SXM v NYH[2013] QDC 254

DISTRICT COURT OF QUEENSLAND

1.)  Background

1. [1]
   SXM and NYH met in 2002. By January 2003 they were living in a genuine and committed relationship in New Zealand. The couple returned to Brisbane later that year and continued living together, at SXM’s property at Balmoral. Their son AH was born the following April. They lived together as a family until the parties separated on 24 July 2007. In total, they cohabited for some four years and six months.^[1]

2. [2]
   They have now been separated more than 6 years. SXM seeks a property adjustment order pursuant to Ch 19 of the Property Law Act 1974 (Qld). Under that chapter, the Court’s function is to determine an order that is just and equitable in the circumstances of the case,^[2]having identified and valued the property pool at the time of separation and taking into account the relevant factors, including those identified by ss 291-309.

3. [3]
   This application took some time to make its way to hearing, and attempts to resolve the difference between the parties were, unfortunately, unsuccessful. By the time of the hearing the parties represented themselves. There was no dispute about the value of the most significant items of property. The parties did their best to narrow the matters in dispute and both made sensible concessions about the value of disputed items, a shift from some of the assertions made in their most recently filed affidavits.

4. [4]
   Both parties currently own a house in which they separately reside and have modest personal chattels. Currently, they share care for their son. SXM sought an order that NYH pay her $75,000, which she calculated to be a 10% adjustment on her current share of the combined property pool. On her estimate she now holds about 55% of the pool and the order she seeks will result in her holding about 65%.

5. [5]
   She justified the order because she held more assets than NYH when they commenced their relationship. Her financial position deteriorated during and after the relationship, because she did not work after she gave birth to their son. She has some health problems, arising from a motor vehicle accident that predated their relationship. That and her age and the period she has spent out of the workforce limit her future employment prospects.

6. [6]
   NYH asked the court to order that each should retain what is currently in their possession. He relied on his contribution in improving the value of the property owned by SXM, as well as the value of the improvements to the property he now owns. He argued SXM’s earning capacity was greater than she represented.

7. [7]
   Before considering what is a just and equitable distribution now, it is necessary to consider what each party brought into the relationship, their contributions during and after their relationship and the value of the property pool that is now available for distribution.

2.)  The assets each brought into the relationship

8. [8]
   I will start by considering what assets the parties brought into the relationship. The significance of their relative contributions diminishes over time.^[3]However, this was quite a short relationship.

9. [9]
   SXM assessed the value of her assets at the commencement of the relationship at $408,760 and NYH’s at $152,000, a total of $560,760. NYH put SXM’s assets at $400,790 and his at $202,503, a total of $603,293.^[4]The difference in their respective valuations of their combined assets is about $42,533.

10. [10]
    Looked at in percentage terms, SXM estimates her assets constituted about 73% of their combined assets (to his 27%), while NYH considers her assets were 66% of the total value (to his 34%). On either account, SXM brought more assets to the relationship than NYH did.

11. [11]
    Their estimates of the value of the properties each then owned were very close. To some extent the difference between them related to the values attributed to their vehicles. By and large those arguments fell away at the hearing. Some difference between the estimates of total value can be attributed to SXM including her superannuation entitlement and not NYH’s, perhaps because she was not aware of its value at that time. NYH could not say what his entitlements were at the time they commenced their relationship. However, he said he had accrued almost $30,000 by June 2007 (they separated in August that year). In December 2007, SXM had accrued $36,010.

12. [12]
    On the limited evidence before the court it would be difficult to resolve with confidence the few disputes that remain about their assets when they commenced their relationship. NYH’s estimation of the respective values of their assets supported SXM’s argument that her financial position was appreciably stronger than his at that time. Even accepting his assessment, and excluding the superannuation accruals, SXM held around two thirds of their combined assets.

13. [13]
    Given theirs was a short relationship, the disparity in their financial position at the commencement of the relationship is a relevant factor to consider in deciding what is a just and equitable order to make on their separation.

3.)  The property pool at the time of the hearing (s 298: Resources and employment capacity)

14. [14]
    By the time the parties had made their opening statements at the hearing, there was no appreciable dispute about the value of the current pool. Although SXM had suggested that she considered NYH had not disclosed all his current assets, she asked the court to proceed to make an adjustment on the basis of the disclosed assets alone.

15. [15]
    I find the resources available to SXM constitute a total value of $560,887 after her HECS debt of $20,000 and a credit card debt of $1,000^[5]are deducted from her current assets. NYH did not dispute the following values, although he gave a slightly higher figure for her superannuation accrual:

1. (a)
   House and land at Bilyana Street, Balmoral: $543,000 (unencumbered);^[6]
2. (b)
   Mazda 626 Station wagon: $2,350;^[7]
3. (c)
   Superannuation: $36,000;^[8]
4. (d)
   Savings: $200;^[9]
5. (e)
   Qantas shares: $337.^[10]

Less

6. (f)
   HECS debt: $20,000.
7. (g)
   Credit card debt: $1,000.
8. (h)
   Total: $560,887.

16. [16]
    I find the resources available to NYH constitute an approximate total value of $491,244 after his mortgage debt of $58,482.41 is deducted.^[11]That is calculated on the following basis:

    1. (a)
       House and land at Pembroke Street, Carina $413,000;^[12]
    2. (b)
       Toyota HiLux 4 door utility 2003 model - $10,000;^[13]
    3. (c)
       CF Moto Leader 2011 - $1,000;^[14]
    4. (d)
       Superannuation - $122,934;^[15]
    5. (e)
       Savings - $2,792.51.^[16]

Less

6. (f)
   Mortgage debt: $58,482.41
7. (g)
   Total: $491,224.

17. [17]
    Using those figures, the value of the total pool is $1,052,131. SXM holds assets to the value of $560,887, or about 53% of the total. NYH holds $491,244, or about 47% of the total.

4.)  Improvements to the properties (s 291: Contributions to Property or Financial Resources)

18. [18]
    Both parties owned a home when they entered into the relationship. NYH owned a home in New Zealandthat they lived in together for a short time. He sold it around the time they separated and applied the purchase price to the home he now owns at Carina. During the relationship, SXM did not receive the benefit of any rental income, nor did she bear any of the costs of ownership of the New Zealandproperty.

19. [19]
    For most of their relationship, the parties lived in the home at Balmoral still owned by SXM. It seems the expenses associated with the home, such as rates, utilities and insurance, were paid from a joint account into which SXM deposited her Centrelink payments of about $615 a fortnight and NYH deposited in the order of $800 a fortnight from his salary.

20. [20]
    NYH, who holds formal building qualifications,^[17]asked the court to take into account his work on that home. He said he improved the kitchen and bathroom; repaired the roof and barbecue area; painted the exterior of the house to the first floor; and concreted under the rear deck and other external areas.

21. [21]
    SXM did not dispute that NYH worked on the home, but said she worked with him on many of the tasks he identified. She also contested the value he placed on his work. Applying a rate of $20 per hour to the time he estimates he spent completing the improvements, NYH came up with a value of $36,375 to the improvement of the property.^[18]He thought that estimate was conservative. Both parties alleged they had purchased items used for the renovations. NYH said he purchased items directly from his personal account before deposits to the joint account. SXM produced proof of purchase of approximately $2198.77 worth of hardware and supplies.^[19]

22. [22]
    I accept SXM’s evidence that she was an active participant in many of the improvements and assisted NYH. The only aspect of her evidence about this issue that NYH appeared to contest is her assertion relating to preparation for concreting work under the deck. Given SXM’ impairment from the car accident, this does seem quite heavy work.

23. [23]
    NYH estimated he worked on the house for some 10 to 15 hours per week. That seems a little high for someone who was working full time as a teacher and was the father of a young child, for whom he said was involved in daily care. Nevertheless, I accept that NYH would have taken the lead given his qualifications as a builder and given SXM’s child care responsibilities. Her role as primary carer would have enabled NYH to devote time to the renovations that he might not otherwise have been able to do.

24. [24]
    It is reasonable to infer that the improvements enhanced the property, but it is not clear whether this resulted in an increase in value over and above what might have been expected without the improvements. Assuming, however, that they did result in an increase in value, both benefit from that in the assessment of the value of the property pool as a whole.

25. [25]
    The renovations were effected while they were a couple. Both contributed, although I accept NYH did the greater part of the labour. SXM’s role in caring for their child facilitated his availability. I am not satisfied on the evidence before the court that any adjustment should be made in NYH’s favour because of his work on that property.

26. [26]
    NYH has also made improvements to his current property at Carina. He purchased that property in October 2007 using funds from the sale of his New Zealandhome in May 2007. The sale price was (NZ) $279,000.^[20]

27. [27]
    The purchase price of the home at Carina was $370,000.^[21]It was valued in July 2012 at $413,000, an increase in value of some $43,000. NYH estimates the value of his improvements is $42,000.^[22]That is, in effect, the difference between the purchase price and the most recent valuation of the property. A scan of the list of expenses associated with the renovations reveals that some of the items are equipment (such as saws, wheelbarrows and other building equipment or appliances) which NYH, presumably, retains.

28. [28]
    Attributing the difference in value to the renovations does not account for any movement in property prices during the 6 years that NYH has owned the home. There is not specific evidence about that matter before the court and I cannot speculate to what extent the improvements account for the increase in value.

29. [29]
    It is reasonable, however, to make some allowance for NYH’s improvements to the property. I have notionally allocated $20,000 to NYH’s contribution to the improvement in that property. If that amount is deducted from the total property pool, it is reduced to $1,032,131 and NYH’s s property pool is notionally reduced to $471,244.

5.)  Contributions to Family Welfare (s 292)

30. [30]
    During their relationship, the parties kept their financial affairs separate, except for a joint account into which SXM contributed Centrelink payments in the order of $615 a fortnight and NYH deposited from his salary some $800 a fortnight.

31. [31]
    After their child was born, SXM did not work. NYH was then the primary breadwinner and SXM cared for their son and attended to household matters. That is not to say that NYH was not involved in the care of his son. It is accepted that he was. There is no basis for concluding that any adjustment should be made to account for the role that either played in their family during the relationship.

6.)  Child support (s 294)

32. [32]
    After they separated, and until recently, NYH paid $358 per month to SXM by way of child support.^[23]On 11 April 2011^[24]the Federal Magistrates Court endorsed consent orders which resulted in SXM having care for their son approximately 64% of the time.^[25]Since 25 June 2013 the parties have trialled shared care of their son, by alternating care on a weekly basis.^[26]

7.)  Effect on Future Earning Capacity (s 293);Age & Health (s 297)

33. [33]
    SXM is 51 years old. In 1995, an orthopaedic surgeon considered SXM had a 10 – 20% permanent partial disability arising from an injury to two vertebrae (C5 & C6) sustained in a car accident. He said she would have an acceleration of her symptoms from her 6^thdecade of life, that is after the age of 50.^[27]

34. [34]
    NYH is 49. He had recent surgery on his knee to deal with a soft tissue injury and he has a degenerative bone disease. I did not understand him to argue that this impaired his earning capacity.

35. [35]
    Since separation, NYH has continued to work full time, earning a net income in the order of $60,320. SXM is not yet working but has recently graduated with a tertiary qualification in business studies. While that will improve her employment prospects, it could not be said that their earning capacities are equivalent. NYH has worked without interruption. SXM has retrained in order to re-enter the workforce at age 51 after a decade of not working while she cared for their child and with an impairment which will constrain her working hours.

8.)  Conclusion

36. [36]
    SXM contributed at least two thirds of the assets brought into the relationship, which was of relatively short duration. SXM has sought an award of $75,000. The adjusted property pool is $1,032,131. After a payment by NYH to SXM of $75,000, their respective shares of the pool are approximately 62% ($635,887) to SXM and 38% ($396,244) to NYH. I consider that to be an adequate allowance, given the other factors considered above.

37. [37]
    An award of $75,000 is a modest reflection of her greater contribution at the commencement of the relationship and of the deterioration of SXM’ financial position as a result of caring for their child during their relationship and, until recently, after their separation. Although they are now sharing care for their son, and SXM hopes to re-enter the workforce having secured tertiary qualifications, NYH’s employment situation is more secure.

38. [38]
    Given those factors, I consider an order that NYH pay SXM the sum of $75,000 is just and equitable in the circumstances.

39. [39]
    The usual position with such applications is that each party bears their own costs and I make no order for costs.^[28]