Simone Starr-Diamond v Talus Diamond
[2012] NSWSC 675
•19 June 2012
Supreme Court
New South Wales
Medium Neutral Citation: Simone Starr-Diamond v Talus Diamond [2012] NSWSC 675 Hearing dates: 6, 7, 8, 9 & 10 February 2012 Decision date: 19 June 2012 Jurisdiction: Equity Division Before: Slattery J Decision: The Court makes no order under Property (Relationships) Act 1984 for the adjustment of interests in the parties' property. Directions made for submissions about whether the plaintiff should pay the defendant's costs of the proceedings.
Catchwords: FAMILY LAW - domestic relationships other than marriage - issue as to length of relationship - five or six years - just and equitable division of parties' joint property under Property (Relationships) Act 1984, s 20 - extent of financial and non financial and welfare contributions to be recognised under Property (Relationships) Act, s 20(1)(a) and (b) - plaintiff claims adjustment of property interests - whether an adjusting order should be made, and if so what the quantum of such adjustment should be. Legislation Cited: Civil Procedure Act 2005 (NSW), ss 56, 88
Property (Relationships) Act 1984 (NSW), ss 5, 20
Social Security (Administration) Act 1999 (Cth)Cases Cited: Bilous v Mudaliar (2006) 65 NSWLR 615
Evans v Marmont (1997) 42 NSWLR 70
Gazzard v Winders (1998) 23 Fam LR 716
Hibberson v George (1989) 12 Fam LR 725
Howlett v Neilson (2005) 33 Fam LR 402 Jones v Grech (2001) 27 Fam LR 711 Kardos v Sarbutt (2006) 34 Fam LR 550
Lipman v Lipman (1989) 13 Fam LR 1
Pavey v Pavey (1976) 10 ALR 259
Proudman v Dickason [2008] NSWSC 681
S v B (No. 2) [2005] 1 Qd R 537
Sharpless v McKibbin [2007] NSWSC 1498
Thompson v Badger (1990) DFC 95-078
Wallace v Stanford (1995) 37 NSWLR 1Category: Principal judgment Parties: Plaintiff:- Simone Starr-Diamond
Defendant:- Talus DiamondRepresentation: Defendant- Ms F.Sinclair
Plaintiff:- in person
Defendant:- S.Hodges
File Number(s): 2008/278342 Publication restriction: No.
Judgment
The plaintiff, Ms Simone Starr-Diamond, and the defendant, Ms Talus Diamond, lived together from at least mid 2001 until September 2006, in various households on Sydney's lower north shore. The parties agree that for this period they were in a "de facto relationship" and therefore in a "domestic relationship" within Property (Relationships) Act 1984, s 5. But they do not agree they were in a domestic relationship for any longer. Their relationship has now ended. They are unable to agree upon the just and equitable division of their joint property. They have deeply differing views about their respective financial and non-financial contributions to their various properties and financial resources throughout their relationship. They have equally divergent views about the contributions they each made to the other's welfare during the relationship.
Ms Starr-Diamond, the plaintiff in these proceedings, seeks orders under Property (Relationships) Act, s 20 to adjust the interests in the property that they each hold. The defendant has cross-claimed seeking orders for the sale of various jointly held properties and the reimbursement of monies she claims to have loaned to the plaintiff. The principal issues for determination are: (1) whether it is appropriate to make any order, as the plaintiff requests, adjusting the percentage of the parties' respective interests in their joint property; and if so, (2) what that adjusting order should be, and if not, (3) what orders for the sale of the parties' joint property should be made. The defendant says that no adjusting order is warranted and none should be made, and that all joint property should be sold and her advances for the purchase of that property should be repaid to her.
The plaintiff's case is: that the parties lived in a full de facto relationship between October 2000, when the defendant is said to have given the plaintiff a wedding ring, made a life long commitment to her, and arranged for the plaintiff to move into her household at Grasmere Road, Cremorne; but that the relationship ended about 13 July 2007, when the plaintiff moved to Tasmania and the defendant elected to remain in Sydney.
In contrast, the defendant says: that she and the plaintiff first moved into a household together in Nook Avenue, Neutral Bay in mid 2001; and that their relationship barely qualified as a "de facto" relationship until September 2006; but, even that relationship irretrievably fractured that month when the plaintiff left their household and travelled to Queensland with another woman, Ms Gabrielle Maas. Thus the relevant contests about the length of their relationship are: whether or not it existed between October 2000 and mid 2001; and whether it existed between September 2006 and mid 2007. In these reasons I find that the plaintiff's contentions about when the parties' relationship commenced are correct but that the defendant is right about when it ended. This is the first main issue dealt with in this judgment. Although as the more detailed reasoning below shows, the exact length of the parties' relationship is not a major consideration in the Court's determination of the relief in issue.
At the commencement of their relationship the plaintiff was a graphic artist and sub-editor for Fairfax and News Limited publications. The defendant was a podiatrist. Due in part to difficult events in each of their lives and in part due to the breakdown of their relationship, neither the plaintiff nor the defendant now works in their chosen professions. The plaintiff's case is that she first applied her sub-editor's wages of about $75,000 per annum, and then at a later time her Centrelink benefits, to the maintenance of the parties and the acquisition of property throughout the relationship. In addition the plaintiff says that borrowings from her family and the application of her savings and other financial resources that she brought to the relationship helped sustain the couple during their years together.
The defendant's case is quite different. She says that the financial resources that she brought into the relationship and the substantial earnings of her various podiatry practices largely account for the couple sustaining their lifestyle throughout the relationship and enabled them to acquire such property as they held at the end of the relationship in each of their names. The defendant says in consequence that no adjusting order should be made under Property (Relationships) Act, s 20 in relation to their joint property. I have reached the conclusion in these reasons that the defendant's contentions about how the relationship was sustained financially are largely correct and that as a result no adjusting order should be made.
The Legislative Framework
Ms Starr-Diamond's Statement of Claim and Ms Talus Diamond's Cross Claim invoke jurisdiction conferred on this Court by the Property (Relationships) Act 1984 (NSW), s 20 which allows the Court to adjust the interests in property of parties to a domestic relationship. Section 20(1) relevantly provides:
"20 Application for adjustment
(1) On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to:
(a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and
(b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely:
(i) a child of the parties,
(ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties.
(2) A court may make an order under subsection (1) in respect of property whether or not it has declared the title or rights of a party to a domestic relationship in respect of the property."
There is no issue as to the prerequisites to the Court's jurisdiction. The parties "have lived together in a domestic relationship for a period of not less than 2 years": Property (Relationships) Act, s 17. Ms Starr-Diamond brought her application within two years after the relationship ceased in July 2007: Property (Relationships) Act, s 18.
Once a domestic relationship is proven, or conceded as it is here, and there is no other impediment to the Court's exercise of jurisdiction, the decided cases establish three distinct stages in the exercise of the jurisdiction under the Property (Relationships) Act, s 20.
(a)The first stage is the identification and the valuation of the property of the parties to determine their "divisible pool of property". The property so identified is "the property of the parties to the relationship or either of them". Property (Relationships) Act, s 20 gives authority to the Court to adjust the parties' interests in this property.
(b)The second stage is to identify, evaluate and weigh the parties' respective contributions of the various types referred to in the Property (Relationships) Act, s 20. This typically but not always results in the Court apportioning the overall s 20 contributions each party made up to the date of the hearing as a percentage.
(c)In the third stage the Court determines what order is required sufficiently to recognise and compensate an applicant's contributions in the context of the contributions as a whole of both partners. This stage typically results in an order leaving the applicant with the percentage identified in the second stage of the divisible property identified in the first stage.
The courts have repeatedly affirmed this three stage methodology: Evans v Marmont (1997) 42 NSWLR 70; Jones v Grech (2001) 27 Fam LR 711; [2001] NSWCA 208; and Kardos v Sarbutt (2006) 34 Fam LR 550.
In the absence of a contest as to whether there was any domestic relationship between the parties, and subject to the issue of the precise length of the relationship, the stages identified in these authorities present for judgment in this case the following three main questions: (1) what is the parties' divisible pool of property? (2) what were their respective contributions that may be recognised under Property (Relationships) Act, s 20? And (3) what order, if any, as "seems just and equitable" should the Court make to adjust Ms Starr-Diamond's and Ms Talus DIamond's respective interests in their divisible pool of property to reflect and recognise their contributions? Those questions form the structure of this judgment.
To reduce the risk of identity theft this judgment does not publish the full addresses of any of the properties the parties lived in or owned or now own. Nor are any bank account details published. If non-parties legitimately require such information it is obtainable from the Court's file.
Ms Fiona Sinclair represented the defendant throughout the hearing during which the plaintiff was not legally represented. The plaintiff presented her own case.
To understand the issues for determination more background of the course of the parties' relationship is needed. This background is set out in the form of a chronological survey and covers aspects of their respective s 20(1)(a) financial and non-financial contributions to their properties and to their financial resources. It also covers their respective s 20(1)(b) contributions to one another's welfare. These matters are the "focal points by reference to which the discretionary judgement as to what seems just and equitable [under s 20] must be made": Evans v Marmont (1997) 42 NSWLR 70 per Gleeson CJ and McLelland CJ in Eq at 79 G-80A. The parties were at issue about the extent of their relative contributions in each of these areas. In this background survey the Court makes findings as to their disputed relative contributions. This judgment finally deals with the parties' remaining contentions and the reasons through the three stages, in order to determine whether or not to make a s 20 order.
The parties took issue with a great number of detailed matters and incidents in the competing accounts they each gave of the course of their relationship. Many of these matters and incidents were not the subject of cross-examination by either party. Many of the matters did not relate to assets or contributions of any material value. Many of the incidents were not material to the issues that the Court is required to decide. It is not necessary for the Court to determine what happened in relation to all these matters or incidents, for the Court to assess the three stages in the exercise of jurisdiction under Property (Relationships) Act, s 20. The account of the course of the parties' relationship set out below only makes findings on the issues material to the dispute between the parties. It does not make findings in relation to all matters and incidents, even though some of the non-considered matters and incidents were of passionate interest to one or other side in the proceedings.
An assessment under Property (Relationships) Act, s 20 is different from one under the Family Law Act 1975 (Cth). As was explained by Gleeson CJ and McLelland CJ in Eq in Evans v Marmont (1997) 42 NSWLR 70 at 74B, it cannot now be suggested that one should approach an application for adjustment of property interests under the Property (Relationships) Act by beginning with an assumption that an equal division of property is appropriate and then asking whether the circumstances of the case require some departure from that position. But it also can no longer be contended that the contributions of a de facto partner as homemaker and parent should be regarded as in some way inferior to the corresponding contributions of a spouse: Evans v Marmont, at 74C.
Assessing the Plaintiff's and the Defendant's Credibility
Both the plaintiff and the defendant were intensely bitter about one another's conduct during their relationship and upon its failure. This bitterness was evident in almost every sentence of their evidence. It was an odd rare moment that either the plaintiff or the defendant conceded some merit or good quality in the other. Each tended to identify the other as the source of all ills in her life. Resentment still simmered on both sides of the relationship about certain events in September 2006 when the plaintiff left the relationship and temporarily moved to Queensland with a female companion.
But for the reasons, which appear later, I found the defendant often to be the more objective and reliable of the two protagonists, although even her evidence had its problems at times. To make findings about contests of fact it has usually been necessary to look to the objective materials, independent witnesses, and such parts of the evidence of both plaintiff and defendant as are inherently probable.
The case presented two unusual personalities to the Court. The case required the Court to choose between two highly polarised views of the truth. Much of what actually happened to the plaintiff and the defendant in the course of their relationship can only be understood with their characters. To faithfully recount the narrative the description here of plaintiff and defendant is both more direct and more blunt than is be called for in many cases.
The plaintiff is an uncommonly self-absorbed person. Without demonstrable shame she had little difficulty in speaking for hours both at the bar table and from the witness box of her own emotions, feelings and ideas, and their importance. She claimed she was a 'private' person and had difficulty speaking about these things but her conduct in Court was quite inconsistent with such a claim. Her evidence admitted little doubt that she could possibly be wrong about any of her dealings with the defendant. She could only see her relationship with the defendant from her own singular point of view. She is strong minded, determined, persistent and forceful. Her Courtroom answers were often interlaced with arguments about what was wrong with the defendant, about why the defendant's case was misguided, or about how the defendant had harmed her.
The plaintiff showed considerable self-possession. She was across all the detail of her and the defendant's financial affairs. She presented her own case in a factually and, no doubt for her, emotionally demanding five-day hearing. Much of that presentation was quite competent, although in final submissions the plaintiff's case often descended into ungrounded and irrelevant assertion.
But the Court could not comfortably rely upon her as a witness in part because of the unsubstantiated exaggeration inherent many of her evidentiary claims. Examples of this kind of evidence from the plaintiff appear elsewhere in these reasons. But present examples of this are her statement that "the defendant has also seized monies from my bank accounts and credit cards without my authority"; she did not establish any such conduct on the part of the defendant. Also she says throughout her affidavit and oral evidence that she repaid the loans that the defendant made to her to purchase her joint share in the jointly held property at Baker's beach in Tasmania and to purchase the investment property in the plaintiff's name in Jubilee Pocket Queensland. But she provides no objective substantiation of such alleged repayments and I do not accept her oral evidence that she made them. I find she was prepared to mislead Citibank in May 2006 when she was applying for a Citibank Airport platinum credit card. She claimed to Citibank that her gross personal income was $148,000 and that her monthly income after tax was $9,000. I find that the plaintiff was responsible for this document. She knew she did not have an income of that level in May 2006.
Moreover she made baseless attacks in final and other submissions on the defendant's lawyers, accusing them of taking the plaintiff's documents. She did not advance evidence of any cogency whatsoever to support this most serious charge. She seemed to think that anyone, who assisted the defendant, including the defendant's lawyers, must be in a conspiracy against her. Through repeating such allegations she showed a persisting lack of objective judgment.
But at times what the plaintiff said was obviously right. She did make a few concessions against her interest. It was necessary for the Court to pick its way through her evidence and make findings either for or against her on important pieces of evidence. This is not a case where her account is displaced by a wholly more reliable account from the defendant. The defendant's account was generally more reliable but it cannot be completely accepted either.
The defendant's view of her relationship with the plaintiff was also distorted by similar bitterness. Her underlying distaste for the plaintiff was palpable at times during her evidence. For a long time she refused to accept what the evidence showed to be obvious: that there was a domestic relationship between the plaintiff and the defendant between October 2000 and September 2006. She only admitted this just before trial. But overall the defendant had a greater degree of objectivity on her own experience of this failed relationship; perhaps this was because of her professional training as a podiatrist.
A complication in assessing both the defendant's credit and the plaintiff-defendant relationship was the defendant's lifestyle. The defendant was a driven individual who kept herself fit, competed in triathlons and maintained several demanding podiatry practices in Macquarie Street, Sydney and several Sydney suburbs. She had built up a portfolio of investment properties in Queensland. But in contrast to her business life, the defendant's domestic life was one of relaxed liberality. She was quite prepared to tolerate people living in her household, imposing upon her, benefiting from her generosity, and taking liberties that many others would simply not allow. She claimed in these proceedings, with justification I find, that the plaintiff had simply exploited this part of her character.
The case generated contradictory descriptions of the defendant. The plaintiff said that the defendant was dominant, controlling and directed the plaintiff's life. But the defendant said that she tolerated the plaintiff imposing herself at the defendant's residence and really wanted her to leave much of the time but was afraid to confront her. It is true that in her professional life, in her athletic pursuits and in managing her finances, the defendant demanded high levels of self-discipline. But in dealing with other people who became her guests, I find that the defendant could be quite passive. This duality made assessing the defendant's evidence difficult.
The plaintiffs also attacked the defendant's credit by claiming that she was psychotic. This allegation was not supported by any medical evidence the plaintiff put before the Court. But it was not without some basis. The defendant admitted that she had received benefits from Centrelink during the parties' relationship. She claimed those benefits, "on the basis of some medical evidence", and she explained to the Court, "apparently I was diagnosed as being psychotic". The medical evidence that supported the payment of the Centrelink was not revealed. All that can be said was that the defendant accepted this benefit and that she admitted being diagnosed for a period as being psychotic. The other medical bases for the Centrelink payment were not explored. A Centrelink benefit (mainly a disability support pension) was paid to the defendant until November 2008. To her credit the defendant said she was committed to repaying her debt which had reached over $162,000 by December 2009. The Court cannot engage in amateur psychiatry. Whatever may have been the medical reason for the payment of this pension at some time in the past, there was no medical evidence before the Court that showed the defendant had suffered any psychotic illness for any extended period of time. The defendant's evidence at no time in the hearing showed any obvious signs of disordered or irrational thinking or ideas. So far as a Court can say without medical assistance the defendant did not present to the Court as a person exhibiting any kind of mental illness. As they were unsupported by objective evidence, or the Court's own perceptions of the defendant's evidence the Court ignored these allegations against the defendant.
But having seen both the plaintiff and the defendant in evidence during a five-day hearing, I generally prefer the defendant's analysis of their mutual relations. The defendant was a precise though at times hesitant witness. Her reserve was matched by the plaintiff's self-confidence. Yet there was an overall restraint in the defendant's evidence that often prevented her from excessive attacks on the plaintiff and ultimately gave her evidence a greater authority that than of the plaintiff. More often too the defendant's evidence was supported by objective material, when the plaintiff was unsupported by such material and plainly improbable.
The Earlier Course of these Proceedings
These proceedings have had a prior partial hearing. The hearing of the evidence before me over five days, 6, 7, 8, 9 and 10 February 2012 and the filing of written submissions in the 28 days thereafter, followed by a final directions hearing on 15 March 2012, were the conclusion of a number of years of conflict. The Statement of Claim was filed in April 2008. A Defence and an Amended Statement of Cross Claim were filed in November 2009. The proceedings were first heard over five days before Smart AJ on 8, 9, 10, 11 and 12 February 2010. His Honour heard much procedural argument and made many rulings on evidence during this 2010 hearing. The only witness who gave oral evidence in this part of the proceedings, Ms Wendy Janice Roberts, the plaintiff's mother, did so on 10 February 2010. Rulings on objections to affidavits continued. The remaining two days of the proceedings before Smart AJ dealt with multiple notices to produce with a proposal to appoint an accountant, Mr Ron Flood, to analyse the corporate records of the three corporate entities controlled by one or other of the parties. Corporate financial statements for these entities did not exist for the years of the parties' relationship. None of the entities had filed tax returns during the last ten years.
After this hearing before Smart AJ the proceedings came back before his Honour on 8 April 2010, 26 August 2010, 30 August 2010, 12 October 2010, 22 October 2010 and 17 December 2010. The plaintiff had been represented by solicitors until December 2010, after which time she appeared in person. Appearances on 17 December 2010 and 3 February 2011 were in the nature of extended directions and interlocutory hearings, which dealt with issues about the sale of properties, the production of documents, the lodging of caveats and the accounting for proceeds of sale. Many of the interlocutory issues involved the plaintiff opposing the defendant selling investment properties held either in her name or by one of her corporate vehicles.
After this last hearing Smart AJ became ill and most unfortunately was unable to continue to hear these proceedings. From 1 July 2011 through until 8 September 2011 the proceedings were case managed by Bergin CJ in Eq during which time the Court considered issues of possible pro bono assistance to the plaintiff, mediation, production of documents by the defendants and managing defaults on existing mortgages over company property. On 8 September 2011 Bergin CJ in Eq set the matter down for three days before myself on 6, 7 and 8 February 2012. I determined that the proceedings would require more time to be concluded. A further two days, 9 and 10 February 2012, were allocated to conclude the evidence.
Although Smart AJ had made detailed rulings on evidence it was evident from the transcript of the proceedings before his Honour that those rulings had taken many days. The parties had since filed further affidavits and the making of detailed rulings on the remaining affidavits threatened to consume much of the available hearing time of the proceedings. The parties threatened to reargue many of the rulings in light of the further evidence. So the Court approached the proceedings on the basis that all evidence tendered on both sides by affidavit would be admitted into evidence and its assessment was treated as a matter of weight. This was done in furtherance of the objectives identified under Civil Procedure Act, s 56, in facilitating the "just, quick and cheap" resolution of the real issues in dispute in these proceedings. It would simply not have been possible to hear argument upon and determine the objections to further evidence in the proceedings and complete the evidence within a time frame even of some five days. The order was necessary to allow the proceedings to be completed within a reasonable time. The order was especially important because as there had already been one five day hearing together with other scattered hearing days.
It was necessary to formally make orders terminating the proceedings before Smart AJ and constituting a fresh trial. This was raised with the parties on the first day of the hearing. There was no contest the original trial had commenced before Smart AJ and that his Honour was "unable to continue the trial or give judgment in the proceedings by reason...incapacity": Civil Procedure Act, s 88. Thus Bergin CJ in Eq, the "senior judicial officer" within Civil Procedure Act, s 88, nominated me as another judicial officer before whom the proceedings were to be listed for trial: Civil Procedure Act, s 88(1). The proceedings had been so listed and the Court gave directions as to the evidence to be used in the fresh trial before me: Civil Procedure Act, s 89. The formal orders under Civil Procedure Act, s 89 will be made with the final orders in the proceedings.
It was necessary for the plaintiff to offer to recall Mrs Roberts as the defendant initially did not accept directions that her evidence at the previous trial could be read. In the end though the plaintiff was permitted to tender the whole of Mrs Roberts' oral evidence before Smart AJ and the defendant did not require her for further cross-examination. The plaintiff elected to tender this evidence after argument. The Court indicated in that argument that if the defendant wished to tender only parts of Ms Roberts' evidence against the plaintiff, that the Court would allow the plaintiff to adduce such further evidence from Mrs Roberts as she was so minded in addition to the evidence given at the earlier trial. In the end, the plaintiff just tendered the transcript of the whole of Ms Robert's evidence without objection.
The Course of the Relationship - 2000 to 2007
Simone Starr-Diamond and Talus Diamond
Each of the plaintiff and the defendant had adopted the names in which they litigated these proceedings. The plaintiff was born in 1964 as Simone Patricia Carnicelli. The defendant was born in Sydney in 1965 as Elizabeth McDonnell. The defendant changed her name to "Talus Diamond" in late 1997, before she met the defendant. The plaintiff changed her name to "Simone Starr-Diamond" during the relationship. Events surrounding the plaintiff's change of name became one of the issues in the proceedings. Indeed this issue is a cameo of the dynamic of their relationship.
The plaintiff changed her name by deed poll on 21 January 2001. The date of the name change was not contested and is one of the reasons why the Court concludes the relationship commenced before mid 2001, the date the defendant puts it started. The plaintiff says that before the name change the defendant said to her "now we are married I want you to take on my name". The plaintiff says she suggested replacing her second name and giving herself a double barrelled surname "Starr-Diamond" to which, according to the plaintiff, the defendant said "I like the idea of Starr-Diamond". With that general seal of approval the plaintiff says she went and arranged the name change.
The defendant's name change narrative was quite different. The defendant says that the plaintiff changed her name by deed poll in Tasmania to "Simone Starr-Diamond" without the defendant's knowledge. The defendant says she was not consulted prior to the name change and had no involvement in it.
The defendant's version is partly correct in my view. My findings as to what happened follow. The plaintiff did not formally ask the defendant's permission to change the plaintiff's name. She did not need to. The law did not require that. What happened was that the plaintiff had some light-hearted banter with the defendant about changing her name, and about what a changed name would look like. Then she just went ahead and made the change without any further consultation with the defendant. She did it, in my view, to publicly present herself as part of a couple with the defendant. It was a bold move which immediately asserted a degree of control over the defendant which was typical of much of the plaintiff's behaviour. Once the plaintiff's name was changed to a surname similar to that of the defendant others would more readily assume that they were a couple. The defendant never gave her permission to this course. The plaintiff imposed it on her. I do not accept that the defendant said to the plaintiff "I want you to take on my name".
From the time the plaintiff changed her name she signed her name and initialled documents with an open five pointed star followed by the word "Diamond", or using a star in place of the "D" in Diamond, as appears throughout the court documents in these proceedings.
Each of the plaintiff and the defendant are tertiary educated. The plaintiff has a Bachelor of Arts degree from the Australian National University with a double major in political science. She commenced but did not complete a masters degree in public administration. She has a Bachelor of Arts degree (visual communication and graphic design) and a Master of Design with distinction from the Royal Melbourne Institute of Technology.
The plaintiff's working life involved career roles in government and the media. She has worked for the Federal Attorney General's Department, the Australian Government Retirement Benefits Offices and the CSIRO Canberra. She has held positions in the Australian media as a radio announcer and producer and worked for News Limited and Fairfax Newspapers as a layout artist and sub-editor. She has lectured and held academic and faculty positions in visual communications, advertising, graphic design and interior design. She has produced and exhibited artwork and photography, which she herself pointed out to the Court in her evidence has been "exhibited alongside Max Dupain, Oliver Cotton, Wilbur Sievers, Lord Litchfield and Linda McCartney". The defendant did not challenge the plaintiff's curriculum vitae.
The plaintiff did not suffer the disadvantages suffered by many litigants in person. She had quite a high level of comprehension of the legal issues and of court processes. No doubt this was assisted by the fact that she had by the time of the hearing already studied three law subjects at University. Indeed the directions hearings in November 2011 were organised after the conclusion of her legal studies for 2011, so as not to interfere with preparation for her upcoming law examinations.
The defendant has also achieved tertiary academic success in fields related to her practice of podiatry. The defendant trained as a podiatrist and has completed extensive postgraduate study in podiatry in the United States of America and the United Kingdom. She first qualified in podiatry from Sydney University in 1986 and undertook postgraduate study for three months in each year of 1987, 1988 and 1989 at Edinburgh University and the San Francisco College of Podiatrist Medicine. She was appointed Head of the Department of Podiatry at Westmead Hospital for three years, worked at a private practice at Double Bay and then purchased her own first practice at Mascot in about 1992.
The parties agree that they first met socially in about late 1999. The defendant says that they met through a female friend, Dr Shale Preston. That some such introduction occurred at this time is undoubted. Dr Preston gave evidence in the proceedings and confirmed that she was living in the Grasmere Road, Neutral Bay house occupied by the defendant; and that she had a short close relationship with the plaintiff shortly before the plaintiff and the defendant met. But the relationship between the plaintiff and the defendant did not develop any further for a number of months. The plaintiff says, and I accept, that shortly after the conclusion of the Sydney Olympic Games, in early October 2000, the plaintiff and the defendant had more frequent contact. They had a number of common interests including a love of cats. I accept the plaintiff's evidence that a sexual relationship had commenced between them by late October 2000.
The Early Relationship
The evidence of the plaintiff and the plaintiff's witnesses about the commencement of the relationship was compelling. The plaintiff says, and I accept, that at Halloween in the year 2000 the defendant gave her a simple gold ring, which the plaintiff described as a "wedding ring". Although there are many aspects of the plaintiff's evidence that I do not accept, much supports the conclusion that the defendant made a deep personal commitment to the plaintiff on 31 October 2000. The ring still exists. The plaintiff has it. I accept the plaintiff's evidence that both the plaintiff and the defendant treated Halloween each year as the anniversary of the commencement of their relationship. Even the defendant's principal affidavit speaks of a special ceremony between them on Halloween 2001. That was their first anniversary together. The plaintiff's case about the commencement of the relationship goes beyond this ring ceremony of commitment. She says that at some time in October or November 2000 she moved into the defendant's premises at Grasmere Avenue, Cremorne.
There was a prominent contest between the parties about when the plaintiff moved her belongings from the Ivy Street, Chippendale property she shared with her father and joined her household with the defendant. The plaintiff said she went to Grasmere Road, Cremorne in October 2000. The defendant said this did not happen until the middle of 2001, when she was living in Nook Avenue, Neutral Bay. The plaintiff's case was much assisted on this issue by the evidence of her sister, Mrs Vicki Maroulis. Mrs Maroulis was an excellent witness whose account I entirely accept. Mrs Maroulis is a teacher and came across to the Court as a person of precise and exact habits who would not overstate the facts. She gave as accurate a history of the beginning of the relationship as her memory and experience would allow.
Mrs Maroulis explained, and I accept, that shortly after she and her husband were married, which was in June 2000, the plaintiff moved in with the defendant. Mrs Maroulis' best recollection was that the plaintiff had a disagreement with their father and moved out of the Chippendale house she shared with him a matter of weeks or a couple of months after Mrs Maroulis was married. Mrs Maroulis was sure that the plaintiff's move was before Christmas that year. This coincides with the period that the plaintiff says that she was given the ring and made the move. I find that the relationship commenced in October 2000.
The Relationship Develops
The plaintiff's account of the early course of the relationship is reasonably reliable but not completely so. The plaintiff has a fairly exact recollection of the early times in the relationship, especially in the years 2000, 2001 and 2002. The occasions that she and the defendant went to restaurants, went on picnics, visited friends, went to the theatre, visited family members are all recounted in some details in the plaintiff's affidavit. The plaintiff's acceptance into the defendant's life was very important to the plaintiff, probably more so, as it perhaps seems in retrospect, than it was to the defendant. The defendant's evidence does not include similar levels of personal detail about the early part of the relationship. This in my view is because the defendant was reluctant to concede this level of personal intimacy had occurred with the plaintiff, a person for whom, by the time of the hearing, she had the most abject distaste. So strong was this distaste that the defendant could barely bring herself to look at the plaintiff whilst she was in the courtroom, and in particular when the plaintiff was cross-examining her.
But some of what the plaintiff recounts during this period goes too far. The defendant's perception some years later was that the plaintiff, "inveigled" herself to the defendant's life and "insinuated" herself into the defendant's professional and personal affairs. This perception was accurate. In my view, the plaintiff did actively seek to permeate herself through every part of the defendant's life. The defendant did not always want that to happen. Although the defendant was generally willing to go along with the plaintiff's ideas about joint entertainment and mutual social relationships, I accept that the defendant put up some firm boundaries to this process.
One of these was the area of children. The plaintiff says that she wanted to have children with the defendant and that a sperm donor, a mutual male friend was organised for this purpose. But none of this really rings true. This seems to have been something imagined by the plaintiff. The idea of having children evoked a strong reaction from the defendant that shows there was some limitations to her compliant acceptance of the plaintiff's plans for their joint lives. The defendant says, and I accept, that her response to the plaintiff's idea in 2003 that they should have children was wholly negative.
I accept that the proposed father was the defendant's then boyfriend. The defendant claims, and I accept, that her relationship with the plaintiff, at least on her side, was non-exclusive and that she had intimate relationships with a number of other men and women throughout her relationship with the plaintiff. The plaintiff said that the relationship was exclusive on her side and claims that it was exclusive on the defendant's side. But I do not accept that this is a correct account of the defendant's approach to the relationship. The defendant named a number of her other boyfriends and girlfriends during the relationship. It is not necessary to republish any of their names in this judgment. The plaintiff criticised the defendant for not calling these alleged other former lovers to prove that the defendant really did have a non-exclusive relationship with the plaintiff.
Even though a domestic relationship is admitted, the fact that one or other party did not treat the domestic relationship as an exclusive one, can still be a relevant factor to be taken into account, for example, in relation to issues such as the welfare contributions that each party made to the other: Property (Relationships) Act s 20(1)(b). But there are limits as to the extent to which such evidence needs to be examined. Whilst it is true that the defendant did not corroborate her account by adducing evidence from these potential witnesses, Civil Procedure Act 2005, s 56 which commands that the Court promote the "just, quick and cheap" determination of the proceedings was at least one good reason why I was not prepared to draw an inference against the defendant for not adducing such evidence. In any event on this issue the defendant herself was quite credible. I accept her evidence that "I always had friendships and sexual relations with other friends and partners, male and female, during the time that we knew each other and I did not ever exclusively live with the plaintiff".
But the defendant also attempted to play down the public aspects of her relationship with the plaintiff. The defendant denied representing to third parties that she and the plaintiff were introduced as "partners", "girlfriends" or "lovers". The defendant says that she would often say to friends and family "Simone and I are adopted sisters". On some occasions that may have been what was said, especially to the defendant's family. But on this issue I accept the plaintiff's evidence that quite a wide circle of friends were well aware that the plaintiff and the defendant shared an intimate personal relationship.
There were a number of indications of considerable intimacy and trust between the plaintiff and the defendant during their relationship together, through which each expressed a desire to benefit the other. The defendant did make the plaintiff sole beneficiary of her life insurance policy and the plaintiff reciprocated, making the defendant a beneficiary of her life insurance policy. The defendant dismissed this in her evidence, explaining that she only took this step because she would not be alive when the policy was called on and it did not matter to her who received the money. But the defendant's choosing the plaintiff as beneficiary, rather than another member of her own family or another friend, indicates the special place the plaintiff held in the defendant's life at the time.
A Turning Point - 2002
The year 2002 became a relationship turning point. In that year the defendant started to find aspects of her relationship with the plaintiff quite oppressive. I find that the defendant's version of what happened between the couple from this time on is correct: the plaintiff took an overpowering and controlling interest in all aspects of the defendant's life so that the plaintiff, as the defendant said, "became difficult to deal with and started to attempt to dominate me". I find that the defendant's evidence is correct that the plaintiff started to accompany her or follow her to places often when she was uninvited. I find that the plaintiff began to resent the defendant might have any life other than one with her. I accept the defendant's evidence that this became more and more persistent and unpleasant for her. But I also do not doubt that the plaintiff had little sense that the defendant found her conduct oppressive. But I accept that she did, and for good reason, as the evidence shows. This continuing conduct of the plaintiff had adverse personal and financial consequences for the defendant: the personal consequence was increasing stress in the defendant's life and the financial consequence was the defendant's podiatry practices went into decline. These consequences in turn explain why their relationship began to fracture badly in 2005 and 2006. The defendant says, and I accept, that there were 34 police incidents between them, including applications for apprehended violence orders, over the years they were together.
The plaintiff began to absorb the defendant's life in two main areas beyond the purely domestic; in the defendant's recreational and professional life. The defendant is a tri-athlete. She needed to train daily and she swam most days over a kilometre. I find that the plaintiff would often follow her to the pool and sit and watch and then try and interrupt her swimming by speaking to her. The defendant said to the plaintiff a number of times "please leave me alone, all I am doing is some exercise. It is a time for myself". I accept the defendant's evidence that the plaintiff's explanation for this was "I have been traumatised by my earlier relationships, I don't want you to ever leave me. I want to spend the rest of my life with you". The defendant assessed the plaintiff as having "an obsessive, compulsive personality and she tried to take over my life". This was clearly not a qualified medical assessment. But I accept that it was indeed evidence of the concern of the plaintiff from 2002 that she be as much a part the defendant's daily life as the defendant would allow. By 2002 this was aggravating the defendant and diminished much of the support that the defendant might otherwise have gained from their relationship.
But the plaintiff also inserted herself into the defendant's professional life as a podiatrist. This generated the conflict in the proceedings about the parties' respective financial and non-financial contribution to the acquisition, conservation and improvement of their property and their financial resources. The year 2002 also brought this issue into prominence.
The plaintiff ceased to work with Fairfax Community News in late 2001. She was unwilling to go back into sub-editing roles. The plaintiff says, and I accept, that she had encountered harassment and poor behaviour in some of her workplaces and in the media and was not anxious to return there. I accept that she decided, as she explains, that working within the defendant's podiatry practices would be more congenial for her. But her decision to work within these practices was not the result of the defendant's request for her there. She did not have expertise in either podiatry or small business financial management. I find that she assumed a role in the practices, more or less to suit herself. She convinced herself she was helping the defendant at work. Regrettably, as the analysis below establishes, she caused considerable financial damage to these practices.
I accept the defendant's account of how the plaintiff came to work for her. The defendant says that in late 2001 the plaintiff said to her, "Talus please can I work for you now?" to which the defendant responded, "There is not really much work you can do as I already have a secretary who answers the phone and makes appointments". Despite that mild rebuff, the plaintiff presented herself at the defendant's Macquarie Street surgery and found a role for herself answering the telephones. This forced the then secretary-receptionist, Ms Rachael Lee to give up this task. Fairly shortly afterwards the plaintiff took over running the whole surgery.
From that time on the plaintiff's presence depleted the commercial value of the defendant's practices. Subjectively the plaintiff thought that she was helping the defendant. She genuinely believed she was. All her evidence came across that way. But looked at objectively, the plaintiff's personality and behaviour slowly degraded the working environment of these practices to the point that their staff left and their patients did not return.
This commenced with the staff. The plaintiff, in my view, exhibits an unconstrained and impulsive desire to control people and to monopolise conversations around her. She showed this in Court: consistently pursuing her own line of thinking at the expense of the ideas of others. I infer her out-of-Court past conduct was like her in-Court present conduct; which conduct was likely to make the work environment for the defendant's podiatry practices unbearable for others. I find that the staff of the practices progressively left because of the plaintiff's behaviour. The first of these was Ms Rachael Lee, who eventually said to the defendant, "I can no longer work for you with her here. I have to resign". And she did.
The pattern continued. The defendant says, and I accept as correct, that the plaintiff fell out with many work colleagues in these practices. She fell out with the specialist podiatry practitioners and with the proprietors of the Neutral Bay, Surry Hills and the Mascot surgeries. The business of all these surgeries deteriorated from 2002. The defendant says, and I accept, that she had to close the Neutral Bay, Mascot and Surry Hills surgeries without realising their proper value because of these problems.
The Court's analysis below of the financial affairs of the defendant's practices substantiates the conclusion that the plaintiff's conduct caused the deterioration in their commercial value. The mechanism by which this occurred is not difficult to see. The plaintiff's personality progressively forced the administrative and professional staff out of the practices, which could not therefore present the kind of continuity and efficiency to patients that is required for such small businesses to thrive. The revenue and margins in the practices all declined from 2002 and I accept that the defendant had to progressively close them as a result. The loss of this practice revenue in turn put financial strain on several property developments that mainly the defendant was conducting in Queensland.
The introduction of the plaintiff into these practices provides the most reasonable hypothesis for the departure of their staff and their closure. Although the defendant was herself an unusual person, my assessment of her in the witness box was that she was fundamentally courteous, a sound-thinking professional in her field of podiatry and a person exhibiting genuine compassion in the best interests of her patients. She did not appear to the Court to have any character traits, which were obviously an impediment to organising and servicing the prosperous and efficient practices as a medical professional, which she had successfully built up until 2002. There is nothing, in my view, in the defendant's own behaviour that naturally explains from 2002 the departure of key staff, the deterioration of relationships with the proprietors of the branch surgeries and the loss of clients from these practices.
But the plaintiff had an alternative theory. She suggested that the progressive failure of the practices was due to investigations by the Department of Veterans' Affairs into alleged fraud within them. The plaintiff says the practices never recovered from this shock. But there are many reasons in my view why this theory is not correct. First, the Department of Veterans' Affairs (DVA) investigation only affected one of these practices and all of the practices declined financially after the plaintiff became involved with them. Second, there was not an immediate decline in practice income but the practices closed over time, which is not readily consistent with the commercial shock from one event or investigation. Third, the defendant appeared to the Court to have the personal resilience and organisational skills to deal with the DVA investigation herself and to contain its effects and not be overcome by it. Fourth, it has not been established in the evidence that the DVA investigation proved any wrongdoing on the part of the defendant.
But I find that some of what happened to the practices resulted from the defendant being distracted. She was distracted by the Queensland property developments and distracted by managing the plaintiff at the practices. But these distractions can still be sheeted home to the plaintiff's behaviour. The plaintiff had caused problems in both areas increasing stress for the defendant.
The plaintiff has a second alternative theory as to why the defendant's net worth declined after 2002. This other theory is that the defendant and her lawyers have been involved in a deliberate policy of reducing her assets to the point that nothing will be available to the plaintiff. This theory is put a number of different ways. A number of different people are said to be responsible for depletion of the defendant's assets after 2002. The plaintiff says that the defendant has diverted practice income, has failed to account for money from various property sales and that Mr Hodges, the solicitor for the defendant has invoiced excessively large amounts in respect of those conveyancing transactions. The highly generalised contention is that the defendant and her legal representatives have benefited from the defendant's assets and failed properly to bring them to account for the purposes of these proceedings.
Several things must be said about this second alternative theory at a general level. First, there is no evidence whatsoever that any of the defendant's legal representatives have been engaged in any misconduct with the defendant in diverting funds; nor is there any evidence of overcharging by Mr Hodges in conveyancing transactions for the defendant. Secondly, although financial accounts and tax returns have not been prepared for the entities for which the plaintiff has conducted her podiatry practices nor has she put in tax returns herself, the pattern of conduct exhibited here is not consistent with the defendant hiding the diversion of assets by failing to produce adequate documents. Rather, in my view, the chaotic disorder in the defendant's financial affairs seems to be quite consistent with the general breakdown in the defendant's organisational skills from 2002 as a result of endemic conflict with the plaintiff. Thirdly, to the extent that the financial information is available about the mutual affairs of the parties, it does not confirm diversion of assets or deliberate failure to account and is otherwise consistent with a decline in the revenue of the podiatry practices in turn leading to difficulties in sustaining other highly geared investment assets. Fourthly, the plaintiff's contentions that the defendant has been extravagant with her assets is not made out.
The Relationship Ends
The plaintiff says the relationship ended on 13 July 2007. The defendant says it ended in September 2006. There is much to be said for the defendant's version of the ending of the relationship. I accept the defendant's evidence that a sexual relationship between the plaintiff and the defendant ended some time in about December 2004. Yet the parties were still living together in what I find was an atmosphere of declining affection.
The plaintiff's decision in September 2006 to travel to Queensland to meet up with Ms Geraldine Maas at the Jupiters Casino tore up what remained of her relationship with the defendant. The plaintiff and the defendant never moved back together in the same household after the plaintiff set out north on her quest for Ms Maas. There was certainly regular telephone contact between the two during the period September 2006 to July 2007 but the defendant never took the plaintiff back into her household. The defendant explains that telephone contact as merely her responding to calls the plaintiff initiated or showing compassion for the plaintiff's vulnerable state after things had soured with Ms Maas. Frequent though those calls were in this period, I accept the defendant's explanation as to why she made them. She was not trying to re-establish a relationship with the plaintiff.
But the event to be explained on the defendant's version was why in April 2007 the defendant funded the purchase of a property in Ambleside, Tasmania for herself and the defendant as joint tenants. Such an act seems on the surface to be inconsistent with their relationship ending in September 2006. Moreover there is evidence from Mrs Vicki Maroulis that the defendant said that she still clearly had some affection for the plaintiff in this final period. The defendant explained the purchase of the Ambleside property on the basis that it was her way of ensuring that the plaintiff kept away from Sydney and out of the defendant's life. I accept that this was her motivation for funding this purchase.
The precise end of this relationship is clear when the applicable law is considered.
Breakdown of a De Facto Relationship. The principles that govern whether a de facto relationship continues to exist may be shortly stated. With these principles in mind the Court can analyse the evidence as to the ending of the plaintiff's and defendant's relationship.
The authorities explain the effect that a separation has on the inference of the existence of a de facto relationship after the separation. The mere decision not to live together with the other party may in some cases allow the Court to infer the end of the relationship. As Justice Mahoney held in Hibberson v George (1989) 12 Fam LR 725 at 739-740 (with whom Hope and McHugh JJ agreed) a case dealing with an earlier form of the Property (Relationships) Act:
"The relationship of marriage, being based in law, continues notwithstanding that all of the things for which it was created have ceased. Parties will live in the relationship of marriage notwithstanding that they are separated, without children, and without the exchange of the incidents which the relationship normally involves. The essence of the present relationship lies, not in law, but in a de facto situation. I do not mean by this that cohabitation is essential to its continuance: holidays and the like show this. But where one party determines not to "live together" with the other and in that sense keeps apart, the relationship ceases, even though it be merely, as it was suggested in the present case, to enable the one party or the other to decide whether it should continue."
In S v B (No. 2) [2005] 1 Qd R 537, Dutney J (with whom McPherson and William JJA agreed) applied the principles stated in Hibberson v George and his Honour said (at [48]):
"A de facto relationship ends when one party decides he or she no longer wishes to live in the required degree of mutuality with the other but to live apart. It does not seem to me that it is necessary to communicate this intention to the other party provided that the other party that is desirous of ending the relationship acts on his or her decision. I do not think it is necessary that the other party agree with or accept the decision. Once the parties cease to jointly wish to reside together in a genuine domestic relationship, a situation usually ascertained by looking objectively at the whole circumstances of the relationship, the relationship ceases. The relationship ceases even though one of the parties is still anxious to try to save it."
His Honour continued (at [49]): "there is a difference between a marriage and a de facto relationship" and he further concluded (applying Pavey v Pavey (1976) 10 ALR 259) that: "A party asserting the continuing relationship must prove the positive aspects of the relationship rather than the party asserting separation being required to prove negatives": S v B (No. 2) [2005] 1 Qd R 537 (at [50]).
But, as the New South Wales Court of Appeal decided in Gazzard v Winders (1998) 23 Fam LR 716 short separations may not end a relationship. In that case Beazley JA in contrast to Powell JA and with the agreement of Stein JA, found that it was not in the spirit of the De Facto Relationships Act 1984, as the legislation was then known, or reality, to find that a short interruption "which, in a long relationship may be no more than a hiccup, would have completely brought the relationship to an end" (at [20]).
The effect of a period of separation on a de facto relationship may be influenced by the presence of a third person during the separation period. In Thompson v Badger (1990) DFC 95-078 several periods of separation were not seen as fatal to the inference of a de facto relationship. However an element in determining that such separation periods did not signify that the relationship was at an end was not only that the parties eventually reconciled after their periods of separation, but that neither party had another sexual partner during the times of separation.
The potential of a third person to affect the de facto status of a couple during their period of separation was evident in Lipman v Lipman (1989) 13 Fam LR 1. There Powell J found that a separation of 6 months in a long de facto relationship ended the relationship, when one party had required another to leave the shared residence, and had asked another woman to take the place of his partner and live with him.
Thus the Court must examine whether the plaintiff's and the defendant's de facto relationship ceased to exist from September 2006. The circumstances that govern the Court's inferring the existence of such a relationship from that time onwards are the matters set out in s 4(2) of the Property (Relationships) Act 1984 that govern the existence of the relationship. Section 4 of the Property (Relationships) Act provides as follows:-
"De facto relationships
(1) For the purposes of this Act, a de facto relationship is a relationship between two adult persons:
(a) who live together as a couple, and
(b) who are not married to one another or related by family.
(2) In determining whether two persons are in a de facto relationship, all the circumstances of the relationship are to be taken into account, including such of the following matters as may be relevant in a particular case:
(a) the duration of the relationship,
(b) the nature and extent of common residence,
(c) whether or not a sexual relationship exists,
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties,
(e) the ownership, use and acquisition of property,
(f) the degree of mutual commitment to a shared life,
(g) the care and support of children,
(h) the performance of household duties,
(i) the reputation and public aspects of the relationship.
(3) No finding in respect of any of the matters mentioned in subsection (2) (a)-(i), or in respect of any combination of them, is to be regarded as necessary for the existence of a de facto relationship, and a court determining whether such a 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.
(4) Except as provided by section 6, a reference in this Act to a party to a de facto relationship includes a reference to a person who, whether before or after the commencement of this subsection, was a party to such a relationship."
Most of these statutory circumstances are relevant to determining whether there was a de facto relationship between the plaintiff and the defendant after September 2006. The significance of each of the s 4(2) matters is discussed below.
Findings - September 2006 to July 2007. The evidence of Mrs Maroulis also threw light upon the ending of the parties' relationship, as it had on the beginning. Her evidence, which I accept, seems to support the conclusion that the relationship still subsisted after the incident with Ms Maas. Her evidence about this period was to the effect that despite the incidents with Gabrielle Maas, Talus Diamond indicated to Mrs Maroulis that she regarded there as still being a relationship with Ms Starr-Diamond.
The defendant explained to Mrs Maroulis that she "cared about Simone, that she wanted the best for them both". Mrs Maroulis also, in my view, gave an accurate account of what the defendant said about the purchase of the property in Tasmania. She described the defendant as saying, in what must have been late 2006 or early 2007, "there were times when she [the defendant] talked about moving to the country with Simone or the plan to move to Tasmania together and have a different kind of life from the one they had in Sydney together". Mrs Maroulis' evidence was all the more credible because of her reticence in offering opinions about the relationship between the plaintiff and the defendant. She confessed she did not know about their personal lives and gave the impression that it was not something she wished to know more about than circumstances forced upon her. She made a simple observation about the limits of her capacity to observe her sister's relationship with the defendant: "it was something that was beyond my experience". Mrs Maroulis certainly thought that the plaintiff "believed that once the Maas problems were sorted out that things would be fine again". According to Mrs Maroulis, not only was the defendant keen to continue the relationship but so was the plaintiff. Mrs Maroulis gave a faithful account of what the defendant said to her after September 2006. But the defendant was not as committed as she sounded to Mrs Maroulis.
Despite Mrs Maroulis' reliability as a witness, I find that the defendant was prepared to say to Mrs Maroulis that the purchase was an attempt to escape the competitive pressures of life in Sydney and the disturbing intrusion of Gabrielle Maas into their lives. But, in my view, that was only what she said to the plaintiff's sister. In contrast, the defendant's true underlying attitude to this purchase as late as April 2007 was that she wanted the plaintiff as far away from her as possible, even if to secure that she had to fund the purchase of her own and the plaintiff's half share in the Ambleside property. She softened this attitude when speaking to Mrs Maroulis, as perhaps might be expected with a close member of the plaintiff's family.
The relationship was over by April 2007. The defendant did not invite the plaintiff back to live with her in Sydney, as she might have if she had a continuing commitment to a domestic relationship with the plaintiff after September 2006. Nor did she ever live with the plaintiff at the Ambleside property. I do not accept that the defendant demonstrated any commitment to a future life with the plaintiff after September 2006. Apart from the somewhat misleading impression the defendant gave Mrs Maroulis at this time, the defendant did not represent herself to others as part of a couple with the plaintiff after September 2006. In my view the relationship did not exist after September 2006.
After that time the defendant continued to reside in Sydney and the plaintiff in Tasmania. The defendant continued to practice as a podiatrist. But she has spent much of her time since 2009 dealing with these proceedings and selling her investment properties and managing her indebtedness. On 14 September 2010 the defendant had a fall and suffered a traumatic brain injury. Since that time her practice and her income have both continued to decline. The defendant's registration as a podiatrist was cancelled on 29 July 2011 because of the persisting effects of her injuries consequent upon those injuries.
She appeared before the Podiatry Council of NSW during the hearing, on 7 February 2012, in an attempt to reinstate her registration. But there is no clear evidence from which I could infer if and when she might return to practice.
I accept the defendant's evidence that she does not currently receive any income other than the rental income from the properties she continues to control. Although she says, and I accept, this is not enough to cover her mounting liabilities.
The findings in this chronological account of the parties' relationship provide the framework to analyse the various contests about their mutual financial affairs and their respective Property (Relationships) Act contributions.
Stage One - The Parties' Divisible Pool of Property
Real Estate and Secured Liabilities
Omitting the full addresses, the parties owned the following properties at the date of the hearing:-
(1) Suite 207 Macquarie Street, Sydney, owned by the defendant
(2) Lot 13, Jubilee Pocket, Queensland, owned by the defendant
(3) Lot 14, Jubilee Pocket Queensland, owned by Kitty Winks Pty Ltd
(4) A property in Bakers Beach, Tasmania, owned by plaintiff and defendant in equal shares as tenants in common
(5) A property in Ambleside, Tasmania, owned by plaintiff and defendant in equal shares as tenants in common
(6) Suites 201 Macquarie Street, Sydney, owned by Dogstar Diamond Pty Ltd
Despite their many other differences, the parties were at least able to advance competing market values of each of these properties. But they were not able to agree on values. The Court has taken the midway point or average between the parties competing values and treated that as the value of these properties to avoid further fruitless expense on issues of value. Where the parties differed in value they were only about $10,000 apart. The table below shows the external liabilities over these six properties at the time of hearing and their values net of external liabilities. As between the parties the situation was more complex but the relevant contest about each property is dealt with later.
Property
Owner
Value
Mortgage Liability
Net Value
(1) Suite 207 Macquarie St
Defendant
$110,000
Nil
$110,000
(2) Lot 13,
Jubilee Pocket,
Queensland
Defendant
$320,000
$232,600
$87,400
(3) Lot 14, Jubilee Pocket,
Queensland
Kitty Winks Pty Ltd
$320,000
$308,723.39 as at 30 Sept 2011
Negative
(4) A property in Bakers Beach, Tasmania
Plaintiff and defendant in equal shares as tenants in common
$130,000
Nil
$130,000
(5) The Ambleside, Tasmania property
Plaintiff and defendant in equal shares as tenants in common
$244,500
Nil but purchase monies raised by way of mortgage remaining on Lot 13 Jubilee Pocket
Contested
(6) Suite 201, Macquarie Street,
Sydney
Dogstar Diamond Pty Ltd
$310,000
$150,000
Strata levy arrears,
Loan to Kitty Winks P/L
$150,000
The parties' present financial position is parlous. As the table above shows, the net value of the real estate that the parties now share is no more than $370,000. The defendant's financial position is very different from the approximately $1.3 million in net assets she brought to the relationship.
A combination of high levels of debt, legal fees associated with the litigation and the decline in revenue from the defendant's practices meant that the property of the parties was significantly diminished by the time of the trial. Indeed the pattern of events during the hearings before Smart AJ and right up until late 2011 when I commenced case management of the proceedings, was the plaintiff was attempting to place restraints on the defendant's capacity to sell properties and deal with them. But by December 2011 this had left the defendant in a position where she had insufficient funds to pay legal fees and her ordinary living expenses. Orders were made to permit, for the first time, caveats to be placed on the Ambleside property.
Unsecured Liabilities of the Parties and their Companies
But the parties' current financial position is even worse when unsecured liabilities are taken into account. Mr Ron Flood, an accountant, was engaged to produce financial statements for the three entities, Kitty Winks, Dogstar Diamond and Sydney Foot and Ankle Clinic Pty Limited ("SFAC"). He could not complete his work, as his professional fees were unpaid. He is now owed $17,676.43. Both the plaintiff and the defendant have very substantial debts to Centrelink; the defendant owes it $162,119.22 as at 11 September 2009; the plaintiff owes $98,637.15 as at 27 July 2009. The defendant has the following other substantial liabilities: a HECS debt of $16,234; a debt to the ANZ Bank on a credit card of $43,546.11; outstanding levies on Suite 207 of $5,160; rates due to the local Council for Lot 13, Jubilee Pocket of $2,503.51; and finally, she has existing debts to her legal representatives in these proceedings of $180,000. This makes a combined list of unsecured liabilities of just over $525,000, for which the plaintiff is solely liable for just under $100,000.
None of Dogstar Diamond, Kitty Winks and SFAC have produced financial accounts or lodged tax returns for the last ten years. They may have tax liabilities to the Australian Taxation Office ("ATO"). There will certainly be further liabilities associated with the lodgement of late returns, both to the ATO and to the Australian Securities and Investments Commission ("ASIC"). Dogstar Diamond is being sued for $10,538.45 for overdue strata levies in respect of Suite 201 and was served on 21 November 2011 with a Real Property Act, s 57(2)(b) notice under the Eclipse mortgage secured over that property, which is now in default.
I accept that the defendant's income is now negligible. She is not practising as a podiatrist. It is difficult to see how the defendant's mortgage and other unsecured debts and liabilities will be satisfied without her making some future arrangements with her creditors.
Other Assets of the Parties
Both the plaintiff and the defendant (on her cross-claim) have claims against one another in respect of chattels alleged not to have been returned by one to the other at the end of their relationship. Findings about these claims on both sides is made below. The Court's analysis leads to the conclusion, for which the defendant contends: that both the plaintiff's and the defendant's claims for these particular items should be dismissed. Whatever the plaintiff's claims are, they do not exceed the defendant's cross-claim in respect of other chattels.
The Plaintiff's Chattel Claims
The plaintiff's seeks the return of various artworks and her design portfolio. The defendant says she has returned all property belonging to the plaintiff that was ever in her possession, including these artworks and the design portfolio. The defendant says, and I accept, that she arranged for a removalist to take several boxes of goods from her place in Sydney, to the Ambleside property in Tasmania. Moreover she says, and I accept, some other incidental belongings were later delivered to the plaintiff's then solicitor, Mr Geoffrey Choy, of Balgowlah. The defendant's case is, and I accept, that she has no other property belonging to the plaintiff.
I prefer the defendant's version of what happened to the plaintiff's chattels. One thing came through the defendant's evidence with great clarity: that the defendant wanted in April 2007, as she herself said, to get the plaintiff "out of her life". This is exactly what she wanted. It is consistent with this that she would have returned the chattels as she claims she did. I accept the defendant's account of travelling from Tasmania to ensure that the plaintiff's cats were returned to her. I accept that the defendant went to the trouble of taking the plaintiff's 13 cats from Sydney to Tasmania (7 by car, and 6 by plane) for which the defendant paid all veterinary vaccination and transport expenses. The defendant's care in doing this supports the inference that the defendant arranged other similar deliveries of chattels. Moreover, I am not persuaded that any of the other items that the plaintiff now alleges have not been returned to her had any demonstrable value.
But the plaintiff's chattel claims reveal serious problems with her credibility and her judgment. This area of her evidence was another reason why the Court could not accept her as a witness. Her claim was that the defendant had retained her personal clothing and other items of the plaintiff's. But this was hardly consistent with the plaintiff's own previous allegations against others and her own evidence. The plaintiff herself admitted that the defendant moved her (the plaintiff's) belongings to Tasmania. But the plaintiff has also inconsistently claimed to Queensland police and the Local Court that Gabrielle Maas and her mother had stolen all the plaintiff's belongings and assets in September 2006.
The Defendant's Chattel Claims
The defendant says, and I accept, that she left a number of motor vehicles in the plaintiff's possession: a Volvo 740, 1984 model, valued at $9,000; a Saab 900, 1985 model, valued at $4,000; and, a Volvo 264, 1985 model valued at $4,000. I also accept the defendant's evidence that the plaintiff has not paid the defendant for her retention of any of these vehicles. I also accept the defendant's evidence that she now drives a 1995 model Volvo station wagon valued at $5,000. The Court has not granted specific relief in the defendant's favour in respect of the $17,000 value of these three motor vehicles. But the fact that the plaintiff has retained them has been taken into account in the Court's overall assessment of the appropriate relief in the proceedings. The receipt of these three motor vehicles is another benefit the plaintiff obtained from her relationship with the defendant, which in my view, is another reason why the plaintiff should not be granted any relief under Property Relationships Act, s 20 for an adjustment of assets in her favour.
Apart from these dealings with chattels, a number of loan transactions between the parties are dealt with elsewhere in these reasons. In my view, specific orders should be made in respect of these loans.
The Relief Claimed
The plaintiff's Statement of Claim filed on 22 April 2008 sought a variety of relief. In directions hearings held before the hearing of these proceedings the plaintiff foreshadowed that she may amend the relief she claimed. But a formal application to amend the Statement of Claim was never pressed. Although in light of the findings made in those reasons any form of amended relief had little prospect of success.
The defendant relies on a further Amended Defence filed on 26 November 2009 and an Amended Statement of Cross-Claim filed on the same date. Now that the course of the relationship and the parties' assets have been described, the parties' claims and cross-claims for relief are more comprehensible.
The plaintiff in summary in her Statement of Claim sought the following:-
(a)the return of certain artworks and a design portfolio;
(b)the transfer to her of shares in Dogstar Diamond and the payment to her of $215,000;
(c)the transfer to her of the two Tasmanian properties, the one in Ambleside and the one at Bakers Beach;
(d)the sale of (then) five properties in Queensland and the division of net proceeds as to 60 per cent to the plaintiff and 40 per cent to the defendant;
(e)the sale of properties owned by Kitty Winks, at Westmead and Lot 15 Phoenix Court, Queensland and the division of net proceeds as to 65 per cent to the plaintiff and as to 45 per cent (presumably 35 per cent) to the defendant; and
(f)other ancillary relief.
The relief the defendant/cross-claimant sought was as follows:-
(1)repayment of loan moneys paid by the defendant to the plaintiff;
(2)orders for the sale of the Ambleside and Bakers Beach property and an equal division of the proceeds of that sale after the defendant/cross-claimant is reimbursed $400 per week from 17 April 2007 to date with an equal division after that of the proceeds of sale;
(3)orders that the plaintiff repay the defendant sums of $40,000 and $70,000 in respect of loans made by the defendant to the plaintiff for the purchase of a property in the sole name of the plaintiff, Lot 38 Jubilee Pocket and in respect of a loan secured by caveat on that property;
(4)orders for the sale of the property in the name of the jointly owned company Dogstar Diamond, namely Suite 201 Macquarie Street, Sydney and after discharge of loans and mortgages and the winding up of that company, an equal distribution of the net proceeds of sale;
(5) orders for the return of personal items and three motor vehicles.
The findings already made in this section deal with the claims in respect of chattels, the plaintiff's claim for artworks and a design portfolio and the defendant's claim for return of motor vehicles and other personal items. Both those claims will be dismissed for the reasons stated. These reasons now deal with the balance of the claims made between the parties.
Stage Two - The Parties' Financial, Non Financial and Welfare Contributions
This section analyses the parties' Property (Relationships) Act financial contributions (s 20(1)(a)), non-financial contributions (s 20(1)(a)), and welfare contributions (s 20(1)(b)). Starting with the law to be applied, this section deals with the parties' many contests about their respective contributions in each of these three categories.
On the basis of Mrs Maroulis' evidence I find that the plaintiff's non-financial s 20(1)(a) contributions during the couple's domestic life were about equal to those of the defendant. This is an area where the defendant tended to down play the plaintiff's contribution somewhat. But on this issue the plaintiff is well supported by her sister's reliable evidence.
Non-Financial Contributions - The Practices
The plaintiff claims she made a substantial non-financial contribution to the operation of the podiatry practices. These reasons have already made findings about the destructive effect of the defendant's involvement in the running of these practices. But I also find that the plaintiff's own case about her contribution to the practices does not withstand scrutiny.
The plaintiff says that she gave up her career at Fairfax Newspapers to work without salary in the podiatry practice. I do not accept that. I accept the defendant's evidence that the plaintiff and she entered into an Independent Contract Agreement, as the defendant explained, "as was the usual policy of the practice". And I also accept the defendant's evidence that the plaintiff was paid in cash for the work that she did under this agreement. The advantage to the defendant of an Independent Contractor Agreement was that the practice was not responsible for PAYG tax payments. I accept the defendant's evidence that the plaintiff said to her in about late 2001 "I want to be an independent contractor and will sign an agreement to confirm this". The defendant did not have at the hearing a copy of the actual Independent Contractor Agreement signed by the plaintiff but I find that one was signed. The defendant had dealt with a number of other workers at the podiatry practices this way.
I find the defendant paid the plaintiff for all the work the plaintiff did at the practices. The plaintiff did not make a non-financial contribution for the benefit of the practices. But the plaintiff says that she worked very long hours at the practice. This is hard to credit and I do not accept it. The plaintiff says she worked from the time she left Fairfax until August 2006, about five and a half days a week, averaging 50-60 hours per week. I do not accept that the plaintiff worked such hours for no remuneration. I accept the defendant's evidence that the plaintiff answered telephones, made appointments and did administrative tasks in connection with the practice for an average to 20-30 hours per week until June 2006, for which she was fully paid.
Working such hours and being paid anything at all was not consistent, in any event, with the plaintiff claiming Centrelink benefits as she did for much of this period, on the basis that she was unable to work. And also it is not consistent with her claim for damages against the NSW Police for false arrest in October 2004, which event she alleged had prevented her from working because she was phobic and could not mix with people. Inconsistently with her statements to Centrelink and to others she worked and she was paid for what she did. Although it must be said that the defendant's records of a proper payment system were virtually non-existent. In my view the plaintiff paid herself simply by taking monies out of the practices as she saw fit. These "payments" were well in excess of what she could earn for the hours she actually committed to the practices under the Independent Contractor Agreement. The plaintiff's written declaration to Centrelink (to obtain a social security benefit) was that she had been out of work since her Fairfax employment was terminated in November 2001. Centrelink reviewed the plaintiff's capacity to work for the purposes of the Social Security (Administration) Act 1999. In that review in answer to the question "If there was a job available, what kind of work do you think you could do now (e.g. desk work, labouring, answering phones, driving etc)?" The plaintiff replied on 18 October 2004, "No, I am unable to work". I find that she declared to Centrelink officers and to Dr Thomas Oldtree Clark that she had "developed an anxiety disorder and had not been able to function in full time work for the last three years". Quite wrong statements such as these to third parties about her working capacity, persons to whom the plaintiff had a duty to tell the truth, markedly damaged her credibility with the Court. It is difficult to accept the evidence of a person who would say such things.
The plaintiff has exaggerated her contribution working in the podiatry practices in the later period between August 2006 and July 2007. Her claim was that she worked part time during this period, only attending the offices on average three days a week. I do not accept the plaintiff did any work for the practices this late in their acquaintance. In September 2006 the plaintiff had gone to Queensland with Ms Gabrielle Maas. Between October and December the same year she was living in considerable fear of Ms Maas, for a period at Bateau Bay and also for a period in Chippendale. Then in December 2006 she went to live in Tasmania. She could not have possibly have worked in the practices in this period. I find this claim is false
The plaintiff did attend at the Macquarie Street, practice after August 2006. But I accept the defendant's evidence that when she did so she was there for her own personal reasons: to gain access to the internet, which was not installed at their Castlecrag home; and, to make phone calls and conduct her own business affairs. I do not accept the plaintiff did unpaid work for the defendant during this period.
In summary, the defendant made greater non-financial contributions than the plaintiff in their business lives, although in their domestic lives their respective non-financial contributions were about equal.
Contributions to Welfare of the Other - Property (Relationships) Act, s 20(1)(b)
Mrs Maroulis also gave compelling evidence about the parties' contribution to one another's welfare, which I accept. Mrs Maroulis' evidence helpfully presented a picture, that I conclude mainly came from the earlier part of their relationship, in which she explained that each purchased special treats for the other "a little something they thought would please the other", "something a bit cute or something personal or quaint". Mrs Maroulis added "it wasn't really for me to understand. It was something between them". I find that despite their differences the plaintiff and the defendant equally provided support and aided the welfare of the other.
But from 2004 onwards the relationship was far less mutually beneficial. I accept the plaintiff's evidence, she suffered personal trauma in 2004 when the NSW Police arrested her. It is difficult to infer that she made a net contribution to the welfare of the defendant in the course of the relationship after this time. The plaintiff was keen to explain in evidence her vulnerability and the devastating effect of this and other incidents upon her. I do not think that she was feigning this emotion. She struck the Court as quite emotionally fragile and affected at least in her own mind by these events. I do not think she had any personal resources left to giving more to the defendant's overall welfare during the relationship than she received back in similar support from the defendant.
I do not think that she made a contribution to the defendant's welfare in the course of the relationship any greater than that she received from the defendant. Indeed in my view the defendant, being the person who was less in need of care and support than the plaintiff, especially from 2004, conferred a net welfare benefit on the plaintiff over the course of the relationship. As a result there is no adjustment of property interests warranted in the plaintiff's favour on account of this factor. Rather it is a factor that warrants a grant of relief on the cross claim.
Stage Three - What, if any, Order is Required to Recognise the plaintiff's Contributions?
Approach to the Third Stage
In considering the third stage of the exercise of discretion under Property (Relationships) Act, s 20, the Court is concerned with what is "just and equitable" having regard only to the respective contributions of the parties of the type referred to in s 20; and, there is no warrant for having regard to other factors such as the respective means and needs of the parties: Wallace v Stanford (1995) 37 NSWLR 1 and Evans v Marmont (1997) 42 NSWLR 70 at [81].
The Court has a discretion as to whether to adopt an "asset by asset" approach or a "global" approach in deciding what is an appropriate order; the Court has very wide discretion as to which approach may be adopted; but there can be cases where one approach is more clearly appropriate than the other: Kardos v Sarbutt (2006) 34 Fam LR 550 at [52] - [53]. In many cases the global approach is likely to be more convenient than an asset-by-asset approach, but that is not always so. But the defendant raised one issue that was specific to this third stage, the issue of notional rent.
Notional Rent
The defendant also asks for an adjustment in her favour in respect of notional rent for the plaintiff's occupation of the Ambleside property during the period between the end of the parties' relationship and the date of trial. This is a substantial period of over five years from April 2007, when the property was purchased, until February 2012. The plaintiff resists the making of such an adjustment. She says that she paid all the rates and taxes on the Ambleside property during the same period and has correspondingly relieved the defendant of that burden. Whilst that seems to be true, the plaintiff has not substantiated her making any other investment in improving this property during this five-year period.
The authorities suggest that caution should be exercised in acceding to a submission to adjust in respect of notional rent after separation. Undertaking an adjustment for "notional rent" for post separation occupation can result in the giving of undue weight and significance to a single contribution. Notional rent is obviously to be taken into account and I do take it into account. But the proper way to do this is often as part of the overall evaluation of the parties' contributions during the relationship and not as a final single additional adjustment: Kardos v Sarbutt (2006) 34 Fam LR 550; [2006] NSWCA 11 at [78].
In this case the defendant has made a substantially greater contribution to the acquisition, conservation and improvement of the joint property of the parties. If there were no property the subject of these applications other than the Ambleside property I might have taken the course of allowing a precise amount of notional rent in the defendant's favour, especially because the defendant has sustained over $120,000 in interest costs on this property in the last five years. But here the better course is not to make such a precise adjustment. But I do take notional rent into account in the overall result along with the fact that the defendant has had the benefit of the plaintiff paying for rates and taxes on her share of this property for the same period.
Conclusions on Adjusting Orders
In my view, there is no basis for making an adjusting order in the plaintiff's favour in this case. To the contrary, there is a strong basis to grant relief on the defendant's cross-claim.
The defendant's financial and non-financial contributions to the acquisition, conservation and improvement of their property and to their financial resources very substantially outweigh the plaintiff's contributions. Such a general conclusion can be drawn and acted on by the Court: Proudman v Dickason [2008] NSWSC 681. The disparity in contributions arises in two main areas. The first is in the assets brought to the relationship. The second is in the conservation and improvement of those assets. The defendant brought a little over $1 million to the relationship. The plaintiff brought about $67,000 in October 2000. During their relationship the plaintiff was in my view fully paid for her work in the defendant's podiatry practices. Moreover, and more importantly, the plaintiff bears personal responsibility for the destruction of much of the value of the property, which the defendant brought to the relationship, specifically the podiatry practices. I find that but for the influence of the plaintiff that the defendant would have been able to conserve and improve her five podiatry practices. But three were closed during the relationship and the remainder lost value for reasons in my view associated with the conduct of the plaintiff within them. Far from such conduct warranting an order in the plaintiff's favour; it is in my view more likely to warrant an order in the defendant's favour for an adjustment of property against the plaintiff.
The position is no different with respect to the parties' investing activities in Queensland. The defendant conferred considerable benefits on the plaintiff, allowing her to acquire an investment property in Queensland she would not otherwise have been able to do. The plaintiff has not paid the defendant or Kitty Winks back the loans made to the plaintiff to acquire this property. At the same time the plaintiff did not financially contribute to the defendant's investments in the same area. There is no basis looking at that area of the parties' lives for an adjustment in the plaintiff's favour.
The same is true of their domestic life. I do not accept on the plaintiff's income that she was able to contribute financially to the maintenance of their joint household more than the defendant. In my view the defendant was a considerably greater financial contributor to the financial maintenance of their joint domestic life and the plaintiff's lifestyle.
The plaintiff's attempts to make non-financial contributions in the business side of the parties' relationship through the podiatry practices contributed to the loss in their net assets. Her contribution, in my view, was negative on this front. No adjusting order in the plaintiff's favour is warranted by reason of her non-financial contributions. Although the plaintiff's non-financial contributions in domestic matters were probably much the same as those of the defendant.
Finally, the defendant's contribution to the parties' welfare was substantial and outweighed any reverse contribution. This is because the plaintiff herself said she was a very damaged by a number of events in the course of their life. That is evidence that I accept. It was the defendant who had the greater burden of looking after the plaintiff and ensuring her stability, health and welfare during the relationship, especially its latter part. There is no basis to make an adjustment in the plaintiff's favour on this account either.
For all these reasons, in my view the plaintiff's claim for an adjustment of property in her favour fails. But the question now arises as to what orders should be made. The defendant has proposed a set of orders in her cross-claim that in my view are appropriate to this situation. There does perhaps need to be some final opportunity allowed to the parties to put submissions about the final form of relief in light of the more detailed findings in this judgment. That opportunity will be afforded to the parties under a timetable to be agreed.
In my view, the defendant should: (1) retain No. 13 and No. 14 Jubilee Pocket because of her contributions to them and because they funded the Ambleside property; (2) retain Suite 207 which was acquired well before the relationship started; (3) have the benefit of the sale of the Tasmanian properties and receive her half share after she is credited with the interest payments of $120,000 she made to conserve the Ambleside property; and (4) Dogstar Diamond's assets should be sold and any net proceeds divided equally, after its external liabilities and liabilities to Kitty Winks are discharged.
Conclusions and Orders
Accordingly, I have concluded that the plaintiff and the defendant were in a de facto relationship between October 2000 and September 2006. This relationship constituted a "domestic relationship" under Property (Relationships) Act, s 5. But I have also concluded that the parties' current property holdings already reflect their respective financial and non-financial contributions and respective contributions to one another's welfare during their relationship under Property (Relationships) Act, s 20. This is not a case where in my view any adjusting order is warranted under the Act, and I decline to make such an order.
Nevertheless, some orders need to be made to unwind their affairs by disposing of a number of property interests that the parties hold in common and to release their properties from existing restraints. The parties agreed at the commencement of the hearing before me that no issue would be raised between them as to the jurisdiction of the Court to make in personam orders requiring each of them to deal with property held in States other than the State of New South Wales. They have agreed to submit to such orders without further argument.
It is necessary to make some orders to deal with the properties in Queensland and in Tasmania. The properties in Tasmania held in joint names should be sold and the proceeds of sale, if any, distributed between the parties. Efforts should be accelerated to sell the Queensland properties, especially No. 13. The defendant has put some submissions about an appropriate form of orders to achieve this. I am inclined to make orders largely in accordance with the defendant's draft short minutes or order. I will hear further submissions from the plaintiff and the defendant about the final form of orders, including on questions of costs.
The defendant has been largely successful in the proceedings. Ordinarily costs would follow the event. But in this case the plaintiff has applied a substantial degree of litigious effort to proving that there was a domestic relationship between herself and the defendant, an issue, which the defendant conceded only just before trial. The plaintiff may wish to argue that she should have the bulk of her costs on that issue or that there should be some adjusting order in relation to the defendant's costs, because of the non admission of that fact until a late stage. On the evidence that has emerged during the trial, and as these reasons show, the Court would have found that there was a domestic relationship between the parties of the kind the plaintiff alleged, had it not been admitted by the defendant. The admission was properly made. Thus a possible question on costs may be why the admission was not made earlier. I will hear submissions by the parties about this and other costs issues. One or other party may wish to seek some other special order as to costs. I direct the parties to file and serve any submissions on questions of costs within 14 days of the date of this judgment.
Therefore the orders which the Court proposes to make are the following:-
(1)Order the following properties (the "Tasmanian properties") commonly owned by the parties be listed for sale:
(i)the Ambleside property in Tasmania; and
(ii)the Bakers Beach property in Tasmania;
(2)To give effect to the sale of the Tasmanian properties, the parties must do all such things and sign all documents and instruments necessary to sell the said properties at a price to be agreed between the parties within 28 days and in default of such agreement, at a price to be fixed by reference to the fair market value of the Tasmanian properties determined by a real estate valuer who shall be appointed by the Court under this order and who shall be paid out of the proceeds of sale of the Tasmanian properties.
(3)If the sale of the Ambleside property precedes the sale of No. 13, Jubilee Pocket in accordance with these orders, then upon completion of such sale and after adjustment for outgoings, legal fees and disbursements, selling fees and commissions and other expenses relating to the sale of the Ambleside property and payment out of the amount outstanding on Pioneer Mortgage No YX 04, the net proceeds of sale shall be divided equally between the parties.
(4)Note that neither party is prohibited from bidding or negotiating for the purchase of the Tasmanian properties.
(5)Upon completion of the sale of the Bakers Beach property and after adjustment for outgoings, legal fees and disbursements, selling fees, commissions and other expenses relating to the sale of the property, the net proceeds of the sale shall be divided equally between the parties.
(6)Order that the property owned by Dogstar Diamond Pty Ltd, the Second Cross-Defendant, be listed for sale, namely Suite 201, Macquarie Street, Sydney (the "Suite 201, Macquarie Street property").
(7)To give effect to the sale of the Suite 201, Macquarie Street property, the parties must forthwith do all such things and sign all documents and instruments necessary to sell the said property within 28 days at a price to be agreed between the parties and in default of such agreement at a price to be fixed by reference to its fair market value determined by a valuer who shall be appointed under these orders and paid for out of the proceeds of sale.
(8)Upon completion of the sale of the Suite 201, Macquarie Street property and after adjustment for outgoings, legal fees and disbursements, selling fees, commissions and other expenses relating to the sale of the said property, the net proceeds of the sale shall be applied as follows:
(i) to discharge any loan to Kitty Winks Pty Ltd as per the Agreement dated November 2004;
(ii) to discharge the Mortgage with Eclipse Prudent Mortgage Corporation;
(iii) to discharge any other registered mortgages on the title of the property;
(iv) to repay to the Defendant the sum of $100,000 to be applied to her Macquarie Bank account in respect of the line of credit which was obtained to partially fund the acquisition of the Macquarie Street property;
(v) the balance is to be transferred into the Second Cross-Defendant's bank account.
(9)Upon the finalisation of the distribution of the sale of the Suite 201, Macquarie Street property an order that upon payment of all debts, taxes and other company expenses and the calling in of all debts, withdrawals and loans, the Second Cross-Defendant, Dogstar Diamond, is to be wound up and any proceeds are to be distributed equally to the shareholders.
(10)Order that the Defendant may retain ownership of the property at Suite 207, Macquarie Street, Sydney and Kitty Winks retain ownership of the property at No. 14, Jubilee Pocket, Queensland.
(11)Order that all personal items and chattels including motor vehicles, clothing, art, furniture, animals and superannuation monies which are in the possession of a party be retained by that respective party.
(12)An order that if either party refuses or neglects to sign any necessary documents or instruments or to do any acts required by these Orders with such failure continuing for 14 days, then the Registrar in Equity of the Supreme Court of NSW is hereby appointed to execute such document or documents on behalf of the defaulting party.
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Decision last updated: 19 June 2012
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