Waterfield v Capaldi

[2008] NSWDC 308

CITATION:	Waterfield v Capaldi [2008] NSWDC 308
HEARING DATE(S):	25-26 November 2008
EX TEMPORE JUDGMENT DATE:	28 November 2008
JURISDICTION:	Civil
JUDGMENT OF:	Sidis DCJ
DECISION:	1 Within 10 weeks of the date of these orders the defendant is to discharge the mortgage secured on the property situated at and known as 42 Christopher Avenue, Valentine. 2 Simultaneously with compliance by the defendant with order 1, the plaintiff is to: (i) do all such acts and execute all such documents as are necessary to transfer to the defendant his right, title and interest in the property at Valentine; (ii) pay to the solicitors for the defendant for and on her behalf the sum of $53,401. 3 In the event that either party refuses or neglects to sign within 14 days after receipt of a written request to do so any documents necessary to put into effect the terms of these orders, the Registrar of the Newcastle District Court be appointed to execute such documents in the name of the defaulting party pursuant to the provisions of s 39 of the Property (Relationships) Act 1984. 4 Stood over to 3.12.08 to deal with costs.
CATCHWORDS:	PROPERTY (RELATIONSHIPS) ACT - overstatement of assets - non-financial contributions in loss of opportunity to establish career.
LEGISLATION CITED:	Property (Relationships) Act 1984
PARTIES:	Ivan Waterfield (Plaintiff) Emma Jane Capaldi (Defendant)
FILE NUMBER(S):	Newcastle 164/07
COUNSEL:	W J Tregilgas (Plaintiff) S C Austin (Defendant)
SOLICITORS:	Burke & Elphick (Plaintiff) Thomas Mitchell Partners (Defendant)

JUDGMENT

1 Mr Ivan Waterfield and Ms Emma Capaldi lived in a de facto relationship between March 1997 and September 2006. There were no children of the relationship. In that period they lived together in Hong Kong, Ballarat, Melbourne and Valentine, a suburb of Newcastle. Their moves were related to the plaintiff’s career advancement as a executive manager in industry, in particular, the railway industry. In that career he developed a considerable income earning capacity.

2 The defendant, at the commencement of the relationship was 21 years old and had recently obtained tertiary qualifications in business management. She was employed as head receptionist at the York Viking Motor House in the United Kingdom.

3 The parties agreed that because of his established superior income earning capacity the advancement of the plaintiff’s career would take priority over that of the defendant. The consequence was that during the period of the relationship there were substantial periods when the defendant was not in paid employment or when she was working in jobs that were inferior to her qualifications and capacity. Necessarily her income did not match that of the plaintiff.

4 During the period of the relationship the parties built up assets in real estate and superannuation funds. Their dispute concerned the proportions in which those assets were to be divided between them as a consequence of their separation. The plaintiff contended that on the basis of his superior financial contributions to the relationship the division should be 70 per cent in his favour and 30 per cent to the defendant. The defendant claimed a proper adjustment of their property interests would be 55 per cent in favour of the plaintiff and 45 per cent to herself.

5 Application was made to this court pursuant to s 20 of the Property (Relationships) Act 1984 to adjust those interests. I was reminded by the parties that the application of s 20 of the Act involves a three stage process requiring:

(1) identifying and valuing the assets and liabilities of the parties at the time of the hearing;

(2) assessing contributions to the relationship of the parties, financial and non financial, and

(3) deciding whether, having regard to the rights and interests as they stood at the time of hearing, an adjustment should be made that would reflect their contributions in an equitable manner.

6 The parties accepted that their net asset position at the time of hearing, was accurately set out in the balance sheet forming part of exhibit A2. Their assets totalled $976,287. The plaintiff’s claim to a greater proportion of those assets was based upon two factors. He claimed that he introduced a considerable quantity of assets into the relationship at the commencement of cohabitation. The defendant conceded that at this time her assets were modest, amounting to $3,253 in savings and a pension fund.

7 The plaintiff’s affidavit of 8 November 2007 claimed that he brought into the relationship assets having a net value of $449,407. On closer examination, however, it was established that this figure was grossly and apparently deliberately overstated and that the value of his assets at that time was closer to $22,000.

8 The plaintiff also relied upon his income which ranged from $100,000 per annum gross at the commencement of the relationship to close to $200,000 at the time of separation.

9 In contrast, as already noted, the defendant’s income earning capacity was diminished. She was unable to work at all in Hong Kong because of visa difficulties until she was engaged in public relations work for the company that employed the plaintiff. The evidence was that she was employed in the public relations position for one of the three years that they lived in Hong Kong.

10 The parties moved to Ballarat in January 2000. There the defendant was first employed in temporary work until she secured a position with the University of Ballarat as an administrative officer on a salary of $30,788.

11 In January 2003 she was promoted to residential operations manager earning a base salary of $36,564. She stated that she worked overtime at every opportunity so that her income exceeded her base salary.

12 After the plaintiff transferred to Melbourne the defendant moved there in early 2005 and for three months she commuted so as to retain her employment at Ballarat. The plaintiff by this time had transferred to Newcastle and was living there. In September 2005 the Melbourne house was sold and the defendant also moved to Newcastle. She found work after Christmas 2005, initially temporary work, and then in various positions until, after separation, she secured her current position earning in the 2007 tax year an income of $98,498.

13 The parties assets at the time of the hearing comprised, in part, cash deposits with banking institutions. Those deposits were the proceeds of sale by the parties of apartments in York that were purchased during the course of their relationship. Each party purchased two such apartments. The defendant, at the suggestion of the plaintiff, saved her income from her work in Hong Kong and applied those savings towards the deposit on the first apartment that she purchased. She borrowed from a family friend the funds needed for the deposit on the second apartment.

14 The evidence was that the plaintiff suggested these purchases as a means of allowing the defendant to build up a pension fund or superannuation at a time when, because she was unable to work, she was not in a position to do this through an income. Both parties secured a profit on the sale of their respective apartments.

15 The defendant was tested as to whether she fully disclosed the extent to which she profited from these transactions or whether she disposed of part of the proceeds in a fashion that she had not disclosed. There was no evidence that the defendant had engaged in any conduct of a wasting nature and in my view the alleged discrepancy was most likely related to exchange rate fluctuations.

16 The defendant acknowledged that her financial contributions to the relationship did not match those of the plaintiff. She claimed, however, that this should be set off against her substantial non financial contributions in the nature of disruptions to the advancement of her career, undertaking virtually all of the housekeeping duties for the parties, house hunting and arranging for packing and unpacking of the household each time they moved, management of their York apartments, attending to the payment of the household bills, collation of materials for tax returns and organising their holidays.

17 The plaintiff disputed the defendant’s claim to have provided a considerably greater non financial contribution but having regard to the plaintiff’s demonstrated unreliable credit and his evidence that he worked for very long hours on at least six days per week during the relationship I was satisfied that the defendant’s evidence, on this aspect, was to be preferred.

18 The authorities indicated that an appropriate level of recognition should be given to contributions of a non financial nature. In my view that approach was particularly appropriate in this case when the defendant was financially disadvantaged by the inability to establish herself in and progress a career for which she was qualified by tertiary education.

19 The result is that I have concluded that the proportions in which the interests of the parties in their assets, as they stood at the time of the hearing, should be adjusted will be 60 per cent to the plaintiff and forty per cent to the defendant. On my calculation this would involve a cash payment by the plaintiff to the defendant of $53,401.

20 The defendant has indicated a preference for retaining the property at Valentine and has framed the orders sought in her cross-claim accordingly. Adopting that form I have drafted some orders that I ask the parties to check and confirm that they would be appropriate to deal with this matter. I also would like to hear the parties on the issue of costs.

21 In this matter having delivered my reasons I make orders in accordance with paragraphs 1, 2 and 3 of the draft orders agreed upon by the parties with the exception that the period of two months referred to in order one, is with the agreement of the parties, amended to ten weeks. The proceedings are adjourned to 9.30 on Wednesday 3 December 2008 to deal with the outstanding issue of costs.

22 Stood over to Wednesday 03/12/2008 at 9.30am to deal with outstanding issue of costs.

23 Below APPENDIX as to orders made referred to in paragraph 21 above.

1 Within 10 weeks of the date of these orders the defendant is to discharge the mortgage secured on the property situated at and known as 42 Christopher Avenue, Valentine.

2 Simultaneously with compliance by the defendant with order 1, the plaintiff is to:

(i) do all such acts and execute all such documents as are necessary to transfer to the defendant his right, title and interest in the property at Valentine;

(ii) pay to the solicitors for the defendant for and on her behalf the sum of $53,401.

3 In the event that either party refuses or neglects to sign within 14 days after receipt of a written request to do so any documents necessary to put into effect the terms of these orders, the Registrar of the Newcastle District Court be appointed to execute such documents in the name of the defaulting party pursuant to the provisions of s 39 of the Property (Relationships) Act 1984.

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