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  • Unreported Judgment

M v M

 

[2006] QSC 148

SUPREME COURT OF QUEENSLAND

 

 

CITATION:

M v M [2006] QSC 148

PARTIES:

M
(applicant)
v
M
(respondent)

FILE NO/S:

BS 2872/05

DIVISION:

Trial Division

PROCEEDING:

Originating Application

ORIGINATING COURT:

Supreme Court of Queensland

DELIVERED ON:

19 June 2006

DELIVERED AT:

Brisbane

HEARING DATE:

15 June 2006

JUDGE:

McMurdo J

ORDER:

As and by way of a property adjustment order pursuant to subdivision 2 of Division 4 of Part 19 of the Property Law Act 1974 (Qld):

  1. The applicant will have for her benefit absolutely all assets presently in her possession or under her control;
  1. The respondent will have for his benefit absolutely all assets presently in his possession or under his control, including a bobcat and truck and other earth moving equipment in his possession, but not including the house owned by the parties at Morayfield;
  1. The house owned by the parties at Morayfield will be sold and the applicant is appointed to act as the respondent’s agent to do all necessary things, including signing all documents on his behalf and appointing real estate agents and solicitors, in order to effect the sale of that house;
  1. By midday on 10 July 2006, the respondent is to vacate and cause to be vacated the house, so as to allow the house to be sold with vacant possession and in a clean and tidy condition and he is to deliver its keys to the applicant’s solicitors.
  1. The respondent is to do all things reasonably necessary to co-operate in the applicant’s sale of the house;
  1. The net proceeds of sale of the house are to be paid to the trust account for the solicitors for the applicant to be distributed as follows:
  1. $81,000 to the respondent;
  1. Should the sale price of the house exceed $475,000, a further sum being 20 per cent of the difference between that sale price and $475,000, to the respondent;
  1. The balance to the applicant.
  1. The respondent is to leave on the Morayfield property any of the items referred to in paragraph 139 of the applicant’s affidavit filed on 9 June 2006 which is on that property at the date of this judgment.
  1. Liberty to apply.

CATCHWORDS:

FAMILY LAW AND CHILD WELFARE – DE FACTO RELATIONSHIPS – RELATIONSHIP – where the parties were in a de facto relationship which ended in February 2004 – where the parties met in about March 1997 ­– whether the  relationship commenced earlier than 2000

FAMILY LAW AND CHILD WELFARE – DE FACTO RELATIONSHIPS – ADJUSTMENT OF PROPERTY INTERESTS – where there is an application for an adjustment of the parties property interests under the Property Law Act 1974 (Qld) – where the applicant looks after the two children from their relationship – where the applicant’s financial contribution to the relationship was approximately two and a half to three times greater than the respondent  – where both parties made financial and non-financial contributions to the household throughout relationship just and equitable property distribution

Acts Interpretation Act 1954 (Qld), s 32DA
Property Law Act 1974 (Qld), s 260, s 287, s 292, s 293, s 294, s 297, s 298(b), s 302, s 307, s 309

COUNSEL:

T F Jordan for the applicant
The respondent appeared on his own behalf

SOLICITORS:

Fox Mildwaters for the applicant
The respondent appeared on his own behalf

  1. McMURDO J:  The parties were in a de facto relationship which ended in February 2004.  This is an application for an adjustment of their property interests under the Part 19 of Property Law Act 1974 (Qld).
  1. There is an issue as to when the de facto relationship commenced. This is defined as a relationship between two persons who are living together as a couple on a genuine domestic basis but who are not married to each other or related by family.[1]  The parties met in about March 1997.  The house in which the applicant was living was at Kelvin Grove in Brisbane and the respondent then lived in his house at Sussex Inlet in New South Wales.  From then they began to visit each other from time to time, staying at each other’s house and they went on holidays together in Australia and overseas.  This continued until early in 1998 when they fell out at a time when she was staying with him.  There was no further contact between them until about June 1999.  Their relationship resumed in about July or August 1999 when he came to stay with her in the house she by then owed at Red Hill.  She then returned to Sussex Inlet with him in September 1999 and stayed there until just before Christmas.  At this time she fell pregnant.  At about the beginning of 2000 the respondent moved to Brisbane where they lived together until February 2004.  The applicant says that the de facto relationship commenced in 2000.  The respondent, who is not legally represented, says that it commenced earlier, although he did not seem to identify an approximate date of its commencement.
  1. I find that the de facto relationship commenced at the beginning of 2000. Before then the parties were staying in each other’s houses from time to time but these were extended visits rather than periods of cohabitation as a couple.

Background

  1. The applicant is aged 36 and the respondent is aged 44. The applicant was in an earlier relationship from which she has a child born in February 1996. Her partner in that relationship was killed in a motor accident in 1997. He owned the house in which they lived at Kelvin Grove and in which she continued to live until 1999. His estate passed to their child but she received the benefit of his life policy in an amount of $500,000.
  1. The respondent has three children from a previous relationship who were born in 1982, 1984 and 1991. When he came to live with the applicant in 2000, two of those children were with him but none presently live with him.
  1. In August 2000, the applicant gave birth to twins who are now nearly six years of age. The respondent is their father. They live with the applicant. The respondent has been ordered to pay about $21 per month towards their maintenance but the applicant says that the respondent has not paid any of this and he seems to concede that.
  1. The applicant’s present occupation is described as home duties. She says that she has done some part time work but during the de facto relationship the applicant appears to have been occupied full time with the twins and her other child.
  1. The respondent was and is a self employed contractor doing earthmoving work. He was doing that work in New South Wales and has continued it here. During the relationship there was a trading partnership under which that work was performed. The parties were equal partners. The assets of that partnership were various items of equipment which the respondent still has. They were purchased from funds provided by him in a total of about $73,000. I find also that their present value is about $37,000 as it was at the time the relationship ended. The parties agree that this equipment should belong to the respondent.

Their respective contributions

  1. At the beginning of 2000 the applicant’s property was worth in all between $320,000 and $350,000. This represented the $500,000 from the life policy less her drawings upon it for living expenses over those three years or so. She owned her own house at Red Hill, which she bought for $240,000 in March 1999. She also owned vacant land at Esk which she had purchased for $71,000. Neither property was mortgaged. She owned a 1996 motor vehicle, and a full house of furniture with the usual household items.
  1. At this time the respondent’s property consisted of his interest in the house in which he had lived at Sussex Inlet as well as an old bobcat which he used in his business there and an old motor vehicle. Subsequently and during the relationship, the respondent’s house was sold and he received a sum of money through a settlement with his former de facto partner. He says that he received the sum of $150,000 which he thereby contributed to this relationship. The applicant disputes that. The applicant does not know the amount which he received but says that he contributed no more than about $108,000. She arrives at this figure by adding the $73,000 used to buy the earth moving equipment for their business in Brisbane to the $35,000 which she agrees he contributed towards repayment of a loan secured upon another house in which they lived. Unfortunately he could offer no documentary evidence, or any evidence other than his own, as to the amount of his settlement from that earlier relationship. I infer that he did not spend all of his capital in the ways just mentioned but that he brought some other funds to what is commonly described in this context as the pool. I accept that he spent some thousands of dollars upon renovations of their houses. But I am not persuaded that his property settlement was of the order of $150,000. I find that his contribution to the pool of assets was about $125,000. Accordingly, her contribution to the pool was approximately two and a half to three times greater than his.
  1. In April 2001, the applicant purchased another house, this time at Chermside, with the intention that the extended family would move to there from Red Hill. In the sixteen months or so of their relationship to that point, neither was in employment and they lived upon social security payments and some borrowings on the security of the house at Red Hill.
  1. In about May 2001 the family moved to the Chermside house where they lived until about April 2003. It was during the period at Chermside that the respondent received his property settlement and the earthmoving equipment was purchased and the partnership commenced business. It carried on business until the parties separated in February 2004. It is common ground that the respondent paid $35,000 from his settlement towards a mortgage over the Chermside house.
  1. In April 2003 the parties purchased a house at Morayfield, which they still own as joint tenants. They moved there in July 2003 after which the Chermside house was rented out. The respondent has lived at the Morayfield house since that date. The applicant and her children moved out when the relationship ended in February 2004. In October 2004 they went back to live at the Chermside house where they remained until the applicant sold it in June 2005 for $375,000. She now lives in rented accommodation. The respondent now shares the Morayfield house with his father and another person whom he describes as a boarder.
  1. The earthmoving partnership was established in early 2002. The respondent did the physical work and the applicant did some paperwork. Tax returns show that it made a loss of $11,309 in the period to 30 June 2002 and in the next year made a profit of $5,214 from gross income of $25,524. That profit allowed for $9,444 for depreciation so that the cash inflow was closer to $15,000. I have the impression that the respondent believes that the income was higher than the tax returns represent, but there are no records in evidence which go to that and I am not persuaded that the income was significantly different from that disclosed in the tax returns. As yet there is no return for the year to June 2004 but the applicant expects that the return will disclose gross income of a little over $10,000 and expenses of about $3,000, which I accept as reasonable estimates.
  1. Apart from the income from the business, the parties had some further income from social security and they also seem to have used borrowings for some expenses. But neither party made any significant contribution to the household income beyond that of the other, apart from the earthmoving business. Although the applicant did some work for that business I accept that it was relatively little compared with the work done by the respondent.
  1. I find that the parties did share the domestic duties. The respondent alleges that the applicant was having difficulties with substance abuse and that he had to do much of the domestic work. He accepts that the applicant had the principal burden of looking after the children and he makes no criticism of her in that respect. She does not dispute that he did at least most of the cooking and that he did other household chores. Nor does she dispute that he did substantial work on the various houses in which they lived. His evidence in that respect is supported by that of the brother of the applicant’s former partner (the man killed in the motor accident in 1997). That witness described work which he recalls the respondent doing at the Kelvin Grove, Red Hill and Chermside houses. Of course the Kelvin Grove house did not belong to either party and the benefit of that work went to the estate of the applicant’s former partner, so that it is of no particular significance for present purposes. At the Red Hill property the respondent built or rebuilt a driveway and a concrete slab, renovated a bathroom and repaired a ceiling. At Chermside he built a new driveway and some other items and co-ordinated contractors who were making other improvements. Upon the evidence it is not possible to quantify the amount of time he spent doing any of this work or its contribution to the value of the house. However, I accept that it was clearly beyond everyday house maintenance and it is likely to have provided some enhancement of the value of the property concerned which is a consideration in his favour.
  1. The property at Esk did not produce income but it required work such as slashing. The parties did this although sometimes they had a contractor do it. The applicant says she paid the contractor but I do not think that the cost is significant for what should be the outcome here.
  1. There are disputes in several respects as to items of renovation or improvement of the various houses. It is unnecessary to resolve those particular issues such as the claim by the respondent, denied by the applicant, that he spent $1,300 rewiring the house at Red Hill. The amounts involved are not so significant for the outcome of this case. According to his affidavit he spent a total of about $6,500 on Red Hill, but the applicant says that, for example, the costs of renovating the bathroom ($3,100) were paid for from a loan which, it is agreed, she obtained from a bank in January 2000. For the Chermside house, he says that he paid $8,000 for blinds but the relevant records have been produced by the applicant and they show a total cost of about $4,200. He says he incurred costs in relation to the driveway of $3,000 but again she has produced an invoice showing the cost at $780. In all he says he paid out more than $20,000 towards improvements at Chermside. Having regard to the two items I have just mentioned, the reliability of his evidence is in doubt by the records which the applicant has produced and I am not prepared to accept everything which he asserts about these costs. I would accept that he put more than $10,000 into Chermside and that he was able to do this from the balance of his funds from his property settlement.
  1. Apart from the earth moving business, the parties’ income consisted of various social security payments. The respondent says that before the partnership commenced trading, i.e. when they lived at Red Hill, he was often returning to New South Wales and doing work there from which he derived income. I am prepared to accept that this happened on occasions but I am not persuaded that whatever that income was, that it represented some significant contribution to the household budget, and beyond what was necessary for the upkeep of the two children who had come to Queensland with him. One indication of the limited income of the household is that the applicant saw fit to borrow about $6,500 from the trust fund kept for her oldest child (from the death of the child’s father) in 2003. She repaid this in July 2005. That trust fund now has a balance of about $90,000 and as already mentioned, the beneficiary is now aged 10 years. That should provide for most of that child’s maintenance through to adulthood.

Assets at separation

  1. The significant assets at the time the parties separated were the Morayfield house, the Chermside house, the Esk land, the earthmoving equipment, and the car which the applicant had purchased. There are valuations which support the applicant’s case that, both at that time and now, the value of the Morayfield house was and is $475,000 and the value of the equipment was and is $37,000. The respondent says that the house is worth more than that, which I think is likely. There was an offer for it late last year for $500,000. The Esk land was subsequently sold for $56,375 which I would accept was its approximate value at the time of separation. I would also accept that the Chermside house was worth what it was sold for in June 2005 which was $375,000, and that the car was worth about $8,000. Valuing the Morayfield house at $475,000, there were then assets of a total $951,375.
  1. The principal liabilities at the time of separation were the amounts owing on the two houses. It is not disputed that $161,524 was jointly owed on Morayfield and $172,337 was owed by the applicant on Chermside, which was in her name alone. There was the $6,500 owing to the trust fund and other relatively small amounts which I find made the liabilities at the time of separation of the approximate amount of $346,000. The net assets were therefore about $605,000.

Events since the separation

  1. As already mentioned the respondent has remained in the Morayfield house. He has paid the mortgage instalments of about $1,200 per month. There is some issue as to whether he has paid to have the property insured and it would appear that he has not paid the rates. But by meeting the mortgage payments, he has effectively compensated the applicant for his use of the house.
  1. The applicant has had access to monies from the sale of the Chermside and Esk properties. She has had to look after the two children of this relationship. The respondent says that he has bought clothing and some other items although he has not paid maintenance for the children. I am not convinced that he has made any significant contribution for their upkeep since the separation. The applicant has spent the proceeds of the sale of the Esk property for living expenses, some mortgage payments and for legal fees. She has sold her car for $8,000, which she has used for living expenses. The net proceeds from the sale of the Chermside house were approximately $182,000 which she initially invested but upon which she has drawn from time to time leaving a present balance of $104,492,50 (together with some interest) invested by her solicitors on her behalf. Those drawings have been for living expenses, legal costs and other outlays.
  1. So the relevant assets at present are those funds in the solicitors’ trust account, the Morayfield house and the earth moving equipment, and the remaining liability is the mortgage on Morayfield which is a debt now of about $158,000.

Other considerations

  1. Clearly there is a power to make a property adjustment order in this case at least because there are children of the de facto partners who are under 18 years. But further, because of the indisputably greater financial contribution by the applicant, failure to make some order would result in a serious injustice to her.[2]  I turn to the considerations prescribed by the Act for deciding what order would be just and equitable.[3]
  1. I have discussed already the contributions to property or other financial resources, being both financial and non-financial contributions, made by each of the parties and I have also considered the contributions made to family welfare as required by s 292. As to s 293, the future earning capacity of either party should not be affected by the adjustment sought by the applicant or some alternative order which is less favourable to her. The respondent will have the earthmoving equipment for his livelihood.
  1. As to existing child support (s 294), as mentioned already the respondent is presently obliged to pay about $21 per month but has not paid any of it and there are arrears of about $671. In September 2004 there were consent orders made in the Federal Magistrates Court for the twins to live with the applicant. The respondent says that he proposes to apply to have this changed so that they would live for perhaps half of the time with him. But as the circumstances presently appear, it is likely that the children will remain living with their mother for some time yet and the financial burden of them will almost entirely fall upon her. I reach that conclusion particularly because of the respondent’s failure to pay any of the child support presently ordered.
  1. Each of the parties appears to be in good health and there is no suggestion otherwise (s 297). The property and financial resources of each party have been discussed already. Each has a physical and mental capacity for employment (s 298(b)). The respondent does not have a high level of education but he has been able to make a living in his own business and he can no doubt find suitable employment. The applicant has previous experience in hairdressing, retail work and office work. I have discussed already the applicant’s responsibilities for the care of the twins, which responsibilities are likely to continue. She also has the responsibility of her other child although this is not a significant financial burden. The respondent has a responsibility to support his youngest child.
  1. So far as government assistance is concerned (s 302), the applicant receives pensions and other benefits of nearly $500 per week. As to s 307, the applicant is cohabiting with another person but I am not satisfied that this represents either a financial benefit or burden for her.
  1. Section 309 requires me to consider any other fact or circumstance which should be taken into account in the interests of justice. In this respect the applicant has given evidence of suffering physical abuse at the hands of the respondent during the relationship. He strongly denies any such conduct. He consented to a domestic violence order but with no admission of any violence. Simply from the competing evidence of the parties, I am unable to fairly conclude that there was or was not such violence. In any case, as the applicant’s ultimate argument seemed to accept, the allegations, serious as they are, are not of much importance for these proceedings. The same applies to the respondent’s allegations that during the relationship the applicant spent much of her time and the family resources in drug and alcohol abuse. The applicant admits that she has had alcohol and drug problems but she says that she was over these by the time the relationship commenced. Again, I am unable to make a fair conclusion one way or the other about that. But again it is of not much importance for present purposes.

What adjustments should be made?

  1. The most important considerations are these. The parties had a pool of assets at the time of their separation of a net worth of about $600,000. Each had contributed to that pool but the applicant’s financial contribution was much greater. She brought to the relationship about $320,000 to $350,000 and he brought about $125,000. Neither made a significantly greater contribution than the other during the course of the relationship. The income from the business was small and the family income was supplemented by social security receipts and borrowings. Each made substantial contributions in other ways such as performance of domestic chores, her caring for the children and his work on the houses. But for one consideration, the appropriate result would be to adjust so that their respective entitlements at the date of separation corresponded with their original contributions. That consideration is the burden which has fallen and will continue to fall upon the applicant for the care and upbringing of the twins. That is not only a large expense but also has been and will be for some further time an impediment to the applicant’s returning to the workforce, at least on a full time basis. That factor requires a considerable shift in what otherwise would be the appropriate apportionment. But for that consideration, it would be appropriate to apportion on the basis that the applicant should have 70 to 75 per cent of the pool at the time of separation. But with that added consideration the appropriate apportionment to the applicant would be more of the order of at least 80 per cent.
  1. In my conclusion, a just and equitable adjustment can be reached as follows. Adopting a value for Morayfield at the time of separation of $475,000 (from which say $15,000 should be deducted for the costs of selling the house) and thereby a net asset value of the pool of $590,000, an allocation of 80 per cent of that to the applicant at February 2004 would have resulted in about $472,000 for the applicant and $118,000 for the respondent. The value of what remains of that pool at present is (net) $463,000. The decrease from the value of the pool at the time of separation is substantially due to drawings made by the applicant which can, for present purposes, be treated as drawings upon her share. Of course she has had the burden of the children but that has been allowed in the apportionment of 80/20. He has had the benefit of occupation of the house but he has met the mortgage payments.
  1. It is likely that Morayfield will realise more than $475,000. If it does then the excess should be apportioned 80/20. The earthmoving equipment should be his property and the money held by the applicant’s solicitors should remain her property. The Morayfield house will have to be sold. Given the acrimony between them, the parties should not be left to sell it themselves. Often an independent person will be appointed a trustee for sale in these circumstances but I am persuaded that here it is appropriate to appoint the applicant as his agent. That will avoid the costs of an independent trustee and it might also avoid a perception by purchasers that this is something of a fire sale.
  1. Allowing the respondent 20 per cent of the $590,000 in the pool of assets as at the separation, but subtracting $37,000 for the earth moving equipment which will be his, he should have another $81,000 from the sale of the house together with 20 per cent of the difference between its sale price and $475,000. The applicant will have the balance of the proceeds of sale and, as I said, those funds in the solicitors’ trust account. The applicant also seeks an order that she have all of the contents of the house. But some of those contents are the respondent’s property and some of that which she thinks is still in the house is no longer there, according to him. Paragraph 139 of her most recent affidavit[4] refers to certain items which she says are still in his possession at the house.  He does not resist an order that any of the items referred to in paragraph 139 which are in the house at the date of this judgment will be her property.

Orders

  1. The orders will be as follows:

As and by way of a property adjustment order pursuant to subdivision 2 of Division 4 of Part 19 of the Property Law Act 1974 (Qld):

  1. The applicant will have for her benefit absolutely all assets presently in her possession or under her control;
  1. The respondent will have for his benefit absolutely all assets presently in his possession or under his control, including a bobcat and truck and other earth moving equipment in his possession, but not including the house owned by the parties at Morayfield;
  1. The house owned by the parties at Morayfield will be sold and the applicant is appointed to act as the respondent’s agent to do all necessary things, including signing all documents on his behalf and appointing real estate agents and solicitors, in order to effect the sale of that house;
  1. By midday on 10 July 2006, the respondent is to vacate and cause to be vacated the house, so as to allow the house to be sold with vacant possession and in a clean and tidy condition and he is to deliver its keys to the applicant’s solicitors.
  1. The respondent is to do all things reasonably necessary to co-operate in the applicant’s sale of the house;
  1. The net proceeds of sale of the house are to be paid to the trust account for the solicitors for the applicant to be distributed as follows:
  1. $81,000 to the respondent;
  1. Should the sale price of the house exceed $475,000, a further sum being 20 per cent of the difference between that sale price and $475,000, to the respondent;
  1. The balance to the applicant.
  1. The respondent is to leave on the Morayfield property any of the items referred to in paragraph 139 of the applicant’s affidavit filed on 9 June 2006 which is on that property at the date of this judgment.
  1. Liberty to apply.

Footnotes

[1] Property Law Act 1974 (Qld) (“the Act”), s 260 and Acts Interpretation Act 1954 (Qld), s 32DA

[2] Section 287 of the Act

[3] Subdivision 3 of Division 4 of Part 19 of the Act

[4] Filed 9 June 2006

Close

Editorial Notes

  • Published Case Name:

    M v M

  • Shortened Case Name:

    M v M

  • MNC:

    [2006] QSC 148

  • Court:

    QSC

  • Judge(s):

    McMurdo J

  • Date:

    19 Jun 2006

Litigation History

No Litigation History

Appeal Status

No Status