Watson, Sharon Louise v Cameron, Anthony Scott
[2009] VCC 1777
•11 December 2009
| IN THE COUNTY COURT OF VICTORIA | Revised |
Not Restricted
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL LIST
FAMILY PROPERTY DIVISION
Case No. CI-09-00469
| SHARON LOUISE WATSON | Plaintiff |
| v | |
| ANTHONY SCOTT CAMERON | Defendant |
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| JUDGE: | HIS HONOUR JUDGE O'NEILL |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 4 December 2009 |
| DATE OF JUDGMENT: | 11 December 2009 |
| CASE MAY BE CITED AS: | Watson, Sharon Louise v Cameron, Anthony Scott |
| MEDIUM NEUTRAL CITATION: | [2009] VCC 1777 |
REASONS FOR JUDGMENT
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Catchwords: Domestic relationship - application for adjustment of property rights pursuant to Chapter 3, Relationships Act 2008 – whether relationship agreement – financial and non- financial contributions of parties during the course of five-year domestic relationship.
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| APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G A Devries | Cohen Kirby & Iser |
| For the Defendant | Mr M A C Testart | J A Middlemis |
| HIS HONOUR: |
Preliminary
1 The plaintiff and the defendant entered a domestic relationship in accordance with the definition contained in s.35 of the Relationships Act 2008 (“the Act”) in or about January 2003. The relationship continued until February 2008 when the parties separated. There were no children of the relationship. The parties cared for the defendant’s children of a previous relationship who came to stay from time to time.
2 The principal asset the subject of the proceeding is a property at 259 Aitkens Road, Strangways, near Bendigo (“the Strangways property”), registered in the name of the defendant.
3 The defendant alleges that the parties entered two relationship agreements, within the meaning of s.35 of the Act at various times during the relationship. The plaintiff denies any agreement was entered.
4 The plaintiff seeks an adjustment of the parties’ interest in the Strangways property and submits she ought receive an amount equivalent to one-half of the current equity the defendant holds in the property.
5 The defendant submits that the alleged agreements entered bind the parties, and if not, by reason of the defendant’s far more significant financial contribution to the relationship over the years, there ought be no such adjustment of property interest.
6 Pursuant to the provisions of s.45 of the Act, the Court may adjust the interests of the partners in a domestic relationship in property of one or other of them as “seems just and equitable”, having regard to:
(a)
Financial and non-financial contributions made directly or indirectly by either party;
(b) Contributions made in the capacity of homemaker; (c) The nature and duration of the domestic relationship; (d) The factors referred to in s.51 of the Act, including, relevantly: (i) the income, property and financial resources of each domestic partner;
(ii) the financial needs and obligations of each domestic partner.
7 Both the plaintiff and the defendant gave evidence and were cross-examined. In addition, the defendant’s daughter, Cass Cameron-Taylor, gave evidence and was cross-examined. Affidavits and financial statements of each of the parties were tendered in evidence, together with an agreed Valuation of the Strangways property. That Valuation disclosed that:
ƒ As at February 2003, the property was valued at $210,000 ƒ As at October 2009, the property was valued at $300,000.
The Assets of the Parties at the Outset of the Relationship
8 At the commencement of the relationship, the parties lived in rented accommodation at 81 View Street, Bendigo. The plaintiff was the proprietor of a retail clothes business conduct initially at View Street, and subsequently at Centre Arcade, Bendigo. The business was named ‘Feisty’, and was sold in approximately August 2007 for the sum of $13,500. The proceeds of sale went towards bills, debts and a loan the plaintiff had with a friend. Given these matters, I am of the view the business had little if any value.
9 In addition, the plaintiff had household and personal effects, and an elderly car of little value.
10 At the commencement of the relationship, the defendant was the registered proprietor, with his former partner, of the Strangways property which had an agreed value at the time of $210,000. It had a mortgage which secured the property of $100,000 but that mortgage was increased by $93,000, up to $193,000 to enable the defendant to pay out his former partner’s interest in the property, and a further small amount for legal costs. Further, the defendant was the registered proprietor of a motor vehicle which he claims was worth approximately $6000, and a Ducati motorcycle of a value of $8000. The plaintiff claims these items were respectively worth $4000 and $3000. He further owned a range of furniture within the Strangways property. The defendant had contributed to a superannuation fund although it is not clear from the evidence the value of that fund at the outset of the relationship.
Financial Contributions by the Parties During the Course of the Relationship
11 According to the taxation records of the parties, they respectively earned income as follows:
Year Plaintiff’s Gross Income Defendant’s Gross Income 2002 $11,523.00 $24,428.00 2003 $11,167.00 $34,231.00 2004 $9,956.00 $40,304.00 2005 $11,585.00 $40,368.00 2006 $9,454.00 $44,012.00 2007 $2,119.00 $49,082.00
12 Towards the end of the relationship, after the plaintiff sold her retail clothing business in August 2007, she was in receipt of Centrelink payments of $420.00 per fortnight, of which she claims she gave the defendant $300.00.
13 At the present time, the plaintiff is working as an employee in a retail business earning $646.00 gross per week less tax of $81.00, a net amount of $565.00 per week. The defendant is currently earning $1,134.00 gross per week less tax of $320.00, a net income of $814.00.
14 The plaintiff paid the rental and outgoings at the View Street property over the period to December 2003. The plaintiff claims that although her income was not substantial, all of the money she earned was paid towards relationship expenses. She claims to have paid $150.00 per week for food and household goods, and for petrol for the defendant’s vehicles. The only item of furniture jointly purchased by the parties, she claimed, was a washing machine of little value. The plaintiff claims she purchased the great majority of food and household items.
15 The defendant states, and the plaintiff accepts, that he paid all of the mortgage payments due in respect of the Strangways property when the parties lived there from 2003 until 2008. He claims the parties shared equally in household food and goods. He states that because he was earning a far more substantial income, his contribution to the finances of the relationship was greater. He states that he paid registration and insurance costs on the parties’ motor vehicles and paid for the utilities at the property. The plaintiff claims she contributed to the utilities.
16 In addition, the defendant claims that the taxation refunds he obtained over the years amounting to approximately $10,000 went towards joint expenses. He further claims that he gave the plaintiff a public address system which he had been given, to a value of approximately $4000.
Non-Financial Contribution of the Parties During the Relationship
17 The plaintiff claims that in addition to working five to six days per week in her retail business, she built vegetable and flower gardens and did a range of maintenance work around the property, including painting some of the rooms, building fences, building a chicken coup and assisting in the construction of a rock wall. She claims she also assisted the defendant in looking after his children when they came to stay each week. This involved driving them shopping, to the hairdressers, to school and preparing meals for them.
18 The plaintiff claims that effectively she did all of the cooking and cleaning at the premises and that she was the principal homemaker throughout the relationship. She further states that she planted flowers, shrubs and fruit trees in the garden and established a vegetable patch.
19 The defendant states that the parties shared gardening work. Of the fruit trees planted by the plaintiff, approximately half had died and the remainder added no value to the property. The defendant stated that the plaintiff had painted only two rooms and that he had done the bulk of the painting. He acknowledged that they had both contributed to the construction of the chicken coup, the stone wall and a vegetable patch.
20 He disputed the claim by the plaintiff in relation to her assistance with the children, stating that he was principally responsible for his children when they came to stay, and all of their needs.
21 The defendant claimed that he rendered significant assistance to the plaintiff in the maintenance of her business, including carrying out various renovations, painting, installing lights and mirrors and providing short-term financial assistance.
22 Further, the defendant claimed that the plaintiff was ill with a food allergy on a regular basis throughout the relationship and in fact contributed very little to the domestic tasks as she was required to rest after work.
23 Evidence was given by the defendant’s daughter, Ms Cass Cameron-Taylor, who stated that the plaintiff was often asleep while she was at the premises and was lazy around the house. She stated the plaintiff had food allergies and was often ill. The plaintiff only took herself and her sister shopping on a handful of occasions and that her father undertook the bulk of the caring. She acknowledged that the plaintiff did do some cooking, but that her father cooked roasts on weekends.
24 I did not find the evidence of Ms Cameron-Taylor of great assistance. I formed the view that her evidence was designed to give assistance to her father. I am not in any way critical of her in this regard.
Assets at the End of the Relationship
25 The plaintiff has assets of little value, comprising personal effects and some furniture. She claims she has a current debt of $14,000 as a result of finance loan.
26 The Strangways property has an agreed value of $300,000. The current mortgage is $187,000, leaving a net amount of $113,000. The defendant further has a car and motorcycle of modest value and an interest in his superannuation fund currently at approximately $21,000. He has a loan to a friend of $5000, and approximately $4,500 outstanding on a credit card.
Agreements Allegedly Entered in the Course of the Relationship
27 The defendant claims that two agreements were entered during the course of the relationship. The first he states occurred in approximately December 2003.[1] At that time he was involved in property law proceedings with his former defacto partner. He states that he was acutely aware of the need to protect himself against claims by the plaintiff and as a result, discussions ensued between the parties which resulted in an agreement that:
[1] Defendant’s Court Book (“DCB”) 30-31
• The plaintiff would not pay any rent • She would not contribute to the mortgage • She would not contribute to utility outgoings. 28 In exchange, he states the plaintiff agreed that she would make no claim for alteration in property interests should the relationship terminate.
29 The plaintiff acknowledges there were some discussions between the parties but these never resulted in any concluded agreement.
30 Further, the defendant alleges a further agreement was entered between the parties towards the end of the relationship to the effect that the defendant would pay to the plaintiff the sum of $10,000 in full and final settlement of any interest she may have in any property owned by the defendant. It was said on his behalf that that agreement was evidenced by a document[2] setting out the terms of the agreement, signed by the plaintiff and dated 15 December 2008.
[2] Exhibit 2
31 Pursuant to s.35 of the Act, a relationship agreement is defined therein and there is no requirement that the agreement be in writing. S.36 of the Act provides that any such agreement is subject to the law of contract. I am not satisfied any concluded agreement was reached in or about December 2003. The detail alleged by the defendant of what occurred is cursory only and the existence of the agreement is denied by the plaintiff. The defendant took no steps to enforce the agreement, and it is further difficult to accept that the agreement was binding when the defendant alleges a further and different agreement later came into effect. I do not accept the submission of the defendant that the plaintiff partly performed the agreement by living in the property without paying rent or utilities. While the plaintiff agreed she did not pay rent, she stated that she did pay utilities, and in any event, the failure to pay rent does not, in my view, constitute any partial performance. The onus is upon the defendant to prove the agreement on the balance of probabilities, and given the denial of the plaintiff and the conduct of the parties thereafter, in particular the failure by the defendant to enforce the agreement, I am not satisfied there was any concluded agreement between the parties at that time.
32 Likewise, I am not satisfied there was any concluded agreement between the parties at the end of the relationship. The document, while executed by the plaintiff in December 2008, was not executed by the defendant. Further, he agreed in evidence that the writing on the first page of the document making various alterations was his writing.
33 Further, according to his affidavit,[3] he stated that the purported agreement referred only to post-separation negotiations. Again, there was no attempt by the defendant to enforce the agreement and in the circumstances I am not convinced, on the balance of probabilities, that there was any agreement between the parties as alleged.
[3] DCB 52 – paragraph 3.3
Conclusions from the Evidence
34 It is clear that the defendant earned a significantly higher income during the course of the relationship. The defendant was in paid employment, and I am satisfied that after payment of mortgage instalments in respect of the Strangways property, and payment of maintenance to his former partner of $250.00 per week while his children were under eighteen, the bulk of his net income was contributed to the relationship.
35 Likewise, although the plaintiff’s income was not substantial, I am satisfied that her net income available from her business was contributed to the relationship.
36 I am further satisfied that each party made significant non-financial contributions to the relationship, and to the Strangways property. I do not accept that the plaintiff was so debilitated by illness that she was unable to undertake household tasks. She worked five to six days per week in full-time work in her business. While I would accept she would be tired from time to time from such labours, I do not accept that she would be rendered incapable of any household tasks. I accept that she did the bulk of the cooking, cleaning and other domestic duties during the course of the relationship. I am further satisfied that the defendant likewise contributed in a non-financial sense to the relationship. I accept he did a range of maintenance at the property and that the parties jointly undertook tasks outside the house, including the establishment of a vegetable garden, building of a rock wall, establishment of a chicken coup and work generally in the nature of gardening and maintenance.
37 I am further satisfied that the plaintiff gave some assistance to the defendant’s children when they came for access visits. I accept that the bulk of the caring, transport and financial assistance was provided by the defendant.
38 I further accept that the defendant provided some assistance to the plaintiff during the course of her business, including doing some maintenance work, painting and providing some lighting and mirrors.
39 In summary, therefore, I am satisfied that while the defendant earned a more substantial income during the course of the relationship, each party contributed their available funds towards domestic and relationship expenses. Further, each party, during the times that they were not working, contributed to the household and domestic tasks, including cooking, cleaning, maintenance and the establishment of a garden at the Strangways property.
Applicable Law
40 Pursuant to s.45 of the Act, a court may make an order adjusting the interests of domestic partners in the property of one or both of them as seems just and equitable having regard to the matters referred to therein.
41 Further, pursuant to s.44 of the Act, it is the duty of the court to end, as far as practical, the financial relationship between the partners.
42 The provisions of the Act are not dissimilar to the provisions of s.285 of the Property Law Act, the predecessor to the Act. In Kenyon v Akeroyd,[4] the Court of Appeal cited with approval the judgment of Vincent J in Conn v Martusevicius where His Honour referred to the wide discretion given to courts to adjust property interests on the basis of what was just and equitable. S.285 of the Property Law Act, said His Honour, did not attempt to narrowly confine the concept of “contribution”. The process involved:
[4] [2008] VSCA 277, at paragraph 5 and following
• Identity of and valuation of the assets of the parties; • An assessment of the contributions of the parties; •
A determination as to whether the contributions had been recognised and compensated for.
43 The Court of Appeal went on further to consider whether the appropriate approach was on an “asset by asset” basis or a “global” approach. In the latter, it was necessary to treat the assets as a pool, and to make a global assessment of the respective contributions on the basis of a percentage adjustment.
44 With respect, it appears to me, particularly given the relatively short period of the relationship in the present proceeding, and particularly the fact that the asset pool is modest only, that a global approach to the distribution of assets is appropriate. Any attempt to precisely or mathematically attribute a particular hourly rate to the non-financial contributions of the parties or undertake a complex mathematical analysis of precisely the amount of money provided to the relationship by one or other party does not, in my view, lead to an outcome which is just and equitable.[5]
[5] See further Giller v Procopets [2008] VSCA 236
45 Mr Devries submitted that I ought to adopt the approach referred to in Kenyon v Akeroyd,[6] particularly where the Court referred to the domestic relationship as a shared undertaking between the parties and in respect of which there ought to be an equal distribution of the asset pool. While the length of the domestic relationship in that case was similar to the present, Ms Kenyon’s contribution was as parent and homemaker, which the Court found was substantial, and that she bore a significantly disproportionate burden in that regard. Further, the asset pool in that proceeding was very different to the modest value in the present pool. While undoubtedly the parties did establish the relationship in the expectation that it would continue, and that they shared many aspects of the domestic tasks involved that, in my view, does not lead, as Mr Devries submitted, to an equal division of the pool. Regard must be had to the fact that the defendant made a more significant financial contribution to the maintenance of the Strangways property and that the plaintiff did not pay anything towards the mortgage, nor rental. That is not to say, however, that her contribution was not substantial, both in relation to the payment for food and household goods, and non-financial contributions as detailed above.
[6] (supra)
Conclusion
46 The net value of the Strangways property standing in the name of the defendant is $113,000. From this should be deducted the net equity the defendant had in the property at the outset, namely $17,000. Each of the parties has various other assets, including motor vehicles, a motorcycle, and household furniture. None of these are of any great value. The defendant has a superannuation fund with a current net value of $21,000 which I should bear in mind as a financial resource of the defendant, albeit he will not gain access to any superannuation benefit for a considerable period yet to come. Further, a proportion of this was established before the relationship commenced.
47 It was submitted by Mr Testart, on behalf of the defendant, that if I was to make an assessment of the distribution of entitlement, I ought to have regard to the figure of $10,000 referred to in Exhibit 2 as a figure appropriate given the plaintiff was prepared to accept such a figure. However, having found that there was no concluded relationship agreement, I consider that figure no more than a negotiation between the parties in an attempt to resolve the dispute and a matter of no relevance whatsoever in determining an appropriate distribution of property.
48 Bearing in mind the financial and non-financial contributions of the parties during the course of the relationship, and adopting the global approach referred to by the authorities, I am of the view that a just and equitable adjustment of the interests of the parties in the pool of assets, most significantly the Strangways property, is for the defendant to pay to the plaintiff the sum of $24,000.00. This represents a division of the current net equity in the Strangways property, less the defendant’s equity at the outset, of 25% to the plaintiff and 75% to the defendant.
49 I shall make final orders after consulting with the parties.
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