Webber v Webber

[1999] NSWSC 1178

Reported Decision: (2000) DFC 95-225

New South Wales

Supreme Court

CITATION:	Webber v Webber [1999] NSWSC 1178
CURRENT JURISDICTION:	Equity Division
FILE NUMBER(S):	1243/98
HEARING DATE(S):	19/11/99
JUDGMENT DATE:	22 November 1999
PARTIES :	Terrie Christine Webber v Keith John Webber
JUDGMENT OF:	Master Macready at 1

COUNSEL :	Mr A. Todd for the plaintiff]
SOLICITORS:	Grahame W. Howe & Co. for the plaintiff Mr Andrew A. Torok for the defendant
CATCHWORDS:	Family Law. Application under Property Relationships Act. Consideration of contributions when parties' money used to make a windfall purchase in one party's name. Order for adjustment made.
CASES CITED:	Black v Black 15 Fam LR 109.
DECISION:	Para 30

- 1 -

THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

MASTER MACREADY

Monday 22 November 1999

1243/98 - TERRIE CHRISTINE WEBBER -V- KEITH JOHN WEBBER

JUDGMENT

1 MASTER: This is an application under the Property Relationships Act 1984. The parties admit in the pleadings that they were in a de facto relationship from February 1970 to December 1996. There was some mention in the evidence of separation for short periods but the parties do not seem to have treated it as terminating the relationship. 2 There were two children born to the parties in the relationship, Kellie Webber born on 5 April 1971, she now being twenty-eight years of age and Renee Webber born on 18 August 1993, and she is now twenty-six years of age. 3 I will deal with some of the history of the matter. The defendant was born on 13 October 1946 and is now aged fifty-three years. The plaintiff was born on 22 September 1950 and is now aged forty-nine years. It was in February 1970 that they commenced their de facto relationship. The plaintiff was then employed as a sales person in a shoe store and the defendant was employed as a bricklayer. Neither party had any significant assets and they lived in rented accommodation. The children were born in 1971 and 1973 and in 1973 the plaintiff gave up work for some three years while she cared for the children while they were growing up. She went back to her full time employment in the late 1970s at Ethanor Pharmaceutical and had a number of other positions. In 1982 the defendant who had been having some difficulties with employment as a labourer and a bricklayer's labourer decided to purchase a truck with the right to contract with the Ryde Council. 4 The parties borrowed $12,000 from the defendant's father as a loan and that was repaid in due course. The loan was used to commence the business. On 19 October 1987 the defendant's father died. His estate included a property at 7A Sewell Street, Ryde and some personal effects. He died intestate and the estate passed to his three children one of whom was the defendant. One of the other children was Stephen and on 1 November 1988 there was a deed made between Stephen and defendant in which Stephen transferred his interest in the estate to the defendant for a consideration of $5000. That was substantially less than the value of his interest in the estate. Apparently Stephen was in gaol and had an urgent need for money. The plaintiff contends that the funds that were used were advanced from the joint savings. Administration was granted in December 1990 in the estate and in October 1991 an arrangement was made for the defendant to purchase the one third interest of the other brother's interest in the father's estate. That brother had predeceased leaving children who were entitled to take a one third share. 5 In order to buy out that one third share both the plaintiff and the defendant obtained a State Bank mortgage in the sum of $65,000 over twenty years. The property was then transmitted into the defendant's name as executor and on 20 December it was transferred into the parties' joint names and a mortgage taken out. The parties had in fact moved into the property in 1989 and over a period 1987 to 1989 the property had been let to some friends of the defendant on the basis that they would meet the outgoings and pay a rent of something in the order of $130 a week which the defendant tended to collect. 6 In 1994 the parties re-financed that loan with Westpac and they also then took out a business loan for $30,000 over a five year period which was also secured on the property. This was used to purchase a truck for the business. 7 It was in December 1996 that the parties separated. The plaintiff left the home at 7A Sewell Street and the defendant remained in occupation and has been there ever since. Notwithstanding the separation the business that the defendant had been carrying on was transferred to a company in which the plaintiff was a shareholder but probably would not have a beneficial interest. As at separation the amount outstanding on the mortgage was approximately $51,000. 8 In March 1997 the plaintiff sold the Holden motor vehicle which the parties had purchased some time before. She paid $19,450.97 off the housing loan and the balance of the sale price, about $7000 was used to pay off the car loan which the parties had taken out to purchase the car. In June 1998 the defendant gave up his business. He had tried to sell but had been unsuccessful. As a result of him commencing some action against the Council on an employment related accident he lost his contract and ultimately he sold at this stage the truck for $26,000. $6000 was used to pay out the loan which was the business loan which the parties had taken out in 1994 and the balance was retained. 9 It is useful of course to look at the assets of the parties at the commencement of the relationship and also at the conclusion. The parties had no assets of any substance at the commencement of the relationship and for many years lived in rented accommodation. Each of them contributed the whole of their wages to their joint living expenses. In the early years the plaintiff concedes that the defendant earned more than she did but she suggested that when one took into account his absences from work through strikes and other matters, that the contribution would be equal. She suggested that he was off for about eighteen months in 1976. It is important of course to note in these early years the plaintiff herself had been at home for three years looking after the children, not earning any income. 10 There is a total absence of any records showing the parties' earnings for the period prior to 1992. The defendant conceded in the witness box that six months prior to him moving into the business in 1982 he had been having a very thin time and that was the reason why he changed. The purchase by the parties of the one third share in the brother Stephen's interest in 1988 was, according to the plaintiff made from their savings. There is very little evidence other than what the parties say but it would seem to me given their work history that it is probably likely that any savings that they had up to 1988 would have been contributed to fairly equally. 11 As I have mentioned the first piece of property that the parties seem to have acquired was the business which the defendant purchased in 1982. There is some dispute as to whether it was $10,000 or $12,000. There is no documentation which resolves this matter but it is probably not important anyway. The loan was from the defendant's parents and they charged no interest. Accordingly to the extent to which there was a foregoing of interest this is a contribution made on the defendant's side in respect of the parties' property. 12 The parties as I have said had joint bank accounts which they maintained during the relationship. The important piece of property was of course acquired from 1987 through to 1991. In 1987 of course the one third share passed to the defendant. 13 In December 1996 the assets of the parties at the determination of the relationship seem to be as follows. There was the house at 7A Sewell Street, Ryde, the value of it at December 1996 does not appear in the evidence. However in 1991 it seems to have a value of $161,000. The parties are agreed that at the present time it has a value of $305,000. There was the Holden car valued at $27,000. There was some furniture, the amount of which was not valued in the evidence and some personal effects. 14 There was also the business which the defendant was carrying on at separation. That was not valued and even though it might have been offered for sale, the offer for sale is not an indication of its value. Probably the best indication of its value might be seen from the sale of the truck some time after termination. There was also a joint bank account in the sum of $3244. 15 The liabilities of the parties at separation were in respect of the mortgage on the house approximately $52,000, a car loan of approximately $7000 and a business loan of a little in excess of $6000. 16 The subsequent events after separation are relevant for looking at the property. Importantly the car was sold by the plaintiff and those proceeds were used to pay out the car loan and reduce the mortgage on the house. The mortgage on the house then became $31,108. 17 The business was not sold and from the sale of the truck $6000 was used to pay out the business loan and the balance of $20,000 was retained by the defendant. The defendant also retained the joint bank account with the amount of $3244. 18 In considering the contributions of the parties there is over a period from 1991 to separation contributions by the parties in repayment of the house loan, the car loan and the business loan. The parties are agreed as to the taxable income of the parties for the period from 1992 to 1996. 19 The plaintiff's earnings over this period was $97,869 and the defendant's $154,179. Thus the defendant had available at least half as much again as the plaintiff in income that he contributed to their joint purposes. The evidence, although it contained some allegations of him spending money on drink, does not really go to the extent of one being able to infer a substantial waste of funds by either party and the funds seem to have been used for the purposes of the relationship. 20 An important contribution is of course in relation to the provision of the house which was in the parties' joint names. One third clearly was the contribution by the defendant to which he was entitled under his father's will. Another one third was the result of the parties jointly borrowing money to buy out one of the brother's children. They each signed a mortgage and took responsibility for it and made repayments during the period from 1991 to 1996. The other one third share was that which was acquired from Stephen for $5000 in 1988. 21 The suggestion of the plaintiff is that the moneys came from the joint funds. The defendant himself thought it might have been some of the money in the estate. However, I think that is unlikely and it is apparent from the letters dealing with the distribution of the estate that the estate was got in and in due course the sum of $13,223.99 was paid to the defendant. In 1991 at the time of the purchase of the one third share of the brother's children it would seem to me that the defendant is probably in error and that the source of the funds for the purchase of the one third share for $5000 is from the joint savings of the parties. 22 Clearly given that this purchase of $5000 was substantially less than the value which was about $41,000, clearly there is an advantage for the parties. It is a question of whether it was for the parties jointly or whether the greater share should be attributed to the defendant because it was his brother's share which was purchased. 23 I certainly do not think that the fact that the deed was made between the brother and the defendant alone is determinative of the matter. In cases such as this it is necessary to look at what the parties contribute to the joint assets. I am satisfied that the purchase price of this was provided by the use of the parties' joint savings which I have held was equally owned at this stage. 24 The evidence is almost non-existent as to the circumstances surrounding the purchase of this share and accordingly it seems to me that this one third share ought to be looked at as having been contributed to by the parties equally. I would assess the contribution of the plaintiff as to one third and the defendant two thirds subject to the question of the outstanding balance of the mortgage. 25 Given the incomes earned from the period 1992 to 1996 the defendant contributed more towards the repayment of the house loan, the car loan and the business loan over this period. However an off-set against this extra contribution is the fact that after separation he has retained $20,000 from the sale of the truck and the joint savings account of $3244. The defendant also received $13,223.99 at the time of the winding-up of the estate which was financed by both parties' housing loan. He gave no evidence of what he had spent it on but it is a possibility that some of it was applied to re-carpet the house, painting and some other alterations that were made at that time. 26 I turn to the question of the non-financial contribution. The homemaker's contribution were mostly those of the plaintiff. The defendant says that he mowed the lawns and washed the dog and the cars and I accept this evidence. However there would be a substantial amount of home making contributions by the plaintiff over and above the defendant's contributions, given the needs of the children and the long period of the relationship. 27 So far as parenting is concerned the plaintiff took three years off to raise the young children before returning to the work force. The defendant seems to concede that the plaintiff performed the parenting role. He gave no evidence of anything that he had done in this regard. It is necessary to recognise these non-financial contributions in a substantial way and not in a token way. See Black v. Black 15 Family Law Reports at 109. They were provided during the twenty-six years of the relationship. Two children were raised during that time. 28   In summary one has the property originally contributed to a to one third by the plaintiff and two thirds by the defendant. The house and car and business loans repayments coming from the greater contribution by the defendant. Thirdly the defendant's retention on separation of the sum of $23,244. Fourthly the substantial home making and parenting contribution by the plaintiff over twenty-six years. Fifthly the defendant's parents interest-free loan in 1982. 29   The remaining property of the parties is the house. The net proceeds would be in the order of $270,000 after payment of the mortgage and expenses of sale. Having regard to the matters I have considered and the whole of the evidence I am satisfied that the appropriate order is one which gives as suggested by the plaintiff in submissions, forty per cent of the net proceeds of sale. 30   The defendant wishes the opportunity to purchase the plaintiff's interest in the property and this is not opposed. Accordingly I order:

(1) That the defendant pay the plaintiff by way of
adjustment of their property interests the sum
of $108,000 in exchange of a transfer of her
interest in the property 7A Sewell Street,
Ryde, the defendant indemnifying her against
any liability under the existing mortgage on
the property.
(2) In the event that the sum of $108,000 is not
paid to the plaintiff within two months from
today's date I order that both parties do all
acts and things and execute all necessary
authorities, contracts and other documents as
may be necessary to sell the property situated
7A Sewell Street, Ryde, by public auction within
two calendar months from the date hereof by an
agent, auctioneer and at a time, and reserved
price not to exceed $305,000 as agreed upon by
the parties, or in default of agreement in respect
of any such aspects within three working days, as
nominated by the President of the Real Estate
Institute of New South Wales or his nominee
appointed in writing for such purpose provided
that the contract for sale shall provide for
vacant possession on completion in thirty day
and shall otherwise be in accord with the usual
conveyancing custom and usage applicable to
residential housing sales in the Sydney
metropolitan area and on settlement of the said
sale the proceeds therefrom shall be disbursed:-
(a) In discharge of any outstanding mortgage
to Westpac Banking Corporation.
(b) In payment of all reasonable real estate
agent's commissions advertising costs and
fees, including any auctioneer's fee.
(c) In payment of the solicitor's reasonable
costs and expenses in acting on behalf of
the vendors.
(d) In payment of the balance as to 40 per cent
to the plaintiff and 60 per cent to the
defendant.

31   So far as costs are concerned there was a Calderbank letter of offer of 2 November in which the plaintiff was prepared to settle it by taking 40 per cent of the property with no order as to costs. She has in fact achieved that. 32   In the circumstances it seems to me that the appropriate order is that the defendant pay the plaintiff's costs on a party and party basis up to and including 9 November 1999 and thereafter on an indemnity basis. 33   The exhibits may be returned.
oOo

Last Modified: 12/07/1999