MAY v CLK[2006] QDC 410

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The applicant, MAY, lived in a de facto relationship with the respondent, CLK, for nearly five years from October 1997 until 24 April, 2002. On 30 December 2000, they had a son Joshua. During the time of their relationship, they lived at Blackwater which is a mining town. The applicant worked in the mines and earned a substantial income. The respondent worked for some of the time whilst in Blackwater but was predominantly a home maker and subsequently a wife and mother.

2. [2]
   The respondent was given a 50% interest in a property situate at 20 Bernborough Avenue, Planlands in Mackay.^[1] The other 50% vested in her parents, MK and PK as tenants in common.  This property was gifted to the respondent prior to her cohabitating with the applicant.  Transfer documents^[2] show that the K family became registered on 26 May 1997. It was purchased for $192,500.00.  Her parents gifted her the interest in the property to provide some security for her.  It was intended that on the death of her parents it would pass to her.  Of course, initially it would pass to the estate of the last parent who has passed away.  There was no evidence as to what the wills of the parents provided for.  The respondent has a sister Virginia.

3. [3]
   The subject property was valued at $490,000.00.^[3]  Its value is not in dispute.  In fact, that is the only property with which the present application is concerned.  The applicant was not in a position to provide any evidence in relation to any interest held by the respondent in her father’s the trucking business.  The respondent denied that she held any such interest.  The applicant seeks an adjustment in his favour of 40% of the value of the subject property pursuant to Part 19 of the Property Law Act 1974.^[4] In that event, it was accepted by the parties that the quantum falls within the jurisdiction of the District Court.

Background circumstances

4. [4]
   Before dealing with the specific factors to be taken into account under the PLA, it is convenient to deal with the general background of the relationship of the parties. The applicant was born on 3 January 1970. The respondent was born on 25 March 1975. The respondent found living in Blackwater difficult.^[5] Blackwater is a small town some 350-400 kilometres from Mackay.  It has minimal facilities.  Each month, the applicant and the respondent would drive to Mackay and stay with the respondent’s parents at the subject property.  The respondent’s parents have always lived at the subject property. 

5. [5]
   Whilst at Blackwater, the respondent obtained a full time position at the bakery for about 6 to 9 months and later at Coles. She was predominantly the housekeeper, cook and looked after the applicant. She states that he was a demanding person. He required the applicant to account to him for any expenditure and her activities.

6. [6]
   There has been ongoing litigation between the parties in the Family Court about Joshua. Initially, the applicant obtained an interim residence order in his favour due to some psychiatric problems from which the respondent was suffering. Subsequently, the respondent made several applications which resulted in her obtaining a residence order in her favour. As at May, 2004, the respondent stated that her parents had paid some $45,000.00 in legal fees to that date. By December 2006, MK, the respondent’s mother stated that her daughter was indebted to them for $195,000.00 for legal fees and related expenses due to the litigation with the applicant.

Requirements of the Property Law Act

7. [7]
   At the outset, it was argued by counsel for the respondent that the subject property was a ‘financial resource’ within the meaning of s 263(c) of the PLA. That provision states as follows:

A person’s financial resources include the following-

…

3. (c)
   property the disposition of which is wholly or partly under the control of the person and that may be used or applied by or on behalf of the person for the person’s benefit;

1. Other relevant sections are:

s 282: Purpose of sdiv 2

1. (1)
   The purpose of this subdivision is to ensure a just and equitable property distribution at the end of a de facto relationship.

1. (2)
   This purpose is achieved by—

1. (a)
   providing de facto partners who satisfy the requirements mentioned in subsubdivision 236 with particular property rights; and

1. (b)
   allowing applications to a court for an adjustment of interests in property

286 Court may make property adjustment order

1. (1)
   A court may make any order it considers just and equitable about the property of either or both of the de facto partners adjusting the interests of the de facto partners or a child of the de facto partners in the property.

1. (2)
   In deciding what is just and equitable, a court must consider the matters mentioned in subsubdivision 3.

1. (3)
   It does not matter whether the court has declared the title or rights in the property.

1. (4)
   In this section— adjust, for interests of persons in property, includes give an interest in the property to a person who had no previous interest in the property

291 Contributions to property or financial resources

1. (1)
   The court must consider the financial and non-financial contributions made directly or indirectly by or for the de facto partners or a child of the de facto partners to—

1. (a)
   the acquisition, conservation or improvement of any of the property of either or both of the de facto partners; and

1. (b)
   the financial resources of either or both of the de facto partners.

1. (2)
   However, the non-financial contributions of a child of the de facto partners must be considered only if the child’s contributions are substantial.

1. (3)
   It does not matter whether the property or financial resources mentioned in subsection (1) still belong to either or both of the de facto partners when the court is considering the contributions made.

8. [8]
   The legislature distinguishes between ‘property’ and ‘financial resource’. Counsel referred to the decision of C v B & Anor.^[6]  The defendant in that case had no proprietary interest in the trust estate which consisted of a house.  However, he had sufficient standing to compel the proper administration of the trust.  He was also a specified ‘appointor’ under the trust deed with the power to appoint a new trustee.^[7] He was also a potential beneficiary.  McMurdo J. accepted that the rights in relation to a discretionary trust including his right as a beneficiary constituted property which was distinct from the real estate itself.  The latter was the financial resource. Only the rights under the trust deed were ‘susceptible to orders under Part 19’.^[8]

9. [9]
   For present purposes, the subject property was real property which constituted a financial resource. It was property which was partly under the control of the respondent. Any rights which the respondent held was as the registered tenant in common with her parents who held 50%. The respondent did not have existing rights in relation to that 50%. Any interest she had would be contingent upon the provisions in the will of the last surviving parent.

10. [10]
    It is therefore accepted that the 50% interest held by the respondent in the subject property is a ‘financial resource’ in the present case. As such it was not property in respect of which there could be an adjustment order under the provisions of s 286(4) of the PLA. If an adjustment order were to be made to give the applicant 40%, it would lead to an impossible position for the parents of the respondent who are not parties to this action. They were not represented on the hearing although MK gave evidence. It would be wrong and could lead to many impractical outcomes to interpret the legislation to allow an adjustment of the interests held on the subject property in that fashion. The court can order a lump sum,^[9] but in the present case no adjustment is allowed or desirable for the reasons given.

Factors to be taken into account in making an adjustment order^[10]

11. [11]
    If the interpretation of what is a financial resource be wrong, it is desirable to discuss the other factors to be taken into account to justify an adjustment order. A court may make an order adjusting the interests of the parties if it is just and equitable to do so.^[11]

Contributions to property or financial resources^[12]

12. [12]
    The applicant contends that he has made improvements to the subject property. These include assisting to put crusher dust on the driveway, painting some rails on the stables and giving cash to the respondent to pay off the mortgage on the subject property. The applicant contends that is what the respondent told him in any event. Even if true, it does not assist the applicant as it assumes that he made the payments to the respondent. MK gave evidence that there was a mortgage put on the subject property by way of security of a personal loan. There was no debt owing at any point in time. MK gave evidence that the applicant may have mowed the lawn on a couple of occasions. They had a gardener in any event. She also agreed that the applicant possibly assisted with spreading a couple of utility loads of crusher dust obtained by her husband. To be set off against any such work was the fact that the applicant and the respondent spent their holidays each year at the subject property.

13. [13]
    The applicant contended that he paid rent when they stayed there. This was denied by the respondent and MK whose evidence I accept for the reasons given below in relation to the applicant’s credibility. MK and the respondent said that there were small contributions by way of purchasing foodstuffs.

14. [14]
    Whilst the parties lived together, they rented a house at Blackwater for $30.00 per week. The respondent did not contribute any major household items. The applicant was employed full time and earned good wages as a miner. The respondent on the other hand worked for some 6 to 9 months at the bakery and later at Coles. The applicant’s wages were initially between $25,000.00 to $52,000.00 per year after tax.^[13]  As at 1997, the applicant had about $30,000 in superannuation

Contributions to family welfare^[14]

15. [15]
    The respondent was the home maker and from December 2000 was a mother as well. The applicant was not very positive about the respondent’s contribution as a homemaker. He was critical of her failure to provide meals when required. The respondent contended that he was demanding. I accept her evidence. It must be remembered that the applicant did shift work and would require his main meal of the day at different times. The respondent also suffered from post natal depression for about six months. During this time the respondent would have required support from the applicant. It is doubtful that this occurred except in a financial sense and the care of Joshua. When working part time, the respondent contributed to the electricity and telephone bills. She was never allowed access to the applicant’s bank accounts or funds. The respondent did receive payments from Centrelink and she used that to support Joshua as well. The applicant contends that at no stage did the respondent contribute any of her earnings to the family outgoings. I reject his evidence.

Child support

16. [16]
    The applicant provides child support to the respondent for Joshua in the sum of $244.00 per week. He has supported Joshua financially since his birth. The applicant is presently seeking to have that amount re assessed with a view to decreasing same.

Other matters

17. [17]
    The applicant has failed to pay legal costs ordered in the Family Court. There are four orders dating from 2004 and totalling some $17,600.00 payable to the respondent. One order is under appeal.

Age and health of the parties

18. [18]
    Both parties are still relatively young. The respondent has suffered stress probably related to ongoing litigation according to her mother. Having observed the applicant in court, his demeanour and attitude, one can readily infer the affect which his conduct would have had on the respondent and her family, at least in relation to the present litigation.

Resources and employment capacity

19. [19]
    During the financial year 2005-2006 the weekly net sum after tax was about $1160.00.^[15] There was child support and some other deductions taken from that after tax sum.  For the fourteen weeks ended 15 October 2006, the net sum after tax was $1638.00.  The applicant is presently employed part time in the food industry and earns $138.00 per week. Some years ago she completed semester one of a degree in psychology.

20. [20]
    Apart from her interest in the subject property, the respondent does not have any substantial assets. She owed a substantial amount to her parents who have paid her legal costs. It is unlikely that they will enforce repayment. However, according to MK, she has made some $2,000.00 in repayments.

21. [21]
    The applicant has listed his financial position as follows:^[16]

Assets:

Household Effects $2,000.00

Motor Vehicle $8,000.00

ANZ Account $600.00

Liabilities:

Loans outstanding $115,065.00

Weekly outgoings:

Weekly expenses $884.00

Weekly payments on loans$832.00

Weekly earnings

after tax: $1,000.00

22. [22]
    When one looks at the applicant’s Child Support Declaration, he lists his after tax earnings at $895.00.^[17]  It is difficult to know why the applicant has so many loans.  None of them seem to relate to real property.  He has not declared any interest in property.  He has been earning good wages for the past nine years.  He has not disclosed his present superannuation balance.  It would certainly have increased in the past nine years from $30,000.00 taking into account only the employer’s contribution. 

23. [23]
    The respondent has moved away from her parents and has to support herself on her wages and the child support. She has no substantial assets apart from the subject property. She shares accommodation with another person. She owed some $1550.00 on her credit cards as at 1 December 2006.^[18]

Caring for Children and Necessary Commitments^[19]

24. [24]
    The respondent has the care of Joshua. She receives the Child Support from the applicant. Her eligibility for a government pension must be disregarded.^[20] The commitments of the applicant have been referred to.  He pays rent of $370.00 per week.

Credibility of Applicant

25. [25]
    There are various issues which have been canvassed in this case which point to the fact that the applicant is an unreliable witness:

1. (a)
   Initially, the applicant sought orders for an adjustment in his favour relating to the trucking business of PK and MK.  The respondent had no interest in the business.  A search would have revealed that the respondent held no position in the business.  There was also a suggestion that she had an interest in a truck used by the business.  At the outset of the trial, the applicant could point to no evidence which justified considering her interest in the business or the truck as property relevant to the present application.  I find that the objective of conduct in this respect was to cause more problems for the respondent’s family.

2. (b)
   The applicant was also critical of his legal representatives.  The first firm of solicitors no longer acted for him.  The applicant suggested that material filed by them was not correct and he merely continued to rely upon that material to his detriment.^[21] The truth of the matter is that he probably provided that material to them.  Both his former solicitor and the respondent’s present solicitor were reported to the Legal Services Commissioner.  This was another ploy by the applicant to cause problems for them.  It was an attempt to force the respondent’s solicitor to withdraw.  These matters were canvassed in the material.  There was no step taken by the applicant at trial to force their withdrawal nor was there a basis for so doing.  There was also a feint attempt to blame his barrister for not appearing/sending material to him.  There was a belated note from his barrister explaining the position.^[22]  As the applicant did not have an opportunity to challenge the facts therein, it has been marked for identification only and not relied upon.^[23] 

3. (c)
   The first mention of cash payments made by the applicant to pay off the mortgage of the subject property occurred in the affidavit filed by him on 6 December 2006.^[24] He asserts that he had paid some $10,000.00 to $15,000.00 to the respondent for this purpose.  Bank statements were exhibited.  The respondent stated that those withdrawals for sums around $500.00 was for the applicant’s use and for the household.  At no stage was it accepted by the respondent that it was for the mortgage on the subject property.  This belated attempt to create some interest in the subject property reflects adversely on the conduct of the applicant.  It becomes more transparent when one considers the other matters being discussed under this section.

4. (d)
   One very telling piece of evidence was when the applicant was presented with a summary of his earnings.  Presently, he earns some $1600.00 net after tax per week.  When presented with Exhibits 1 and 2 there was a reluctance to admit that they were his.  His demeanour and evasiveness reflected the fact that he had been caught out badly.  In the Child Support Form^[25] he listed his after tax income at $895.00 as at 24 October 2006.  He pretended that he did not understand the figures and said that it was a matter for his ‘tax accountant, not him.^[26]  

5. (e)
   The applicant suggested that he had to pay the medical bills of the respondent who had been involved in an accident when she was 6.  The respondent stated that she had recovered from her problems well before she started cohabitating with the applicant.  This was another attempt by the applicant to bolster his contribution to the household.  He said that she was regularly in hospital and that he paid all of the bills.  In fact, the respondent had her own medical cover in the first instance and added the applicant’s name to her fund.  Later they transferred to a fund to which the applicant contributed.  To her credit, the respondent stated that the applicant may have confused her treatment for post natal depression and her earlier problems as a child.

6. (f)
   There was a complaint by the applicant that he had not been served with the recent affidavit of the respondent.  In fact, it has been made available to him but he failed to attend to pick it up either at the respondent’s solicitor’s office or from the bailiff.^[27] The barrister who was to appear for the applicant withdrew for unknown reasons.  He had received all of the material and had given the applicant certain advices which the applicant ignored.  To allow the applicant to deal with the material which he failed to collect, the hearing was adjourned and further evidence was heard.^[28]

Date of commencement of co-habitation

26. [26]
    The applicant has sworn in an affidavit^[29] that the parties commenced co-habitation in June/July 1997. In another affidavit he stated that it was “sometime in October 1997”. The respondent has in one of her earlier affidavits referred to an earlier date but said she was referring to when they met. In an affidavit^[30] the respondent stated that she commenced the relationship sometime in October 1997. I am satisfied that the latter is the correct date.

Findings

27. [27]
    Except where documents supported the applicant, his evidence could not be accepted as reliable or trustworthy. It is therefore open to make the following findings consistent with the evidence of the respondent and her mother and the supporting documents:

1. (a)
   The applicant did not contribute in any relevant way to the improvements of the subject property which would justify an adjustment of any interest in his favour based on a just and equitable ground.

2. (b)
   During the term of the relationship between the parties from late 1997 to April 2002, the applicant contributed in a substantial way to the household.  The respondent also contributed in a limited way for some 6 to 9 months when she was working.  Her contribution as a mother and home maker was what could be expected of a young mother living in Blackwater.

3. (c)
   The applicant did not allow her access to his accounts but he did pay the bills as required.  He did not provide any funds on the basis that they would be used to pay off the mortgage on the subject property

4. (d)
   The applicant has earned good wages since 1997 and it is difficult to know why he is so indebted by way of loans.  Not all of the documents for all loans were made available.  Even if it is true that he is so indebted, it is not clear as to when such debts accrued.  It may well have been after 2002.

5. (e)
   The applicant was less than frank about his present superannuation fund or his present earnings.  He is theoretically in a commanding position to accrue assets.  He has failed to do so.  The respondent is living off a moderate income with the assistance of Child Support from the applicant.

6. (f)
   The applicant has failed to show that it would be just and equitable to adjust the interest held by the respondent in the subject property in his favour to any extent.  The subject property was purchased prior to their cohabitating and any improvements contributed to by the applicant were of no significance.

Orders

1. The application is dismissed.
2. It is ordered that the applicant do pay the respondent’s costs including reserved costs if any, of this application and hearing to be assessed on the standard basis.