DISTRICT COURT OF QUEENSLAND

1. [1]
   This is an application under Part 19 of the Property Law Act 1974.  The parties were for a time in a de facto relationship; it was common ground that it came to an end in August 2007.  The respondent did not dispute that the relationship existed from January 2006 until July 2006 when the parties were living together in a flat, and from about December 2006 when the respondent purchased a house in which they lived until they separated.  There are no children of the parties and it was not submitted that the applicant had made substantial contributions of the kind mentioned in ss 291 or 292 so as to give rise to serious injustice if no order were made, and accordingly unless the relationship commenced not later than August 2005 and was continuous until it came to an end, the requirements of s 287 of the Act cannot be met, and no order can be made.

Applicant’s evidence

2. [2]
   In the applicant’s affidavit sworn November 2008 she referred to the parties living together at her parents’ house from in or about July 2005 (para 3), and later as between March 2005 and December 2005:  para 7.  In her oral evidence she said that the respondent moved into the parents’ house in late June or early July 2005:  p 5, p 19.  She said that they met in August 2004 and by the end of that month they were dating exclusively.  In 2005 the applicant was at school, in Year 12, and she said that her parents wanted her to stay at home until she finished Year 12:  p 6.  They were concerned that the couple would not have enough money to live on until she was in a position to work, and it appears that by way of compromise they agreed to let them live together in a particular room which was set up as their room, in a house which was being renovated at the time:  p 7.  She said that they had their clothes and everything in the room.  In January of the following year after she had obtained a job they moved into a flat,^[1]but they found that even with both of them working they were not bringing in enough money, so after six months they moved out of the flat and back to her parents’ house until they could find a home that they could afford:  p 7.

3. [3]
   The house was bought in the respondent’s name, and largely with funds borrowed by the respondent from a particular financier: p 13.  The applicant said that this arrangement was made deliberately, on the theory that the respondent would get a first home owner’s grant for this house and later if she bought one in her own name she could also get such a grant.^[2]The respondent in fact obtained such a grant.  At one point in his affidavit (para (q)) he seemed to be supporting this idea, but not as something agreed between them.^[3]

Respondent’s evidence

4. [4]
   The respondent said that until January 2006 they were just boyfriend and girlfriend: affidavit para (d).  He said that at times he would stay over at her parents’ place on weekends, and at times she would stay at his parents’ place overnight, but they kept the bulk of their belongings at their parents’ homes:  p 34.  He said in paragraph (e):

“Since the commencement of our relationship until July 2005 we resided at our own parents’ homes where all our clothing and personal items were kept.”

5. [5]
   He said, however, in his oral evidence that this date was a mistake and that continued until December 2005: p 31.  He did say at paragraph (h) that they began living together as a couple in January 2006 at the flat, but they returned to their respective parents’ homes in July 2006.  He agreed that they moved into the house that he had purchased in late December 2006 and stayed there living together as a couple until they split up in August 2007:  para (t).

6. [6]
   There was one other witness, a woman whose children were regularly minded by the respondent’s mother at her home from 2004 until January 2007: para 4.  In her affidavit she said she observed the applicant occasionally staying over at the respondent’s house.^[4]She said that in the second half of 2006 she saw the respondent at his mother’s home when she delivered and collected her children:  para 12.  She observed the respondent’s parents assisting him in relation to the acquisition of the house, but did not see the applicant involved in this:  paras 14, 15.  Under cross-examination she said that her children were minded three days a week except when she was on leave, while she was at work from about 8.30 am to 5 pm:  p 49.  She said she was told that the respondent had a girlfriend in about March 2005.  She was aware of the applicant’s staying overnight at the respondent’s parents’ house, though she could not recall when that started:  p 50.  She said that before the house was purchased the applicant was staying with her parents and the respondent was staying with his parents:  p 52.  She said that at that time she believed that they were in a relationship, but she did not identify the nature of that relationship as she understood it at that time.  Overall, this witness supports the respondent’s case, though it did strike me during her evidence that she was not well disposed towards the applicant.

Analysis

7. [7]
   It is somewhat surprising that there was no affidavit material relied on from the parents of either of the parties. Presumably they would have been in a position to give evidence as to where the parties were residing, and where their belongings were, at particular times. An inference is open because of the absence of this evidence, but in the circumstances the inference would appear to fall both ways, with the overall result that the position is not different from what it would have been if there had been affidavits from the parents each supporting their respective child.

8. [8]
   The applicant was fluent in her evidence, and did not make any significant concessions during cross-examination, nor were there any particular aspects of her evidence which suggested that it was unreliable. The respondent gave evidence by telephone, which produced some difficulties, particularly because at times the line was not good. There was some inconsistency between his oral evidence and what was said in the affidavit; for example, in the affidavit he said in paragraph (j) that he tried to arrange for a friend to move in to the flat to ease financial pressures but this did not eventuate, whereas he said in oral evidence that a friend moved in about half way through the period when the flat was being leased:  p 35.^[5]He said in his oral evidence that the applicant had actually moved out of the flat two or three weeks before he did, and that they had in effect separated during that period.^[6]That would provide some support for the proposition that they moved back to their respective parents’ homes from the flat, but there was no reference to this in his affidavit.  The respondent claimed that after the parties separated he spent $50,000 on renovating the house that he had purchased:  p 44.^[7]However, he was not able to account for more than about $20,000 in terms of what had been done to the house:  p 45.

9. [9]
   At one point it was submitted for the applicant that the relationship began in August 2004, when the parties began to date exclusively. In my view that would not satisfy the requirements of a de facto relationship.  That depends on whether the parties are living together as a couple, and it is not achieved by mere dating, however intensively and however exclusively.  This part of the applicant’s argument is rejected.

10. [10]
    The applicant referred to a decision of the Court of Appeal: FO v HAF [2006] QCA 555.  That decision, however, does not support this argument, but if anything provides authority to the contrary.  In that case the court varied by about 12 months the finding of the trial judge as to the date of commencement of the relationship.  Keane JA as his Honour then was said at [26]:

“It will be an exceptional case where two people who have not lived in a common residence, and who have not made actual provision for their mutual support, can be said to have been living together as a couple on a genuine domestic basis.  A case is not rendered exceptional in this context merely because the parties intend, eventually, to live together as a couple.”^[8]

11. [11]
    In this context it is relevant to note that the mere fact that parties who have been living together as a couple on a genuine domestic basis separate in circumstances where the separation is intended to be temporary does not necessarily mean that there ceases to be a de facto relationship.  Such was established by the decision of the Court of Appeal in PY v CY [2005] QCA 247 at [7].^[9]In the present case, on the applicant’s evidence the parties were, after they left the unit, investigating the possibility of obtaining a house where they could live together, which suggests that if there was a separation it was intended to be only temporary.

12. [12]
    The respondent denied that there was any great involvement on the part of the applicant in obtaining the house or the loan to purchase it, but did not really explain how it came about that the parties moved together into the new house in circumstances where on his evidence they had separated before he came to leave the home unit. It follows that the more important issue is as to when the relationship commenced, because the relationship may be taken to have continued over the period between when the parties had moved out of the unit and when they moved into the house, even if they were not living together at the applicant’s parents’ house during the intervening period.

13. [13]
    The resolution of this conflict is difficult, and there are no compelling considerations either way. Ultimately, however, I prefer the evidence of the applicant in relation to this, essentially for two reasons. The first is that it did seem to me that there were some discrepancies in the evidence of the respondent given at different times, and even during the course of the hearing, whereas this was not such a problem with the applicant’s evidence. As a result, I have more doubts about his reliability. The second is that the respondent conceded that from the time the house was occupied the parties were living together again as man and wife, and it seems a little unlikely that that situation would have arisen if the parties had actually separated prior to the end of the lease on the unit, and had not been living together thereafter. I am conscious that this conclusion is inconsistent with the evidence of the witness, but as I have said I am wary about her evidence anyway. Accordingly, I find that the parties were living together in a de facto relationship from July 2005 until August 2007.  This satisfies the requirements of s 287, although only just.

Contributions

14. [14]
    On the evidence, neither party brought any significant assets into the relationship. During the relationship, the respondent purchased the house property in his own name.^[10]It was purchased largely with money borrowed in his name from a financier, together with the amount of the first home owner’s grant:  p 33.  There was some support provided in terms of making the house liveable, and getting the parties established, by their respective families:  p 10, p 39.  Thereafter, the respondent made the payments on the loan for the house, while the applicant, who for a time had a lower income during this period, made some contributions to household living expenses, and did pay for some things for the house, although probably not very much.^[11]

15. [15]
    I accept that after the parties separated the mortgage was increased by $40,000, and some of this money was spent on renovations which would have improved the value of the house, though I suspect that some of it was simply consumed by the respondent in living expenses. Ultimately the house was sold on 28 August 2008 for $277,000, the existing mortgage was discharged, and the balance of about $78,000^[12]was applied to the purchase of a different house for which he paid $380,000, and which was in March 2009 subject to a mortgage with a balance of about $346,000:  para (hh).  He has made all the payments on that loan since then.  He did not give the amount currently owing on the mortgage.

16. [16]
    Effectively, therefore, the house purchased during the relationship was sold about one year and eight months after purchase for a capital profit of about $100,000. To some extent this increase in value would be attributed to renovation work undertaken in order to make the house habitable before or shortly after the parties moved in; it seems to have been common ground that the house was in an unsatisfactory state when it was purchased. I accept, however, that to some extent the increased value reflected improvements effected by the respondent after the parties separated. It is difficult to know just what effect these two periods of renovations actually had on the value of the property, but it appears likely that to some significant extent the profit is attributable to the increase in house prices over the period of 20 months. I did not have any expert evidence to assist with these matters, but doing the best I can in the light of the evidence that was presented I find that the increase in value was attributable, as to $20,000 to pre-separation renovations, $20,000 to post-separation renovations, and $60,000 to changes in the property market.

Property pool

17. [17]
    The property pool is very difficult to identify in the conventional way. There were statements of financial circumstances filed in November 2008 (applicant) and March 2009 (respondent) but these are incomplete. The applicant listed a half interest in a property but there was no indication of its value or the amount of any security on it, although she said she pays $100 per week for such a loan. She referred to a car loan and other costs of a car, but not the car itself. The respondent’s statement also does not give the value or amount owing on his new property, but does at least refer to cars, and to a superannuation fund. On the face of it his expenses exceed his income by about $700 per week. Neither statement was updated at the trial. It is apparent that both are now in, or have been in since separation, new relationships but there was virtually no evidence about those relationships. In these circumstances, it is not appropriate to try to identify and value a property pool in the conventional way, particularly when the relationship was so short and ended so long ago. What I propose to do instead is try to determine a notional property pool as at the end of the relationship, and divide that on the basis of contributions. The only significant item in this was the house owned by the respondent.

18. [18]
    Assuming that the property market rose steadily throughout the relevant period, the increase in value during the period of the relationship was $24,000 with the balance of $36,000 attributable to the period after separation. In relation to the renovations prior to separation, I consider that the contributions for these should be divided equally. On that basis, it is appropriate to allow the applicant the equivalent of half the benefit of the renovations prior to separation and half the increase in market value prior to separation, a total of $22,000. It does not appear that either party had any other significant assets at the time of the separation. No doubt they took their respective personal belongings. The applicant took some furniture which had been in the house, but left other furniture (p 13, p 30), and on the evidence all I could reasonably conclude is that apart from the house the asset pool of the parties was effectively divided equitably between them.

19. [19]
    The income of the parties during the relationship was unequal, and became more unequal as the relationship continued until April 2007 when the balance swung in favour of the applicant.^[13]  Again there are differences between the parties in their evidence about contributions to the household, with the respondent asserting that the applicant, particularly in the latter part of the relationship, made little contribution either financial or non-financial.  A different version was given by the applicant:  p 10.  There is I suspect in practical terms a presumption that the parties contribute as they can, both financially and non-financially, and that overall the contributions should be ranked equally, in the absence of some clear indication to the contrary, and overall that is the approach I propose to adopt.

20. [20]
    There were no relevant children, either of the parties or of one of them. The earning capacity of the parties would not have been affected by the relationship, nor will it be affected by any order I make. Neither party is paying child support so far as the evidence discloses, nor are there any other relevant orders within s 295.

21. [21]
    The applicant was born on 8 August 1988, and is now 23; the respondent as born on 21 February 1985, and is now 26.^[14]  Neither has any significant health problems.  Both of them have a capacity for gainful employment.  At the time of the trial the respondent was working for a mining company earning $2,046 a fortnight after tax:  p 31.  This was a permanent full-time position.  The respondent said that he had entered another relationship some months after the relationship with the applicant terminated, but there was no evidence about his responsibility, or for that matter the applicant’s, to support any other person:  p 301.  It does not appear that either is eligible for government assistance.  There was no evidence of any significant difference in the living standard of either of the parties compared with what it was during the relationship.  The relationship lasted just over two years, about as short a relationship as one could have to qualify for an order under Part 19.  No other events or circumstances were relied on, or emerge from the evidence which should be taken into account to meet the justice of the case.

22. [22]
    Overall there was little of significance in relation to the factors referred to in ss 297-309 of the Act so as to justify any great adjustment of the contribution-based entitlement of the parties.  The only matter of any differentiation would appear to be the difference in earning capacity of the parties, where the respondent may have an advantage, although that may be just because the applicant’s earnings have not been updated.  Ultimately, I am not persuaded that some adjustment needs to be made to reflect that.  Overall therefore I would not adjust the contribution-based entitlement.

23. [23]
    Finally, it is necessary to consider whether this result is just and equitable in accordance with s 286.  In my opinion it is, subject to one consideration.  It was common ground that at the time when the relationship came to an end the applicant caused some damage to the property and to chattels within the property belonging to the respondent.  There was some difference between the parties as to their estimates of this damage; the respondent claimed in his affidavit that the value of the damage was $1,600 (para (aa)), whereas the applicant in oral evidence estimated the value at $400:  p 14.  There was no independent evidence of this value, but I expect that both estimates are slanted in favour of the party estimating, and bearing in mind the description of the damage by each of them (which may well have the same feature), I allow $1,000 in respect of this matter.

24. [24]
    The applicant did not seek to argue that this was a reasonable response to anything done by the respondent, which may have been a difficult thing to establish anyway, and I think the final figure should be adjusted by reducing the entitlement of the applicant by $1000 to accommodate this feature.

25. [25]
    The final figure therefore is an adjustment of $21,000 in favour of the applicant. This does seem to me to be just and equitable in all the circumstances. This is a case where the financial resources of the parties are very modest, and where the relationship was very brief, and where neither party seems to me to have suffered any significant adverse consequences from the existence of the relationship while it existed. In those circumstances only quite a modest adjustment in favour of the applicant should be made, which is the result at which I have arrived.

26. [26]
    I therefore order that the property interests of the parties to the relationship be adjusted pursuant to s 286 of the Property Law Act 1974 by requiring the respondent to pay the applicant the sum of $21,000.  Subject thereto, I will simply order that each party is entitled to retain all property in the title and possession of that party.

27. [27]
    With regard to the question of costs, s 341 of the Act starts from the presumption that each party bears the party’s own costs.  Bearing in mind the matters referred to in subsection (4)(a), (c) and (e), so far as I am aware of them, it seems to me that no order for costs ought to be made, but it is possible that there are other relevant considerations of which at the moment I am unaware.  Accordingly, I am prepared to receive further submissions from either party in relation to costs following the delivery of these reasons, within 14 days, with a copy being sent to the other party as well, if either party seeks an order.  If such submissions are made, the other party will have seven days after receiving such submissions to respond in writing to me and the first party.  Unless I receive such submissions within 14 days after the reasons are delivered, I will assume that no party seeks any order as to costs.