Stanley v Ward - [2006] NSWSC 789

NEW SOUTH WALES SUPREME COURT

CITATION: Stanley v Ward [2006] NSWSC 789

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): 1129 of 2004

HEARING DATE{S): 4 and 5 October 2005, 19 April 2006

DECISION DATE: 09/08/2006

PARTIES:
Anne Betty Stanley (Plaintiff)
Clive Antony Phendon Ward (Defendant)

JUDGMENT OF: Associate Justice McLaughlin

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:
Mr. C. Evatt/Mr. M. Rollinson (Plaintiff)
Ms. M. Bateman (4 and 5 October 2005), Mr. G. Gould (19 April 2006) (Defendant)

SOLICITORS:
Carters (Plaintiff)
Proctor Phair (Defendant)

CATCHWORDS:
Family Law. De facto relationship. Duration of relationship. Parties still living under same roof. Whether relationship has come to an end. Admissions on pleadings. Adjustment of interests of parties in property. Jointly owned property. Respective contributions of parties to acquisition, conservation or improvement of property and as homemaker.

ACTS CITED:
Conveyancing Act 1919
Property (Relationships) Act 1984

DECISION:
I stand the matter over to a date to be fixed by arrangement with my Associate for the bringing in of short minutes and, if desired, for argument as to costs.

JUDGMENT:

- 14 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

ASSOCIATE JUSTICE McLAUGHLIN

Wednesday, 9 August 2006

1129 of 2004 ANNE BETTY STANLEY –v- CLIVE ANTONY PHENDON WARD

JUDGMENT

HIS HONOUR: These are proceedings under the Property (Relationships) Act 1984.
By statement of claim filed on 19 January 2004 Anne Betty Stanley claims, substantively, orders adjusting the interests of the parties in respect to the proceeds of sale of and other moneys representing a house property situate at and known as 14 Kepos Street, Redfern (“the Kepos Street property”) and in respect to a house property situate at and known as 105 Marriott Street, Redfern (“the Marriott Street property”), as well as in respect to the furniture, fittings and contents of the Marriott Street property and in respect to other assets of each party.
The statement of claim also seeks further, or alternative, relief, by way of an order that the Defendant pay maintenance for the Plaintiff pursuant to section 27 of the Property (Relationships) Act; and, further, or in the alternative, orders for the appointment of trustees for sale of the Marriott Street property pursuant to section 66G of the Conveyancing Act 1919. However, at the hearing the Plaintiff did not pursue those items of relief, and confined her claim to seeking an order that she receive a 50 percent interest in the Marriott Street property. Nevertheless, on the final day of the hearing it was stated by Counsel for the Defendant, and noted, that the Defendant consents to the relief sought in prayer 4(d) of the statement of claim (being an order for the appointment of trustees for sale of the Marriott Street property pursuant to section 66G of the Conveyancing Act). It will, however, be appreciated that the Defendant does not consent to the adjustment between the parties of the interests of the parties in the proceeds of such sale.
The Defendant named in the statement of claim is Clive Antony Phedon Ward. The Defendant was the registered proprietor of the Kepos Street property, which was sold in 2001. Shortly before that sale the Marriott Street property had been purchased in the names of the Plaintiff and the Defendant as joint tenants in unequal shares. I will shortly refer to the circumstances surrounding the purchase of the Marriott Street property.
By paragraph 1 of the statement of claim the Plaintiff alleged that at all material times since about 1 July 1997 the Plaintiff and the Defendant have lived together in a de facto relationship within section 4 of the Property (Relationships) Act 1984. By paragraph 1 of the defence filed on 18 February 2004 the Defendant admitted that allegation. The terms of paragraph 1 of the statement of claim are such that by that paragraph the Plaintiff alleges that the de facto relationship between the parties subsists to the present time.
Despite the admission contained in paragraph 1 in the defence, the Defendant on the first day of the hearing sought and obtained leave to amend the foregoing defence by, in effect, limiting that admission to the period from about 1 July 1997 to December 2002. Pursuant to such leave, an amended defence, to reflect that amendment, was filed on 5 October 2005.
To the present time both parties are still residing in the Marriott Street property. Although it was alleged in the statement of claim that the de facto relationship between the parties was still in existence at the date of that pleading, the Plaintiff in her oral evidence said that she regarded that relationship as now having come to an end. It was the case for the Defendant that the de facto relationship had ended by December 2002.
Nevertheless, it should be recognised that the parties, even to the date of the hearing, have maintained a social relationship. As well as residing in the same premises (although occupying separate bedchambers) the parties since December 2002 have gone on holidays together (for example, to the Philippines in November 2003, to Nelson Bay in February 2004). On occasion the Defendant brings home wine for himself and the Plaintiff to consume and videos for them to watch, the most recent such occasion being three weeks before the commencement of the hearing. Presently the parties conjointly maintain in the house, as a pet, a large canine animal of a breed known as a Rhodesian Ridgeback.
The Plaintiff said that at present she has mixed feeling for the Defendant, and that at present the relationship between them is strained.
Whilst the domestic arrangements between the parties may be regarded as somewhat unusual, especially when the parties are currently locked into litigation under the Property (Relationships) Act, nevertheless a breakdown in, or the termination of, a de facto relationship is not a prerequisite to the Court granting relief pursuant to section 20 of that Act.
Although the existence of a de facto relationship between the parties from about 1 July 1997 to December 2002 was admitted on the pleadings, nevertheless, somewhat curiously, evidence from a number of other witnesses was adduced by each of the Plaintiff and the Defendant, essentially to prove, or disprove, the existence of such a relationship. That evidence was largely unnecessary.
At the commencement of the relationship in mid-1997 the Plaintiff was employed as a property manager in a real estate agency at Burwood, where she was earning about $750 gross a week. She had the following assets and liabilities.
A house property, standing on 40 acres, known as The Grange, Lot 2, Pacific Highway, Kew
Half share in a house property at Laurieton
Ford Laser motor vehicle
Approximately $2,000 standing in an account with the St. George Bank
Various shares, to a value of about $20,000
The property at Kew was sold in 2003 for $325,000. The Plaintiff’s half share in the house property at Laurieton was sold shortly after the commencement of her relationship with the Defendant, for a sum which the Plaintiff was unable presently to recall. However, from the proceeds of that sale she deposited an amount of about $160,000 as a fixed deposit with MLC.
At the time of the commencement of the relationship the assets and liabilities of the Defendant were as follows.
House property situate at and known as 14 Kepos Street, Redfern, which was subject to a mortgage in favour of the National Australia Bank (securing an advance of $110,000)
Furniture and furnishings
B & O stereo and TV system
Antique carpets
Intercom telephone system
1993 Land Rover Discovery motor vehicle
Superannuation entitlement - $200,000
Shares, having a value of about $25,000
At that time the Defendant, who is a licensed dealer in securities and a registered life broker, and who holds qualifications in accounting and financial planning, conducted his own business, Clive Ward & Associates, from a rented office at Double Bay. At that time he had a taxable income of $37,000 a year.

The only significant change in the Plaintiff’s assets during the course of the relationship, apart from the sale of the Kew property and the Laurieton property to which I have just referred, was the acquisition by the Plaintiff of a 20 percent interest in the Marriott Street property in circumstances which I will shortly outline.
In December 2002 the assets and liabilities of the Plaintiff were,
20 percent interest in Marriott Street property.
At that time the Plaintiff was still in employment, although the evidence did not disclose her income in 2002. However, at the time of swearing her primary affidavit, that of 6 May 2004, her salary was $850 gross a week. She held accumulated savings in an amount of about $360,000 in the St. George Bank, had $100,000 invested in shares, and owned a Toyota Corolla motor vehicle, as well as furniture at the Marriott Street premises.
At the time when he says that the relationship came to an end, in December 2002, the Defendant had the following assets and liabilities.
80 percent interest in house property situate at and known as 105 Marriott Street, Redfern
Furniture and furnishings
At that time the Defendant still conducted his own business. The evidence did not disclose his income in December 2002. However, at the time of swearing his primary affidavit, that of 24 June 2004, his annual salary was $48,000, and his company provided him with a Holden Berlina motor vehicle, 1999 model, which at that time had a value of $18,000. He said that there were no company profits from his business.
Neither party placed before the Court evidence of the value of the Marriott Street property in December 2002, or at any later date. However, on behalf of the Defendant there was filed an affidavit of Alberto Novati sworn 2 February 2005. That deponent, a construction manager by occupation, gave evidence, over objection by the Plaintiff, of the details of construction costs of four units at 105 Marriott Street, Redfern, totalling $688,900. It was Mr. Novati’s evidence, under cross-examination, that those figures were estimates of the costs as at January 2002. He also said that at the present time there would be an increase of 35 percent on those costs.

There has been little material change in the assets and liabilities of each party since the institution of the proceedings, or, indeed, since December 2002.
The Plaintiff, who was born on 26 June 1947, is presently aged 58. She married in 1972 and had two children of that marriage, who are now adults and who are no longer dependent upon her. The Plaintiff’s husband died in 1995.
The Defendant was born on 13 November 1937, and is presently aged 69. He also had been married, and has one adult daughter, who is no longer dependent upon him. The Plaintiff and the Defendant met in November 1996. They commenced to live together on or about 1 July 1997 in the Kepos Street property, of which the Defendant was at that time the registered proprietor.
It was the evidence of the Plaintiff that the Defendant had informed her that he was making mortgage repayments of $1,400 a month and that from the time when she entered into residence with him in July 1997 the Plaintiff paid to the Defendant one-half of that amount, being $700 a month.
In April 2001 the Defendant at auction purchased the Marriott Street property for $701,000. The Plaintiff said that she and the Defendant had agreed beforehand that the highest bid which the Defendant would make at the auction would be $600,000. The Plaintiff assisted the Defendant in that purchase, by providing the deposit of $70,100. The proposal of the Defendant, at least acquiesced in, if not agreed to, by the Plaintiff, was that the Marriott Street property should be ultimately developed into four strata residential units or townhouses. For that purpose a loan was obtained by the parties from the National Australia Bank on 13 June 2001 in an amount of $550,000. That loan was secured by a mortgage in the names of each of the Plaintiff and the Defendant. Three days later, on 16 June 2001, the Defendant entered into a contract for the sale of the Kepos Street property for $738,500.
Shortly thereafter, on 11 July 2001, the Plaintiff and the Defendant executed a deed concerning the respective interests of the parties in the Marriott Street property. By that deed it was agreed that that property would be held by the Plaintiff and the Defendant as joint tenants, the Plaintiff having a 20 percent interest and the Defendant having an 80 percent interest. The deed made further provision concerning the respective entitlements of the parties, in the event that one or other of them were to die before the completion of the proposed development of that property, and that a will would be made by that party along those lines in favour of the other party.
The completion of the purchase of the Marriott Street property was effected on 11 July 2001, the same day as the deed was executed. The parties then moved into residence in the Marriott Street property, and the Plaintiff commenced to make payments of $750 a month to the Defendant, as contribution towards the mortgage payments.
Throughout the period whilst the Plaintiff and the Defendant were living in a de facto relationship, and, indeed, after the date upon which the Defendant asserted that that relationship had come to an end, the parties shared the household tasks in the Marriott Street property, and the Plaintiff, even to the present time, has contributed at least one-half to such outgoings as electricity, telephone, municipal rates, and the like.
The Plaintiff said, also, that during the period whilst the Defendant was unable to drive, on account of his licence being suspended, the Plaintiff drove him in his motor vehicle. She also, under cross-examination, volunteered that that motor vehicle, although registered in the name of the Defendant’s business, Clive Ward & Associates, had actually been paid for by the Plaintiff herself, in an amount of about $26,000 or $27,000. She said that the use of that vehicle was shared by the parties when there was no restriction upon the ability of the Defendant to drive.

I have had the benefit of receiving a written outline of submissions from Counsel for the respective parties, together with a chronology from Counsel for the Plaintiff. Those documents will be retained in the Court file.
At the trial the Plaintiff asserted that she had been coerced by the Defendant into entering into the deed on 11 July 2001, and that that deed did not accurately reflect the arrangements agreed upon between the parties concerning the Marriott Street property. It was the assertion of the Plaintiff that she and the Defendant had agreed that the property would be purchased by them in equal shares, but that she was very much pressured by the Defendant, immediately before the completion of the purchase, into agreeing that the shares would be 20 percent for herself and 80 percent for the Defendant.
It appears that the Defendant suggested to the Plaintiff, indeed advised her, that she should seek her own independent legal advice before entering into the deed. She chose not to do so. Further, although she now asserts that she was pressured into signing the deed, the Plaintiff has not at any time since 11 July 2001 challenged the validity of that document or sought to have it set aside or declared null and void. Even in the present proceedings, in which she has sought relief other than relief under the Property (Relationships) Act, the Plaintiff has not sought to challenge the validity of the deed.
I am satisfied that the deed is of binding effect upon the parties, and accurately evidences the agreement between the parties at the date upon which it was executed. The deed, of course, does not in any way preclude the Court from exercising it discretion to grant the relief sought by the Plaintiff for adjustment of the interests of the parties in the Marriott Street property. Such adjustment is the only substantive relief which the Plaintiff now seeks.
It has been calculated on behalf of the Plaintiff that from the time of the purchase of the Marriott Street property under contract dated 10 April 2001 until the commencement of the present proceedings in March 2004 the Plaintiff has expended in respect to that property about $159,000 (comprising the 10 per cent deposit of $70,100; $750 a month towards the mortgage, in a total amount of about $27,000; and the balance representing at least one half of the household outgoings and cost of utilities), whereas the Defendant has expended about $492,000 (of which $450,000 was by way of repayments in respect to the mortgage principal made by the Defendant in February and March 2002). That is, so it is argued on behalf of the Plaintiff, the Plaintiff has expended about $159,000, whereas the Defendant has expended, leaving aside the repayments of principal on the mortgage, only about $42,000. Thus, upon those calculations, it is asserted on behalf of the Plaintiff that she has contributed about 79 per cent of the total costs and outgoings, whilst the Defendant has contributed about 21 per cent.
It is essentially in consequence of the foregoing calculations that the Plaintiff submits that she is entitled to a one-half interest in the Marriott Street property.
The Defendant, on the other hand, points to the significant reduction which he made in the principal of the mortgage, and submits that when that payment is taken into account the Plaintiff has paid only about 24 percent of the total expenditure in respect to the Marriott Street property, whilst the Defendant has paid about 76 percent.
I consider that it would be quite unrealistic to disregard the fact of the significant reduction made by the Defendant in the principal amount outstanding under the mortgage, being a reduction of $450,000 on a mortgage loan of $550,000. Further, it would be unrealistic to disregard the fact that essentially the purchase of the Marriott Street property and the substantial reduction in the mortgage were made possible only by reason of the fact that the Defendant, before he entered into the de facto relationship with the Plaintiff, was the owner of the Kepos Street property, and that it was the sale of that property which enabled the mortgage on the Marriott Street property to be significantly reduced.
Section 20(1) of the Property (Relationships) Act provides,
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.

The phrase “domestic relationship” is by section 5(1) of the Act defined to include a de facto relationship.
In approaching the claim for adjustment of interests of parties in property pursuant to section 20(1) of the Property (Relationships) Act, the Court makes a wholistic judgment and should not attempt to evaluate the respective contributions of the parties as if it were undertaking a reductionist process analogous to the taking of partnership accounts (notoriously one of the most time consuming and expensive of litigious exercises). (See Davey v Lee (1990) 13 FamLR 688.)

The fact that, upon one calculation, the Plaintiff contributed 79 per cent to the purchase price and the outgoings during the period of the de facto relationship and, upon another calculation, only 24 per cent, is not determinative of the entitlement of the Plaintiff to the relief which she now seeks by way of adjustment of the interests of the parties in the Marriott Street property, and to her claim to a one-half share in that property.
It is apparent, however, that without the participation of the Plaintiff in providing the deposit upon the purchase of Marriott Street, that property could not have been purchased at that time, and the Defendant might have missed out upon that purchase. Neither should it be overlooked that the Plaintiff, although the legal owner of only a 20 percent interest in the Marriot Street property, accepted joint liability, with the Defendant, for the entirety of the mortgage loan of $550,000 from the National Australia Bank. Further, I am satisfied from the evidence that the contribution of the Plaintiff as homemaker was greater than the contribution of the Defendant in that character.
Until the payment of the amount of $450,000 by the Defendant in reduction of the mortgage debt, the financial contributions of the Plaintiff to the acquisition of Marriott Street and to the household outgoings thereof were at least equal to, and possibly somewhat in excess of, the contributions by the Defendant.
In all the circumstances of this case, it seems to me that it is appropriate that the Court should exercise its discretion under section 20 of the Act by adjusting the interests of the parties in the Marriott Street property, so that the Plaintiff will receive an interest of one third therein and the Defendant will receive an interest of two thirds therein.
The Defendant through his Counsel expressed a desire to purchase the interest of the Plaintiff in the Marriott Street property. It is appropriate that short minutes be brought in to give effect to my foregoing conclusion. Those short minutes should provide not only for the appointment of trustees for sale pursuant to section 66G of the Conveyancing Act 1919 (it having already been noted that the Defendant consents to such relief), but also should provide that either party may by agreement acquire the interest of the other party in the Marriott Street property. If there can be such an agreement then the necessity for the appointment of statutory trustees for sale will be obviated, with a consequent conservation of costs.
Regarding the costs of the present proceedings, it should be observed that the Plaintiff has not succeeded in obtaining the 50 percent interest claimed by her. However, she has obtained more than the Defendant submitted she was entitled to receive, the Defendant disputing her entitlement to anything more than her 20 percent legal interest as co-owner with the Defendant.
My present view is that the interests of justice will be adequately served if the Court makes no order as to costs, to the intent that each party should bear her or his own costs of the proceedings. However, if either party is desirous of seeking some other costs order, then that party will have an opportunity to do so.
Accordingly, I stand the matter over to a date to be fixed by arrangement with my Associate for the bringing in of short minutes and, if desired, for argument as to costs.

**********

LAST UPDATED: 09/08/2006