DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   This is an application for property adjustment orders pursuant to s 286 of the Property Law Act 1974 (“the Act”) arising out of the de facto relationship between the parties to this application.

2. [2]
   The applicant seeks an adjustment of property interests between the parties on the basis of an apportionment of 90%/10% of the net assets in her favour whereas the respondent submits that the ultimate apportionment should be of the order of 55%/45% in the applicant’s favour.^[1]

The Property and Financial Resources

3. [3]
   The parties were in agreement in relation to the identity of the property and financial resources which should be taken into account and their value as at the date of trial as follows:

This was incorporated in a document which became Exhibit “1”.

The Law

4. [4]
   The proceedings are governed by Part 19 of the Act one of the “main purposes” of which is “….to facilitate the resolution of financial matters at the end of a de facto relationship”.^[2]

5. [5]
   The court may make such order as it considers just and equitable.^[3] In deciding what is just and equitable the court must consider the matters mentioned in sub subdivision 3.^[4] Sub subdivision 3, in turn, requires the court to consider a range of matters including, relevantly for present purposes, financial and non-financial contributions made directly or indirectly to property or financial resources^[5] and contributions to family welfare, including homemaking contributions. Sub subdivision 3 also requires the court to have regard to the matters mentioned in sub subdivision 4, to the extent that they are relevant in deciding what order adjusting interests in property is just and equitable.^[6] Sub subdivision 4 sets out a range of specific matters in ss 297-308 and also requires the court to consider any fact or circumstance the court considers the justice of the case requires to be taken into account.^[7]

6. [6]
   In general terms the provisions in Part 19 of the Act largely reflect the provisions contained in the Family Law Act 1974 (as amended).  Consistent with this approach it has been held by Mullins J and Philippides J^[8] that it is appropriate in considering an application under Part 19 of the Act to have regard to authorities that have considered the equivalent provisions in the Family Law Act namely ss 79 and 75(2) of that Act.

7. [7]
   The objectives of the introduction of Part 19 were discussed in E v S [2003] QSC 378 at paragraph [30] by Mullins J.

8. [8]
   The first step therefore is to determine the existence of a “de facto relationship” as defined in the Act between the parties as, relevantly in this proceeding, any “property adjustment order” may only be made by a court if it is satisfied:

“(a) the de facto spouses have lived together in a de facto relationship for at least 2 years”.^[9]

9. [9]
   It is to be noted that under s 32DA of the Acts Interpretation Act 1954 (“AIA”):

“(6) In an Act enacted before the commencement of this section, a reference to a spouse includes a reference to a de facto partner as defined in this section unless the Act expressly provides to the contrary.”^[10]

10. [10]
    Section 32DA(1) of the AIA defines a “de facto partner” as

“……either 1 of 2 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.” 

Section 32DA(2) then sets out a series of “circumstances” which may be taken into account along with “….any of their circumstances…” in deciding whether 2 persons are living together as a couple on a genuine domestic basis to satisfy the definition of a “de facto partner”.

11. [11]
    There is no issue per se between the parties as to the existence of a de facto relationship pursuant to the Act nor is there disagreement as to when the relationship came to an end. Both parties agree that the relationship ended on 3 June 2004. The disagreement is in relation to when the de facto relationship commenced between the parties as this fact is of course relevant to any adjustment order that the court may consider appropriate in the circumstances insofar as determining each party’s contribution to the financial and non-financial criteria of the relationship.

The Evidence of the De Facto Relationship

12. [12]
    The evidence in this application was adduced by affidavits filed on behalf of the respective parties with most of the deponents being called for cross-examination by each counsel.

The Applicant’s Evidence

13. [13]
    The applicant filed 3 affidavits^[11] in which she stated among other things that:

• She entered into a de facto relationship with the respondent “on 7^th June 2001”^[12] and “……separated on the 3^rd June 2004”.
• She met the respondent “….in 1996 and we continued with a boyfriend/girlfriend relationship until 7^th June 2001”.^[13]
• Her relationship with the respondent until June 2001 was that he was “…..in the habit of staying over from time to time in my residence at 4 Spire Street Caboolture (“Spire Street”)…… and I also stayed over at his homes at Elliot Street, Caboolture, Linfield Drive, Caboolture and 15 Churchill Street, Caboolture”.^[14]
• The respondent attended “…..at my residence at (Spire Street) at will”.^[15]
• “Sometimes he (the respondent) stayed overnight sometimes he did not”.^[16]
• “There was no arrangement in place between us that he was to stay on a full time domestic basis between us as he was funding his own residence at 15 Churchill Street, Caboolture and other residences before that”.^[17]
• In June 1999 the respondent installed a computer in the applicant’s property at Spire Street.^[18]
• “The respondent did not have a key to (Spire Street)”.^[19]
• “The respondent never relocated any assets into my house at all until 7^th June 2001 when he contributed a Queen size water bed on which we slept, a large television and a barbeque as a direct consequence of the respondent and his two sons relocating out of 15 Churchill Street, Caboolture”.^[20]
• The applicant took “3 months sick leave” in November 1998 and “the respondent was not living at my household then and provided no assistance to me during this period other than he did drive me to the shops as I was unable to drive”.^[21]

The Respondent’s Evidence

14. [14]
    The respondent, born 17 September 1956, filed 3 affidavits^[22] in which he stated among other things that:

• He “……entered into a de facto relationship (with the applicant) in late 1998….” when he moved into the applicant’s residence at Spire Street which is some 2.5 years earlier than that alleged by the applicant “……and separated on 3 June 2004”.^[23]
• He was “….the lessee on paper for a house at Linfield Drive, Caboolture at the commencement of cohabitation….”^[24] which was occupied by his two sons.
• He carried out “renovations” to the applicant’s property at Spire Street which included:

• He contributed to the applicant’s children’s “pocket money and gifts from time to time”.^[26]
• He carried out “renovations at the 30 Lesley Avenue, Caboolture property including:

Summarising Evidence of the Commencement of the De Facto Relationship

15. [15]
    It is common ground that the parties to this application met in or about 1996 at which time the applicant resided with her family at Spire Street and the respondent resided with his family at Elliot Street, Caboolture.

16. [16]
    The relationship between the parties developed in the succeeding years with the respondent moving residence from Elliot Street, to Linfield Drive, and then to Churchill Street, Caboolture. The respondent disputes that he resided at Churchill Street, Caboolture but agrees that he was the lessee of those premises which he says was occupied by his then teenage sons. The respondent’s evidence is that he merely carried out his panel-beating work from a shed at the rear of the premises from at or about the latter part of 1998^[28] having moved into the applicant’s residence on his evidence in or about August 1998.^[29]

17. [17]
    The applicant was adamant that the respondent did not move into her home at Spire Street “in or about August 1998” as was put to her in cross-examination on behalf of the respondent.^[30]  The applicant’s final position was that the de facto relationship between the parties commenced in “June 2001”^[31] which is repeated as “….the 7^th June 2001” contained in paragraph 2 of the applicant’s affidavit filed 21 March 2005.^[32]

18. [18]
    The respondent’s evidence is that he commenced to live with the applicant at her residence at Spire Street “in about August 1998”^[33] at which time he took into the residence his “…..queen size waterbed ….a large television and BBQ”.^[34]

19. [19]
    There is also evidence that the respondent registered for Goods and Services Tax (“GST”) purposes, his GST registration number at the Spire Street address in June 2000^[35] and a “CarpetCall” tax invoice for the installation of carpet at the Spire Street, Caboolture residence was completed in joint names from Spire Street, Caboolture on 30 November 2000.

20. [20]
    I am satisfied that as the relationship developed between the parties between late 1996 and when they finally decide to purchase a property in joint names in June 2001^[36] the respondent spent an increasing amount of time at the applicant’s residence as he did with the applicant herself in a social sense and it would appear from the evidence that both parties led a very active social life which centred around the Caboolture Golf Club, the Caboolture Hotel, Trader Duke’s Tavern and backyard barbeques.

21. [21]
    Having regard to the criteria set out in the definition of “de facto partner”^[37] and the authorities referred to^[38] I find that a de facto relationship commenced between the parties in the early part of the year 2000 but not later than June 2000 at which time the parties commenced to live together as a couple at the applicant’s residence at Spire Street on a genuine domestic basis.

Sub-subdivision 3 Factors

(i) Initial Contributions

22. [22]
    The applicant stated that:

“At the date of commencement of cohabitation I had the following assets:-

23. [23]
    The applicant further stated that “as at 30^th June 2001 I had superannuation in the sum of $29,762.31…….(and) was receiving full Child Support in the sum of $10,000 per annum as well as Family Tax Benefits”.^[40]

24. [24]
    The respondent stated that:

“At the commencement of cohabitation^[41]:

a) I had no debts or financial resources and had the following assets with the following value:

25. [25]
    He was an undischarged bankrupt.^[43]

26. [26]
    He was “….a self-employed panel beater doing jobs for people on a barter or cash basis, mostly with Caboolture Demolitions”.^[44]

27. [27]
    In summary the respective financial positions of each party at the time of commencement of the de facto relationship would appear to be as follows:

1. Applicant:

1. (a)
   Owner of residential property and contents at Spire Street upon which she owed approximately $90,000.00 leaving an equity of approximately $55,000.00.

2. (b)
   Part-time employment as a customer service officer at Centrelink.

3. (c)
   Child Support of approximately $10,000.00 per annum from her former husband; and

4. (d)
   Family tax benefits.

2. Respondent:

1. (a)
   Self-employed panel-beater discharged from bankruptcy in May 2000.

2. (b)
   Work tools estimated at $10,000.00.

3. (c)
   A 1968 model motor vehicle estimated at $2,000 - $4,000.

4. (d)
   Other items of furniture estimated at $5,800 including a pool-table.

From their descriptions the respondent’s estimates of his property would appear to be extremely generous.

28. [28]
    There is no doubt and I so find, that the initial contributions to property and financial resources at the commencement of the de facto relationship were mainly those of the applicant with the substantial contribution being her Spire Street property.

(ii) Contributions during Relationship

29. [29]
    Following the commencement of the cohabitation the parties resided at the applicant’s residence at Spire Street to which both contributed in various ways in the maintenance and up-keep thereof.

30. [30]
    The respondent gave evidence that he effected “renovations” referred to in paragraph [13] hereof to the Spire Street property to the extent that “the market value of the renovations would have been in excess of $30,000.00 and they increased the market value of the home significantly”.^[45]

31. [31]
    The applicant and the respondent purchased a house property at 30 Lesley Avenue, Caboolture in joint names by contract dated 8 June 2001^[46] for the sum of $124,000 all of which was borrowed from the Wide Bay Capricorn Building Society.  On settlement in September 2001^[47] the applicant and respondent moved into this property and rented the applicant’s Spire Street property.

32. [32]
    The applicant subsequently sold the Spire street property on or about 14 January 2003 and received the sum of “$43,733 net” from the sale “……from which I purchased new furniture for $10,000 and utilised the majority of the balance towards the payment of the Mortgage over the former family home situated at 30 Lesley Avenue, Caboolture. I also paid out the Respondent’s Credit Union MasterCard on the sum of $4,524 which he had incurred since commencement of cohabitation and which he utilised to his own benefit”.^[48]

33. [33]
    The applicant’s evidence at the hearing was that out of the net proceeds of the sale of the Spire Street property of $43,000 she reduced the mortgage on the Lesley Street property by the sum of $12,000 and the balance of $31,000 was paid into her account at the Suncorp Bank^[49] out of which the respondent’s credit union Mastercard debt was discharged.^[50]

34. [34]
    Because of family commitments the applicant worked part-time at Centrelink as a customer service officer between 1996 and at least 2000^[51] and is currently employed full-time in that capacity with Centrelink.^[52]

35. [35]
    The applicant continued working part-time (at first 3 days and then 4 days per week) until 2003 when she commenced to work full-time in her present position.^[53]  In addition she continued to receive child support payments from her former husband.^[54]

36. [36]
    The respondent’s employment history during the period of the relationship is clouded with mystery to say the least. His earnings from the year 1999 to the present time were difficult to identify with accuracy in that apart from some part-time work as a delivery driver he was also self employed as a spray-painter for which he appears to have been paid in cash. The amended income tax returns exhibited to his affidavit filed 24 March 2005 reflect this arrangement.

37. [37]
    The respondent’s income from the 1999 financial year based upon his taxation returns including his amended returns in the 2002, 2003 and 2004 years would appear to be as follows:

38. [38]
    He worked for himself “and had regular money coming into the household. I estimate my cash income to be approximately $30,000.00 gross from my self-employment. I also worked on a casual basis for Trader Dukes in Caboolture between early 2001 and November 2002”.^[55]  The above figures are completely inconsistent with the respondent’s version under cross-examination that his statement in paragraph 7 of his affidavit filed 29 October 2004 was meant to be interpreted as his having earned “cash income” of $30,000.00 per year for those years^[56] and even inconsistent with his revised tax returns.

39. [39]
    He stated in his affidavit that he accepted responsibility for the mortgage repayments on the Lesley Avenue property:

“Once in the new property of 30 Lesley Avenue a new Financial agreement went into place.  I then became solely responsible for the mortgage repayments, the GE Credit Line Loan, which was $10,000.00 in total and my credit card.  I was also still responsible for all entertainment, I helped with groceries, fuel and odds and ends”.^[57]

40. [40]
    The applicant concedes that the respondent eventually made almost all of the mortgage repayments on the Lesley Avenue property “….from Jan 2003 until June 2004”.^[58]

41. [41]
    I am satisfied on the evidence that the applicant was by far the most stable and consistent income-earner of the de facto relationship and in addition she received the child support from her former husband by way of maintenance for her children.

42. [42]
    I find further that she gave her evidence in an honest and forthright manner doing the best she could to recall circumstances and events during the course of the relationship even allowing at times for her down-playing of the respondent’s role. On the other hand I found the respondent vague and evasive in his answers to questions; at times significantly overstating the cash income he said he earned during the period of the relationship and his overall financial contribution to that relationship and the general impression I received from his evidence was that he did not allow his many social commitments to be impeded by any work ethic.

43. [43]
    I accept and find that he contributed to renovations and maintenance to the applicant’s Spire Street property residence during the course of the developing relationship between the parties from 1996 to 2000 and particularly in the years 1999 and 2000 but not to the extent deposed to by him.

44. [44]
    While I accept that all of the witnesses he called to corroborate the work carried out on the Spire Street property and later at the Lesley Avenue property did in fact assist the respondent in those activities from time to time it was work carried out in a social setting in keeping with the respondent’s very active and consistent social ethos.

45. [45]
    In general terms I prefer the evidence of the applicant to that of the respondent in respect of his contributions to the renovations, maintenance and upkeep of both residences they occupied together, as well as the contributions made to their mutual socialising at the various venues referred to in paragraph [20] above.

46. [46]
    I base these conclusions on the fact that the applicant received a net figure of approximately $43,000 from the sale of Spire Street in January 2003 from which she paid the sum of $12,000 to the Wide Bay Capricorn Building Society in reduction of the mortgage on the Lesley Avenue property; spent $10,000 on the purchase of furniture for the Lesley Avenue property and subsequently expended another $11,784.72^[59] on building materials and supplies in respect of the Lesley Avenue property as evidenced by her Suncorp Bank statements exhibited to her affidavit filed 21 March 2005.

47. [47]
    On the other hand the respondent’s contribution to the relationship over the period of four years approximately it existed ie., between the years 2000 and 2004, consisted primarily of the labour he expended on the Spire Street and Lesley Avenue properties and some assistance from friends on a “barter” arrangement, with some further contribution to materials together with the mortgage repayments he made on the Lesley Avenue property between January 2003 and June 2004.^[60]

48. [48]
    Generally I accept the evidence of the applicant where it differs from that of the respondent in relation to the cash contributions he made during the relationship and I reject in particular the respondent’s assertion that he would loan the applicant money; share any household chores; wash clothes or carry out cleaning or other household duties.

49. [49]
    I further accept the applicant’s evidence on these issues in preference to the evidence of the witnesses called on behalf of the respondent some of whom where very vague and equivocal under cross-examination.^[61]

Subdivision 4 Factors

(i) Age and Health (s 297)

50. [50]
    The applicant is 45 years of age and the respondent is 49 years and they appear to be both in a reasonable state of health. Although there was evidence given that the plaintiff had a back problem some years ago, it would seem that she has fully recovered from this disability and it does not impede her working capacity. Her counsel did not urge to the contrary and no medical evidence was called.

(ii) Resources, Employment Capacity and Government Assistance

  (ss 298, 302)

51. [51]
    Each of the parties has the physical and mental capacity to obtain and/or continue in suitable gainful employment. The applicant continues to be engaged in full time employment as a customer service officer with Centrelink and earns a gross amount of approximately $45,000 per annum. In addition she receives child support from her former husband for the two remaining dependent children, who are now teenagers, and one would reasonably expect that the support will cease when the children become totally independent within a few years. The applicant also has her superannuation entitlement, which has accrued over a number of years and will continue to do so. It would appear, therefore, that after making allowances for the normal vicissitudes of life the applicant’s future financial independence is reasonably secure.

52. [52]
    I am satisfied that the respondent is capable of earning at least to the equal of the applicant, but it will be dependent upon his motivation to do so. He does have a taxation liability and Bankcard debt which will impinge upon his financial resources in the short term, but they will not have any lasting impact upon them.

(iii) Caring for Children, Necessary Commitments, Responsibility to Support Others or Pay Maintenance, Commitments to Support Self, Appropriate Standard of Living. (ss 299, 300(b), 301, 302 and 303)

53. [53]
    As stated previously, the applicant has the care of and responsibility for her two dependent children at the present time, which she is capable of doing by herself with the assistance of the support from her former husband. She is capable of supporting herself and her children at least to the standard of living she enjoyed during the relationship.

54. [54]
    The respondent does not have any specific commitment for the care or support of his children who are now independent adults. He also is capable of supporting himself at least to the standard of living he enjoyed during the relationship.

(iv) Length of the Relationship (s 305)

55. [55]
    In respect of the length of the relationship and its effect on the earning capacity of the parties, I find that their respective earning capacities are not affected by their relationship which existed for a period of approximately four years.

56. [56]
    The applicant and respondent live separately and there was no evidence that either of them is cohabiting with another person.

Overview of sub-subdivision 4 Factors

57. [57]
    As stated above, neither party is at a disadvantage in respect of age, state of health, or physical and mental capacity to obtain and maintain suitable gainful employment commensurate with their qualifications. The applicant has an adequate capacity to care for her children and each party is able to maintain an acceptable standard of living. However, at the end of the relationship the applicant’s financial position is more favourable than that of the respondent due, essentially, to her being able to maintain regular permanent and well-paid employment, including a superannuation benefit, in comparison with the respondent, who effectively has no tangible assets other than his interest in the jointly owned property, to which his contribution in cash and kind has been fully analysed.

58. [58]
    It is submitted on behalf of the respondent that in addition to the “just and equitable” apportionment there should be a further adjustment in his favour of 10 per cent of the net assets for these “additional matters”, so that ultimately the respondent should be awarded 45 per cent of the net assets, with an appropriate adjustment for the GE Finance and CU credit card debt for which the respondent will retain responsibility. Finally it is submitted on these calculations that an order should be made that the applicant is entitled to a cash payment of approximately $80,000 of the net assets.

59. [59]
    I consider that a further adjustment under s 309 of the Act, in favour of the respondent in the sum of 10 per cent of the net assets, to be excessive, but taking into account all relevant matters, I am prepare to make a further adjustment of 5 per cent of the net assets.

Adjustment of Interests

60. [60]
    Dealing firstly with the primary property adjustment on a “just and equitable” basis I am of the opinion that the appropriate adjustment between the parties should be an apportionment of the net assets of 80% / 20% in the applicant’s favour.

61. [61]
    In respect of any further adjustment under s 309 of the Act, after taking into account the sub-subdivision 4 matters I consider that an additional adjustment in favour of the respondent of the order of 10% to be excessive but I am prepared to make a further adjustment in his favour of 5% of the net assets. I base this conclusion on the fact that the applicant’s current and future financial position is more secure than that of the respondent due mainly to her own efforts and endeavours but to which the respondent has made some minor contribution during the period of the relationship, together with the fact that he has a taxation debt and the responsibility for the repayment of the GE Finance and credit card debts.

62. [62]
    Accordingly there should be a distribution of the assets of the parties so that the applicant retain 75% thereof and the respondent the remaining 25% thereof with the respondent to retain responsibility for the repayment of the GE Finance and credit card debts.

63. [63]
    I will make orders to give effect to this adjustment but I shall hear the parties further in respect of the terms of the final orders to be made and costs.