Travers & Debski
[2022] FedCFamC1F 748
Federal Circuit and
Family Court of Australia (DIVISION 1)Travers & Debski [2022] FedCFamC1F 748
File number(s): BRC 13687 of 2018 Judgment of: HOGAN J Date of judgment: 30 September 2022 Catchwords: FAMILY LAW – FINANCIAL AGREEMENT – Where the respondent seeks that a financial agreement made pursuant to the Property Law Act 1974 (Qld) is declared to be a Part VIIIAB financial agreement that is binding on the parties – Where the financial agreement is found to be not a “recognised” agreement as defined by s 266 of the Property Law Act1974 (Qld) – Where the agreement is not a Part VIIIAB financial agreement.
FAMILY LAW – DE FACTO RELATIONSHIPS – Where the applicant contends that the parties remained in a relationship until 2018 but the respondent contends the relationship ended in September 2010 – Where it is found that the de facto relationship broke down in January 2018 – where the parties sought to be heard about the form of order to be made to reflect the findings made.
Legislation: Family Law Act 1975 (Cth)
Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth)
Family Law Amendment (Validation of Certain Orders and Other Measures) Act 2012 (Cth)
Property Law Act 1974 (Qld)
Cases cited: Bevan & Bevan (2013) FLC 93-545; [2013] FamCAFC 116
Clauson and Clauson (1995) FLC 92-595; [1995] FamCA 10
Dickons v Dickons (2012) 50 Fam LR 244; [2012] FamCAFC 154
Ferraro and Ferraro (1993) FLC 92-335; [1992] FamCA 64
Hayes v Marquis [2008] NSWCA 10
Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93‑143; [2003] FamCA 395
Herford & Berke (No.2) (2019) FLC 93-919; [2019] FamCAFC 182
Hoult & Hoult (2013) FLC 93-546; [2013] FamCAFC 109
Jonah & White (2012) FLC 93-522; [2012] FamCAFC 200Lee Steere and Lee Steere (1985) FLC 91-626; [1985] FamCA 57
Lovine & Connor and Anor (2012) FLC 93-515; [2012] FamCAFC 168
Lynam v Director-General of Social Security (1983) 52 ALR 128; [1983] FCA 249
Mallet v Mallet (1984) 156 CLR 605; [1984] HCA 21
Pastrikos and Pastrikos (1980) FLC 90-897; [1979] FamCA 56
Sinclair & Whittaker (2013) FLC 93-551; [2013] FamCAFC 129
Stanford v Stanford (2012) 247 CLR 108; [2012] HCA 52
TAG v CBS [2016] QCA 318
Waters and Jurek (1995) FLC 92-635; [1995] FamCA 101
Division: First Instance Number of paragraphs: 110 Date of hearing: 8 & 9 July 2021; 1 & 11 October 2021; 20 December 2021 Place: Brisbane Counsel for the Applicant: Mr Coveney with Ms Fitzgerald Solicitor for the Applicant: Bell Legal Group Counsel for the Respondent: Mr Munsie Solicitor for the Respondent: JML Rose ORDERS
BRC 13687 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS TRAVERS
Applicant
AND: MR DEBSKI
Respondent
order made by:
HOGAN J
DATE OF ORDER:
30 September 2022
IT IS ORDERED THAT:
1.The matter is listed for further hearing at 10.00 am on 17 October 2022 for the purpose of hearing the parties about the terms of orders to be made to give effect to the findings made and conclusions expressed in the Reasons for Judgment delivered on 30 September 2022.
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 the pseudonym Travers & Debski has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
HOGAN J:
By way of broad overview, these proceedings require the Court to consider the following issues which arise out of the parties’ previous cohabitation:
(a)whether an agreement, entitled “Financial Agreement”, into which the parties entered on 1 June 2007 pursuant to the Property Law Act 1974 (Qld) (“the Property Law Act”), (“the June 2007 Agreement”[1]) is an agreement under Part VIIIAB of the Family Law Act 1975 (Cth) (“the Act”) that is binding on the parties[2] such that, by virtue of the operation of s 90SA(1) of the Act, this Court does not have jurisdiction pursuant to the Act to make orders adjusting the interests of the parties in property; and
(b)if the June 2007 Agreement is a Part VIIIAB financial agreement that is binding on the parties – whether it should be set aside;[3] and
(c)if the June 2007 Agreement is not a Part VIIIAB financial agreement that is binding on the parties or if it is a Part VIIIAB financial agreement that is binding on the parties but should be set aside:
(i)whether the proceedings commenced by the applicant by Initiating Application filed on 26 November 2018 were commenced within time[4] – which will depend in part at least on whether the parties separated in September 2010 (as asserted by the respondent) or in January 2018 (as asserted by the applicant); and
(ii)if the proceedings were commenced in time – whether, given the circumstances of the relationship between the parties, it is just and equitable to make an order, pursuant to s 90SM of the Act, altering the interests of the parties in property and, if it is, what order is appropriate.[5]
[1] Affidavit of the respondent filed 24 August 2020, Annexure “D1”.
[2] Family Law Act 1975 (Cth) s 90UJ.
[3] Family Law Act 1975 (Cth) s 90UM.
[4] Family Law Act 1975 (Cth) s 44(5).
[5] Family Law Act 1975 (Cth) s 90SM(1)(a).
It is trite to remark that the determination of some of the issues summarised above may obviate the need for some of the others to be the subject of discussion in these Reasons.
Brief summary of the parties’ respective positions
The applicant, who was born in 1947, contended that the June 2007 Agreement is not binding on the parties and, consequently, she is not prevented from bringing proceedings for property settlement.[6] Her alternative position was that, if the Court concluded that the June 2007 Agreement is binding on the parties, it would be persuaded that the same should be set aside because it is void, voidable or unenforceable[7] and/or because the respondent’s conduct in procuring it was unconscionable.[8] In either scenario, she advanced that the Court would be persuaded that the parties were in a de facto relationship between about April 2005 and January 2018 and that, having regard to the circumstances of the same, it is just and equitable and appropriate[9] that orders are made to ensure that she receives property valued at about forty per cent of the total nett value of the property of the parties.[10]
[6] Family Law Act1975 (Cth) s 90SA(3).
[7] Family Law Act1975 (Cth) s 90UM(1)(e).
[8] Family Law Act1975 (Cth) s 90UM(1)(h).
[9] Family Law Act1975 (Cth) ss 90SM(1)(a) and 90SM(3).
[10] Applicant’s Outline of Closing Submissions 24 November 2021 at paragraph 109.
The respondent, who was born in 1952, contended that the June 2007 Agreement is a Part VIIIAB financial agreement that is binding on the parties, is enforceable and has the effect that this Court does not have the jurisdiction to make the orders sought by the applicant.[11] In the event that this primary position did not find favour and the Court determined that the agreement is not binding (or, if it is – that it should be set aside: which he opposed), his contention initially was that the Court would be persuaded that the parties were in a de facto relationship between about December 2006/February 2007 and September 2010 and that those orders which are just and equitable and appropriate in the circumstances are orders which would see the applicant receive a payment representing 34.3 per cent of the value of real property situated at B Street, Suburb C[12] (“the Suburb C property”) and that, otherwise, the parties should each retain all other property of whatever kind (and all entitlement to superannuation) each holds in their respective names or which is otherwise under their respective control.
[11] Family Law Act1975 (Cth) s 90SA(1).
[12]More particularly described as all of that real estate registered in Queensland as Lot … Registered Plan … bearing Title Reference ….
In the event that his primary positions were not accepted, the submissions made on his behalf ultimately contended that it was just and equitable for an order altering the interests of the parties in property to be made and that such order should be made so as to cause the applicant to receive property valued at $317,232.85 – namely, five per cent of the total nett value of the property of the parties, which is agreed to be $6,344,657.
Given that the respondent advanced that Division 2 of Part VIIIAB of the Act does not apply to the property or financial resources of the parties or of either of them because the June 2007 Agreement is a Part VIIIAB financial agreement that is binding on the parties[13], he bears the onus of establishing that:
(a)there was, in fact, an agreement or contract between the parties, which agreement or contract was manifested in the June 2007 Agreement; and, if this is so, that
(b)the June 2007 Agreement is a “Part VIIIAB financial agreement”; and, if it is, that
(c)the June 2007 Agreement is a “Part VIIAB financial agreement that is binding on them.[14]
[13] Family Law Act1975 (Cth) ss 90SA(1)(b) and (c).
[14] Hoult & Hoult (2013) FLC 93-546.
Is the June 2017 Agreement an agreement?
The respondent’s evidence included that, within months of starting the relationship with the applicant, he asked Mr D, a solicitor whom he had previously engaged for other matters, to prepare a financial agreement.
I accept Mr D’s evidence that the relevant file was opened in 2005 and closed on 14 August 2007. I also accept that Mr D’s practice did not store all documents digitally in 2005 or 2007 and that, whilst he continues to hold the original of the June 2007 Agreement, his thorough searches revealed that the file no longer exists.
I accept that, despite this, Mr D was able to reconstruct the following documents:
(a)a memorandum which said:
Ring client – ask him what he wants to do about this financial agt – does he want to finalise this or not. If he doesn’t tell him we’ll just render a tax invoice in relation to the draft and put the file away. If he does want to proceed can he advise us in relation to any amendments.
and which recorded that, when “Ms G” called him on 12 September 2006 to ask him about the financial agreement with the applicant, the respondent said that he wanted to finalise it but had not had the chance to come in and “he will give instructions in the next few days”;[15] and
[15] Affidavit of Mr D filed 9 March 2020, Annexure “D-03”.
(b)correspondence to the respondent dated 30 November 2006 (which was sent only by facsimile) which advised “agreement attached as requested”;[16] and
[16] Affidavit of Mr D filed 9 March 2020, Annexure “D-04”.
(c)correspondence to the respondent dated 8 December 2006, addressed to him at “E Street, Suburb F” (“the E Street property” which was owned by the applicant when the parties met) which:
(i)referred to the “draft Agreement” and the respondent’s previous request; and
(ii)outlined, amongst other things, that the reason for including the independent certification was to “strengthen the agreement and remove any doubt subsequently that the parties executing did not have the benefit of the advice”; and
(iii)advised that if either party did not want to obtain independent legal advice then they should both execute the document marked “A-Without legal advice” but, if they were both content to have independent legal advice, they should both execute the document marked “B-With legal advice”;[17] and
(d)correspondence to the respondent dated 22 February 2007 (addressed to a post office box at Suburb H), which:
(i)referred to the agreement that Mr D had prepared after instructions; and
(ii)noted that Mr D had asked that the respondent to complete execution of it as requested, but he had not received any response; and
(iii)advised that, if the respondent no longer wished to proceed with the matter it was his affair; and
(iv)said that, if he did wish to proceed, he was asked to execute the documents as indicated or attend on Mr D so he could assist him to complete; and
(v)advised that Mr D needed to finalise the file one way or the other.[18]
[17] Affidavit of Mr D filed 9 March 2020, Annexure “D-05”; Exhibit 24.
[18] Affidavit of Mr D filed 9 March 2020, Annexure “D-06”.
I accept Mr D’s evidence to the effect that the 8 December 2006 correspondence was sent to the respondent at the E Street address because it was his (Mr D’s) understanding that the respondent was then living at that address. Given that the respondent was Mr D’s client, it seems much more likely than not that he was the source of this information. The fact that the 8 December 2006 correspondence was addressed to the respondent at the applicant’s E Street property seems to me to provide substantial support for the applicant’s contention that the parties lived there together before moving to live together in the Suburb C property. In my view, the correspondence also contradicts the respondent’s implied assertion that he and the applicant only started to live together when they moved to live in the Suburb C property – saying that a property was “maintained” is not evidence that it was where a person lived.
It is, I think, clear that the terms of the June 2007 Agreement were drafted as they were on the respondent’s instructions to Mr D. After all, that was the task for which the respondent had engaged Mr D, as is reflected in the tax invoice dated 8 December 2006 which outlines that the account of $750 was for the costs of and incidental to Mr D acting on the respondent’s behalf in relation to the agreement, including the preparation of drafts of the same.[19] The respondent contended that both he and the applicant gave instructions to Mr D in relation to the June 2007 Agreement. However, if “instructions” are accorded the meaning usually attributed to that word when discussing the interactions between a solicitor and that solicitor’s client, I do not accept that this was the case – the respondent was Mr D’s client (and not the applicant) in so far as the preparation of the June 2007 Agreement is concerned.
[19] See Exhibit 35.
I think it much more likely than not that, from the time the respondent engaged Mr D to prepare the financial agreement until it was executed on 1 June 2007, a number of drafts of the agreement were prepared and provided by Mr D to the respondent.[20] I also think it highly likely that earlier drafts contained more limited information about the parties’ financial circumstances than is found in the June 2007 Agreement.[21]
[20] See Exhibit 35.
[21]Compare the details contained in Schedules 1 and 2 of Exhibit 32 (an unsigned and undated draft Financial Agreement) with the details contained in Schedules 1 and 2 of the June 2007 Agreement.
At the highest, Mr D may have obtained some information about the applicant’s financial position from her directly – although I also note he accepted, when cross-examined, that such information might have been provided to him by the respondent or provided to him by the parties jointly. There is no evidence to suggest that the applicant had any input into the composition of the terms of the June 2007 Agreement as opposed to providing some details about her chattels and property for inclusion in the schedule to the June 2007 Agreement which asserts her assets and liabilities at the time.
I accept that, when the parties attended on Mr D on 10 April 2007, they signed a Contract to make Mutual Wills[22] (“the Contract”) and their respective Wills. [23] I accept that, before this event, Mr D had not provided the applicant individually with any documents such as drafts of the same or drafts of the financial agreement. Despite the Contract referring to “the Binding Financial Agreement which we have entered into”, it is clear that the parties had not then entered into any binding financial agreement.
[22] Exhibit 12.
[23] Exhibits 13 and 21.
The general tenor of Mr D’s evidence was that the financial agreement was not signed on 10 April 2007 because the applicant said that she did not want to sign it then and wanted to check to see if she wanted to get some legal advice about it. He said he recalled that she had wanted to double-check something and that it might have been then that he, in essence, raised with her whether she wanted to get some independent financial advice about the agreement or even suggested to her, given that he was not acting for her, that she would be better off going to get independent advice about the agreement. He did not seem to me to accept the suggestion that the applicant was, as at April 2007, happy to sign the financial agreement.
Mr D’s evidence about what happened on 1 April 2007 contradicts the respondent’s rejection of the contention that the applicant was not comfortable about signing the financial agreement that day. Whilst the respondent contended that the applicant did not sign the financial agreement that day because she needed to compile her list of assets, Mr D’s evidence did not mention this. To the extent that the accounts about what happened on 10 April 2007 differ, I prefer the evidence given by Mr D to that given by the respondent.
It is accepted that, when the parties returned to see Mr D on 1 June 2007 (by way of joint appointment which I consider much more likely than not to have been made by the respondent), each signed the June 2007 Agreement. It is accepted that, at this time, the parties were both ordinarily resident in Queensland (which is a participating jurisdiction) [24] and were in a de facto relationship.
[24]Family Law Act1975 (Cth) s 90UA; Family Law Amendment (Validation of Certain Orders and Other Measures) Act 2012 (Cth) s 2(1)(a)(iii).
Despite clauses 10 and 11 of the June 2007 Agreement positively asserting that each of the parties had received independent legal advice before signing the same, it is clear that they had not. I accept that Mr D determined to record the fact of the parties not obtaining independent legal advice before they each signed the June 2007 Agreement by inserting Clause 18 (which is in the following terms: “[Mr Debski] and [Ms Travers] are both aware that they have the right to obtain independent legal advice prior to the execution of this Agreement but have elected to waive that advice.”) into it.
Whilst the applicant said, when cross-examined, that Mr D had read through the June 2007 Agreement with her, this does not, to my mind, necessarily constitute him explaining the contents of the same to her – after all, the respondent was his client. I accept that the applicant was not given legal advice about the consequences for her of signing the June 2007 Agreement. I accept that both parties were present with Mr D when the June 2007 Agreement was signed by each of them and, on balance, I accept the thrust of the applicant’s evidence to the effect that she felt pressured and overwhelmed and consequently signed the agreement as requested.
Despite my acceptance of this aspect of the applicant’s evidence, I do not accept that, when she signed the June 2007 Agreement she thought that she was signing her Will; I think it more likely than not that, in recounting matters in her evidence, the applicant confused the events, especially given that it is clear that the Wills were signed in April 2007 and the June 2007 Agreement was not signed until 1 June 2007. I am persuaded, on balance, that it is more likely that, when she signed the June 2007 Agreement, the applicant understood that she was signing an agreement about how property matters would be dealt with in the event of a breakdown in the de facto relationship, even if she did not necessarily appreciate the potential consequences for her of signing such an agreement in the terms in which it was drawn. Given these conclusions, I decline to accept the submissions made by counsel for the applicant that I should conclude that there was not the requisite meeting of minds between the applicant and the respondent when the June 2007 Agreement was signed.
Is the June 2007 Agreement a “Part VIIIAB agreement”?[25]
[25]I note the respondent accepted the recitation of the law contained within paragraphs 39 to 47 of the Applicant’s Outline of Closing Submissions filed 24 November 2021.
Given that the June 2007 agreement was made pursuant to the Property Law Act and prior to the commencement, on 1 March 2009, of the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth) (“the Amending Act”) – which, amongst other things, amended the Act to bring de facto financial causes within jurisdiction[26] – it is necessary to have regard to item 88 (Pre-commencement agreements – made during de facto relationships) in Division 3 (De facto relationships linked to earlier participating jurisdictions) of Part 2 of Schedule 1 of the Amending Act.
[26]And which has the effect that, after commencement on 1 March 2009, agreements which, by virtue of the operation of the relevant provisions in the Amending Act are “Part VIIIAB financial agreements” for the purposes of the Act can only be enforced, varied ,terminated or otherwise set aside under the Act.
If item 88 of the Amending Act applies, then, for the purposes of the Act, the June 2007 Agreement is taken to be a Part VIIIAB financial agreement made as mentioned in subsection 90UC(1) of the Act to the extent that it deals with “the eligible agreed matters” – which term is relevantly defined in item 88(3) as being how all or any of the property or financial resources of either member of the couple at the time the agreement is made, or at a later time and during the de facto relationship, is to be distributed in the event of the breakdown of the de facto relationship and matters incidental or ancillary to these matters.
The matters which must exist in order for item 88 of the Amending Act to apply are set out in item 88(1). In so far as they are concerned, there was no dispute between the parties that the following matters are established:
(a)the parties, prior to 1 March 2009 and while in a de facto relationship, made a written agreement (namely, the June 2007 Agreement), signed by both of them, with respect to any of the eligible agreed matters mentioned in sub-item (3);[27] and
(b)the June 2007 Agreement was made under a preserved law[28] of an earlier participating jurisdiction[29] (here, the Property Law Act); and
(c)immediately before 1 March 2009, the June 2007 Agreement was in force under the preserved law and the de facto relationship between the parties had not broken down and they were not married to each other.[30]
[27]Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth) sch 1 pt 2 div 3 item 88(1)(a).
[28]Defined in Part 2 of Schedule 1 to the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth) to mean "a law of the State or Territory relating to financial matters relating to the parties to de facto relationships arising out of the breakdown of those de facto relationships".
[29]Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth) sch 1 pt 2 div 3 item 88(1)(b) and see also: Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth) sch 1 pt 2 div 1 item 85; Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth) s 2; Family Law Amendment (Validation of Certain Orders and Other Measures) Act 2012 (Cth) s 2(1)(a)(iii).
[30]Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008 (Cth) sch 1 pt 2 div 3 item 88(1)(d).
What was disputed is whether item 88(1)(c) – which provides that “a court could not, because of the preserved law, make an order under that law that is inconsistent with the agreement with respect to any of the eligible agreed matters” – is satisfied.
Section 274(1) of the Property Law Act is the provision which provides that a court must not make a property adjustment order[31] which is inconsistent with an agreement’s provisions on financial matters.[32] It is in the following terms:
If a court is satisfied that there is a recognised agreement, the court must not make a property adjustment order inconsistent with the agreement’s provisions on financial matters.
[31]Defined for the purposes of the Property Law Act by s 259 of the same to mean an order made under s 286 of that Act.
[32]Whilst s 274(1) is, by virtue of s 274(2) subject to sections 275 and 276 of the Property Law Act, it was not suggested that either were relevant.
In order to be a “recognised agreement”, an agreement must satisfy s 266 of the Property Law Act, which is as follows:
266 Meaning of recognised agreement
(1)A “recognised agreement” of de facto partners is a cohabitation or separation agreement of the de facto partners that –
(a) is a written agreement; and
(b) is signed by the de facto partners and witnessed by a justice of the peace(qualified) or a solicitor; and
(c)contains a statement of all significant property, financial resources and liabilities of each de facto partner when the de facto partner signs the agreement.
(2) Whether all significant property, financial resources and liabilities of a de facto partner are stated depends on whether the value of a property, financial resource or liability of the de facto partner that is not stated is significant given the total value of the de facto partners’ stated property, financial resources and liabilities.
It follows from the above that, if the June 2007 Agreement is a “recognised agreement” pursuant to s 266 of the Property Law Act, then the requirement imposed by item 88(1)(c) of the Amending Act will be satisfied and, given it is accepted that the other requirements of item 88 are satisfied (as noted above), it will be taken to be a Part VIIIAB financial agreement made as mentioned in subsection 90UC(1) of the Act (that is, a financial agreement made during a de facto relationship) to the extent that it deals with how all or any of the property or financial resources of either party is to be distributed in the event of the breakdown of the de facto relationship and matters incidental or ancillary to that.
I turn now to consider whether the June 2007 Agreement is a “recognised agreement” for the purposes of the Property Law Act.
It is clear that the June 2007 Agreement is a “cohabitation agreement” (as defined by s 264 of the Property Law Act), is a written agreement and was signed by the parties and witnessed by a solicitor. The real point of contention between the parties was whether the June 2007 Agreement contains a statement of all significant property, financial resources and liabilities of each party as at 1 June 2007, having regard to the mechanism provided by the terms of subsection 266(2) by which such query is to be answered.
The applicant contends that it does not; the respondent contends that it does.
Each of the applicant’s assets, set out in Schedule 2 of the June 2007 Agreement, are accompanied by assertions of value. In addition, this schedule states “rent moneys collected from the properties listed in 1 and 2 above”, albeit that no value or amount is provided for this entry. In contrast, the respondent’s assets and liabilities, set out in Schedule 1 of the June 2007 Agreement, are not accompanied by any assertion about their respective value. The same is the case in relation to the entry which deals with the respondent’s liabilities – which simply states “National Australia Bank Limited – charges over companies and assets with fluctuating liability”. Further, whilst item 2 of the schedule states:
All shares and interests in the following companies:-
2.1 [J1 Pty Ltd]
2.2 [J2 Pty Ltd]
2.3 [J3 Pty Ltd]
2.4 [K Pty Ltd]
2.5 [L Pty Ltd] as Trustee in the [Debski Family Trust]
2.6 [M Property Trust]
2.7 [Debski Family Trust]
there is no further information provided about matters such as: the value of the respondent’s shares and interests in the same; the benefits he obtains as a consequence of his ownership of such shares and whatever other interests he has in the same; any property that, under a discretionary trust such as the Debski Family Trust, may become vested in him or applied for his benefit; any property the disposition of which is wholly or partly under his control and that may be used or applied by him or his behalf for his benefit.
This omission is arguably relevant given that 263 of the Property Law Act defines the term “financial resources” as follows:
263 Meaning of financial resources
A person’s “financial resources” include the following–
(a) a prospective claim or entitlement under a scheme, fund or arrangement under which superannuation, resignation, termination, retirement or similar benefits are provided to, or in relation to, the person;
(b) property that, under a discretionary trust, may become vested in, or applied to the benefit of, the person;
(c) property the disposition of which is wholly or partly under the control of the person and that may be used or applied by or on behalf of the person for the person’s benefit;
(d) any other valuable benefit for the person.
I accept that the proper interpretation of s 266 of the Property Law Act is that the reference to “value of property, financial resource or liability” in s 266(1) of the same defines the criterion of significance for the purpose of s 262(1)(c), rather than requiring that such value (or values) be stated in an agreement.[33] I also accept that the “mere non-inclusion” of significant property, financial resources or liabilities that satisfy the “significance test” as propounded by s 266(2) of the Property Law Act – namely, whether or not the value of the omitted item is significant given the total value of the stated property, financial resources and liabilities of the de facto partners – is sufficient to have the legal consequence that the agreement is not a “recognised agreement” irrespective of the knowledge a party has or does not have about that item: that is, knowledge of an omitted item is irrelevant.[34]
[33] TAG v CBS [2016] QCA 318 at [27].
[34] TAG v CBS [2016] QCA 318 at [28] and [29].
Whilst the June 2007 Agreement purports to contain a statement of all significant property, financial resources and liabilities of the parties (via the schedules which relate to each of them respectively), the applicant has established that, as at 1 June 2007, the respondent had a 20 per cent interest in real property situated at O Street, Suburb N, Victoria (“the Suburb N property”). This property is not included in the schedule of the respondent’s assets and liabilities in the June 2007 Agreement. Consistent with the absence of evidence about the value of any of the respondent’s property, financial resources and/or liabilities as at 1 June 2007, there is no evidence about the value of the Suburb N property at that time – all that can be said is that the respondent received $410,411.42 in early 2020 following the sale of the same.
The applicant has also established, given the contents of the financial statements for the Debski Family Trust (“the Trust”) for the 2006 financial year, that she was a beneficiary of the same when the June 2007 Agreement was signed. This interest, which seems to me to amount to a valuable benefit for her (given the distributions recorded then and in following years when compared to the income she was then earning from her own personal exertions and which she continued to earn on various ad hoc bases thereafter) arguably comes within the definition of “financial resources” outlined above. There is nothing in the definition of “financial resources” or in s 266 itself that requires the same to be, in essence, guaranteed of existing indefinitely (or even at any time) after the relevant agreement is signed and, consequently, I decline to accept the submission made by counsel for the respondent insofar as the same advance something to the contrary.[35] The schedule of the applicant’s assets and liabilities in the June 2007 Agreement does not contain any reference to her being a beneficiary of the Trust.
[35] Respondent’s Outline of Submissions filed 19 December 2021 at paragraph 73.
The applicant also contended that, given that the respondent asserted that she had various interests in property (namely, an interest in a unit at Suburb P, an interest in two factories situated in Q Street, Suburb R, an interest in real property situated in S Street, Suburb T and the financial resource constituted by rental receipts from the Suburb P unit), none of these were listed in the schedule of her assets and liabilities. However, given that the applicant disputed the existence of these interests, and I am not persuaded on the evidence before me that she held such interests when she signed the June 2007 Agreement, I reject this contention.
Whilst not the subject of any specific discussion during the trial, the parties’ respective schedules to the June 2007 Agreement do not contain any reference at all to the interest that each had, as tenants in common in equal shares, in the Suburb C property following the acquisition of the same by contract dated mid-2006, which settled later that year. The only specific reference to the Suburb C property is in Clause 13 of the June 2007 Agreement – which asserts, in essence, that “the ownership share” of the property “is owned 65.7% by [Mr Debski] and 34.3% owned by [Ms Travers]” and provides that:
(a)the respondent agrees to “buy out” the applicant’s “share of the residence” by paying funds into a specified bank account which are to be used to pay “all living, food, household items, electricity, council rates, telephone, maintenances, traveling and holidays, cars, caravans and boat expenses”; and that
(b)all monies drawn from the account referred to in subparagraph (a) were to be “split 50/50” – that is, 50 per cent for his living expenses and 50 per cent for the applicant’s living expenses (clearly, irrespective of whether the withdrawn funds were in fact applied for the benefit of a party); and
(c)the 50 per cent of the funds apportioned to the applicant for her living expenses “is to be deducted from the amount owed to [Ms Travers] by [Mr Debski] for the purchase of her share of the house” (although the agreement is completely silent about matters such as: the amount said to be owed by the respondent to the applicant for the purchase of her share in the house; the basis on which this amount was to be calculated; the time at which this amount was to be calculated).
In the absence of evidence which establishes the total value, as at 1 June 2007, of the respondent’s property, financial resources and liabilities and the value of the property omitted from his schedule of assets and liabilities, I am not persuaded that the respondent has established that the June 2007 Agreement contains a statement of all significant property, financial resources and liabilities of each of himself and the applicant when they signed it on 1 June 2007. Given this, I consider that the June 2007 Agreement is not a “recognised agreement” as defined by s 266 of the Property Law Act. It follows from this conclusion that s 274 of the Property Law Act does not apply to prevent a court from making a property adjustment order that is inconsistent with the agreement’s provisions on financial matters: consequently, item 88(1)(c) of the Amending Act is not satisfied and, therefore, item 88 of the Amending Act does not apply. The end result is that the June 2007 Agreement is not taken to be a Part VIIIAB financial agreement as mentioned in subsection 90UC(1) of the Act.
Given this conclusion, s 90SA(1) of the Act does not apply to exclude the operation of Division 2 (Maintenance, declarations of property interests and alterations of property interests) of the Act. Consequently, given that it is accepted that the prerequisites prescribed by sections 90SB(a) and 90SK(1) or 90SK(1A) are satisfied in this case, I may, pursuant to s 90SM(1)(a) of the Act, make such order as I consider appropriate altering the interests of the parties to the de facto relationship. Of course, I must not make such order unless satisfied that, in all the circumstances, it is just and equitable to make the order and, in considering what order (if any) should be made, I must take into account the matters set out in s 90SM(4) of the Act.
Were the proceedings commenced within time?
Subject to the grant of leave,[36] a party to a de facto relationship may apply for an order under s 90SM of the Act only if, relevantly, the application is made within the period of two years after the end of the de facto relationship.[37]
[36] Family Law Act 1975 (Cth) s 44(6).
[37] Family Law Act 1975 (Cth) s 44(5)(a)(i).
The respondent asserted that the de facto relationship between the parties ended in September 2010 when his then solicitor sent correspondence to the applicant advising her of this fact. If his contention is accepted, the applicant did not apply for an order under s 90SM within the prescribed period of time because her Initiating Application was filed on 26 November 2018. If, though, the applicant’s contention that the parties’ de facto relationship ended on 18 January 2018 (when the respondent moved out from the Suburb C property) is accepted, her application for a s 90SM order was clearly made within time.
When did the de facto relationship end?
Relevantly,[38] a person is in a de facto relationship with another person if, having regard to all of the circumstances of their relationship, they have a relationship as a “couple living together on a genuine domestic basis”.[39] Whilst “the circumstances of their relationship” referred to above may include any or all of the matters particularised in s 4AA(2) of the Act, none of these are either collectively or individually determinative of the factual determination to be undertaken by the Court; rather, in determining whether, as a matter of fact,[40] a de facto relationship existed over a certain period of time or not, the Court is entitled to have regard to such matters and attach such weight to any of them and to any other matter as may seem appropriate to the Court in the circumstances of the case.[41]
[38]It being uncontentious that the applicant and respondent are not legally married to each other and are not related by family.
[39] Family Law Act 1975 (Cth) s4AA(1)(c).
[40] Jonah & White (2012) FLC 93-522 at [39]; Sinclair & Whittaker (2013) FLC 93-55 at [65].
[41] Family Law Act 1975 (Cth) ss 4AA(3) and 4AA(4).
In Sinclair &Whittaker[42] the Full Court adopted[43] the observations of Fitzgerald J in Lynam v Director-General of Social Security[44] that:
Each element of a relationship draws its colour and its significance from the other elements, some of which may point in one direction and some in the other. What must be looked at is the composite picture. Any attempt to isolate individual factors and to attribute to them relative degrees of materiality or importance involves a denial of common experience and will almost inevitably be productive of error. The endless scope for differences in human attitudes and activities means that there will be an almost infinite variety of combinations of circumstances which may fall for consideration. In any particular case, it will be a question of fact and degree, a jury question, whether a relationship between two unrelated persons of the opposite sex meets the statutory test.
[42](2013) FLC 93-551 at [94].
[43] Ibid [55].
[44](1983) 52 ALR 128 [131].
That is, in determining whether the parties were or were not in a de facto relationship at a particular time or during a particular period of time, the Court should look to the composite or whole picture, established by the evidence before it, to determine whether, in a particular case, the relationship established by the evidence satisfies the statutory test.[45]
[45]See, for example: Herford & Berke (No. 2) (2019) FLC 93-919; Sinclair & Whittaker (2013) FLC 93-551 and the reference therein at [55] to Fitzgerald J in Lynam v Director-General of Social Security (1983) 52 ALR 128 at 131.
Given that the respondent’s position was that the de facto relationship between the parties broke down in September 2010 (and that, whilst he and the applicant continued to live under the one roof in the Suburb C property until he moved out from the same on about 17 January 2018, they were not then in a de facto relationship) it is necessary to look to the composite picture of the parties’ interactions, actions and engagements with others after September 2010 in order to determine whether the de facto relationship ended then or, as the applicant contended, continued until the respondent’s January 2018 departure from the Suburb C property.
Before doing that it is, I think, useful to note that the evidence upon which the respondent relied for his assertion that that the parties’ de facto relationship ended in September 2010 included that, following an altercation while on a cruise with the applicant in early 2010, he temporarily moved out of the Suburb C property and resided in business premises at Suburb U which were under his control. I accept that he caused correspondence dated 27 September 2010 (“the September 2010 correspondence”) to be sent by his then solicitors (V Solicitors) to the applicant. I accept that in this correspondence, Mr W advised the applicant, in essence, that he had been asked to assist the respondent in enforcing the terms of the June 2007 Agreement, that the respondent had told him that his relationship with her “appears to have broken down irretrievably” and that she seemed unwilling to comply with the agreement (in particular, clause 13 of the same).
I accept that the September 2010 correspondence also advised the applicant:
(a)to take it as the respondent’s written notice of his intention to dispose of his interest in the Suburb C property; and
(b)that she had told the respondent that she was not in a position to acquire his interest in the property and was going to throw any lawyer’s letter in the bin; and
(c)that the respondent was not prepared to buy her interest in the Suburb C property; and
(d)that she should take it as his written notice of intention to separate (if he had not already provided her with a separate note in that regard).
Despite the assertions contained within this correspondence, the respondent subsequently resumed living with the applicant in the Suburb C property. He took no steps to implement his asserted intention to dispose of his interest in the Suburb C property even though he clearly had the benefit of legal representation; instead he continued to cause the mortgage repayments to be paid until the borrowings were discharged in 2011. In fact, there is no evidence to suggest that the respondent took any further formal steps at all to seek to enforce the June 2007 Agreement before he started proceedings in the Supreme Court in late 2018 by which he sought the sale of the Suburb C property in reliance on it.
Whilst the respondent’s evidence included that he had returned to live in the Suburb C property because he considered it was “his” (as he was the person who had caused the deposit associated with its purchase and the mortgage repayments to be paid), this evidence does not explain why, having caused his solicitors to advise the applicant in September 2010 of his intention to sell his interest in the Suburb C property, he took no steps consistent with that expressed intention – particularly if, in fact, the de facto relationship between the parties had finally broken down.
I accept that, after 27 September 2010 and despite the respondent’s contention that their de facto relationship had finally broken down:
(a)the respondent took no formal steps to end the parties’ joint ownership of the Suburb C property – which is to be contrasted with his actions after January 2018, given that he commenced proceedings in the Supreme Court later that year of that year to seek orders for the sale of the property; and
(b)the respondent took no steps to cause the parties’ joint indebtedness to a commercial lender, in respect of the jointly loaned $650,000 used to fund the purchase of the Suburb C property, to be extinguished until he caused the facility to be paid out in 2011; and
(c)the respondent, in his capacity as sole shareholder and director of L Pty Ltd (“L Pty Ltd”) – which is the corporate trustee of the Debski Family Trust, the beneficiaries of which are defined by its Deed to be the respondent, his spouse and his children – continued to cause the Trust’s financial statements to record the applicant as a beneficiary of the same until 30 June 2018 such that:
(i)according to the financial statements for the year ended 30 June 2015, the applicant’s opening balance was $244,385 and she was recorded as having taken no drawings;[46] and
[46] Exhibit 25.
(ii)according to the financial statements for the year ended 30 June 2016, the applicant was recorded as having drawings of $47,800;[47] and
[47] Exhibit 25.
(iii)according to the financial statements for the year ended 30 June 2017, the applicant was recorded as having drawings of $77,275;[48] and
[48] Exhibit 18.
(iv)according to the financial statements for the year ended 30 June 2018, the applicant was recorded as having drawings of $31,500;[49] and
[49] Exhibit 18.
(d)the respondent caused L Pty Ltd to make the following payments to the applicant or for her benefit:
(i)in December 2015: payments totalling $21,800;[50] and
[50] Exhibit 33, page 54.
(ii)in January 2016: payments totalling $11,000;[51] and
[51] Exhibit 33, page 65.
(iii)in March 2016: payments totalling $20,400;[52] and
[52] Exhibit 33, pages 63 to 65.
(iv)in January 2017: payments totalling $20,975;[53] and
[53] Exhibit 33, pages 112 to 113.
(v)in March 2017: payments totalling $23,000;[54] and
[54] Exhibit 33, page 114.
(vi)in June 2017: payments totalling $3,000;[55] and
[55] Exhibit 33, page 124.
(vii)in August 2017: payments totalling $11,000.[56]
[56] Exhibit 33, page 131.
(e)the respondent appeared to allow the applicant to use a secondary credit card and only caused an investigation into her use of the same by the issuing bank in March 2018; and
(f)the applicant and respondent continued to holiday together both domestically and internationally (including by taking cruises of long duration during which they shared a cabin and caravanning) between about late 2010 and late 2017 to the extent that the respondent accepted that, when their trips of whatever nature were added together, they added up to about 100 trips; and
(g)in early 2012, the applicant organised a surprise 60th birthday celebration for the respondent at the Suburb C property, to which she invited long-standing friends of hers whom had met the respondent at various times before September 2010 and in respect of which the evidence given by Mr Z (one of the respondent’s long-standing friends) included that he understood that they were then in a relationship (although I note that this assertion is contradicted by the evidence given by the respondent’s daughter, Ms AA, to the effect that she thought they were friends); and
(h)an invoice dated mid-2013 in relation to the purchase of a new caravan recorded that the same was sold to “[Debski] & [Travers]” and was addressed to the Suburb C residence by that term;[57] and
[57] Exhibit 30.
(i)the parties continued to attend various celebratory events (such as Christmas and birthday celebrations) together, including:
(i)in early 2011: the applicant’s son’s engagement party; and
(ii)at Easter 2011: visiting and staying with the BB Family (who were friends of the applicant); and
(iii)in late 2011: the applicant’s son’s wedding in Country CC; and
(iv)in 2012: travelling with Mr & Mrs DD on a cruise between EE Region and Australia, during which they shared a cabin; and
(v)in 2014: the applicant’s grandson’s first birthday celebration; and
(vi)in 2014: travelling together with the BB Family to attend the FF Town races (during which they were accommodated as explained by the applicant and Mr BB); and
(vii)in 2014: spending time with Mr & Mrs DD in City GG during the course of them travelling around the United States of America together; and
(viii)in 2015: attending a 65th birthday celebration for the BB Family; and
(ix)in 2016: travelling with Ms HH on a 10 day caravan holiday, during which they occupied the same bed; and
(j)the parties had booked to travel on a cruise in 2018, which booking was cancelled by the respondent on behalf of both of them in late 2017 because the dates clashed with Ms AA’s wedding; and
(k)Ms AA had included the applicant on the wedding invitation she sent to the respondent for her 2018 wedding.
Ms AA’s evidence included that she had included the applicant on the wedding invitation she sent to her father for her 2018 wedding because, as far as she could tell, they were living together. Whilst she may well have decided to invite the applicant to her wedding irrespective of the nature of the relationship between her father and the applicant at that time (given her evidence about their joint involvement in organising the respondent’s 60th birthday celebration in 2012, that the applicant had spent Christmas with her and her brother and his family at Suburb C in 2014 and that the applicant had participated in a family catch-up with her, her brother and his family at the Suburb C property in 2017), I think it highly unlikely that she would have invited the applicant in the way that she did if she had formed the view that they were nothing more than co-tenants in the Suburb C property.
I note that the respondent’s evidence included that, after the September 2010 correspondence was sent, he slept in a different room to the applicant at the Suburb C property. I note that the applicant denied that this was the case. Whilst I think it highly likely that, given the volatile and tumultuous nature of the parties’ relationship, there were occasions on which they did not share the same room at the Suburb C property, their joint decision to share a cabin when cruising and a caravan during their domestic travels suggests that these physical separations did not necessarily indicate the cessation of their de facto relationship.
It is, I think, probably useful if I record that I decline to accept the submissions made by counsel for the respondent to the effect that I should disregard the evidence given by the witnesses called in the applicant’s case, or accord it extremely limited weight, on the basis that they are not independent, lack objectivity and have provided evidence only to support her case. Whilst I accept that it is always necessary to assess carefully the evidence given by persons known to parties and to be alert to the possibility that the same is deliberately untrue, I am not remotely persuaded in this case the any of those witnesses positively advanced something that they knew to be untrue. I generally accept the evidence that they have given about their observations of the parties’ interactions and the actions of each of them and prefer their accounts to those given by the respondent with the same are inconsistent.
I decline to accept the respondent’s contention that he shared a cabin with the respondent during the cruises that they took together simply because this was the cheaper option. Given the general tenor of his evidence about the applicant’s behaviour toward him (for example, that she tagged along on various travels he took after September 2010 and, in essence, refused to accept the cessation of their relationship), I struggle to accept his assertion that, in travelling as they did between 2012 and 2017, he and the applicant were doing so as “mates” rather than partners. Whilst the respondent’s evidence included that the various payments made by L Pty Ltd to the applicant between 2015 and 2017 were largely related to them travelling together, her relatively parlous financial situation at the time seems to me to make it more likely than not that, whatever they related to, such payments were made for her benefit.
Despite all of the matters outlined in paragraph [50] above, I also accept that, in December late 2013, the applicant advised Centrelink that the de facto relationship between the parties had ended on 18 January 2011 – although I note that this was not the date advanced by the respondent as being the date on which the parties’ de facto relationship ended.
I note that the applicant’s evidence, when cross-examined, included that she had lied to Centrelink when she advised that she was not in a de facto relationship – she said, in essence, that she had acted as she had because she needed financial support. Her evidence was that, despite lying to Centrelink, she was not lying when she said, under oath, that the parties’ de facto relationship ended in January 2018. I note that, during her cross-examination, the applicant accepted that: between 2013 and 2018, she did not inform Centrelink that she had rekindled a de facto relationship with the respondent; during a January 2014 conversation with a Centrelink employee she said that she and the respondent were both free to form relationships with others (although I note that monogamy is not a prerequisite to a de facto relationship and that the Act provides that, for its purposes, a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship[58]); in early 2018, she informed Centrelink that she and the respondent had been separated under the one roof between 2014 and 2018 ( a contention that, again, does not accord with the respondent’s assertion that the de facto relationship ended in September 2010), that before this the respondent had had affairs and that in the week prior to the conversation, they had been talking about reconciling after they had gone away on a cruise together. I also note that aspects of the content of the Centrelink applications prepared by the applicant[59] are completely inconsistent with the sworn evidence she gave in the proceedings. As an aside, I note that one of the documents the applicant attached to one of her late 2013 Centrelink applications was a water and sewerage account which is in the names of both of the parties.
[58] Family Law Act 1975 (Cth) s 4AA(5)(b).
[59] Exhibits 3 and 4.
I also note that one of the late 2013 Centrelink applications completed by the applicant includes a request for “your partner’s name” – which she answered by providing the respondent’s name. Reference to this application makes it clear, it seems to me, that it, too, is inaccurate in some respects: for example, the applicant denied that she “and/or your partner” owned or had any interest in any motor vehicle; she denied that she “and/or partner” owned a caravan (when the mid-2013 receipt referred to above suggests that this was not the case) and she denied that she “and/or your partner” had been involved in any type of business – when it is clear that, at that time, the respondent continued to be involved in his business. Whilst counsel for the applicant explored with the respondent whether, as the applicant contended, he had signed this document, the state in which the application was produced and the respondent’s answers to such questions left me unsure about whether the respondent actually signed this application or some other document.
Understandably, counsel for the respondent made forceful submissions to the effect that I should not accept the applicant’s evidence, should regard her as a witness of limited credit and should refrain from accepting her evidence where it is contentious, unless it is otherwise corroborated by independent evidence. Counsel’s submissions included that either the applicant had lied to Centrelink or, given the information she provided Centrelink, she had lied to the Court in her evidence about the existence of the de facto relationship after September 2010. Counsel also submitted, in essence, that the Court would not accept the applicant’s sworn evidence that she had lied to Centrelink and that she was not lying when she said that the de facto relationship ended in January 2018 because, during another aspect of her cross-examination, she was caught in a lie – this being a reference to the evidence she gave when asked about the $9,000 transferred to her by a Mr JJ. I accept that, when first asked about this transfer the applicant asserted that it had occurred because she had lent Mr JJ some money; however, when counsel sought to explore that assertion further, she said “no. I have to retell. I told a lie” and that Mr JJ had given her $9,000 to help her pay her credit card. I accept that the applicant accepted the proposition that, when she asserted that Mr JJ had been repaying a debt owed to her, she was “consciously lying”; when asked “what other lies have you told in these proceedings so far?”, she said “None. None.” And, when asked why she lied to the Court just moments earlier, she said that she did not know and that she was all mixed up.
Whilst statements to government authorities apparently inconsistent with a party’s case may “complicate the resolution of the issue of the nature of the relationship” between two people, such statements are not determinative; instead, they too are to be taken into account as part of the circumstances comprising the whole picture of a particular relationship.[60] This statement seems to me to be particularly relevant in the present case given that:
(a)during the time she asserted in these proceeding that she was in a de facto relationship with the respondent, the applicant applied for and received a Centrelink payment predicated on her not being in a de facto relationship; and
(b)during the times he asserted in these proceedings that he was not in a de facto relationship with the applicant, the respondent caused the preparation of the financial statements for a Trust under his control to assert that the applicant had a beneficiary account upon which she had drawn – in circumstances where, pursuant to the terms of the Trust’s deed, such draws could only have been made if the applicant was (as she asserted she was) then his de facto spouse.
[60]Sinclair & Whittaker (2013) FLC 93-551 where, at [66], the Full Court quoted, with apparent approval, the comments of McColl J in Hayes v Marquis [2008] NSWCA 10 at [99].
That is, both parties have made public representations which are inconsistent with the cases each advanced in these proceedings about the nature of their relationship at various times.
Given the above – and noting that others may well disagree – I accept the thrust of the submission made by counsel for the applicant to the effect that, given the other evidence (to which reference has been made above) which objectively establishes that the parties’ de facto relationship continued after September 2010, I should not regard the information the applicant provided to Centrelink to be determinative of the issue.
In addition, I am not necessarily persuaded that I should simply discount all of the applicant’s evidence because she lied in her first response to a question asked of her during her cross-examination which sought to explore her receipt of $9,000 from Mr JJ. However, her conduct in this respect has certainly caused me to be particularly careful in my analysis of her evidence generally.
Such careful analysis should not, though, be interpreted as meaning that I have automatically accepted the evidence given by the respondent and preferred the same to that given by the applicant where the two conflict. Aspects of the respondent’s evidence when cross-examined has caused me to reflect carefully upon his evidence also: for example, I considered some of his responses to questions about his presence in photographs which I accept were taken during the course of the applicant’s son’s wedding in Country CC to be evasive and, frankly, unbelievable. In addition:
(a)his actions vis-à-vis the Trust and the applicant (which were for his benefit only given that it is accepted that the applicant never received any of the drawings attributed to her in the Trust’s financial statements) – which occurred over many years – completely contradicted his sworn evidence about the end of the de facto relationship; and
(b)his assertion that, between 2006 and 2010, the parties kept their finances separate seems to me to ignore the $650,000 joint loan they obtained to finance the purchase of the Suburb C property and, whilst it may be technically correct insofar as he was referring to personal finances, it needs to be seen in the context of him causing the Trust to make distributions to, and record drawings by, the applicant commencing in the 2006 financial year.
Conclusion about when the de facto relationship ended
I consider that the respondent’s conduct in causing the Trust to continue to record the applicant drawing upon a beneficiary account of the same until 30 June 2018 is a positive action that is entirely consistent with the applicant’s contention that the de facto relationship between them continued after September 2010 and only broke down when he moved out of the Suburb C property in January 2018. I reiterate that the applicant could only have been regarded as a beneficiary of the Trust if she was the respondent’s “spouse” at the time when the decision to make distributions was made.
Despite my findings in relation to the applicant’s conduct toward Centrelink, I reject the respondent’s contention that the parties’ de facto relationship ended in September 2010. I also reject the submission made by counsel for the respondent to the effect that I should find that the de facto relationship between the parties ended “prior to 25 November 2016” – the respondent was unequivocal in his evidence that the relationship ended in September 2010 and I am unpersuaded that there is any proper evidentiary basis upon which I could be persuaded to conclude in the manner advocated for by counsel for the respondent. Clearly, the date proposed was one that is relevant to the determination of whether the proceedings commenced by the applicant were commenced within time.
I am persuaded that their de facto relationship, beset as it was by difficulty, turbulence, fallings out, reconciliations, tumultuous times and an absence of monogamy on the respondent’s part on occasion, persisted until the respondent moved out from the Suburb C property on about 17 January 2018.
Given this conclusion, the applicant’s proceedings were commenced within time.
Prerequisites to the making of an order pursuant to s 90SM(1) of the Act
As well as being in dispute about when their de facto relationship ended, the parties were in dispute about when it began: the applicant asserted that the parties started to live together shortly after they met in early 2005, whilst the respondent asserted that their cohabitation only commenced in either late 2006 or early 2007 when they moved to live in the Suburb C property.
The parties appeared to agree that they met in early 2005. At that time the applicant (a health worker) was working in an aged care facility and lived in a unit she owned at Suburb F (“the E Street property”). The respondent, who operated various businesses, lived in a unit he owned at Suburb KK.
It appears accepted that, in about late 2005, the parties travelled together to Country LL and thereafter spent about two months traveling around Europe together. The applicant said that, after they returned to Australia, the respondent moved to live with her in the E Street property and that they thereafter rarely stayed at his Suburb KK unit.
Given that:
(a)the respondent instructed Mr D in relation to the preparation of the financial agreement within months of commencing his relationship with the applicant and Mr D’s file was opened in 2005; and
(b)the parties signed a contract for the purchase of the Suburb C property in mid-2006; and
(c)the applicant was recorded as a beneficiary in the financial statements of the Trust (which required her to have the status of the respondent’s “spouse”) for the year ended 30 June 2006; and
(d)a joint mortgage account in respect of the parties’ joint loan of $650,000 to fund the purchase of the Suburb C property was opened on about mid-2006; and
(e)Mr D chased up the respondent about the financial agreement in late 2006; and
(f)the correspondence dated 8 December 2006 from Mr D to the respondent was addressed to him at the E Street property,
I think it much more likely that the parties’ de facto relationship commenced no later than the end of 2005 and certainly before the time when the respondent asserted that it commenced.
Given that it is agreed that the parties were in a de facto relationship until September 2010, it is unnecessary to traverse the evidence which relates to matters relevant to determining, from their actions and interactions, whether they were in a de facto relationship between when I have found such relationship to have commenced and September 2010.
Given my finding about when the parties’ de facto relationship ended (as expressed above), I am satisfied that the parties were in a de facto relationship between no later than the end of 2005 and January 2018: that is, I consider that their de facto relationship was of no less than about 12 years’ duration. [61] That it was, as I accept, difficult and volatile (according to Ms MM) and very unstable (according to Ms HH) and toxic (according to Ms DD) and that the respondent, on occasion, saw other women, does not detract from this conclusion which I have based on my assessment of the composite picture established by the evidence.
[61] Family Law Act 1975 (Cth) s 90SB(a).
There was no contest that the parties were ordinarily resident in Queensland[62] when the Initiating Application was filed by the applicant on 26 November 2018[63] and that both parties were ordinarily resident in Queensland during at least a third of the de facto relationship[64] and I accept that this was the case. Although this makes it unnecessary to do so, I record that I am also satisfied that the parties were ordinarily resident in Queensland when their de facto relationship broke down.[65]
[62] Which is a participating jurisdiction.
[63] Family Law Act 1975 (Cth) s 90SK(1)(a).
[64] Family Law Act 1975 (Cth) s 90SK(1)(b)(i).
[65] Family Law Act 1975 (Cth) s 90SK(1A).
The determination of the property settlement proceedings
There was no dispute about the manner in which the Court should approach its consideration of the property settlement proceedings between these parties and, given that this approach is well known,[66] it requires no further elucidation.
[66]See, for example: Pastrikos and Pastrikos (1980) FLC 90-897; Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Waters and Jurek (1995) FLC 92-635; Clauson and Clauson (1995) FLC 92-595; Hickey and Hickey and Attorney-General for the Commonwealth of Australia (Intervener) (2003) FLC 93-143; Stanford v Stanford (2012) 247 CLR 108: whilst involving the resolution of proceedings pursuant to s 79 of the Act, it is agreed, given the mirrored relevant legislative provisions, that the same approach should be applied to the determination of proceedings pursuant to s 90SAM of the Act.
Counsel for each of the parties contended that it is just and equitable in the circumstances of this matter that an order altering the interests in property owned by each of the parties is made: that is, that the requirement imposed by s 90SM(3) of the Act is met. I agree and, whilst it is perhaps unnecessary to do so (given this agreement), I record that I generally accept the thrust of the submissions made on behalf of the applicant, as outlined in paragraphs 86 to 88 (inclusive) of the Applicants Outline of Closing Submissions filed 24 November 2021 which included that, as a consequence of the breakdown of the parties’ de facto relationship:
(a)they no longer enjoy the common use of property in which their existing legal and equitable interests were acquired during the cohabitation; and
(b)any assumption that any adjustment to such interests could be effected consensually as needed or desired has ceased. [67]
[67] Stanford v Stanford (2012) 247 CLR 108 at [42].
Given the acceptance of the satisfaction of s 90SM(3) of the Act, it is necessary to resolve the conflict between the parties about the terms of the order which is appropriate to reflect properly those matters which the Court is required, by s 90SM(4) of the Act, to take into account in determining the order to be made.
The competing proposals
Whilst the applicant initially sought[68] an order to ensure that she receive property valued at 50 per cent of the total nett property of the parties, the submissions made by counsel who appeared for her were to the effect that, having regard to the evidence, the Court would be persuaded to assess the matters prescribed by s 90SM(4)(a)to (d) so as to conclude as to at least 40 per cent in her favour[69] and then, having regard to the matters referred to in s 90SF(3) of the Act,[70] make a further five per cent adjustment in her favour[71] – although I note that the concluding submission was that “the court should make an order that the property interests of the parties be altered so that the Applicant receives 40% of the Agreed Pool”.[72] Whatever the assessment, the applicant sought, in her formal documents, that the order provide for her to retain the household contents, furniture and furnishings in her possession, her personal items (including jewellery) in her possession, the cash in her bank accounts and the motor vehicle in her possession and registered in her name and, in essence, that the respondent be required to transfer his interest in the Suburb C property to her so that she also receive that property.
[68] Initiating Application filed 28 November 2018; Case Outline filed 11 September 2020.
[69] Applicant’s Outline of Closing Submissions filed 24 November 2021 at paragraphs 91 to 97 inclusive.
[70] Family Law Act 1975 (Cth) s 90SM(4)(e).
[71] Applicant’s Outline of Closing Submissions filed 24 November 2021 at paragraphs 98 to 106 inclusive.
[72] Applicant’s Outline of Closing Submissions filed 24 November 2021 at paragraph 109.
The respondent initially sought[73] orders that would, in essence, result in:
(a)the applicant transferring her interest in the Suburb C property to him in exchange for a payment to her by him of the sum which represented 34.3 per cent of its value or, if he was unable to secure sufficient finance to implement this proposal, that the property be sold (pending which the applicant be responsible for paying all outgoings relating to it, including rates and the cost of insurance by indemnifying him in respect of them) and the applicant be paid this sum from its nett sale proceeds and he receive the balance; and
(b)the parties otherwise retaining all property in their possession or under their control, including any entitlement to superannuation.
[73] Amended Response to Initiating Application filed 14 May 2019; Case Outline filed 14 September 2020.
However, the respondent’s position was, ultimately, that the Court would conclude that the appropriate order was one which would see the respondent receive property valued at 95 per cent of the total nett value of the property of the parties and the applicant receive property valued at five per cent of the total nett value of the property of the parties. According to his counsel’s calculations, such a conclusion would result in the respondent receiving property valued at $6,027,424.15 and the applicant receiving “a net payment of $317,232.85”.[74]
[74]Respondent’s Outline of Submissions filed 19 December 2021 at paragraphs 90 to 112 inclusive, noting that the same were advanced only in the context of the respondent being unsuccessful in his primary position/s about the issues associated with the June 2007 Agreement.
Property of the parties
The property of the parties and the value of the same was ultimately the subject of agreement, as set out below:[75]
[75] Exhibit 6.
No. Ownership Description Value ASSETS 1. Joint (that is, as tenants in common in equal shares) B Street, Suburb C $1,330,000 2. Respondent NN Street, Suburb OO $525,000 3. Respondent Debski Family Trust $2,683,100 4. Respondent Unpaid entitlement – Debski Family Trust to L Pty Ltd $120,562 5. Applicant Unpaid entitlement – Debski Family Trust $87,810 6. Respondent Unpaid entitlement – Debski Family Trust $959,833 7. Respondent Unpaid entitlement – M Property Trust $537,033 8. Respondent Motor Vehicle 1 $60,000 9. Respondent Motor Vehicle 2 $20,000 10. Applicant Motor Vehicle 3 $8,500 11. Respondent Vehicle 4 $3,000 12. Respondent Vehicle 5 $40,000 13. Applicant Bank accounts E$3,000 14. Respondent Bank accounts $1,900 15. Respondent Superannuation Fund 1 $40,000 16. Applicant Superannuation Nil Total $6,419,738 LIABILITIES 17. Respondent ATO debt $62,000 18. Respondent NAB credit card $7,335 19. Applicant ATO debt $5,746 Total Liabilities $75,081 NET TOTAL $6,344,657
It follows from the above that, putting the June 2007 Agreement aside:
(a)the applicant’s current property has a nett value of $758,564, as constituted by her interest in the Suburb C property ($665,000), her unpaid entitlement in the Trust ($87,810), her motor vehicle ($8,500) and cash at bank ($3,000) from which her taxation debt of $5,746 has been deducted – that is, the value of her property at present represents 11.95 per cent of the total nett value of the property of the parties; and
(b)the respondent’s current property has a nett value of $5,586,093, as constituted by the balance of the property particularised in the table less his liabilities – that is, value of his property at present represents 88.05[76] per cent of the total nett value of the property of the parties.
[76] Rounded up.
The s 90SM considerations and conclusions
In considering the relevant matters mandated by s 90SM(4) of the Act, I accept that the exercise of the discretion conferred must not proceed on an assumption that the parties’ interests in property are, or should be, different from those determined by common law and equity.[77]
[77] Bevan & Bevan (2013) FLC 93-545 at [73].
There is no evidence to establish the value of the property and financial resources owned by the respondent when the parties commenced their cohabitation. Given this, I decline to accept the submission made by counsel for the respondent to the effect that I should be persuaded that the respondent’s initial contributions were largely comparable to the value of property of the parties which currently exists (exclusive of the Suburb C property and the applicant’s property) and, therefore, accord his initial contributions a value of at least $5 million. Whilst there was no challenge to the proposition that the various entities and Trusts, which are either controlled by the respondent or in which he has an interest, existed at the commencement of the parties’ de facto relationship, it is, in my view, impossible to conclude on the evidence before me that they had the same value then as they do now.
Insofar as the applicant is concerned, I accept, as was submitted by counsel for the respondent, that the maximum value of her initial contribution was $325,942. Whilst this may well be relatively modest when compared to the respondent’s financial situation at that time, I accept, as was submitted by her counsel, that this represented everything that the applicant owned.
Whilst counsel for the applicant submitted that the value of the respondent’s property and financial resources at the commencement of the de facto relationship was likely greater than the value of the property and financial resources owned by the applicant at that time, I consider it more likely than not that this submission understates the true position. Despite the comments in paragraph [84], it seems much more likely than not that the respondent’s financial situation was significantly superior to that of the applicant at the time they commenced their de facto relationship. What is impossible to know, though, is the relativity of their respective contributions: as noted, I accept that the applicant contributed pretty much all of that which she had accumulated prior to the start of the de facto relationship, to the relationship, but I am unable to undertake the same exercise insofar as the respondent is concerned.
The parties purchased the Suburb C property in mid-2006 as tenants-in-common in equal shares for $715,000. I accept that the respondent caused L Pty Ltd to pay the deposit and the costs associated with the purchase and that the parties jointly loaned $650,000 from a commercial financier to complete the purchase in late 2006. I note that the respondent accepted that the applicant contributed about $225,000 in total to the acquisition, conservation or improvement of this property. However, applying the 34.3 per cent “ownership share” ascribed to the applicant by Clause 13(a) of the June 2007 Agreement results in a figure of $245,245 rather than the amount acknowledged by the respondent. I am unable to discern the basis on which the respondent contends for this reduction given that the Suburb C property was purchased in late 2006 and the June 2007 Agreement was signed on 1 June 2007.
The respondent’s evidence included that his contribution to the acquisition, conservation or improvement of the Suburb C property was in the amount of about $951,919. There was no particular challenge to the submission made by counsel for the respondent to the effect that, on the figures his client contended for, the respondent was responsible for 80.88 per cent of the total financial contributions made toward the Suburb C property, whilst the applicant was responsible for about 19.12 per cent of the same.
I accept that despite initially causing the entirety of the mortgage repayments for the Suburb C property to be allocated against the applicant’s beneficiary account in the Trust, the respondent subsequently instructed his accountant, in 2019, to reallocate the same such that each party was recorded as having borne an even share of the expenses of the purchase and renovation of the property. This recalculation has seemingly resulted in the respondent being owed $87,810 by way of unpaid entitlements.
Given the significant difference in the parties’ financial situations and my acceptance of the applicant’s evidence to the effect that, during the course of the de facto relationship, she at first limited the extent to which she worked for remuneration outside the home in order to support the respondent and be available to him and subsequently ceased her paid remuneration and allowed her work status to lapse, it is clear that the respondent’s capacity to contribute financially during the relationship significantly exceeded that of the applicant.
Whilst the applicant may well have spent some of the funds available to her from what remained of her $325,942 after she contributed about $225,000 toward the Suburb C property on herself alone, I am unpersuaded that none of these funds were spent in a way that provided the respondent with some benefit.
I consider that, whilst the applicant did not receive any direct financial benefit from the respondent’s decision to have the Trust make distributions to her between the 2006 financial year and the 2018 financial year (inclusive), it is more likely than not that the respondent obtained such a benefit.
On balance, I think it more likely than not that both parties assisted in the management of the renovations undertaken to the Suburb C property. Whilst I accept that the respondent was very significantly involved in the same, I do not accept that the applicant made no contribution or provided no assistance in this regard. I accept and consider it highly likely that she was involved in organising some aspects of the renovations, like fixtures and fittings.
Where the evidence given by the respondent and the applicant differs insofar as it relates to the non-financial contributions generally made by the applicant during the course of the parties’ de facto relationship, I generally prefer the evidence given by the applicant because it seems to me that her evidence, at least as it touched upon her performance of various home duties, was corroborated in part by that given by the witnesses called in her case, including Ms PP who described her as a “fastidious housekeeper”. Whilst I accept that the opportunity that the relevant witnesses had to observe the parties attending to home duties was very limited, I accept their recounting; I think it highly unlikely that any person would be worse behaved in the presence of company in their home than they are when they are alone there with their partner.
On balance, I think it much more likely than not, particularly given that the respondent continued to be engaged in his business, that the applicant did almost all of the cleaning, cooking, yard tasks, pool maintenance, shopping and washing that was associated with the parties’ shared living arrangements. I also accept that it is more likely than not that, on occasion, the applicant assisted the respondent in various other ways: for example, by acting, in a sense, as his “trades assistant” during his renovation of a vehicle and, on occasion, helping to clean his business premises and sorting stock and performing administrative tasks such as photocopying and shredding and otherwise supporting him in his endeavours in ways that she could.
I decline to accept the submission made by counsel for the respondent to the effect that I should be persuaded that, during the course of their de facto relationship, the parties made similar non-financial contributions. Rather, I am persuaded that the applicant’s non-financial contributions to the conservation of the Suburb C property exceeded those made by the respondent and that she made the overwhelming contribution to the welfare of the family, as constituted by the two of them, in the capacity of homemaker. Such contribution must be assessed not in any “merely token way” but in terms of its ‘true worth’.[78]
[78] Mallet v Mallet (1984) 156 CLR 605.
I accept that, after the January 2018 separation, the applicant continued to reside in the Suburb C property and that she maintained the same and, at varying times, obtained a very modest income by renting rooms out via AirBnB. I also accept that, in about mid-2019, the respondent made a cash acquisition of the Suburb OO property in which he currently lives. Clearly, the applicant made no contribution to this property.
It is well established that the task of assessing contributions under s 90SM(4) of the Act is a holistic one in which the Court is required to evaluate the extent of the contributions of all types made by each of the parties in the context of their particular relationship:[79] such an evaluation cannot be treated as a mathematical exercise, but inevitably involves value judgements and matters of impression.[80] It has often been said that, in assessing the contributions made by parties, the Court embarks upon a process involving the exercise of a broad discretion in respect of which reasonable minds may differ and that the process is neither an accounting or mathematical exercise, but involves a movement from “a qualitative evaluation of contributions to a quantitative reflection of such evaluation” – that is, a “leap” from words to figures.
[79] Dickons v Dickons (2012) 50 Fam LR 244.
[80] Lovine & Connor and Anor (2012) FLC 93-515 at [40] and [41].
Doing the best that I can to weigh all of the various contributions of various sorts made by each of the parties during their de facto relationship of about twelve years duration and after their January 2018 separation, I consider that quantifying contributions as to 15 per cent to the applicant and 85 per cent to the respondent affords such contributions appropriate and proper recognition.
The assessment of contributions in this manner results in the respondent having to receive property valued at $5,392,958.45 and the applicant having to receive property valued at $951,698.55; it also results in a disparity in the parties’ respective financial positions in favour of the respondent in an amount of about $4,441,259.90 which, I consider, appropriately reflects the respondent’s overwhelming financial contributions.
In the circumstances of this case, any order which may be made will not have any effect on the earning capacity of either party.
Relevant s 90SF considerations and conclusions
As noted earlier, the applicant was born in 1947 and is about four years older than the respondent. Whilst she was previously a health worker, she now works casually and is also supported by her receipt of a pension. The applicant has no financial resources of any substance; she has no superannuation. I accept she ceased her employment during the de facto relationship to support the respondent. I also accept that one of the consequences associated with her decision to stop working outside the home was that she also ceased to maintain her work status. I accept that these matters have had a significantly adverse impact on her current capacity to engage in paid employment.
The respondent was born in 1952. Whilst he is now retired, he is supported by dividends he receives from a company entirely under his control. The evidence certainly suggests that he is able to ensure that he is supported by L Pty Ltd and the Trust in a tax-effective way, including by enabling him to continue to make annual contributions to superannuation in an amount that is just beneath the allowable personal contribution limit. Given the evidence about the extent of the travel the respondent has previously been able to undertake, the contributions he caused L Pty Ltd to make to the acquisition of the Suburb C property and his post-early 2018 cash acquisition of the Suburb OO property in which he currently lives, it is clear that his financial situation is overwhelmingly superior to that of the applicant and that, as I accept he has in the past, he will continue in the future to treat the assets and financial resources of both L Pty Ltd and the Trust as his own money to be called upon whenever he wishes to do so.
I reject the submission made by Counsel for the respondent to the effect that his client has greater “future needs” than the applicant. I am entirely confident that, as he has in the past, the respondent will be able to ensure that whatever financial needs he has in the future will be met; in contrast, the applicant’s financial future is much more precarious.
Whilst I accept that the terms of the June 2007 Agreement are a relevant consideration, it is clear that the weight to be given to the same depends on the circumstances. In this case I decline to accord any particular weight to the contents of the June 2007 Agreement because: it is clear that the applicant did not obtain any legal or other advice about the consequences for her of signing the same; I have accepted the applicant’s evidence that she felt pressured and overwhelmed and so signed the Agreement; and, the absence of any information in it about the value of the respondent’s property, financial resources and liabilities at the time prevents me from having any true appreciation of the financial context that then existed and/or the true financial consequences of its terms for each of the parties.
My conclusions as to the respective contributions of the parties will result in a 70 per cent differential between the parties: the respondent will receive property and superannuation entitlements valued at $4,441,259.90 more than the property received by the applicant.
In all the circumstances and taking the matters to which I have referred above in my discussion of the relevant s 90SF(3) considerations into account and in the exercise of the broad discretion afforded to trial judges, I consider that an adjustment of 7.5 per cent in the applicant’s favour is appropriate to ensure that orders which are just and equitable in all the circumstances are made.
Justice and equity of the proposed orders
The consequence of the conclusions outlined above is that, having regard to the parties’ respective contributions and the relevant s 90SF(3) matters, following the conclusion of their approximately twelve year de facto relationship, the property of the parties shall be apportioned between the parties so as to accord 22.5 per cent of the value of the same to the applicant and 77.5 per cent of the value of the same to the respondent.
This will see the applicant have to receive property valued at $1,427,547.82 and the respondent have to receive property valued at $4,917,109.18.
Given that the parties sought to be heard further about the form or terms of the order to be made to give effect to the findings and conclusions expressed in these Reasons, they will be accorded that opportunity when the matter returns at 10.00 am on 17 October 2022.
I certify that the preceding one hundred and ten (110) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Hogan. Associate:
Dated: 30 September 2022
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