Simpson v Barker

[1999] NSWSC 165

CITATION:	Simpson v Barker [1999] NSWSC 165
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	3151/97
HEARING DATE(S):	12/02/99
JUDGMENT DATE:	10 March 1999
PARTIES :	Diana Margaret Simpson v Bruce Napier Barker
JUDGMENT OF:	Master Macready

LOWER COURT JURISDICTION:	Supreme Court
LOWER COURT FILE NUMBER(S) :
LOWER COURT JUDICIAL OFFICER:

COUNSEL :	Mr P. Sternberg for the plaintiff Mr W. Moss for the defendant
SOLICITORS:	Billington McLure Lee for the plaintiff Hones & Ledingham for the defendant
CATCHWORDS:	Family Law.; Claim under Defacto Relationships Act for adjustment of parties' property interests. No matter of principle.
DECISION:	Paragraph 32

17

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER MACREADY

Wednesday, 10 March 199

3151 of 1997 DIANA MARGARET SIMPSON v BRUCH NAPIER BARKER

JUDGMENT

1 MASTER MACREADY: This is an application under the Defacto Relationships Act for adjustment of the parties’ property interests. The parties lived together in a defacto relationship from May 1983 until January 1996. There is no dispute about the existence of the relationship. There were no children of the relationship although each of the parties had previously been married and had children from that marriage. However, throughout the relevant period the parties’ children were adult, or almost so, and no questions of parenting contributions arise. The plaintiff, who was born on 31 July 1939 is now 59 years of age and the defendant who was born on 9 June 1940 is now 58 years of age.
2 The parties had met early in 1982 and when they commenced their relationship in May 1983 they lived at Woollahra in premises which were owned by the defendant with his brothers. At that stage the plaintiff had commenced working for Home Care at Bondi and the defendant was working as a Logistics Manager for Gilbarco. The property at Woollahra was sold in 1985 and the parties moved to 306 High Street, Chatswood and lived in the property owned by the defendant’s mother. The parties occupied a granny flat at the rear of the premises and paid no rent. About this time the plaintiff obtained employment at Fisher Industries assembling electronic printed circuit boards which position she held for over ten years. In June 1985 the defendant purchased in his name 5.5 hectares of land near Berry known as 289 Brogers Creek Road, Woodhill. The purchase price was $56,000 and with stamp duty and legal costs the actual cost was some $58,000. A mortgage was taken out for some $37,000 at the time of purchase and the balance of the funds, to which I will refer in more detail, came from the defendant.
3 Over the next few years the parties worked on the vacant land to get it ready for the erection of a house and in due course in 1987 a kit home was purchased for about $21,000. Construction of that on the Berry land commenced.
4 In 1992 the plaintiff, with the permission of the defendant, had travelled to England to visit her family who lived there and she was away for some three months. She returned and cohabitation resumed. Even though the property at Berry had been completed to a live-in stage the parties continued to reside at the flat at Chatswood since they both worked in Sydney. Berry was really a holiday retreat which the parties had planned as home for their retirement.
5 In December 1994 the plaintiff ceased to work at Fisher Industries and she and the defendant travelled to the United Kingdom for holidays for a period of some two months. On their return the defendant returned to his employment and the plaintiff started working for Dial-an-Angel house cleaning.
6 After separation in January 1996 the defendant moved out of the Chatswood premises and the plaintiff remained there until the end of July 1997. She then left the Chatswood premises and moved to the Central Coast where she now resides with her daughter.
7 At the commencement of the relationship the plaintiff had little in the way of assets. Her assets consisted of clothes, personal items and a minor amount of furniture which she was given by her husband. Prior to the commencement of the relationship the defendant had entered into consent orders for a property settlement which meant that the former matrimonial home was transferred to his wife. He owned with his brothers a property at Woollahra which had previously been occupied by his father who was by then in a nursing home. What the value of his interest was does not appear although ultimately he received approximately $46,000 as a result of the sale and distribution of the proceeds in 1985.
8 At the completion of the relationship the plaintiff was virtually in the same position as she was at the commencement. She had few personal items, no cash saved and had nothing else. The defendant at the completion of the relationship had the land at Berry in his name. That is now valued at $245,000. At the time of separation there were amounts outstanding on bank loans for its purchase of some $13,080. Since separation the defendant has repaid that loan. The defendant also had a Nissan car which he valued at $8,000 which has subsequently had money expended on it and was recently traded in on another car by him for $4,000.
9 It can be seen from the recounting of the above history and the assets of the parties that the main focus of the parties’ assets centred upon the property at Berry. The defendant had during his employment with Gilbarco been in a superannuation fund and as 19 February 1986 the amount of the total benefit he was entitled to at that stage was $140,918.58. Part of this, namely, $18,491.43 was indicated as being before 1983. The plaintiff did suggest that this financial resource of the defendant was one which has been contributed to by the plaintiff. There is no doubt, and I will deal with it later, that the plaintiff contributed the whole of her wages towards the purchase of food for the household and any balance over, apart from minor matters for herself, was given by her to the defendant for the joint purposes of the relationship. In Green v Robinson , (1995) 36 NSWLR 96 the Court, inter alia, dealt with the way superannuation should be dealt with. His Honour, the President, at p 11 of the judgment had the following to say in relation to superannuation:
"It is as erroneous to ascribe the superannuation payments to the separate and differentiated income of the parties as it is to ignore superannuation altogether. Despite equal pay legislation, and industrial decisions to the same end, it is well known that in Australia, female earnings are typically lower than male earnings. Inherent in the notion that each 'owns' the superannuation entitlements accumulated from his or her income, in an inescapable bias against vulnerable (usually female) members of a marriage or marriage-like relationship. This is a bias which the Act, far from condoning, forbids. By section 3(1), the Act requires, in relation to 'de facto partners or either of them', that the financial resources, which must be taken into account under section 20(1) of the Act, are to include entitlements under a superannuation scheme. This is therefore something which, in the exercise of the section 20(1) discretion, the Court must view as belonging not to Mr Robinson separately however he actually banks or notionally receives the contingent benefit, but to the financial resources of the parties which need to be adjusted, having regard to the contributions 'made directly or indirectly' by them. Conformably with the language of the Act and applicable jurisprudence which has developed in the Family Court on analogous problems, it is my view that Ms Green made an indirect contribution to Mr Robinson's superannuation entitlements. Just as he did to hers. The only difference is that his entitlement was more substantial. This was because of its longer duration and because of his higher base income.
I shall assume that the contributions to superannuation made before the relationship commenced to be disregarded. See Lipman v Lipman (1989) 13 FAM LR 1; DFC 95-068 (SCNSW). Both parties argued the case on this basis, although it is not without controversy and contrary opinions exist. See e.g. In The Marriage of Gill (1984) 9 FAM LR 969.
The funds must therefore be reduced pro rata for the contributions made before 1974. I agree generally in the approach of Cole JA to this adjustment. But, with respect, the error in his Honour's approach, is to require, in effect, proof by evidence of the direct or indirect contributions made by Ms Green to Mr Robinson's accumulating superannuation entitlements during the relationship. Such proof is not required in cases under the Family Law Act. In my view, the express mention of superannuation entitlements in section 3(1) of the De Facto Relationships Act, makes it plain that Parliament accepted that ordinarily, partners to such relationships would be making at least indirect, if not direct, contribution to the accumulation of the form of savings which superannuation constitutes. That, in my view, gave Ms Green, for the period of the relationship at least, such a stake in that aspect of the 'financial resources' of Mr Robinson, as must be reflected in a 'just and equitable order', designed to adjust the interests of the partners, as section 20(1) of the Act requires."
10 Powell J at p 9 of his judgment referred to the need to establish that one of the parties had in some way contributed to the other's superannuation entitlements and that by reason of that contribution, it was "just and equitable" that some order based upon, or derived from, those entitlements should be made. Cole JA dealt with the matter on pp 11 and 12 of his judgment and inclined to the view that there was no evidence in the case to suggest that the appellant had made any contribution, direct or indirect, to the respondent's present superannuation entitlement, it being a deduction from his service pay. He held that a similar situation pertained to the appellant's superannuation.
11 It is not easy to reconcile the different views but it would appear from the comments of Powell J and Cole JA that there must be some factual matter which enables one to form the view that there had been a contribution to a spouse's superannuation entitlements. A common example of this would be a partner who stays at home to look after children thus enabling the other partner to go to work and earn a superannuation entitlement.
12 In the circumstances of this case there does not seem to be any factual basis for suggesting that the plaintiff did contribute in any way to the defendant’s financial resources. A submission was made to the effect that the handing over of the balance of the plaintiff’s salary allowed the defendant to devote some of his wages to his superannuation. The majority in Green v Robinson seems to require a greater factual proof than that identified in the submission. The submission is more consistent with the approach of the President in his dissenting judgment. It seems to me therefore that in this case there would be no contribution to that financial resource of the defendant to be taken into account in the adjustment process. If the evidence is available it might, however, be appropriate to deduct the defendant’s superannuation contributions from his general financial contribution to the parties’ joint endeavours to which I will later refer.
13 I turn to the contributions to the purchase of the Berry property and the construction of the improvements thereon. I will deal with the financial contributions at this stage. As I have indicated the purchase price of the Berry land was $56,000. On 23 April 1985 the defendant received the sum of $43,132 and on 27 March 1985 the sum of $3,200.31. These sums were the amounts which he received from the distribution following the sale of the Woollahra property that was owned by him and his brothers. The purchase in July was made using a loan of $37,000 from a credit union. These funds of approximately $80,000 were used for the following purposes.
$58,000 was applied by the defendant to purchase the land and pay expenses of purchase.
$6,000 was used for the costs of making an access road to the house when, in due course, it was built.
$2,700 was used for power reticulation.
$1,000 was used for plumbing.
The defendant purchased a Nissan vehicle for $13,800.
14 Between December 1985 and 1987 the parties arranged a number of further loans and got together funds in order to obtain a kit home which cost them $21,000. It was acquired in June 1987. Two personal loans were taken out, one by the defendant for $2,000 and one by the plaintiff for $8,500. This loan was taken out in the plaintiff’s name because she had a salary which could support it and the defendant could not, because of his other loans, increase his borrowing. It is not disputed that the loan the plaintiff took out was repaid out of the defendant’s bank account. The plaintiff never had a bank account and the defendant operated all the finances. In addition other funds were contributed being $5,400 from a tax credit which the defendant received and $5,500 from the sale of a Ford car which the plaintiff described as his car. A further loan of $9,400 in the name of the defendant and a further loan in the name of the plaintiff for $2,700 were taken out. All of these funds were used for the purpose of the home, fitting out and for other expenses of the parties.
15 From a consideration of the above it can be seen that the direct contributions in cash by the defendant amounted to $57,232 and the that the balance of the purchase price of the two major assets, namely, the house and the Nissan car, came from loan funds. This leads one to the question of how the loans were repaid and the extent of their repayment by the parties over the period of the relationship.
16 Each party has given evidence of their financial situation in respect of income. In order to make the comparisons relevant I will not deduct the plaintiff’s Medicare Levy. For the plaintiff the situation is as follows:-
Taxable Income less Tax
1988 $10,854
1989 $15,212
1990 $16,600
1991 $18,809
1992 $16,094
1993 $19,926
1994 $20,789
1995 $ 9,054
$127,338

17 On the defendant’s part he was employed at a somewhat higher gross salary and his earnings for the relevant period were as follows:-
Group Certificate Less Tax
1983 $19,152
1984 $19,752
1985 $21,071
1986 $22,397
1987 $23,959
1988 $26,037
1989 $26,929
1990 $30,820
1991 $33,255
1992
1993 $33,205
1994 $34,132
1995 $35,368
$326,077
18 Making inferences where the evidence is wanting, the plaintiff’s net salary is in the order of $175,000 and the defendant’s $360,000 for the period 1983-1995.
19 Not all the defendant’s income can be taken to account for these purposes because a sum of $82,674 was paid by the defendant over the years from his salary as maintenance to his former spouse. In 1998 his contributions to superannuation were $1,263. Using the increase in salary as a yardstick, his total contributions over the period are likely to be in the order of $12,000.
20 It is important to realise that in this case the parties have lived quite a Spartan lifestyle. They lived frugally and clothes were bought from K-Mart. There was no suggestion that there was any extravagance and apart from payments to the former wife, the payments were for the benefit of the relationship. Thus one has the plaintiff’s wages being used initially for food on a Thursday night when she was paid and the balance being given over to the defendant. The amount could be $200, $100 or $20 on any given week. The total amount borrowed was $59,600. The actual principal owing as at separation was $13,080 leaving the amount by which the principal was reduced to $46,520.
21 After taking out payments by the defendant to his former wife for maintenance and payments for superannuation one can see that the proportion of contribution by each of the plaintiff and the defendant to household expenses, repayment of mortgages and other charges concerning the joint property, namely, the property at Berry and the car, were in the proportion of approximately 175 to 265. The contributions of each to the reduction in the principal sum under the mortgage was as to the plaintiff $18,502 and the defendant $28,017. The defendant over a period of some years contributed cash of $57,232 making his total contribution $85,249. This makes the proportion of each person’s contribution to the capital assets (the Berry property and the Nissan) approximately 18 percent by the plaintiff and 82 percent by the defendant. I say, approximate, because it does not take full account of the time value of money amongst other things. The parties’ work, and hence their salaries, was of quite a different nature. No submission was made that I should take into account in the final balancing process what might be perceived to be an entrenched inequality in female wages and no evidence was led in this regard. See Gazzard v Winders, Court of Appeal 23 July 1998 and my comments in Anderson v Charlton 5 August 1998.
22 I turn to the non-financial contributions. One of the major non-financial contributions concerned the parties endeavours in procuring the property at Berry. There was also work in preparation of the ground to enable the house to be built. The parties substantially did this work on weekends and most of their weekends were spent at Berry either preparing the land or building the house.
23 In paragraph 20 the defendant described the work he did as follows:-
Excavation by hand for piers
Concreting and bricklaying
Construction, assembly and erection of the house from and flooring
All external plumbing and drainage
All internal plumbing
Installation of a water supply system from a creek to the house
All internal gyprock fixing to walls and ceiling
Floor and wall tiling in wet areas
All internal joinery
Re-fencing all the property boundaries, gate installation etc.
Installation of a ground water supply for stock
Trenching for underground electricity supply
24 It is not disputed by the plaintiff that the defendant did this work and it is not disputed that the plaintiff herself was a willing pair of hands and assisted enormously. The plaintiff in her statement described the amount of work she did in these terms.
Holding wall and ceiling gyprock whilst the defendant nailed the sheets into place.
Climbing ladders and holding gutters and fascia in place whilst measurements were taken or they were being affixed.
Generally assisting inside and outside the house in taking measurements and holding beams, fittings and fixtures in place whilst measurements were being taken or they were being affixed.
Holding reels of barbed wire whilst new fences were being constructed around the gardens (to keep the animals out).
Fetching tools and materials for the defendant whilst he was working.
Preparing meals.
Internal painting of walls and ceilings.
Sanding and painting doors, architraves and skirting boards.
Holding floor boards in place whilst they were being measured and affixed.
Helping with the tiling - holding tiles in place and helping the defendant install show screen.
Assisting with measurements and holding beams for front and back verandahs.
25 Obviously there were other joint endeavours by both parties in the fitting out and the final work that went into getting the house almost finished. At the end of the evidence I had the strong impression that each party contributed as fully and to the best extent that each could given their knowledge and physical capabilities.
26 So far as housekeeping contributions are concerned, it seems that the plaintiff did the majority of matters such as cleaning and cooking. Although these are matters which should be recognised in a substantial and not token way, it should be appreciated that in the present case the parties did not have any children. They were both working and accordingly the extent of household contributions are not the same as is the case where there is a family comprising children.
27 It is thus a matter of balancing what are the respective contributions to arrive at a just and equitable result. The defendant concedes that the plaintiff would be entitled to some payment and suggests that 30 percent of the present value of the house after taking account of post-separation matters is appropriate. The plaintiff put her claim at 40 to 50 percent of the value of the property and the defendant’s superannuation.
28 Following cessation of cohabitation it is clear that the plaintiff remained in occupation for 15 or so months but there is no evidence of the rental value of such occupation. It was also submitted that the defendant should be credited for a contribution during the period of the relationship consisting of the rent free accommodation provided by his mother. This is appropriate but there is no evidence of the value of such accommodation.
29 Since separation the defendant has paid rates and insurance on the property amounting to $3,360 and has discharged the mortgage which was $13,080 as at separation. In dealing with the present value of the real estate which the parties agree is $245,000 these contributions should be taken into account.
30 So far as the Nissan is concerned it was worth $8,000 at separation. The defendant retained it and recently traded it in for $4,000. He also spent $3,362 in essential repairs on the vehicle. That was a matter which he should bear and the plaintiff given credit for the fact that assets include that vehicle at its present value of $4,000.
31 Doing the best I can and taking into account the whole of the evidence, most of which I have referred to, the identified financial and non-financial contributions, the appropriate order is that the defendant pay the plaintiff, by way of adjustment of property interest, the sum of $85,000.
32 Accordingly, I order:-
1. The defendant pay the plaintiff the sum of $85,000 by way of adjustment of the parties’ property interests within 60 days.
2. Subject to any submissions, the defendant is to pay the plaintiff’s costs.
3. Reserve liberty to apply for orders for sale of the property or other enforcement if order 1 is not complied with by the defendant.
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