Todd & Calise
[2023] FedCFamC2F 1644
•8 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Todd & Calise [2023] FedCFamC2F 1644
File number(s): NCC 3649 of 2022 Judgment of: JUDGE BETTS Date of judgment: 8 December 2023 Catchwords: FAMILY LAW – Property – de facto property settlement proceedings – short relationship – where the parties jointly own three properties – where the parties agree that the wife will retain two of the three properties and receive a cash adjustment – where the husband contends the adjustment be $150,000 – where the wife contends the adjustment be $280,000 – where the Court considers a cash adjustment of $263,000 is just and equitable – just and equitable outcome. Legislation: Family Law Act 1975 (Cth), Pt VIII Number of Paragraphs: 132 Division: Division 2 Family Law Date of last submission/s: 8 December 2023 Date of hearing: 7 and 8 December 2023 Place: Newcastle Solicitors for the Applicant: Powe & White Family Lawyers Solicitors for the Respondent: N/A – Self-represented ORDERS
NCC 3649 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: MR TODD
Applicant
AND: MS CALISE
Respondent
ORDER MADE BY:
JUDGE BETTS
DATE OF ORDER:
8 DECEMBER 2023
THE COURT ORDERS THAT:
1.The Applicant pay the Respondent the sum of $263,000.
2.By Friday 23 February 2024, and occurring contemporaneously:
(a)Ms Calise (“the Respondent”) shall do all acts and things and sign all necessary documents so as to transfer to Mr Todd (the “Applicant”) her right, title and interest absolutely in the property being the whole of the land situate at and known as B Street, Suburb C in the State of New South Wales (the “Suburb C property”);
(b)The Applicant shall thereafter indemnify the Respondent from and keep indemnified from any and all liability owing over the Suburb C property;
(c)The applicant shall do all acts and things and sign all necessary documents so as to transfer to the Respondent his right, title and interest absolutely in the property being the whole of the land situate at and known as Lot … D Street, Town E in the State of New South Wales (the “Town E property”); and
(d)The Respondent shall thereafter indemnify the Applicant from and keep him indemnified from any and all liability owing over the Town E property.
(e)If not already done, the Applicant shall do all acts and things and sign all necessary documents so as to transfer to the Respondent his right, title and interest absolutely in the property being the whole of the land situated at and known as F Street, Town G in the State of New South Wales (the “Town G property”); and
(f)The Respondent shall thereafter indemnify the Applicant from and keep him indemnified from any and all liability owing over the Town G property.
3.Except as otherwise set out in these Orders, the parties have the sole right, title and interest in any other property which is at the date hereof in their possession, title or name and they shall be solely liable for and indemnify the other against any and all liabilities that stand in their name, title or possession.
4.Each party must do all acts and things and give all consents and execute all documents and writings necessary to give effect to the Orders made herein.
5.In the event that either party refuses or neglects to execute any deed or instrument, a Judicial Registrar or such other empowered person of the Federal Circuit and Family Court of Australia or such other Court with jurisdiction, be appointed pursuant to section 106A of the Family Law Act 1975, to execute such deed or instrument in the name of such party and to do all acts and things necessary to give validity to the operation to the deed or instrument.
6.If either party wishes to bring an application for costs they are to make application within 28 days, failing which the proceedings will be removed from the list of active pending cases.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under a pseudonym has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
JUDGE BETTS
These reasons for judgment were delivered orally. For ease of reading, they have been corrected from the transcript.
OVERVIEW
These are de facto property settlement proceedings arising out of the breakdown of the relationship between the applicant Mr Todd, who for convenience I will refer to as “the husband”, and the respondent Ms Calise, who for convenience I will refer to as “the wife”.
It is a somewhat unusual case in that the parties commenced a relationship in or around 2012 and separated seemingly around August of 2015. That is to say, the parties have been separated now for over eight (8) years, which is almost three (3) times as long as their relationship subsisted.
It was a short relationship; one which left the parties financially intertwined.
There are effectively three (3) properties which are jointly owned by the parties. These are a property at Suburb C, a property at Town E and a property at Town G, all of which I will refer to in more detail shortly.
These three (3) jointly owned properties cannot continue to remain jointly owned. Something needs to be done to sever the financial relationship between the parties. Indeed, their financial relationship probably should have been severed a long time ago.
It is common ground that the wife should be receiving both the Town E property and the Town G property and that the husband should be receiving the Suburb C property. The question really is this: what is the ‘just and equitable’ cash settlement to be paid from the husband to the wife consequent upon those transfers taking place? That is really what this case is all about.
The husband’s position is that there should be a cash adjustment in the wife’s favour of $150,000. The wife’s case, as ultimately advanced in closing submissions, is that the cash payment to her should be $280,000.
THE HEARING
The matter proceeded to final hearing before me over the past two days. The husband was represented by Mr White, solicitor. The wife was self‑represented.
The wife initially sought an adjournment of the hearing for various reasons, but her application was rejected and the hearing proceeded as originally ordered.
For the purposes of the hearing, the husband relied upon:
·a Case Outline Document filed 4 December 2023;
·the husband’s trial affidavit filed 9 December 2023; and
·the husband’s Financial Statement filed 9 November 2023.
The wife relied upon:
·her Amended Response filed 24 October 2023;
·her affidavit filed 22 March 2023; and
·her Financial Statement filed 27 March 2023.
The wife’s affidavit and Financial Statement had been filed very early on in the proceedings and had not been updated for the hearing. However, given that most of the relevant factual matters in this case are historical and given that the relationship ended in 2015, I do not consider that she was really under any significant forensic disadvantage in that respect.
In addition to this material, the parties tendered various exhibits, to which I will refer a little later.
I had the benefit of seeing both parties in cross‑examination. It would be fair to say that both parties impressed me as generally being as honest as they could, and bearing in mind the obvious significant timeframes that have elapsed between the passing of various events. That is to say, time generally makes it more difficult for people to remember things with exactitude. I have no particular criticism to offer against either party in terms of the reliability of their evidence, although that is not to say that their evidence is completely ad idem. They disagree as to various matters, not all of which are relevant for present purposes.
THE COURT’S APPROACH
In determining this dispute, I propose to undertake the following process:
(1)firstly, to consider the Balance Sheet. That is to say, the assets, the liabilities and the financial resources of the parties;
(2)secondly, to ponder the question whether it would be ‘just and equitable’ to make a property settlement order in this case;
(3)thirdly, assuming it is just and equitable to make a property settlement order, I will consider relevant contributions of the parties pursuant to section 90SM of the Act;
(4)fourthly, I will consider relevant future factors as required by section 90SF of the Act;
(5)fifthly, I will look at the overall outcome arrived at by this analysis to determine whether the outcome is just and equitable as mandated by the legislation, and in particular section 90SM(3) which provides that the Court must not make an order under this section unless it is satisfied that in all the circumstances it is just and equitable to make the order.
THE BALANCE SHEET
I have been provided with a document prepared by Mr White and marked as exhibit 5. For convenience, I will annexe a copy of this Balance Sheet to these Reasons.
This is the Balance Sheet which was, for all intents and purposes, a joint document, and really there are only two (2) issues in dispute.
It suffices to observe that for present purposes, I do not intend to take into consideration all of the items in the Balance Sheet. My focus is very much on the real properties that the parties acquired, or ended up owing, jointly. To the extent that the wife has a motor vehicle, some household contents, various chattels and some savings of limited amount, these are not by any stretch of the imagination assets that ought be the subject of any adjustment between the parties, particularly given that the parties separated so long ago.
By the same token, the husband’s bank accounts, his motor vehicles and his superannuation entitlements are all very much his and are not the subject of any application for adjustment, nor could it be said that there has been any serious contribution made towards those assets by the wife, in the same way that the husband could not be said to have made contribution of any serious kind towards the other assets held by the wife.
For present purposes, I proceed on the basis that the relevant assets are, first and foremost, the property at Suburb C valued at $800,000; secondly, the property at Town E valued at $100,000; and thirdly, the property at Town G valued at $40,000. There are no relevant mortgages in respect of these properties.
Separately, the wife has a property in New Zealand which, to be more precise, she has a 71% interest in and which equates to a value in Australian dollars of $226,870. That is a major asset, but, again, not one which the Court is asked to make any orders about, but merely to note its existence in the context of arriving at a ‘just and equitable’ order.
The relevant assets, for present purposes and for the purposes of division, are the properties at Suburb C, Town E and Town G.
The wife seeks to include two (2) specific liabilities:
·firstly, a liability of $6,500, being what she says is the husband’s half share of her legal costs to H Law Firm. This is in respect of an easement dispute concerning the Town E property;
·secondly, the wife seeks to include a liability that she has accrued to the lawyers for the other parties (the Defendants) in the easement proceedings in the Supreme Court of New South Wales (Equity Division). These are R Law Firm, and the wife asserts that a figure of $21,000 is owing to them pursuant to a costs order made against her in the easement proceedings.
In relation to the liability to R Law Firm, to be fair there is no real warrant for the Court to arrive at any specific figure in that respect. The Supreme Court of the New South Wales (Equity Division) ordered that the wife pay 80% of the Defendants’ costs of the proceedings up to late 2023 on the ordinary basis. The wife told me that R Law Firm had charged the Defendant landowners total costs of around $150,000. If that is the indemnity or solicitor and own client cost figure, then a payment of 80% of their costs on the ordinary basis up to late 2023 is going to be a much lower figure than $150,000, perhaps in a ‘ballpark sense’ closer to $30,000 or $40,000.
But to some extent it is academic because I have no intention of including R Law Firm’s liability as a liability in the Balance Sheet for two reasons.
Firstly, there is no quantification whatsoever as to what the amount of the costs liability might be.
Secondly, the content of exhibit 2 - namely the judgment in this respect - is roundly critical and castigates the wife for various ongoing procedural defaults, which is the reason why his Honour made the costs order against her. That is to say, the wife has serially failed to properly run her case in that Court, ironically a case which seems to be rather a strong one if run properly and perhaps one that is not even actively or seriously being defended by the Defendants. As his Honour observed at paragraph 2 of the judgment, the wife was bringing proceedings in that Court which were deficient in a number of respects and were not presently being prosecuted by her to hearing “even though the grant of an easement is not strongly contested”.
Given the content of exhibit 2, it would be contrary to justice and equity for this Court to include in the Balance Sheet as a liability of the husband, or, more accurately, as a liability in which the husband should share, a liability that is arising squarely as a result of the manner in which the wife has prosecuted her case in the Supreme Court, and I do not propose to make any allowance in that respect.
In relation to the liability to H Law Firm, being the wife’s previous lawyers in the easement proceedings, I do not propose to make a specific allowance for this in the Balance Sheet either. However, this liability is in a somewhat different category and I propose to address it in the context of section 90SF considerations a little later.
IS IT ‘JUST AND EQUITABLE’ TO MAKE A PROPERTY SETTLEMENT ORDER?
As I indicated at the outset of this case, it seems to me that this is a very easy question to answer in the affirmative.
The fact of the matter is that the parties, despite their relationship ending eight (8) years ago, remain financially intertwined in that they are joint tenants of each of the three (3) real properties referred to at Suburb C, Town E and Town G.
Neither of them want to remain so entangled. Their continued entanglement offends the Family Law Act and it seems to me that, as each party seeks a specific order for the transfer of the real properties as identified, the only debate being the cash payment, that it is manifestly just and equitable to proceed to make a property settlement order.
In a nutshell I am satisfied that the ‘just and equitable’ requirement is made out.
CONTRIBUTIONS
I then turn to a consideration of the contributions of the parties.
Mr White submitted, and I agree with him, that the appropriate way to assess contributions in this case is on an asset-by-asset basis, and this will be specifically with reference to the three (3) real properties to which I have referred.
In the circumstances presented by this case it would be an artifice to proceed to assess contributions by way of a ‘global assessment’. In my view, although it is a somewhat unusual approach to assess contributions on an asset-by-asset basis, this is a case which plainly cries out for such an assessment in the interests of justice in order to arrive at a just and equitable division.
The fact of the matter is that these are parties who commenced a relationship at a mature age. The wife is presently 56, the husband is 70. They started their relationship when they were 44 and 58 respectively, and each already had their own real estate and their own assets. It is not a case where, for example, they were a young couple starting out who pooled all of their money together and acquired an asset base. This is a couple who had already lived their own financial life to a significant extent prior to commencing this relationship.
I therefore propose to assess contributions in respect of each of the three (3) real properties, but in so doing, I do not lose sight of the fact that there are obviously other assets that the parties own, which they may not now have, such as the wife’s property at Town J, for example. And I accept that there was a degree of financial intertwining above and beyond these particular assets, such as, for example, paying groceries, paying for holidays and the like. But my focus, as I indicate, is very much on the three (3) real properties in order to arrive at a just and equitable outcome in this case.
Initial contributions
When the parties first commenced a relationship in 2012, the husband had previously been married and had three (3) children to his wife. He was living in the Suburb C property with the children.
The value of the Suburb C property is an unfortunate unknown in this case. What is known is that at some point between 1999 and 2004 the husband paid his ex‑wife the amount of $147,000 which, at that time, represented approximately 50% of the net equity in the property. This point assumes some significance for this reason: the property must have been worth more than $294,000. If $147,000 represented half the net equity, then the total net equity was $294,000, but the gross value of the property must also take into account the mortgage balance that was on top of that figure. (The husband had purchased the Suburb C property from the wife and he then discharged/refinanced the mortgage. His wife had received some of his superannuation by way of a superannuation split which was to happen when she was a little older).
When these parties commenced the relationship in 2012, the husband owned the Suburb C property which, at that time, was subject to a mortgage of approximately $225,000, he had some defined benefit superannuation arising out of his career as an educator, he had a small amount of savings, some shares with K Company, a vehicle and some other chattels and household items.
As for the wife, at commencement of the relationship she had a property at L Street, Suburb M, subject to a mortgage. She had purchased that property in 2010 for $140,500. She had a small amount of savings, a vehicle and a small amount of superannuation.
When the parties commenced the relationship in 2012, it seems that the wife’s mortgage at that point was around $240,000, according to a Financial Questionnaire that she provided to the Court earlier in these proceedings. It is a little unclear exactly why the wife’s balance was at that amount. She said that it related to the purchase of Town E, to which I will come shortly.
I accept the wife’s evidence that, when she visited the husband’s home at Suburb C, from her perspective it was somewhat run down. She makes observations at paragraph 12 of her affidavit that:
·the ceiling had black mould on it, which the husband admits in any event;
·that there was a vanity that was falling apart; and
·that the kitchen was an outdated 1970s style;
·she says, and I accept, that the ensuite was also quite old.
In a nutshell, the Suburb C home needed perhaps some renovation and some modernising, although I certainly also accept the husband’s evidence that the home was functional. Indeed, the husband was renting out some bedrooms to friends of his younger son and was receiving around $300 per week in rent in that respect.
The wife observed that the Suburb C home had various other issues that could use some modernising, including an old electric hot water system that had broken down with a relatively inadequate heater being in its place; the garden was somewhat overgrown, and there was generally a sense that the house needed to be ‘spruced up’ both inside and out.
The wife, I should add, has post graduate qualifications. She is adept at construction and has some renovation experience, and I accept that she is someone whose opinion the husband valued in terms of upgrading and updating his home.
Contributions during the relationship
Reasonably early on in the relationship, the wife undertook some work at the Suburb C home. I accept that she purchased the husband a nearly new second hand electric hot water system to replace the small electric system and that she paid for it in cash. I accept her evidence that she expected the husband to organise a plumber to get the hot water system installed, but that for some reason, this did not happen very quickly.
It seems to me from reading the material that, in general, a source of conflict between the husband and the wife was that the wife saw herself as having more “get up and go” and being more motivated in terms of renovation and the like, whereas the husband had a more relaxed approach. Certainly, it seems that it was a source of some tension between the parties.
I accept the wife’s evidence that she did some work in the gardens at the Suburb C home, including planting various gardens, plants and the like. Certainly, I accept her evidence that she began to do some things at the home. I also accept the wife’s evidence that she sourced some timber and that she, the husband, and a friend who helped them (a fellow by the name of Mr N), then installed a deck off in order to improve the home.
I accept the wife’s evidence in her affidavit as to the work that was done and the costs that were incurred. These are not really controversial matters. The husband himself accepted that they had built the deck together. I also accept that the wife paid for various furniture and other items to try to beautify the property at Suburb C as she indicates.
The wife was also something of an artist in terms of her interests, and indeed, she has some obvious skill in that respect, including in painting.
In 2013, she talked to the husband about moving away from city life and going to live out in the country, somewhere near Town O where she was employed at a local business. She was looking for a semi‑rural property to, in her words, “get away from the hustle and bustle of city life and live on a property somewhere quiet”. She wanted to be able to ‘connect with her art’ and she thought that she would do that better if she was living in the country.
With that in mind, the wife went looking for a property to buy. She located the property at D Street, Town E, this being the Town E property referred to. The property was quite basic. It was a single room at that stage, accessible by a gravel road off the main road. It bordered a park and was quite picturesque. The wife invited the husband to join her in the purchase and he agreed because he was interested in the idea of having some sort of a retreat to live in. Moreover, the place was quite cheap. Though initially advertised for $69,000, the wife was able to purchase it for just $60,000.
The husband paid the wife $34,000 which, in round terms, was a little more than half of the purchase price, but probably about half taking into account stamp duty and the like.
The husband was away overseas in 2013 and there is some debate about the extent to which the husband contributed to improvements to the Town E property. As a general statement, the wife says that the husband did not do very much. The husband portrays himself as having done quite a bit more than the wife suggests.
I accept the husband’s evidence that before he travelled overseas, he did assist the wife in the exterior of the property by connecting a generator to get the water pump working, as well as repairing the lawnmower so that the grass could be kept at a manageable height.
I accept the wife’s evidence that when the husband was overseas, she seemed to have formed a relationship with a fellow by the name of Mr P, and that she and Mr P, with the assistance of some workers, undertook significant work at the property, essentially while the husband was away.
I accept her evidence at paragraph 51 of her affidavit that they picked up a kitchen island online and installed it; that they installed a gas oven and kitchen wall cupboards; cleared vegetation from around the house; started the bedroom walls and installed the doors; installed aluminium windows and doors to the main bedroom; installed sliding doors to the dining area; deconstructed the outhouse and reconstructed it away from the house; removed the wet back hot water system as it was in the way of a second bathroom and set up a temporary outdoor bath. They also recovered a corrugated iron water tank instead of it being discarded. The wife fixed the holes in the bottom of the tank and relined the interior to gain an extra 5,000 litres of water, connected to the existing water tank on the property.
The wife paid over $1,000 for a plumber to connect the water to the kitchen sink. She and Mr P re‑clad the outside of the house, replacing old with new. They framed up the ceilings and clad the ceiling panels and did the same on the walls. I accept the wife’s evidence that she also engaged a local contractor to bring his bulldozer to level around the house and to clear the home and that she paid him around $2,000.
At the same time as all of this was occurring, I should indicate that the wife was also renovating the property that she owned at L Street, Suburb M in City Q.
In early 2014, the wife found an old house in City Q that was being demolished and it happened to have an iron garage attached. She paid $1,000 for it, including the large carport. I accept her evidence that she, rather than the husband, paid for a large truck to load the timber and iron onto although the husband assisted her to demolish it.
I accept the wife’s evidence that she also advertised online to get some workers to help with the renovation of Town E, including reconstructing the shed, although the husband also assisted. It was not just the two (2) parties. I accept the wife’s evidence that she, the two (2) workers and the husband also did a lot of work including building concrete steps and stone retaining walls, gathering firewood, building garden beds and the like.
Although the husband had paid half of the money for the purchase of the Town E property, he was not on title. This may be because he was overseas at or about the time that the conveyance was happening, but it is a little unclear in that respect. In any event, I accept the evidence of the husband that arrangements were later made for him to sign a Statutory Declaration which was effectively for the purposes of stamp duty so that he could go on the title (as a joint owner), but be exempt from stamp duty because it was effectively a transfer pursuant to a relationship. That is what happened. The husband became a joint owner in that respect.
The husband stayed at the Town E property with the wife from time to time during the course of the relationship.
The Town E property had a problem which I have already touched upon earlier, namely the easement. The difficulty is that to access the property, which is landlocked, it is necessary to travel through a neighbour’s adjoining property. It seems that the neighbour had granted a licence to the predecessors in title in respect of the Town E property whereby they were at liberty to pass through the owner’s property in order to get to the Town E property.
This was an issue that had been contemplated at the time of the purchase. I accept the wife’s evidence that it was an issue that seems to have been ‘in play’ as it were, from the very outset when the purchase of Town E took place. At that stage, the access was not a difficulty because there was no dispute between the owner of the adjoining property and the wife, so no issue arose at that point in time.
It was, however, to become a problem later when the owner passed away, ultimately leading to Court proceedings to which I have referred.
In 2014, the wife, having renovated her property at L Street, Suburb M, sold it for $600,000. She says that the mortgage over the property at that time was around $240,000 and that this figure included the purchase price of the Town E property. In cross‑examination from Mr White, it emerged that she would have received a net figure, allowing for the mortgage as well as real estate fees, of around $335,000, and I accept that is a reasonably accurate figure.
In 2015, the wife, who at that time had quite significant cash in the bank, decided to purchase the property at Town G. She bought it for $49,000. The husband did not contribute to the purchase price in any way, and I am not critical of him in this respect; it is really just a statement of fact.
The Town G property has some serious restrictions and I accept the wife’s evidence is that it is zoned as being ‘environmentally sensitive’, which means that a person can only stay on the property for two (2) days per week. It does not have power, water, sewerage or electricity. There is no entitlement to build on the property, and as a general statement it is very much a boutique property which one would think would have a limited number of potential people who would be interested in buying it. Nonetheless, it seems from what I read in the material to be a beautiful place, but certainly not one of any great monetary value.
It seems that the wife, despite putting the purchase moneys up for it, decided that it should go into the parties’ names equally as joint tenants. This is what occurred. The husband had no particular objection in this respect.
The husband says that the wife later told him that because he was on the title for Town G, she should be on the title for Suburb C on the same basis, and indeed, this is effectively what occurred. The husband transferred his interest in Suburb C into the joint names of the parties, but on the condition that the wife paid out the mortgage balance which was approximately $180,000 - $180,584 is probably the most accurate figure that I can see in the material.
I accept the wife’s evidence that the husband told her that, as she had done a lot of work on the Suburb C home already, and as she had paid out his mortgage, then they would be equal partners. He told her that the Suburb C home may be able to be subdivided down the track (although this was never in fact able to occur and I make no critical finding of anyone in this respect).
The husband told the wife that she could receive the rental on the Suburb C home because he was in receipt of his pension of $45,000 per year effectively through his superannuation fund. The wife talked to him about possibly further improving the house and increasing the rental and I accept her evidence that the husband told her that the rental income would be hers. On that basis, the wife bought into the property by paying out the mortgage, which is how she ended up being a joint tenant with the husband.
I pause here to observe that it is unknown what the value of Suburb C was at the time that the wife paid out the mortgage. As I have indicated earlier, when the husband had paid out his ex‑wife in respect of the Suburb C home, the home must have had a value exceeding $294,000. Indeed, by definition, its value was $294,000 at that time plus whatever the value of the mortgage happened to be.
The wife’s payment of $180,000 to the husband is likely, and on balance, a figure which represented less than one‑half of whatever the gross value of the property was at that time. That is to say, in a purely dollar sense, the wife was probably receiving a generous proposal to acquire a joint interest in the Suburb C home in return for payment of that figure, but I cannot be any more precise than that on the evidence that is before me.
I certainly accept, however, that the wife set out to improve the Suburb C home with gusto after she had invested that money. It seems that numerous renovation works were undertaken and that the rental income, which had been around $300 per week, had already increased to around $520 per week by the time the relationship ended in August 2015.
I have seen the numerous photographs attached to the wife’s affidavit as well as the evidence contained at paragraph 103 of her affidavit, and as a broad statement I accept that the wife undertook the work that she refers to therein. It is quite clear that the property has been significantly modernised and improved, particularly in relation to the kitchen, but that is just one of many improvements to the home.
I accept the wife’s evidence at paragraph 103 of her affidavit that she found and paid for and organised a truck and installed what she describes as a “beautiful kitchen with modern appliances and a kitchenette”. The husband accepts, by the way, that the wife paid for that.
She assisted in restoring the gardens, with the husband and their friend Mr N (I have already referred to the deck).
The wife replaced the toilet and built a wall forward to fit the toilet, painted the walls, and fitted a shelf above the toilet door for toilet rolls. She installed a new vanity. She replaced all the hardware on the doors. She installed new plumbing taps on the bath and in the shower. She replaced the kitchen floor. She organised for the electrics to be fitted with new lights in the ceilings and walls throughout. She installed carpet tiles, painted throughout. She organised and paid for the majority of the furniture.
The wife coordinated with the tenants, although, to be fair, the husband did so as well. The wife paid for and installed the hot water system to which I referred earlier, undertook some plastering and replaced some furniture in the home.
It is common ground that what the wife did, did not involve the purchase of brand new items. Rather, she was buying second‑hand items and effectively being thrifty in that respect.
No doubt the husband also worked on the property and assisted, but it was very much the wife, in my assessment, who was driving these renovations.
Of course, there is no specific dollar value that I can put on the work that the wife did. Just as I have no valuation of the Suburb C property at the time the wife acquired her joint interest in return for a payment of $180,000 toward the mortgage, equally I have no evidence as to the dollar value of any improvements that were undertaken by the wife. I can say from the photographs, though, that they are obviously improvements that in some respects modernise and beautify the home. Again, I cannot really put it any higher than that because the evidence does not permit me to do so.
Post-separation contributions
When the parties separated, I accept the wife’s evidence that the rental income for the Suburb C property was, from her perspective, effectively split equally. That is to say, she began to receive rental income of approximately $260 or $265 per week. In that sense, the wife has received quite a significant amount of money in the eight (8) years post‑separation, a figure perhaps in the order of $110,000 to $120,000.
The rental income received by the husband is a little unclear. In his material he suggested that the wife had received the lion’s share of the rent, perhaps something in the order of 80% of the net income from the various tenants that had lived in the property since separation. But the husband’s evidence in this respect was somewhat difficult to follow and ultimately not really pressed, appropriately so.
To be fair, I do not intend to be critical of the parties for not being able to give me an exact accounting of all of the money that was received by them in the past eight (8) years. It would be counsel of perfection for me to expect them to produce such evidence. It suffices to say, though, that the parties split the income seemingly more or less equally, but I cannot be any more precise than that, and certainly each of them did receive a significant income from Suburb C. Equally, the husband had the benefit of living in the property at Suburb C, whereas as a general statement the wife has not.
Likewise, in relation to the property at Town G, the wife has had the benefit of staying at that property when she has wanted to. In respect of the property at Town E, the wife has essentially made that her home base to a very large extent. So the wife has primarily had the benefit of Town E in the same way that the husband has primarily had the benefit of Suburb C, though the income from Suburb C was split more or less equally in terms of the rent.
The parties seem to have had some discussions to try to reach agreement about resolving their property issues, but these were unsuccessful, and ultimately the husband brought these proceedings and the wife consented to them being brought out of time which, again, I might add, was an entirely appropriate concession on her part given that the parties were obviously still financially interconnected.
In terms of the three (3) real properties, the husband has paid the rates, the land taxes and any utility bills in respect of the property at Suburb C, without contribution from the wife. Equally, the wife has paid such expenses for Town E, and Town G (which has no utilities), without contribution from the husband. This is perhaps consistent with the expectation that each has, namely, that the wife will retain Town E and Town G and the husband will be retaining Suburb C.
I turn then to assess the contributions in respect of the three (3) properties individually.
In submissions before me, Mr White argued the point that in a practical sense I should be focusing on the actual dollar figures that were contributed by each party towards the other’s real estate. That is to say, I should be taking into consideration the fact that the wife paid $180,000 towards the husband’s mortgage, but equally he had paid approximately $30,000 in round terms towards the property at Town E, so that there is a net difference between the two figures of about $150,000.
Ms Calise submitted to me that while she had no difficulty in the Court making an allowance for the husband’s financial contribution to the Town E property, which she would put at around $40,000, that it would be wrong to focus on the cash figure she paid towards the mortgage for Suburb C, but rather to look more holistically at all of the work she had done there and the contributions she had made. She sought that the Court assess her contributions as being 40% of the value of Suburb C - or $320,000 - with a deduction of $40,000 in respect of the moneys paid by the husband towards the Town E property so that there was a net adjustment to her of $280,000.
Of course, I am mindful in this assessment that mathematics are relevant. Clearly, in a short relationship such as this one was, the mathematics can be more important at arriving at a just and equitable outcome. But it is not entirely a mathematical exercise, and in truth, the mathematics is not determinative of what would be just and equitable.
Mr White also made a good point that the wife had the benefit of receiving an immediate rental income on her $180,000 investment in the Suburb C home. That is to say, she was immediately receiving $260 per week in round terms. That is a fair submission to make, but equally, the husband was saving himself interest on a mortgage of $180,000 as soon as the wife paid it out. So it seems to me that the benefits go in both directions.
When I consider each of these properties individually, but against the backdrop of the mathematics to which I have referred, and taking into account the contributions that each has made both during the relationship and post‑separation, I come to the following view.
In respect of the Town G property, quite simply, the husband’s contributions to it are de minimis. I do not say that to be disrespectful of the husband in any way, but I simply do not consider that he has any contributions‑based entitlement that is worth mentioning in this case.
When I consider the property at Town E, it is true that the husband contributed a sum of $34,000 early on, but it is also true that the wife undertook the lion’s share of improvements at that property. I would assess the respective contributions of the parties to that property in percentage terms, rather than in strict dollar terms. In that respect, I would assess the wife as having made 60% contribution toward that property and the husband a 40% contribution, essentially driven by his early initial contribution. Given that the value of that property is $100,000, I would therefore relevantly assess the husband’s contributions‑based entitlement to that property at $40,000. This will be offset against what he has to pay the wife for the Suburb C home.
In respect of the property at Suburb C, this is really the critical asset for present purposes because it is worth $800,000. That is to say, it is worth eight (8) times as much as the Town E property. The percentages in respect of Suburb C therefore make a very big difference when converted into dollar amounts. I consider again that it would be appropriate to assess the respective contributions of the parties in percentage terms, rather than dollar terms.
In this respect I am mindful that the husband owned this property before he met the wife, that in a sense he provided the ‘seed capital’ for the property, and that it seems in all likelihood that the wife acquired her joint interest, in a practical sense a half‑interest, at somewhat of a discount.
Having said all of those things, to be fair, the wife’s contribution of $180,000 was a substantial contribution and I am satisfied that the work the wife has undertaken at the property, some of which she has funded, has also had a relevance and a significance in terms of the value of the property, albeit that I cannot put any exact dollar figures on it.
I also note that each of the parties has received other offsetting benefits from the Suburb C home. In the wife’s case she has received an income stream. In the husband’s case, he has saved interest on his mortgage as well as receiving his share of the income which was also increased as a result of the renovation work.
Doing the best I can, and weighing up the evidence that is before me, I assess the parties’ respective contributions-based entitlements in respect of the Suburb C property at 62.5% to the husband and 37.5% to the wife.
In terms of the overall assessment, on my calculation the wife’s dollar entitlement in respect of Suburb C would be a cash payment of $300,000 less the $40,000 offset to the husband in respect of his contributions to Town E – resulting in a cash adjustment to the wife of $260,000.
FUTURE FACTORS
However, that is not the end of the matter. The Court must then consider future factors pursuant to section 90SF of the Act.
Future factors are somewhat vexing in this case.
The wife is quite a bit younger than the husband but has a number of medical conditions as set out in exhibit 1. However, I do not consider that her medical conditions, by and of themselves, warrant any further adjustment in her favour, in circumstances where they are chronic medical conditions which seem to post‑date this relationship, and given the very short nature of the relationship in this case.
The fact is that the parties were in a short relationship. It is not one party’s obligation to guarantee the health of the other or to act as some sort of de facto “health insurance fund” in the event of one of them having a problem. It is not, for example, a long relationship where the parties had children and where perhaps the wife has some post‑pregnancy health issues. That would be entirely a different situation. In my view, it would be unjust for me to take the wife’s medical conditions into account in the circumstances of this individual case, and against the background as well that the husband is himself 70 years of age.
The husband has more financial security than the wife in the sense that he has a guaranteed pension payment which gives him a measure of security she does not have. Moreover, he has the capacity, clearly, to keep renting out the Suburb C home for a rental income of something in the order of $520 per week.
Now, it might be said that he ought not to have to keep renting out his home to other people at his age, and perhaps that is a fair observation. But equally, he has been renting that property out for many, many years now. Moreover, the husband is able to do some casual work as an educator, albeit I accept his evidence that he only works at one employer these days, though when he gets a call to go to work he earns something like $450 per day.
The wife and the husband both seem, on the face of the material before me, to be able to meet their needs and to have a reasonable standard of living, or at least as reasonable as can be obtained by them in the circumstances.
The husband’s income exceeds his expenses. The wife’s income exceeds her expenses as well, and in that respect the wife also has the benefit of a significant asset in New Zealand, namely her 71% share in the property referred to in the judgment. I accept however that there are some difficulties in the wife converting that asset into a liquid cash form, at least at this time, but it is certainly there and the asset is a relevant matter.
There are no children in this case.
The parties can support themselves adequately, in my view, having regard to the circumstances they find themselves in.
There are no relevant creditors, save perhaps the lawyers in respect of the wife’s easement claim, and in that respect I simply make these observations:
·It is clear that when the parties purchased this property in joint names, that it was a joint problem that was looming in respect of the easement. It was clearly a problem when the place was purchased. Now, I know the wife drove the purchase, but the husband was also an equal or a joint owner in the property and he paid or contributed the $34,000 referred to. It seems that the problem emerged after the owner of the adjoining property passed away. It is suggested that there is a dispute now in terms of whether the licence can be converted to an easement;
·Complicating matters, there are a number of blocks of land involved as well as there now being other owners of these other blocks. And it seems that the wife has ‘dug herself into something of a hole’ with these people in the sense that she no longer gets on with them (if she ever did), and that they are now locked in an acrimonious dispute in the Supreme Court. I should also add that the Defendants are apparently accusing her of nuisance and trespass, which are obviously complicating matters as well.
·But be that as it may, one thing is clear - even if the wife had so conducted herself as to have no difficulties whatsoever in respect of the next door neighbours and in respect of registering an easement, the fact remains that it was a problem that at some point had to be dealt with. The problem has to be dealt with now because now the owner of the property next door has passed away.
I think, having regard to justice and equity in this case, and particularly section 90SF(3), and noting that the husband was also a joint owner of the Town E property, that he cannot simply walk away and wipe his hands of a problem that effectively he jointly acquired with the wife when they purchased the property.
However, I do not think that it is just and equitable in any way to expect the husband to share equally in the wife’s overall legal costs in respect of the easement proceedings, in circumstances where, clearly, the proceedings have been conducted in a less than diligent way by the wife and where there are obviously other complications and difficulties that have now arisen. I have already said that there is no proper basis for the balance sheet to include the liability to the Defendant’s lawyers.
In respect, however, of the fact that an easement needed to be drawn up at some point and a proper survey completed, doing the best I can on the evidence before me, I consider it appropriate that there be an allowance to the wife in this respect under section 90SF(3) limited to the amount of $3,000.
It might be said that this figure is, to some extent, plucked from the air, but it is the best I can do on the evidence before me. Put shortly, I think and I am of the view that for the purpose of section 90SF(3) the husband should share in at least some notional burden of the cost of actually securing proper access to the Town E property.
The property certainly should have proper access. There is no other way to look at the matter, other than that proper access is needed, and I note from the judgment that there are survey costs and registration of easement costs and no doubt there are legal costs associated with all of that, so the figure of $3,000, if anything, is probably generous to the husband, but it is the best I can do on the evidence before me.
It was suggested that the wife has an ABN which is current and small business. I accept Mr White’s submission about that. The wife conceded that her ABN is current. It is obvious that she conducts a small business on the property, but I accept her evidence that it is really in the nature of a hobby business more than anything else.
Frankly, if the wife was receiving any serious income from this venture, then I would be surprised that she would have ‘dug herself into the hole’ she has found herself in the easement proceedings, and equally I would have thought that maybe she would be considering being legally represented in this proceeding as well.
I simply do not assess that the wife has any significant income. That is the reality of this case. She does, however, have the property in New Zealand to which I have referred.
I would also add that even if the Court made some allowance for some notional income from her small business, it should also, in fairness to the wife, be observed that she does not make a claim in respect of the expenses of the business either, so she is not trying to ‘have her cake and eat it’ as it were.
The husband has other tenants in the Suburb C home, but is not in another relationship per se, and nor is the wife.
There are really no other relevant matters in my mind that arise.
JUST & EQUITABLE OUTCOME
I think that given the nature of this case and particularly given the shortness of the relationship and the financial contributions of each of the parties, that justice and equity are best served by an order that there be a payment from the husband to the wife calculated as I have indicated.
In a justice and equity sense there is never a perfect solution to a problem such as this, but weighing up all of the evidence and having heard the submissions, I am of the view that justice and equity require the following result:
·Firstly, that the husband pay the wife the sum of $263,000, being her $260,000 net contributions‑based entitlement after Suburb C is offset against Town E, together with a $3,000 adjustment under section 90SF(3) purely in respect of the easement issue;
·Subject only to that cash figure being included, I am otherwise satisfied that the draft order proposed by Mr White as set out in the husband’s proposed minute of orders, for which I express my gratitude, is entirely appropriate and that it would affect the just and equitable result mandated by the legislation, save for the adjustment that the cash payment be $263,000.
I am mindful of the husband’s age and his income and that he will need to take out a loan to pay out the wife, and taking those things into account and having regard to what Mr White submits, I am minded to give the husband until Friday, 23 February 2024 to pay that sum to the wife. That is about eleven (11) weeks.
I certify that the preceding one hundred and thirty-two (132) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Betts. Associate:
Dated: 8 December 2023
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