W, HJ v A, TW
[2009] SADC 16
•19 February 2009
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
W, HJ v A, TW
[2009] SADC 16
Judgment of His Honour Judge Boylan
19 February 2009
FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS
Property division - application out of time - extension granted. Consideration of contributions by parties - financial and non-financial contributions considered - issue of joint and separate bank accounts and Centrelink payments.
Trusts - whether one party held property on trust for the other.
Held: property not held on trust.
Held: property should be divided 20% in favour of plaintiff and 80% in favour of defendant, adjusted for interest in favour of plaintiff.
Domestic Partners Property Act 1996, referred to.
W, HJ v A, TW
[2009] SADC 16Application for Division of Property
Ms W and Mr A lived together for about nine years. They separated early in 2005. Ms W now applies to the Court for an order pursuant to the Domestic Partners Property Act 1996 dividing their property; or rather, for an order dividing Mr A’s property because most of it always belonged to him. The application is out of time but I have power to extend that time limit and I do so. I shall say why later.
In my view Ms W is entitled to recover from Mr A the sum of $30,000.00.
I set out my reasons for coming to that conclusion, beginning with a brief history of Ms W’s and Mr A’s relationship.
The Relationship of the Parties
The parties met in 1991 and they began living together in July or August 1992. They always lived in a house at Trevena Street, Tailem Bend. That house originally belonged to Mr A’s mother, Freda A but she sold it to her son in 1993.
When she began living with Mr A, Ms W already had two children by an earlier marriage. One of those children, a daughter, lived with Ms W and Mr A until about the end of 1997. Ms W’s son lived with them on occasions during that period.
Ms W and Mr A had two children of their own, N born on 7 November 1995 and S born on 16 March 1998.
Ms W and Mr A’s relationship was often troubled and there were numerous separations. Neither of them gave reliable evidence of the dates or duration of the separations but there is reliable independent evidence about those matters. Throughout their relationship at least one of them was receiving Centrelink benefits. Centrelink has kept a record of the times when they were living together and when they were separated. On the basis of those records, I find that between 1992 and 2005 Ms W and Mr A lived together for a total of some 9 years. One of the periods of separation is significant. They separated in July 2002 and did not resume living in a de facto relationship again until July 2004. At the time of that separation the elder daughter left the Trevena Road house to live with her mother while the younger daughter remained there with her father. To the time of trial, the younger daughter was still living with her father and the elder with her mother.
The Property Identified
I turn, then, to identifying the property the subject of the application.
There are three categories of property:
·A house at Trevena Road, Tailem Bend.
·Mr A’s share of the proceeds of sale of a house at Gollan Street, Tailem Bend.
·Personal chattels consisting mainly of motor vehicles, household appliances, furniture, and tools.
Was there a Trust?
Before going to the value of the various items of property, there is a preliminary issue concerned with the Trevena Road house. I deal with that now.
The house at Trevena Road originally belonged to Mr A’s parents. His widowed mother, FA, was the sole owner in 1992 when Ms W and Mr A decided to live together. The house was then uninhabitable. There had been a fire in it and the local council had made orders that it was in an unsanitary and dangerous condition.
Mrs A decided that Ms W and her son Mr A should repair the house and live in it. In August 1992 she signed a brief note recording her intention of selling the property to the two of them[1]. That never happened. On 21 June 1993, she transferred the property to Mr A only. He paid her $20,000 cash for the house but she returned $5,000 to him immediately so that he could renovate the bathroom. At the same time, he executed a mortgage over the property in her favour for a further $20,000. In a codicil to her will[2], made at around the same time, FA forgave her son any debts owing to her at the date of her death and removed him as a beneficiary under her will. He never repaid any of the $20,000 loan the subject of the mortgage.
[1] See Exhibit P6
[2] See Exhibit P20
The preliminary point is this. Mr Keen, Ms W’s counsel, argued that FA had created a trust in favour of Ms W when she recorded her intention of selling the house to Ms W and Mr A. I reject that submission. Whatever FA’s intentions may have been in August 1992, she changed her mind. When Ms W and Mr A went with his mother to a solicitor in Murray Bridge in June 1993, Ms W was required to remain outside the solicitor’s office. Mr A and his mother saw the solicitor in private and executed the transfer and mortgage. I find that Mrs A intended that the property at Trevena Road should be transferred solely to her son Mr A. I also find that she did not intend that he repay any of the $20,000 the subject of the mortgage. I find that she gave the house to her son Mr A for significantly less than its market value. I shall return to the question of value.
The fact that there was no trust created in Ms W’s favour does not mean that she is not entitled to a share in the Trevena Road house. Her rights to a share of the property do not necessarily depend upon the creation of a trust. She has such a right under the Act.
The Value of the Property
The value of the Trevena Road property is agreed at $175,000. There was no clear evidence about its value in 1992 but the fact that Mr A paid his mother $20,000 and executed a mortgage in her favour for another $20,000 suggests that the value of the house was $40,000. In 1995, the Valuer General valued the house at $50,000.[3] Taking those matters into account I find that the house was worth $40,000 when Ms W and Mr A began living there in 1992. She contributed nothing to its purchase.
[3] See Annexure "B" to Exhibit D1
The next item of property is Mr A’s share in the proceeds of sale of a house at Gollan Street, Tailem Bend. Many years ago, an old friend of the family bequeathed that house to Mr A and his brothers. They sold it in 2006 for $37,000. Mr A’s share of the proceeds came to $5,500.
There are a number of items of personal property the subject of Ms W’s application. They include a bus which has been renovated as a motor home or campervan, motor vehicles, household appliances, furniture, tools and sundry items which Ms W said she left at the house and which Mr A will not hand over to her.
The value of most of the personal property was disputed. I received no reliable independent evidence of its value and Ms W and Mr A gave very different values for most of it. I accept Mr A’s evidence on the topic of value. I shall say why I do so when I deal with the general topic of credibility. But, in the circumstances, I ignore most of the items of personal property for three reasons. First, much of the property is of negligible value. Mr A was on good terms with the operator of the local rubbish dump. He acquired much of the property from there, repairing it where necessary. Secondly, I cannot find that some of the property belongs to Mr A. Some of it, including furniture described as “antique” was in the house before Mr A and Ms W moved in. It may well belong to FA’s estate. So, too, with a picture which was mentioned in evidence. Thirdly, with some specific exceptions, with which I shall deal, I find that Ms W made no contribution to the acquisition or improvement of any of the personal property. I take into account only the following property and at the following values:
Solar Water Panel (installed at Trevena Road
Purchase price less rebate of some $1,600) $1,000.00Hot Water Service $ 650.00
Baker’s Oven (installed at Trevena Road) $1,450.00
$3,100.00Therefore, the pool of assets in respect of which Ms W seeks an order is:
Trevena Road House $175,000
Share in proceeds of sale of Gollan Street $ 5,500
Personal property $ 3,100
Total $183,600
But I deduct from the total amount $20,000 originally contributed by Mr A and a further $20,000 in respect of his mother’s gift to him, leaving a total of $143,600.
Ms W’s Contribution
Ms W claims that she has an interest in the property at Trevena Road because she did renovation work on it, made financial contributions to the renovation and maintenance of the property and non-financial contributions by way of homemaking and caring for the children.
As to her contributions to the renovation, she asserts that she helped clear the premises, especially the yard, of rubbish; that she helped load trailers with rubbish in preparation for its being taken to the dump; that she helped Mr A re-roof the house mainly by passing up sheets of galvanised iron to him when he was on the roof; that she did painting work; that she mixed mortar for repairs to the stonework; that she stripped back the kitchen floor and also stripped two doorways back to their natural state.
As to childcare and homemaking, it was her evidence that she did nearly all of the caring for the children, including taking them to kindergarten or school. She says that she did the cooking, house cleaning and washing. The effect of her evidence was that she attended to all of the duties associated with raising and caring for the children in addition to doing all of the housework. She agreed in cross-examination that Mr A did his own washing. It was her evidence that he spent most of his time in the shed.
Mr A agreed that Ms W tried to help with the renovation work where she could, but the effect of his evidence was that she was not able to be of much use. He readily agreed that she helped with the rubbish removal, but denied she helped with re-roofing other than by throwing necessary items up to him from time to time. She could not hand up iron sheets for the roof as they were too heavy. He said that he did the whole roofing job by himself. Of her claims to have helped with mortar, he said that she had “a bit of a play with it”. He did not deny that she had done some stripping of woodwork in the house.
Mr A disagreed that Ms W had done all of the caring for the children. He said that she would have done about 80% of it. He said that he cooked when she was working. As she was in paid employment only in the last couple of years of the relationship, the effect of his evidence is that he really only cooked during that period of their relationship. He said that he contributed to cleaning the house, especially by doing the vacuuming and that he did his share of cleaning the bathroom. He told me in evidence that he was constantly cleaning as he, by necessity, had to create a mess during renovations. He said that he spent most of the time renovating the house. In addition, for a couple of years before her death, he spent time caring for his mother who lived nearby.
Ms W’s evidence about her financial contributions to the renovation and maintenance of the house was extremely unsatisfactory. Before turning to that, I should say something about their financial arrangements.
Mr A told me that, for the first few months of their lives together, they had a joint bank account. The effect of his evidence was that Centrelink’s rules changed and they were both required to have separate accounts which they had for the rest of the relationship. He remained on a Newstart allowance. Ms W was in receipt of a Supporting Parents Pension or some sort of parental allowance. There is no suggestion that Centrelink was not fully aware of their relationship. She told me that the Centrelink pension was about $380 per fortnight. The child endowment was about $80 per fortnight. I was not told whether or not these figures related to the earlier part of their relationship or later.
During about the last two years of their relationship, Ms W worked as an aged care worker. She received $2,000 to $3,000 per month gross. Owing to her receiving that money, Mr A’s Newstart allowance was reduced. Ms W said that she paid him the difference between the amount he had been getting before she began work and the amount that he received after she began work. He denied that. He said that he paid all necessary expenses until he had no money left and then Ms W would “top up” as necessary.
Ms W maintained that by paying council rates, water bills and other bills, she contributed to the maintenance and running costs of the house. She said that she did so using her own money out of her own account. She produced no records to support her claims. She said that she had left all of her records at the Trevena Road house and Mr A has refused to give them to her. She also claims that she paid for all of the food for the family out of her own account, using her own money.
Mr A told a different story. He said that, usually, he paid council rates and water bills. He said that he also paid half of the food bill at the supermarket. He told me that Ms W’s practice was to use a credit card to pay at the supermarket so that she could acquire points on that card or on one of her cards. He said that, although she paid the full amount out of her account by using a card, he was always required to pay half of that amount back to her in cash and that he did so. He also told me that he paid the regular outgoings, using his money. He produced a large number of receipts showing payments in cash.
Ms W has also given evidence about the chattels which she asserts the couple owned. Her evidence on that topic is most unsatisfactory. She gave estimates of the value of chattels which I cannot accept. Indeed, the estimates she gave convinces me that she has deliberately exaggerated values.
One aspect of her evidence is curious. When answering questions about the acquisition of various chattels she said that the monies to pay for them “would have” come out of our joint monies or our joint account. But it seems quite plain that throughout nearly the whole of their relationship they had quite separate accounts.
I was concerned by her evidence that, during the period of their relationship, they were apart for 12 to 18 months. It is clear from the Centrelink records that they were apart for a total of something like 3 ½ years and Ms W agreed as much in cross examination. Again, I think she has exaggerated. Indeed, I think she has set out in some ways to deceive me.
In addition to what she described as chattels which must have been jointly owned, she says that she paid for the installation of a hot water service in the house shortly before separation and she also paid for a new stove. Mr A agreed that she had paid for those two items and said she is welcome to have them back.
It seems to me, on the subject of their financial arrangements, that Mr A’s evidence and, indeed, Ms W’s evidence, about “top ups” is important. When she began earning fairly good money as an aged care worker, Mr A’s Newstart payments were reduced. He said that he complained to her about that. He said he was receiving less on account of her earnings. On that topic, she agreed that he was receiving less and said that she paid him $150 per fortnight to make up the difference. He said that he asked her to make up the difference but she refused. He went on to say that, when his money ran out and bills had to be paid, then she gave him money by way of top up. He insisted that throughout the relationship she refused to share her money.
I prefer Mr A’s evidence about their financial arrangements. As I have said, I found Ms W an unreliable witness. I am satisfied that she exaggerated the value of chattels and there were some other matters which caused me concern about her evidence. For instance, she told me that she paid some $3,200 for a solar hot water service. There is no doubt that she bought the hot water service and I accept that she paid that sum. But there is a question of a rebate from the Government for the installation of such a hot water service. She says that it was “about $600”. Mr A insisted it was $1,600 or thereabouts. I do not accept that Ms W does not know what the rebate was.
I do not accept that Ms W would have acquiesced in paying, out of her own funds, outgoings in respect of the house such as council rates and water bills. Nor do I accept that she paid for all of the food. Ms W impressed me as being very shrewd about money matters. I do not accept that she would have permitted Mr A to get away with not paying at very least a half share of household accounts, including food. Further, I find it difficult to see, on her story, how she could have made any financial contribution to the renovations to the house if she was supporting the family completely on her parenting pension, together with the child endowment.
Both parties were ill-prepared for trial. Indeed, the matter was not ready for trial when it began. Mr A was self-represented and had not come fully prepared with evidence to substantiate his claims. Leaving aside the agreed valuation, Ms W produced almost no evidence to support her claims.
I found Mr A an credible witness and I prefer his evidence when it differs from Ms W’s. He was emotional and was very upset at the prospect of losing the house which he described as “the family home”. He is upset at the prospect that his mother’s avowed wish, namely, that the house remain in the family, should be subverted by Ms W’s claims. But I thought he was truthful and reliable. When it came to the value and history of the acquisition of chattels, all of his evidence had the ring of truth to it. He told me that he “wheels and deals”. By that, he meant that he trades, especially in motor vehicles and motor vehicle parts. I accept his evidence about the circumstances of the acquisition of the various items in the list of chattels.
Findings
I find that Ms W made some contribution, but not a particularly significant one, to the cleaning up and renovation of the Trevena Road house. I find that she made a much more significant contribution to the restoration and increase in the value of that property by caring for her and Mr A’s children and running the household while he worked on the house. I find that she made no significant financial contribution to the improvement of Trevena Road other than paying for the solar panel, hot water service and baker’s oven, all of which were installed at the premises. As I have said, I find that she made no significant financial contribution to the acquisition of any other personal property. Leaving aside those three items, I find that Ms W made no contribution, financial or otherwise to the improvement of the Trevena Road house after July 2002. I find that her contribution to the improvement of the Gollan Street house was minimal and I ignore it.
The power of the court to make the order Ms W seeks is set out in Section 10 of the Act which reads as follows:
“10—Power to make orders for division of property
(1) On an application for the division of property after the end of a domestic partnership, the court may make such orders as it considers necessary to divide between the domestic partners the property of either or both partners in a way that is just and equitable.
(2) For example, the court may make orders for—
(a) the transfer of property from one domestic partner to the other; or
(b) the sale of property and the division of the net proceeds between the domestic partners in proportions decided by the court: or
(c) the payment by one domestic partner of a lump sum to the other.”
The matters which I am required to take into account are set out in Section 11 which reads as follows:
“11—Matters for consideration by the court
(1) In deciding whether to make an order for the division of property under this Part, and if so the terms of the order, the court—
(a) must consider the financial and non-financial contributions made directly or indirectly by or on behalf of the domestic partners to—
(i) the acquisition, conservation or improvement of property of either or both partners; or
(ii) the financial resources of either or both partners; and
(b) must consider the contributions (including homemaking or parenting contributions) made by either of the domestic partners to the other partner or to children of the partners or either of them; and
(c) must have regard to the terms of any relevant domestic partnership agreement; and
(d) may have regard to other relevant matters.
(2) If a relevant domestic partnership agreement—
(a) is a certified domestic partnership agreement; an
(b) provides for the exclusion of the court's power to set aside or vary the agreement,
an order for the division of property under this Part must be consistent with the terms of the agreement.”
This case is somewhat unusual as, throughout most of the relationship, both parties were unemployed and each was receiving a pension. Further, there is effectively only one asset, a house. Ms W contributed nothing to its purchase. It has appreciated in value over the years, partly by effluxion of time and partly owing to the work done on it by Mr A. Ms W made no signification financial contributions other than to pay for the appliances to which I have referred. Nor did she do really any significant physical work to help with the renovations. But she contributed non-financially by caring for the children and generally running the household. Those efforts gave Mr A the time he needed to work on the house and improve its value. No evidence was led about the current or future financial positions of either party. I received no evidence about “other relevant matters”. I must divide the property as best I can.
I am of the view that it is just and equitable to order that Ms W recover from Mr A about one fifth of the total value of the assets, namely, $28,000.00. Allowing for interest on that sum from the time of trial at 6.5%, I round that payment up to $30,000.00.
Extension of Time
Ms W is out of time with this application. She asks for an extension of time. She says that she tried to settle the matter after separation and that it almost settled on the basis that she would receive the Gollan Street property. She was to pay out Mr A’s brothers. She borrowed $10,000, either for that purpose or, at least, to demonstrate to them that she was able to pay a deposit. One of the brothers refused to proceed with that arrangement. She had lived in the Gollan Street property on some occasions during her separations from Mr A. She claims that Mr A has been on notice for a long time that she intended to make a claim because she lodged a caveat fairly early in 2005, of which he had notice. She saw a solicitor first in January 2005. Nothing was done until she saw another solicitor who took some action in April 2005. In those circumstances, I think an extension of time is necessary to avoid serious injustice to Ms W. I extend the time for the filing of her application to 9 August 2007.
I order that Ms W recover from Mr A the sum of $28,000.00 plus interest in the sum of $30,000.00 and I further order that, if that sum is not paid by 30 May 2009, the property at Trevena Road be sold and the sum of $30,000.00 further be paid to Ms W from the net proceeds of sale.
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