Salter and Metcalfe

[2015] FCCA 671

FEDERAL CIRCUIT COURT OF AUSTRALIA

SALTER & METCALFE [2015] FCCA 671

Catchwords:
FAMILY LAW – De facto relationship – threshold issue – date of separation.

Legislation:

Family Law Act 1975, s.90RD

Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008, s.86(1)
Family Law Act1975, s.4AA

Todd & Todd (No.2) (1976) FLC 90-008
Falk & Falk (1977) FLC 90-247

Applicant: MR SALTER

Respondent: MS METCALFE

File Number: ADC 1319 of 2013

Judgment of: Judge Cole

Hearing date: 19 February 2015

Date of Last Submission: 19 February 2015

Delivered at: Adelaide

Delivered on: 26 March 2015

REPRESENTATION

Counsel for the Applicant: Tom Birchall

Solicitors for the Applicant: David De Sciscio & Associates

Respondent: Self-represented

ORDERS

1. That there be a declaration pursuant to s.90RD(1) of the Family Law Act 1975 that:

   (a)The applicant and the respondent were in a de facto relationship for more than two (2) years; and

   (b)The de facto relationship ended in August 2011.

2. The parties attend a Conciliation Conference with a Registrar of the Federal Circuit Court of Australia at 9.15am on 8 July 2015.

3. The Applicant pay the Conciliation Conference fee ($370) in accordance with the Family Law (Fees) Regulation 2012 at least twenty-eight (28) days prior to the Conciliation Conference unless otherwise exempted from payment.

4. The respondent reimburse the applicant one half of the Conciliation Conference fee (being $185.00) within fourteen (14) days thereafter.

5. All valuations or any other relevant documents that the parties wish to rely upon be exchanged fourteen (14) days prior to the Conciliation Conference.

6. Further consideration of this matter be adjourned to 9.30am on 16 July 2015 for directions.

IT IS NOTED that publication of this judgment under the pseudonym Salter & Metcalfe is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT ADELAIDE

ADC 1319 of 2013

MR SALTER

Applicant

And

MS METCALFE

Respondent

REASONS FOR JUDGMENT

Introduction

1. This matter concerns the application of Mr Salter for a division of the parties’ assets. The application is opposed by Mrs Metcalfe.

2. The property comprises amongst other things, the house occupied by Mrs Metcalfe, which was transferred into the parties joint names in 2008, against which is secured a $200,000 line of credit in the joint names of the parties, which was obtained in 2004.

3. The parties agree they were in a de facto relationship. They do not agree however on the date of separation.

4. Mrs Metcalfe says the parties separated in 2006. She acknowledges that if she is successful on this point, the proceedings will conclude in this jurisdiction.

5. Mrs Metcalfe will then need to institute proceedings in the District Court of South Australia, to obtain any orders in respect of the transfer of the applicant’s interest in the property to her and any payment from the applicant that she may be seeking. This may mean the process of dividing the property may well not conclude for some years.

6. Mrs Metcalfe acknowledges that it was open to her to opt in to the jurisdiction of this Court and that she had known of this option for some time. She has chosen not to exercise that option.

7. Mr Salter says the parties separated in August 2011.

8. His counsel correctly refers me to s.86(1) of the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008, which in effect gave this Court jurisdiction in respect of de facto relationships in South Australia for parties who separated on a final basis after 1 July 2010.

9. Parties who separated prior to that date are required to resolve their matters in accordance with State legislation through the District Court of South Australia.

10. The parties agree that the issue is therefore the date of separation, and consequently the question as to jurisdiction of this Court.

Background

1. The applicant was born on (omitted) 1971 is aged 44 this year. He is currently employed as a (occupation omitted) with the (employer omitted) in South Australia.

2. The respondent was born on (omitted) 1954 and will be aged 61 this year. She continues in her studies as a part-time (omitted) student.

3. It is agreed that the parties met in or about 1996. There is some dispute as to whether they commenced cohabiting in 1997 or 1998. It is not necessary for the purposes of this hearing to make any finding in respect of that matter.

4. There are no children of the relationship. The dispute is whether they separated in 2006 or 2011.

5. The Respondent continues to reside in the property owned by her and then registered in the joint names of the parties in 2008 (“the Property C property”).

The evidence

1. Neither party bothered to set out with precision the evidence that they were relying on. In view of the fact that the respondent was representing herself and made a vague reference to her other affidavits filed in these proceedings, I took it that each party was relying on the documents filed with this Court.

2. The applicant relies on:

   a)his Application filed on 17 April 2013;

   b)his Affidavit filed on 17 April 2013;

   c)his Affidavit filed on 15 August 2013; and

   d)his Affidavit filed on 4 February 2014.

3. The respondent, who has represented herself through the course of these proceedings, relies on:

   a)her Response filed on 4 July 2013;

   b)her Affidavit filed on 4 July 2013;

   c)her Affidavit filed on 25 July 2013;

   d)her Affidavit filed on 12 December 2013;

   e)her Affidavit filed on 14 April 2014; and

   f)her Affidavit filed on 17 February 2015.

4. Each party gave evidence and was cross-examined. Neither party called any other evidence. Mrs Metcalfe was advised that having purported to annex the affidavits of witnesses to one of her affidavits that, as those documents had not been properly filed and those persons had not been asked to provide evidence, no weight could be given to those affidavits. I note that it had been previously noted she would be relying on a number of witnesses. I do not know why they were not called.

5. The proceedings were listed for trial on 26 June 2014. The trial was vacated as the applicant’s solicitor had been struck off. It was listed again on 31 October 2014 and had to be vacated due to the death of the respondent’s mother. It came on for hearing on 19 February 2015.

The law

1. To determine whether or not this Court has jurisdiction, I am correctly referred to the definition of a de facto relationship contained in s.4AA(1) of the Family Law Act 1975(Cth) (“the Act”).

2. Counsel for the applicant correctly submits that the definition of a de facto relationship can be broken down into three elements namely:

   a)the parties were not legally married to each other;

   b)the parties were not related by family; and

   c)that, having regard to all the circumstances of the relationship, the parties have a relationship as a couple living together on a genuine domestic basis.

3. In determining whether the couple were living together on a genuine domestic basis, the circumstances may include all or any of the known factors, which are referred to in s.4AA(2)(a)-(i) inclusive of the Act.

4. No particular finding in relation to any circumstances is to be regarded as necessary in deciding whether the parties had a de facto relationship.[1]

   [1] Family Law Act 1975 (Cth) s 4AA(3)

5. A court is entitled to have regard to such matters and to attach such weight to any matter as may be seen appropriate to the Court in the circumstances of the case.[2]

   [2] Ibid, s 4AA(3)

Chronology

1. There is no dispute that the parties commenced living together at the Property C property from September 1998. The evidence of the applicant is that he moved in on (omitted) in September 1998. This was not disputed by the respondent.

2. The applicant was working with a (employer omitted) business at the time and continued to work throughout the relationship obtaining employment at several places on a casual basis until obtaining a full-time casual job with (employer omitted) in (omitted). He worked there until the (employer omitted) closed down in 2003. His evidence is that he was contributing $100 a week to the mortgage, from the commencement of the relationship in 1997 (when he says the parties were residing in a house owned by the applicant’s parents due to the Property C property being occupied by the respondent’s husband.)

3. There is no dispute that when the parties moved into the Property C property, the respondent’s former husband remained living in the house.

4. In 2000/2001 the parties subdivided the Property C property into three blocks (the house being located on one). The two new blocks were sold and the funds used to pay out the mortgage and to pay out the respondent’s ex-partner. The Property C property was transferred to the respondent and her ex-partner vacated the premises.

5. In 2004 the parties moved to (omitted) where they had obtained part-time employment.

6. During their time on (omitted) they opened a joint account with the (omitted) Bank. They also applied for and obtained a $200,000 equity loan from the (omitted) Bank in their joint names with a loan to be secured against the Property C property. There is no dispute that the application was instigated by the respondent with a view to renovating and extending her property.

7. The respondent gave evidence that she approached the bank for a loan for $200,000, to enable her to build an extension on her property. The bank informed her that they would lend her $150,000. She says she did not have enough hours of part-time work to guarantee a loan of $200,000, and to achieve this she needed to have the applicant joined to the loan.

8. Her evidence was that it was her loan, her equity, and that the applicant could take no credit for it.

9. She attempted to argue that:

   a)interest was only paid on the actual amount of money drawn down from the loan (there is no dispute here);

   b)the interest repayment was taken from the loan balance itself (there was no dispute with that although it was pointed out that this argument ignored the deposits made by the parties); and

   c)the applicant did not pay any equity interest payments at all (this was not accepted).

10. There is no dispute that the parties over the forthcoming years drew on the loan to meet:

    a)the applicant’s living expenses;

    b)the respondent’s living expenses (her evidence was that with minimal income from Centrelink she had to live on the funds withdrawn from the loan account);

    c)the costs of extensions to the Property C property; and

    d)the interest payments on the outstanding funds.

11. There is no dispute that part of the living expenses were met by the parties’ joint use of a Visa card which was paid in full from the account each month. Neither party in the course of the evidence, attempted to provide any breakdown of the proportion of the expenses that could be attributed to the above categories. It was agreed however that the expenses exceeded the income and the loan slowly increased.

12. It is acknowledged that the applicant obtained employment with the (employer omitted) in (omitted) 2006 working as a (occupation omitted) at (omitted). His wages were deposited into the equity account and funds were withdrawn to meet the parties’ expenses, including the monthly Visa account, and the building expenses, on a regular basis.

13. There is no dispute that the respondent, prior to taking up a job on (omitted), was unemployed. Following the conclusion of her employment on (omitted), she did not engage in any employment for the remaining period of the relationship. It is acknowledged that she was in receipt of some benefit from Centrelink, and that this was deposited into the equity account being a sum of approximately $50 in 2006, which increased to $371.40 per fortnight in or about mid-2009.

14. There is no dispute that the respondent ceased paying his wage into the account in or about September 2009 and commenced making periodic payments of $230 per fortnight to contribute to the servicing of the equity loan which then amounted to a debt of approximately $200,000 to the (omitted) Bank.

15. He continues to make those payments to the present day.

16. The respondent’s evidence in respect of the equity loan:

    a)Only acknowledged the contributions of the applicant to the loan through the deposit of his wages on the basis that those funds were subsequently withdrawn by him. She did not give any credit to the respondent for the subsequent deposit of the fortnightly contributions of $230.

    b)Failed to accept that the applicant in becoming a signatory to the loan was jointly and severally liable for that debt, relying on what she claimed was an oral assertion from the bank that as she had the land, then should the bank issue proceedings in respect of any default, it would be against her only.

    c)Was presented on the basis that the increase in the debt due and owing to the bank to the sum of $200,000 was the responsibility of the applicant, whilst at the same time acknowledging that the equity loan was used to meet the living expenses of both parties and the costs of the extensions to the home, and included any interest that had accrued on the outstanding amount.

    d)Did not acknowledge that throughout the period of the relationship, save for a period of work whilst the parties were on (omitted) she was unable to contribute to the servicing or repayment of the equity loan, other than through the deposit of such amounts as she received from Centrelink.

17. Mrs Metcalfe alleged that the parties separated in 2006 and yet conceded that she had made no approach to the bank, to finalise the loan or to restrict the applicant’s access to the money. Nor had she asked him to cease depositing his wages into the account. She submits that the amount outstanding on the account at the beginning of 2006 was $57,000. In view of her previous evidence in respect of her ability to obtain a loan for $150,000, I do not understand why if the relationship was over, this issue could not have been resolved by her.

18. It is acknowledged by the applicant that the parties’ relationship ran into difficulties in 2006 and that they attended mediation at Centrecare in May 2006.

19. It is also acknowledged that the applicant sought some legal advice from Messrs Robinson and Mason in or about October 2006.

20. No action however was taken by either party. In April 2006 the applicant was employed at (omitted). His evidence was that he rented a unit at (omitted) because it was closer to work and spent every weekend in Property C with the respondent. He continued to deposit his wages into the equity account.

21. In 2007 he commenced working on the (omitted) in the far north of the state, managing amongst other things the (omitted) and providing (omitted). He remained employed there until November 2008. During this time his evidence is that he had holidays over the Christmas period in 2007 (two weeks) and three months holiday from June to August 2008. This time he said were spent with the respondent in Property C. This is denied by the respondent.

22. The evidence is clear that he continued to deposit all of his salary into the parties’ joint equity account and continued with the respondent to draw on the Visa card which was paid for from the account.

23. In February 2008 the respondent transferred a half interest in the Property C property to the applicant. Her evidence is that she was forced to by the applicant’s demands and the fact that he had withdrawn the remaining $70,000 from the equity loan on 4 January 2008, and refused to return it until the transfer was done.

24. Mrs Metcalfe’s evidence was that the parties attended upon the settlement agent on one occasion to give instructions and sign the transfer. I have difficulty with that. There was a mortgage secured against the Certificate of Title and without further evidence I cannot see how the transfer could have been prepared and signed that day even if the conveyancer was supplied with the correct particulars of the title.

25. The parties did sign an acknowledgment that the conveyancer acted for more than one party on 6 February 2008. The monies were returned to the account by the applicant on 8 February 2008. The transfer of land document was signed by the parties and dated 15 February 2008 and appears to have been lodged that day. The respondent was adamant that the document had been signed on the 6 February 2008. I have difficulty accepting that evidence.

26. This would mean that after the parties had attended upon the conveyancer the funds were returned and the transfer subsequently was registered having been signed on 15 February 2008. I do not accept that the conveyancer inserted the date subsequent to the parties signing the document.

27. The parties attended upon the conveyancer together. The respondent was clear that she did not want to be in the company of the applicant, however there is no indication that she made any complaint to anyone or raised this issue with any other party.

28. The respondent does not explain, save for the argument that she signed the transfer under duress, as to why for the sake of $70,000 being returned to the account, she transferred the property with an equity which, on her estimate, was approximately $180,000 to the applicant.

29. The respondent also fails to explain why no action was subsequently taken by her particularly in view of the fact that there is no dispute that the applicant continued to work away, moving from the (omitted) to (omitted). Her evidence was that he screamed, smashed plates, bullied, intimidated and threatened her. This is denied or addressed by the Applicant in his affidavits and he was not pressed on this in the course of cross-examination.

30. The respondent’s allegations are in the context that the applicant spent significant portions of the year away from her. She was not engaged in full-time employment being a student and had time to attend upon the necessary agencies to lodge a complaint in respect of the transfer and in respect of the applicant’s conduct. There is no evidence to suggest that this was undertaken.

31. Her evidence is that his intimidation was of such a nature that she felt powerless to do anything. The difficulty is, that there is nothing in the evidence that would enable me to sanction her failure to take matters into her own hands, including a failure to approach the authorities, the bank, or the applicant himself to cease his use of the account including his regular deposits of his entire wage and his subsequent withdrawal of his living expenses.

32. I should also note at this stage that the respondent denied the allegation that the applicant has spent any time residing at the Property C property following his departure to work on the (omitted), and yet the parties clearly attended upon the settlement agent in 2008 and signed off on a transaction transferring the half share in the property for natural love and affection.

33. I therefore am unable to accept the argument that the half share in the property was transferred as a consequence of the duress applied by the applicant, due to his behaviour and/or the alleged extortion which occurred through the removal of the $70,000 from the equity account.

34. The applicant submits that the respondent transferred the half interest in the Property C property to him at his request because he was contributing the major portion of the repayments of the mortgage. Whilst I make no finding regarding the expenditure of the funds, it is clear that he was the one contributing the majority of the repayments.

35. He notes that the parties discussed the issue and the respondent agreed it was fair. At paragraph 31 of his trial affidavit he also notes they had a plan to further subdivide the land to pay out the mortgage.

36. There is no dispute that he subsequently gave the respondent $1,000 to lodge an application with the local council for a further subdivision of the land. The cheque was not presented and it is his case that this led to the argument which in turn led to him vacating the property in August 2011.

1. Following his vacating the property, the applicant continued to contribute to the payment, or servicing of the equity loan. The respondent has not asked him to cease depositing the sum of $230 per fortnight into the account to date, and is unlikely to, as it is clear that she considers him to be responsible for the debt, stating on more than one occasion during the trial that he had used her equity.

2. The applicant acknowledges that on his return to the Property C property, the parties were still having difficulties in the relationship and that they were trying to work those out.

3. In July 2010, the applicant had an operation on his ankle. The respondent concedes that she drove him to the surgery at (omitted) and then subsequently picked him up and took him home to the Property C property after the operation. She did so she says because as a former (occupation omitted) she considered that despite her desire not to be anywhere near the applicant, she was obliged to help. She concedes that she may have made him lunch, for example a sandwich, but is adamant that she gave no further assistance.

4. The respondent’s evidence is that on his return to the property the parties lived separate lives. She says that the applicant presented with a number of issues following the incidents in (omitted) including placing a shotgun in its zipped cover under her bed. This is denied by the applicant. He concedes following his experiences in (omitted), he did place a gun under his bed, however this ceased after a few weeks.

5. It is difficult to make any findings in respect of the allegations put by the respondent in that they are denied or not admitted by the applicant. The respondent is adamant that she and the applicant had no relationship and did not discuss matters and yet as rightly pointed out by counsel for the applicant, her knowledge of his affairs including the allegations in respect of his attending upon a psychologist and a psychiatrist in the course of the WorkCover claim, suggest that there was communication between the parties.

6. Counsel for the applicant submits that there is nothing unusual about this matter in the context of a relationship breakdown prior to the party separating. On the evidence before me, I would accept that submission.

7. In this period of time (following the applicant’s return from (omitted)), the respondent concedes that she had been communicating with surveyors and the council who still had a number of problems with the proposed further subdivision of the land. She does not deny that during this time he also spent money on a driveway for the proposed subdivided block. It would therefore appear that while the relationship may have been in trouble, they continued to work albeit in a haphazard manner on a joint project.

8. She also concedes that he was paying a set amount of $115 per week being the $230 per fortnight contribution to the equity account. She points out that this bore no relation to the bank’s interest repayment requirements. Nevertheless a contribution was being received.

9. There is controversy as to whether, upon his return in 2010, the parties did engage in in sexual relations. I make no finding on that point.

10. They were however residing under the one roof, still engaged in a joint financial arrangement through the equity loan account, and had undertaken some work in respect of the proposed subdivision the property.

11. There is no suggestion that either party had become involved in a committed relationship to another person. Save for the evidence of the attendance at the surgery in 2010 for the ankle operation, there is very little or no reliable evidence as to how the parties presented to the community.

12. The explanation put forward by counsel for the applicant in the circumstances of this matter that the parties relationship was disintegrating and they finally separated in August 2011, is preferred to that of the respondent that the parties had separated in 2006 and yet following that separation, in 2008 she had transferred a half interest in the property to the applicant, and in 2010, she had tolerated the respondent returning to Adelaide and moving into the property to reside there until August 2011 when she finally took the step of telephoning a friend and threatening to call the police to have the applicant evicted.

13. Whilst I can make no finding that the parties were still sleeping in the same bed, I accept that they were still operating a joint bank account, that each party was still contributing to that account, and they were continuing to reside under the one roof.

14. The separation of the parties not only requires the intention to separate, but the communication of the separation and the subsequent acting on that intention.[3]

    [3] See Todd & Todd (No.2) (1976) FLC 90-008 and Falk & Falk (1977) FLC 90-247.

15. I have no difficulty in accepting that the relationship had issues in 2006 and that the parties attended mediation to attempt to resolve these matters. I also accept that the applicant sought legal advice in respect of his rights and obligations as he was entitled to do but did not act upon that advice.

16. I have difficulty accepting the respondent’s assertion that the applicant did not reside at the Property C property during the time he worked in the north of the state.

17. The evidence supports a conclusion that:

    a)The Property C property remained the parties’ common residence;[4]

    b)The parties had a degree of financial interdependence in their ongoing use of, and payment of the (omitted) Bank loan amongst other things;[5] and

    c)The parties continued until 2011 to own and use the Property C property with the ownership continuing today. [6]

    [4] Family Law Act 1975 s 4AA(2)(b).

    [5] Ibid, s 4AA(2)(d).

    [6] Ibid, s 4AA(2)(e).

18. There is little or no evidence on which I can safely rely to conclude that the parties separated in 2006. If I am wrong on that point then it is open to me to find that the relationship recommenced on or before the transfer of the property to the applicant.

19. In Sinclair & Whitaker (2013) FLC 93-551, the Full Court noted:

    given the nature of the definition of a de facto relationship in the Act, the ultimate decision as to whether there is a de facto relationship at any given time is a matter for the Court, not a matter for the parties. Although their perception of the nature of the relationship is a relevant matter, it is not determinative.[7]

    [7] Sinclair & Whitaker (2013) FLC 93-551, 65.

20. In Sinclair & Whitaker  (supra) the Court said:

    it is also to be remembered, perhaps making the task of the trial judge applying section 4AA more difficult, that the nature of relationships and commitments for both married and unmarried couples find expression in many different domestic arrangements. The application of the statutory criteria to reach a conclusion must be done judicially…[8]

    [8] Ibid, 95.

21. The respondent argues that after 2006, the parties no longer presented as a couple, there was no sexual relationship, and no degree of mutual commitment to a shared life. I have difficulty with and do not accept this submission in view of the events which both parties concede followed including the transfer of the land and the applicant returning to reside in the Property C property in 2010/2011.

22. The respondent argues that the reputation and public aspects of the relationship were gone after 2006. I do not accept that in relation to the period prior to 2010 and note again the steps to transfer the property and the ongoing payments and use of the loan amongst other things.

23. If that were to be the case for 2010/2011 then I accept as noted, the submission that this was indicative of a relationship that was breaking down, not one where the parties had separated. Separation occurred only when the respondent formed the intention, communicated it to the applicant and acted upon it in August 2011.

24. The parties resumed cohabiting on a full-time basis under the one roof in 2010, following the applicant ceasing employment at (omitted). He remained there until August 2011. The circumstances of the argument leading to the separation and the smashing of the windows remains in dispute however it is accepted that following the intervention of the applicant’s friend, he left the property and subsequently took steps to initiate proceedings.

25. It is on that date that I consider it appropriate to find that the parties separated.

26. I would therefore accept that this Court has jurisdiction to determine the financial issues between the parties.

Conclusion

1. I make orders accordingly with the Reasons set out above.

I certify that the preceding eighty-eight (88) paragraphs are a true copy of the reasons for judgment of Judge Cole

Associate: 

Date:  26 March 2015