlands performed in his businesses was not claimed as a business expense:
Well, I never treated her as a worker so – she was my partner.
The parties’ relationship was not registered in any state or territory and they do not have children together.
The evidence before the court in relation to the public aspects of their relationship shows that they were regarded as a couple, that they socialised in their local community as a couple, attending restaurants and clubs in the area together and entertaining friends at home. None of that evidence was challenged by either party, save that Mr Arden stated that the parties ate out on most nights, whereas Ms Rowlands stated that they ate out occasionally and that she cooked for them at home on most occasions.
Ms Rowlands complains that Mr Arden was not interested in his relationship with members of her family, but there is no suggestion on either side that family, friends and colleagues saw them as anything other than a couple.
In Spencer & Speight [2014] FamCA 436, Benjamin J referred to the judgment of Murphy J in Johan & White [2011] FamCA 221 where Murphy J said, at paragraph 60:
60. In my opinion, the key to that definition is the manifestation of a relationship where “the parties have so merged their lives that they were, for all practical purposes, ‘living together’ as a couple on a genuine domestic basis”. It is the manifestation of “coupledom”, which involves the merger of two lives as just described, that is the core of a de facto relationship as defined and to which each of the statutory factors (and others that might apply to a particular relationship) are directed.
And later:
66. The issue, as it seems to me, is the nature of the union rather than how it manifests itself in quantities of joint time. It is the nature of the union – the merger of two individual lives into life as a couple – that lies at the heart of the statutory considerations and the non-exhaustive nature of them and, in turn, a finding that there is a “de facto relationship”
Benjamin J went on to quote the following passage from the unreported decision of Crowley & Pappas [2013] FamCA 783, where Tree J observed in relation to s 4AA of the Act:-
Those provisions, or their state counterparts, have been the subject of considerable judicial discussion, principally in an attempt to more precisely analyse what will comprise “a couple”. Much of that analysis seems to have its genesis in the difficulty in satisfactorily distilling the essence of such a common, everyday concept. From those decisions the following propositions may be stated:
(a) whether a de facto relationship exists or not is a question of fact, not a matter of discretion;
(b) a de facto relationship does not need to be akin to a marriage although the nature of the association involved in a marriage relationship may be instructive;
(c) the parties determine the nature of their relationship and it may evolve and alter, even dramatically, over time;
(d) there need not be full time living together;
(e) the relationship may be unhappy, but still subsisting;
(f) sexual or other exclusivity is not necessary;
(g) the gist of the inquiry is the degree to which parties have merged their lives into one. That connotes financial, emotional and physical interdependence.[2]
[2] Footnotes omitted.
When all the above evidence and law is taken into account, I find that Ms Rowlands and Mr Arden lived together on a genuine domestic basis and were therefore engaged in a de facto relationship as defined in s.4AA of the Act.
The length of the relationship
The date of cohabitation is not in dispute, that having been in April 2010.
As previously stated, Ms Rowlands says that the parties separated when she moved out of the unit they shared at Property M, New South Wales (“the Property M unit”) in February 2014.
Mr Arden’s case is that the parties separated in January 2013 and thereafter they lived under the one roof until Ms Rowlands moved out a little over a year later.
Ms Rowlands says that the parties did have an argument in January 2013 about Mr Arden conducting another relationship and that she had wanted to leave at that time, but that Mr Arden had asked her to stay and she had done so.
She was very clear at trial that the parties had separated on 14 February 2014 and that she had moved out of the Property M unit on 15 March 2014.
At trial, Ms Rowlands put to Mr Arden that his daughter X had come to live with them at the Property M unit in about January 2013. Mr Arden replied that his daughter had been “in some sort of trouble in Melbourne so she moved in with us, yes”. It was not disputed that his daughter had stayed with the parties for several months before moving back to Melbourne.
He agreed with Ms Rowlands that the Property M unit contained two bedrooms and that his daughter had occupied one of them, with him and Ms Rowlands occupying the other.
When asked whether the parties were still entertaining friends during that time, Mr Arden replied: “Yes, always”.
There does not seem to be any particular evidence about exactly when Ms Rowlands is alleged to have moved out of their joint bedroom, or when the parties ceased to entertain together or to socialise with third parties as a couple, or when Mr Arden ceased to fully support Ms Rowlands, other than undisputed evidence that he gave her $10,000.00 in early 2014.
In all of the above circumstances, I find on balance that the parties separated in February 2014.
Therefore, the parties were engaged in a de facto relationship between April 2010 and February 2014, a period of almost 4 years, and I will make a declaration to that effect.
B. If so, is it just and equitable to adjust their property interests?
This question is mandated by s.90SM(3) which states as follows:
The court must not make an order under this section[3] unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.
[3] That is, an order adjusting the property interests of the parties.
In Stanford v Stanford (2012) FLC 93-495, the High Court discussed at some length how a court should approach the question of what might be “just and equitable in all the circumstances” as that term is set out in s.79(2) of the Act, which is couched in identical terms to s.90SM(3), but which refers to an adjustment of property of parties who have been married.
When the words “de facto relationship” are substituted for the word “marriage” in Stanford, the High Court essentially laid out the following principles:
·There is no automatic right to receive a property settlement arising from a de facto relationship, as set out at paragraph 43:
[…] the bare fact of separation […] does not show that it is just and equitable to make a property settlement order. It does not permit a court to disregard the rights and interests of the parties in their respective property and to make whatever order may seem to it to be fair and just.
·While the term “just and equitable” is a qualitative description not capable of precise definition, the decision as to what is just and equitable will be reached after an examination of the current property interests of the parties, and a determination, based on the provisions of the statute, as to whether it is just and equitable to alter those interests. As discussed at paragraph 37:
First, it is necessary to begin consideration of whether it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property. So much follows from the text of [s.90SM(1)] itself, which refers to “altering the interests of the parties to the marriage in the property” (emphasis added). The question posed by [s.90SM(3)] is thus whether, having regard to those existing interests, the court is satisfied that it is just and equitable to make a property settlement order.
It is common ground between the parties that all real property in dispute between them, as well as Mr Arden’s car and business, are registered in his sole name. He therefore holds legal title to all of that property and Ms Rowlands has no legal interest in it.
Ms Rowlands claims an equitable interest in Mr Arden’s real property on the basis of a constructive trust.
She says that Mr Arden promised her that the notional wages due for the work she performed in his (businesses omitted) were being accumulated so that they could be applied to a deposit on a home unit the parties were intending to buy. She claims that she relied on that promise to her detriment in that she did not insist on being paid wages for the work performed.
Ms Rowlands is a self-represented litigant, and she did not of course put her case in those words, but in exchanges between the bench, counsel for Mr Arden, and Ms Rowlands it was agreed that essentially that is what she was claiming.
Equitable interests in real property usually arise through trust arrangements, whether express or implied or imposed by law.
There is no evidence before the court of an express trust having been executed in this matter.
If Ms Rowlands seeks to prove a constructive trust, she would need to show that she had acted to her detriment in reliance on a promise made by Mr Arden such that it would be unconscionable for Mr Arden to deny that he holds the property on trust for himself and her[4].
[4] Muschinski v Dodds (1985) 160 CLR 583; Calverley v Green (1984) 155 CLR 242; Giumelli v Giumelli (1999) 196 CLR 101; Friar & Friar [2011] FamCAFC 71.
The authorities in relation to constructive trusts between domestic couples are almost without exception in relation to situations where the putative beneficiary has made financial contributions to real property.
In this case it is not disputed that no direct financial contribution to any real property has ever been made by Ms Rowlands.
Ms Rowlands’ evidence is that she worked in (omitted) businesses owned by Mr Arden for much for the relationship in a (omitted) and managerial role.
Mr Arden, while acknowledging that Ms Rowlands did occasionally spend time in his (businesses omitted), denies the extent to which she says she was involved in his business and it is his clear evidence that she was never an employee.
It is not disputed between the parties that Ms Rowlands was never paid for her work in Mr Arden’s (businesses omitted).
Ms Rowlands believes, based on what she said at trial was the award wage for a “level 8 employee – a manageress”, that she ought to have been paid a total of $240,000.00, or $60,000.00 a year for the four years she says she worked in Mr Arden’s (businesses omitted).
I note that because there was no evidence before the court of that award rate, counsel for Mr Arden objected to the statements in relation to it and I upheld that objection.
I also note that there is no corroborative evidence of the parties ever having discussed the rate at which Ms Rowlands was notionally entitled to be paid, and that Mr Arden in fact denies that she was ever employed in his businesses at all.
As previously stated, it is his affidavit evidence that if she worked in the (businesses omitted) at all, it was on a very ad hoc and casual basis. Further he says that he never insisted that she attend the (businesses omitted) and that there were never any set times or hours when she was required to work. Indeed he deposed in his affidavit material that if Ms Rowlands did attend the (businesses omitted) it was primarily for social reasons and not because she was involved in the business.
However, under cross-examination at trial, it was Mr Arden’s evidence that Ms Rowlands had hired staff for the (business omitted) that she had worked in that (business omitted) during the winter period of 2011 (although he said that he had always been “in the background” during that period), and that while he was away skiing during that period it was Ms Rowlands with whom he was in contact about his business dealings.
Further, it was clear from the evidence adduced from Ms Rowlands under cross-examination that she had worked alone in the business known as (business omitted) for some months in 2013.
Mr Arden also acknowledged that she had worked in his (business omitted) in (omitted), although again he says that the work she did was unnecessary and minimal.
The following exchange between Mr Arden and the bench took place during his cross-examination:
Her Honour: So you were in a relationship. You are receiving wages from the business?
Mr Arden: I was receiving rent from commercial properties which I used to own.
Her Honour: But you told me you that you took a wage from the business.
Mr Arden: And a small wage.
Her Honour: And your employees all got wages?
Mr Arden: Yes
Her Honour: How were your wages paid? Was it a wage as in a regular amount each fortnight?
Mr Arden: It – (sic) yes, it would come to my account – (sic) personal account every month.
Her Honour: And it would have tax taken out of it?
Mr Arden: Yes.
[…]
Her Honour: And that never happened for Ms Rowlands?
Mr Arden: Because Ms Rowlands never provided me with any records of any sort. And I’ve always looked after her and weekly basis, daily basis (sic).
Her Honour: So you saw it as sort of quid pro quo, that you would look after her and she would do some work in the (business omitted) when it was needed?
Mr Arden: Sort of.
Her Honour: Sort of like that?
Mr Arden: Not really full-time work but she did help in the (business omitted) when […] we had too much stock, yes.
I find, on the balance of probabilities that Ms Rowlands did work in (businesses omitted) owned by Mr Arden, that that work did not amount to full-time work over the four years of the relationship, and that she was never paid a wage for that work. It is probable in my view that the degree and amount of work she performed in the (businesses omitted) was somewhere between the full-time, fully involved work she claims and the “on and off” casual work that Mr Arden claims.
Ms Rowlands says that Mr Arden told her during the relationship that her notional wages for the work she did were being used to pay the deposit on the Property M unit and that she would have an interest in that property as a result.
She says she was astounded to find during these proceedings that no deposit was ever paid for that property, Mr Arden having obtained a mortgage loan for the whole purchase price, that loan having been guaranteed by his parents.
Mr Arden, for his part, says that he never made any such statement to Ms Rowlands, and that if she came to that belief, there was no basis for it.
Mr Arden says that throughout the relationship he supported Ms Rowlands as his domestic partner and that any work she performed in the (businesses omitted) was both minimal and unnecessary as he had paid staff to manage and operate the (businesses omitted).
Counsel for Mr Arden cross-examined Ms Rowlands about the timing of Mr Arden’s alleged promise of an interest in the Property M unit as recompense for the work she did in his (businesses omitted).
Ms Rowlands’ evidence was that the parties had moved into the unit as tenants in December 2012 and that they had intended to buy it sometime in 2013.
It was her further evidence that the builder of the unit, Mr R, had offered the unit to the parties for sale while it was being built.
The following exchange then took place:
Counsel: And you say this promise that Mr Arden is said to put your wages into this unit was done in 2011?
Ms Rowlands: Yes, prior to me working […] full time in the (business omitted).
Counsel: Do you see the problem with that is if you say to this court you can’t give evidence as to when it first came up for sale, and you’re saying that he made a promise to give you that unit based on your wages in 2011, that the two of those don’t go together? Because at 2011 the unit wasn’t available to be purchased?
Ms Rowlands: But we knew we were purchasing it. We had talked about it. We had discussed it. That was going to be our home for ever.
Later, under cross-examination, Ms Rowlands said that the promise had been made in February or March 2011, and that while no particular figure had been discussed Mr Arden had told her that her “wages would go towards the deposit of the unit we were moving into in Property M”.
However she conceded that the time the parties moved into the (omitted) unit in December 2012, there was no arrangement to buy it.
On balance, I find that Ms Rowlands did rely on a promise she believed Mr Arden to have made that her work in his (businesses omitted) would be recompensed by her obtaining an interest in a unit he planned to buy in the future. It is unlikely that if the promise was made, as Ms Rowlands asserts, in early 2011, it related to the Property M unit specifically, as that unit had not yet been built.
Nevertheless, her claim that a promise was made that she would have an interest in property in the future as recompense for her work in Mr Arden’s (businesses omitted) has a certain ring of truth about.
I found Mr Arden’s evidence on that issue to be almost entirely self-serving and that it lacked conviction.
The question then becomes whether Ms Rowlands’ reliance on that promise was “to her detriment” to the extent that it would be unconscionable of Mr Arden to deny that he holds the Property M unit on trust for himself and Ms Rowlands.
It is common ground between the parties that during the relationship Ms Rowlands was not required to pay anything towards her accommodation, utilities, telephone, food, clothing, entertainment or any other expense she incurred.
All of her financial needs, in their entirety, were met by Mr Arden, although Ms Rowlands does say that she had to account for her expenditure to Mr Arden whenever he asked.
If she had been paid directly for the work she performed in Mr Arden’s (businesses omitted), she would have had to pay for all of the above expenses from that wage.
There is no evidence whatsoever before the court that Ms Rowlands would have applied any of those monies toward the deposit on the Property M unit.
She cannot say that she deserves to be recompensed for the work performed for which she was not paid, and at the same time claim that the work performed constitutes a basis for a constructive trust in relation to the Property M unit.
On the basis of all the above evidence, I find that while Ms Rowlands did perform work in Mr Arden’s (businesses omitted), the recompense for that work was received in the form of Mr Arden providing total financial support for her throughout the relationship.
I therefore find no detriment to Ms Rowlands in her reliance on the promise which I have found, on the balance of probabilities, that Mr Arden made, let alone to the extent that it would be unconscionable for Mr Arden to deny that he holds his property, or any of it, on a constructive trust for both parties.
Therefore I cannot find that Ms Rowlands currently has any equitable interest in Mr Arden’s property.
In Stanford, the High Court said the following at paragraph 42:
In many cases where an application is made for a property settlement order, the just and equitable requirement is readily satisfied by observing that, as the result of a choice made by one or both of the parties, the husband and wife are no longer living in a marital relationship. It will be just and equitable to make a property settlement order in such a case because there is not and will not thereafter be the common use of property by the husband and the wife.
In Bevan & Bevan [2013] FamCAFC 116 the Full Court said that the circumstances described in the above passage of the Stanford judgment “encapsulate the vast majority of cases”[5].
[5] Bevan & Bevan [2013] FamCAFC 116 paragraph 70
These parties lived together, as I have found, in a de facto relationship, for a little less than four years. They no longer live together and therefore there is no longer common use of property.
There is nothing about the relationship which would remove it from the category of “the vast majority of cases”.
I therefore find that it is just and equitable to consider adjusting the property interests of the parties: that is, the legal and equitable interests in property held by Mr Arden.
C. If it is just and equitable, what is the property to be divided between them?
The property pool at the time of trial consisted of the following:
·The Property M property worth $590,000.00;
·Three investment properties in (omitted) owned by Mr Arden worth a total of $748,000.00[6];
·Mr Arden’s business which he values at nil because he says the trading debts of that business outweigh the value of the stock, and for which there is no sworn valuation as Ms Rowlands says she could not afford to obtain one. However, the business is trading and providing Mr Arden with a wage which he says is about $134,160 per year.[7] I therefore find that the business has some value although it is impossible to quantify that value;
·Mr Arden’s motor vehicle which he obtained earlier in 2016 for $90,000.00, which he says is now worth $70,000.00, and which is encumbered by a loan for $80,000.00;
·Mr Arden’s superannuation entitlements of $11,000.00;
·Mr Arden’s mortgage debt in relation to his three investment properties of about $618,677.00;
·Mr Arden’s commercial loan in the sum of about $577,000.00 which is secured by mortgage over the Property M property;
[6] The value of the real properties owned by Mr Arden was established by way of sworn valuations.
[7] Part B of Mr Arden's financial statement sworn 3 and filed 7 June 2016
Therefore, the total assets of the relationship are worth about $1,419,000.00 and the total liabilities amount to $1,275,677.00, which means the net value of the parties’ non-superannuation property is about $143,323.00 as it is common ground that Ms Rowlands owns nothing but some furniture and has no superannuation entitlements.
When Mr Arden’s superannuation entitlements are added to that figure the total property available for distribution is about $154,323.00.
D. What were the contributions of the parties to that property?
It is common ground between the parties that while Ms Rowlands made no financial contribution to the parties assets, she made contributions as homemaker in that she performed all the household cleaning tasks and at least some cooking.
Mr Arden made all of the financial contributions to the property, most of which was acquired before the relationship began in April 2010, as well as financially providing for Ms Rowlands for the four years of the relationship.
I would therefore assess the contributions of each party at 95% to Mr Arden and 5% to Ms Rowlands.
E. Should the parties’ contribution-based entitlements to the property be adjusted on the basis of the matters set out in s.90SF(3) of the Act.
Section 90SF relates to the payment of spousal maintenance by one member of the de facto relationship to the other, and subsection (3) sets out the issues to be taken into account in determining whether such a payment should be made. S.90SF(3) states as follows:
Section 90SF (3) The matters to be so taken into account are:
(a) the age and state of health of each of the parties to the de facto relationship (the subject de facto relationship); and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the de facto relationship who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) subject to subsection (4), the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(i) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the de facto relationship and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party’s role as a parent; and
(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made under section 90SM in relation to:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(o) the terms of any order or declaration made, or proposed to be made, under this Part in relation to:
(i) a party to the subject de facto relationship (in relation to another de facto relationship); or
(ii) a person who is a party to another de facto relationship with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(p) the terms of any order or declaration made, or proposed to be made, under Part VIII in relation to:
(i) a party to the subject de facto relationship; or
(ii) a person who is a party to a marriage with a party to the subject de facto relationship; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(q) any child support under the Child Support (Assessment) Act 1989 that a party to the subject de facto relationship has provided, is to provide, or might be liable to provide in the future, for a child of the subject de facto relationship; and
(r) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(s) the terms of any Part VIIIAB financial agreement that is binding on either or both of the parties to the subject de facto relationship; and
(t) the terms of any financial agreement that is binding on a party to the subject de facto relationship.
Not all of those considerations are relevant to the relationship that existed between the parties.
However, when taken as a whole, Ms Rowlands is clearly in a less secure financial position than Mr Arden. She is living on a carer’s allowance and owns no property save for her furniture.
Mr Arden on the other hand owns several real properties and an operating business which provides him with a substantial income.
I would therefore make a further adjustment of 5% in Ms Rowlands’ favour.
That means she should receive a total settlement of 10% of the property pool, or property worth $15,432.30[8].
F. On the basis of the answers to the above questions, what orders should the court make in order to arrive at a just and equitable outcome?
[8] ie. 10% of the total property pool of $153,323
It is common ground that in addition to providing for all Ms Rowlands’ financial needs during the relationship, Mr Arden provided her with the sum of at least $10,000.00 (on her evidence) and perhaps up to $35,000.00 (on his evidence) so that she could re-establish herself at the end of the relationship. Those sums represent between 6% and 19% of the available pool.
There is no evidence before the court to corroborate the claim of either party as to the amount of money Mr Arden gave to Ms Rowlands at the end of the relationship.
However, as it was at least $10,000.00 that is the amount I will consider to have been paid.
Therefore, if Ms Rowlands ought to receive a settlement of $15,432.30 and she has already received $10,000.00 of that, I will order that Mr Arden pay her the sum of $5,432.30 by way of final property settlement and spousal maintenance.
Mr Arden will then retain all of his property and his superannuation entitlements.
Conclusion
No doubt Ms Rowlands will be disappointed at the outcome of these proceedings. She clearly expected to be recompensed for what she saw as unpaid wages earned during her relationship with Mr Arden.
It was her evidence at trial that she had made enquiries at Fair Work Australia in that regard but that she had been told that as there was a relationship issue surrounding the dispute, and because Mr Arden had paid for all her living expenses, Fair Work Australia could not help her.
She then came to this court seeking a property settlement under the Family Law Act1975, whose principles she did not understand and in circumstances where she had no detailed knowledge at all of Mr Arden’s financial position.
She referred to herself at trial as having been “gullible” and “naïve” in relation to the trust she had placed in what Mr Arden had told her about her wages being applied towards a deposit on the unit.
I cannot help but agree with her although I make no criticism of her in saying that. Trust is the basis of most intimate relationships, and it is not unusual for a party in a relationship to find, to their surprise, that the trust they felt was not mutual.
I certify that the preceding one hundred and twenty nine (129) paragraphs are a true copy of the reasons for judgment of Judge Small
Date: 23 November 2016
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