SAH v WJB and RSD

[2005] QDC 427

DISTRICT COURT OF QUEENSLAND

CITATION:

SAH v WJB & RSD [2005] QDC 427

PARTIES:

SAH

Applicant

v

WJB

First Respondent

AND

RSD

Second Respondent

FILE NO/S:

D1287 of 2005

DIVISION:

PROCEEDING:

Hearing

ORIGINATING COURT:

District Court, Brisbane

DELIVERED ON:

13 December 2005

DELIVERED AT:

Brisbane

HEARING DATE:

18 November 2005

JUDGE:

McGill DCJ

ORDER:

Order that the benefit of any option agreement held by the first respondent, either solely or together with the applicant, to purchase from the second respondent the property situated at 8 Pleasant Court, Albany Creek in the State of Queensland, vest in the applicant solely.

Order that the first respondent pay the applicant $20,000, and that upon such payment being made, the first respondent have title to all of the goods and chattels retained by him at the termination of the relationship.

Order that the first respondent do whatever is necessary to secure the release of the applicant from any personal liability in respect of the Ford motor vehicle retained by him at the termination of the relationship, and indemnify the applicant in respect of any liability to any finance company the applicant may have in respect of the vehicle.

Application otherwise dismissed.   No order as to costs.  

CATCHWORDS:

DE FACTO RELATIONSHIP – property settlement – whether any order available concerning property sold – order transferring benefit of option – compensation for chattels – damages not available

COUNSEL:

A. Twina (solicitor) for the applicant

The respondents did not appear

SOLICITORS:

Douglas Law, Solicitors for the applicant

The respondents were not represented

1. This is an application for relief under part 19 of the Property Law Act 1974 (“the Act”). In addition, certain other relief is sought against the former de facto first respondent, and a friend to whom it is alleged the first respondent has transferred at an undervalue property formerly owned jointly with the applicant. Neither respondent has taken any active step to resist the application, and neither appeared on the hearing of the application[1].

   [1]Another judge at an earlier time made orders for substituted service with respect to service on both respondents, and the application and other relevant documents have been subsequently served pursuant to that order.

Background

1. A relationship developed between the applicant and the first respondent during 1999 while the applicant was still in year 12[2].  After she left school at the end of the year they went away together and lived for about a month in accommodation provided by a cotton farmer for whom they worked.  They then from about January 2000 lived together in a caravan park at Aspley in Brisbane.  I accept that at least by the time when they began to live in the caravan park the applicant and the first respondent were living together on a genuine domestic basis in a relationship based on intimacy, trust and personal commitment to each other.  I find that the relationship came to an end in March 2005.  On 22 March 2005 the applicant found the locks changed at the house in which she and the first respondent had been living, and there was a notice on the door threatening to treat her as a trespasser if she entered[3].  I am satisfied that the applicant and the first respondent lived together in a de facto relationship for more than two years, and that the relationship ended prior to the filing of the application in the court.

   [2]Affidavit of the applicant filed 14.4.05 para 4.

   [3]Affidavit of the applicant para 34; affidavit of the applicant filed 29.7.05 para 2.

1. According to the applicant at the beginning of their relationship neither had significant property.  She estimated that she owned furniture and furnishings worth approximately $1000, while the respondent had a motor vehicle worth about $2000 and furniture and furnishings of about $500, but also had a credit card debt of $2500[4].  After they came to Brisbane the applicant began to work at a café, while the respondent did a security course after which he obtained a job at a security company[5].  After the caravan park they stayed in a rented house for about a year, and in March 2002 purchased a property at Albany Creek for $195,000:  Exhibit 4[6].

   [4]Affidavit of the applicant, paras 9, 10.

   [5]Exhibit 1, paras 5, 7.

   [6]Affidavit of the applicant, para 22.

1. To some extent this purchase was funded using money borrowed from the applicant’s grandfather.  He originally advanced $27,000 on 7 December 2001[7].  Part of this was refunded in January 2002, and it appears that the purchase was funded in part by the amount of about $20,000 borrowed from the applicant’s grandparents, the balance coming from a home loan secured by a mortgage of $179,000[8].  Only $500 of the debt to the grandparents has been repaid.

   [7]Exhibit 3 is an extract from his account showing the debit of that amount on that date, and the same amount was deposited on the same day into the applicant’s account:  Exhibit 5.  Almost the full amount was withdrawn on the same day.  See also Exhibit 1, para 11.

   [8]Exhibit 1, paras 12, 13;  Affidavit of the applicant, para 22.

1. Initially they were both working, and the mortgage repayments of $1026 per month were taken directly from the applicant’s bank account; otherwise money and household expenses were pooled[9].  In July 2002 the first respondent left his job and began his own security business[10].  It appears that the business rapidly produced significant debts, and at some point the home loan and other debts were consolidated to a single loan of about $235,000[11].  Again, monthly payments were made by the applicant, but otherwise household expenses were paid by whoever had the money at the time.  According to the applicant the cooking was shared but otherwise she did all the household tasks.

   [9]Exhibit 1, paras 16, 17.

   [10]Exhibit 1, para 17; Affidavit of the applicant para 24 (which refers to October 2002).

   [11]Exhibit 1, para 19.  Affidavit of the applicant, para 23 (which gave a figure of $250,000).

1. The respondent’s business continued to struggle, and in late 2004 the property was transferred to the second respondent:  Exhibit 7.  According to the applicant what happened was that the house was transferred to the second respondent for enough to pay off the secured debts[12], although the applicant claims that this was about $55,000 less than the then true value of the house; this value was based on what the first respondent told her was the result of a valuation, which she had not seen[13].  They have, however, an option to repurchase the house within five years at a cost of $345,000, and in the meantime could occupy the house and pay $400 per week to the second respondent[14].  Apparently the $400 per week would be credited towards the purchase price if the option were exercised.

   [12]Affidavit of the applicant, para 28; Exhibit 1, para 23; Exhibit 2, para 7 gives a payout figure of over $265,000.

   [13]Affidavit of the applicant, para 29; Exhibit 1, para 23.

   [14]Exhibit 1, para 25; the affidavit at para 28 gives a figure of $430.

1. According to the applicant at the time they were living in the house it was fully furnished[15].  At some point insurance was sought on the basis of an insured value of the residential contents of $80,000:  Exhibit 2.

   [15]Exhibit 1, para 27.

1. For a time the applicant was not working, but was assisting in the operation of the first respondent’s business; more recently she was working in the business, and sometimes being paid, but she claims that she was not paid for the last period of six weeks that she worked in the business[16].

   [16]Affidavit of the applicant, paras 26-27.

1. At the time of separation she was left with nothing but some personal effects.  There has not been any division of the chattels.  There was one other piece of jointly owned property, a motor vehicle used by the first respondent in which a finance company Ford Credit has an interest; she believed that they were the hirers under a hire purchase agreement of it from that company[17].  The respondent has possession of it, but evidently she is also liable in the event of there being any loss to the finance company.  She said she was recently contacted by the finance company who said that the first respondent was behind in the payments, they were proposing to repossess the vehicle, and that if it was repossessed it would be sold at auction and they would be looking to her in relation to any shortfall:  pages 9-10.

   [17]Affidavit of the applicant, para 25; Exhibit 1, para 18.

The property

1. It seems clear enough that the applicant has been badly done by in all of this, but it is difficult to see that there is very much opportunity to give any sort of meaningful relief under part 19 of the Act. There is no reason to doubt that when the house was sold the proceeds were used to discharge the mortgage; there is no evidence that the first respondent is in possession of any sale proceeds from that transaction which could be the subject of any order. He evidently has some sort of security business, but there is no basis on which I can attribute any value to it, and indeed no reason to think it has any great value. He is in possession of the chattels and furnishings and apparently even some of the personal effects of the applicant, and the car on hire purchase, but there was no evidence of any other property. There are a wide range of powers specified in section 333 of the Act, but they are all concerned with property or dealing with property, and there is nothing to indicate that the Act contemplates any order for damages to compensate a person for the failure of the de facto spouse to have property available for distribution.

1. The applicant’s submission did not refer to s335 of the Act. It is not at all clear on the material that the sale of the property to the second respondent is a disposition liable to be set aside under that provision. There is no evidence to suggest that an order under Part 19 was “anticipated” at the time of the transaction with the second respondent. It may be that, had it not been made, the mortgagee would have long since exercised its power of sale over the property. In any case, it could not be set aside without reinstating the mortgage,[18] to which the mortgagee may well object, and with justification. Besides, it has not been made a respondent, or been given notice of this application.

   [18]See also s.336(1).

1. Other property, although there is really little detail about it in the material, is the benefit of the option agreement, or rather the first respondent’s interest in the benefit of that agreement.  It is not at all clear just what that is worth, but in principle the benefit of an option agreement is property, and accordingly the first respondent’s interest in it can be transferred.  I have unfortunately very little information about it, but such information as I have suggests it may be worth something to the applicant.

1. On the other hand, it seems to me there is no power under section 286 of the Act to make an order in respect of the property of the second respondent. There is power in section 280 to declare in a proceeding as between de facto spouses any title arising in any property, but what seems to be sought in the first order in the amended originating application is an order as against the second respondent creating a beneficial or equitable interest in the property in favour of the applicant. There is in my opinion no power to impose such an order under the Act on a third party. As the holder of an option to purchase the property, the applicant has some equitable interest in the land[19].  There is, however, no basis upon which I could attribute any particular value to that interest, so as to order that she be paid the sum of $85,000 or any other sum.

   [19]L&SW Railway Co v Gomm (1882) 20 Ch D 562 at 581; Commissioner of Taxes v Camphin (1937) 57 CLR 127 at 132.

1. The next order sought was an order that the first respondent hold the property on a constructive or resulting trust on behalf of the applicant in a proportion to be determined by the court.  The applicant sought to amend this proposed order so that it was sought against the second respondent rather than the first respondent, but no notice had been given to the second respondent of the intention to apply for that amendment, so I could not agree to it in the absence of the second respondent.

Relief available

1. An order can be made against the first respondent transferring his interest in the option to purchase the property to the applicant. Although I am a little wary about making such an order without having seen a copy of the option agreement, in principle such an order could be made, and it would be a reasonable attempt to salvage something for the applicant from the wreckage of this relationship. The applicant has made a substantially greater financial contribution than the first respondent, particularly in terms of the money borrowed from her grandparents in respect of the acquisition of the property, and bearing this in mind, and bearing in mind the various other matters referred to in sections 291 to 308 of the Act[20], in my opinion it is appropriate that if there is any benefit arising from this option agreement it accrue to the applicant. I therefore order under s. 333(1)(o) that the benefit of any option agreement held by the first respondent, either solely or together with the applicant, to purchase from the second respondent the property situated at 8 Pleasant Court, Albany Creek in the state of Queensland, vest in the applicant solely.

   [20]So far as they are relevant – there were no children from the relationship.

1. The next order sought was that the second respondent pay $20,000 compensation for furniture, chattels, household goods and personal belongings retained by the second respondent when the applicant was excluded from the property. Again, it was sought to amend that order to seek an order in those terms against the first respondent. In my opinion the issue of property settlement is adequately raised as against the first respondent by the originating application in its amended form, so that an order in respect of division of the chattels owned by the parties to the relationship can still be made under the Act, even though order 4 refers to the second respondent instead of the first respondent.

1. The first respondent has evidently retained possession of all of this and refused to allow the applicant to have any of it[21], and in those circumstances it is appropriate in my opinion to make an order for payment of a lump sum by way of the division of this property, on the basis that the property will thereafter remain solely the property of the first respondent.  The applicant contended for an amount of $20,000[22].  The only evidence of value was the evidence that it was at one time proposed for insurance at a value of $80,000:  Exhibit 2[23]. In circumstances where the first respondent has not cooperated in relation to the ascertainment of the value of these chattels, I am prepared to accept that the appropriate order by way of division of the property under the Act in light of the relevant considerations would include an order that the first respondent pay the applicant $20,000, and that upon such payment being made, the first respondent have title to all of the goods and chattels retained by him at the termination of the relationship.

   [21]Exhibit 1, paras 33, 34.

   [22]Exhibit 1, para 40.

   [23]The applicant said it was actually insured for this:  p5.  On the other hand, in her affidavit she gave an estimate of value of $10,000:  para 11.

1. The one remaining piece of property is the motor vehicle.  It is appropriate in the circumstances for that to be dealt with on the basis that it be retained by the first respondent, but that the first respondent do what is necessary to prevent the applicant being personally liable in respect of it.  I therefore order that the first respondent do whatever is necessary to secure the release of the applicant from any personal liability in respect of the Ford motor vehicle retained by him at the termination of the relationship, and indemnify the applicant in respect of any liability to any finance company the applicant may have in respect of the vehicle.

1. In relation to any potential claim against the second respondent in respect of the chattels, presumably for conversion, it is not clear whether anything was being done by or on behalf of the second respondent in order to take control of the chattels, to the exclusion of the applicant.  In the circumstances I am not prepared to grant any relief against the second respondent in relation to the applicant’s chattels.

1. The next order sought was the payment of $50,000 compensation for pain and mental distress, inconvenience and humiliation occasioned by the actions of the second respondent. Again leave was sought to amend this to refer to the first respondent, but the first respondent was also not present and was not given notice of that proposed amendment. There is nothing in the Act which gives any jurisdiction to make an order of this nature, and insofar as relief is sought against the second respondent, it is not at all clear on what basis this is available.

1. The submissions on behalf of the applicant refer to compensation as an equitable remedy, but it is apparent from further submissions that this is not a reference to equitable compensation in the technical sense. There is certainly nothing in the circumstance of this matter to give rise to any entitlement to equitable compensation in that sense. The submission proceeds rather on the basis that it is fair and just that she receive compensation of this nature and that the court’s power under section 333 is wide enough to grant relief of this nature. There is nothing in the Act which indicates that matters of this nature may be taken into account in a proceeding for division of property, or gives any jurisdiction to award compensation for pain, mental distress, inconvenience or humiliation. In any event, insofar as the applicant is relying on the Act, it is not appropriate in relation to a claim against the second respondent.

1. In relation to the claim against the second respondent, there is nothing in the material to indicate that there is any cause of action available against the second respondent.  As a general proposition, mere mental suffering which does not amount to psychological injury, and does not accompany a physical or psychological injury, is not actionable, whether for negligence[24] or even in respect of the intentional conduct of the defendant[25].  It was submitted[26] that there was inherent jurisdiction to award exemplary damages in certain circumstances, including trespass to chattels, trespass to person and conspiracy. 

   [24]Fleming “The Law of Torts” (9^th Ed 1998) page 173.

   [25]Fleming, ibid page 40.

   [26]In supplementary written submissions on behalf of the applicant.

1. If any of the things of which the applicant complains did extend to psychological or psychiatric injury, it would amount to personal injury for the purposes of the Civil Liability Act, so that her claim would be one for personal injury damages for the purposes of that Act, and by section 52 a court cannot award exemplary damages in relation to a claim for personal injury damages.  More generally, however, an award of exemplary damages is only available where there is otherwise a cause of action based on the more conventional entitlement to compensatory damages.  In my opinion, the existence of circumstances which would justify an award of exemplary damages is not something which in itself gives an independent cause of action for such damages.  Any such claim would also have to face the difficulty that there is no indication that there has been compliance with the requirements of the Personal Injuries Proceedings Act.  In all the circumstances in my opinion there is no basis for any such claim. 

1. It was also submitted that the court’s power in section 333 gave an unfettered discretion, and is wide enough to give whatever relief was appropriate to do justice. But the power in this section is given for the purposes of the Act, and relevantly must be exercised for the purpose of giving effect to the jurisdiction in section 286(1), to adjust interests in property. In my opinion the sweeping language of section 333 has to be read down by reference to the purpose for which the court is given such power. In my opinion there is no power to award damages under the Act. The application is otherwise dismissed.

Costs

1. Finally, it was submitted that the first and second respondents should pay the applicant’s costs on an indemnity basis. The Act provides a particular regime in relation to costs, starting from the proposition that each party bears the party’s own costs: section 341(1). However, if the court is satisfied there are circumstances justifying its making an order it may make any order for costs it considers appropriate; there are a number of matters the court must consider before making such an order. In the present case the respondents have simply taken no part in the proceedings. There were even difficulties about effecting service on them, so that an order for substituted service had to be made, but otherwise they have done nothing to increase the applicant’s costs.

1. On the other hand, to some extent, the applicant’s costs have been inflated by a failure to conduct the proceedings efficiently.  As a result I have by way of evidence from the applicant the applicant’s original affidavit, a statement from her which was verified in the witness box (Exhibit 2), a “brief of evidence” from her which was also verified in the witness box (Exhibit 1), and some oral evidence, in the course of which a number of exhibits were verified[27]. That is not the way in which a proceeding of this nature should be conducted. There is no evidence of any offers to settle under the UCPR. In all the circumstances, I do not think there is sufficient justification to depart from the prima facie position laid down by section 341(1), and will make no order as to costs.

   [27]In general the “brief of evidence” Exhibit 1 seems to be the most comprehensive and thorough document, and where there are inconsistencies (which are not rare) I prefer to accept it rather than the other versions.