RT v IS[2007] QSC 153

SUPREME COURT OF QUEENSLAND

1. Douglas J:  The parties were de facto partners at least between 2 May 1997 and 4 April 2002. The applicant, the female partner, was born on 16 April 1964 while the respondent was born on 13 April 1966.  There were no children of the relationship.  This application is one to declare their rights in the property relevant to their relationship.  I shall discuss the evidence as much as possible by reference to the relevant issues referred to in ss 291-309 of the Property Law Act 1974. 

Length of the relationship

2. The applicant’s case was that the relationship began in May 1997 and concluded on 4 April 2002 although she continued to live under the same roof as the respondent until, at the latest, 15 May 2004. There was no dispute about when the relationship began. The applicant ceased sleeping in the same house as the respondent in January 2004 but kept much of her property there and used it during the day. Her view was that the relationship ceased in April 2002. It was not shared by the respondent who believed it lasted to the end of 2003 or the beginning of 2004. In either case the statutory period required to give rise to the Court’s jurisdiction is met.

3. The applicant’s evidence was that the respondent commenced other relationships in about April 2002 bringing their relationship to an end. It seems that there were several attempts at reconciliation between the parties which, from the applicant’s point of view at least, were not successful enough to count as a re-establishment of a relationship as defined under the Act. There was evidence that the applicant first saw solicitors about the termination of the relationship on 12 August 2002, but there were some attempts at reconciliation between the parties after that, none of which were successful. I preferred the applicant’s evidence on this issue and conclude that the relationship lasted approximately five years, terminating in about mid-2002 when they ceased living together as a couple on a genuine domestic basis; see S v B (No 2) (2004) 32 Fam LR 429; [2004] QCA 449 at [48]; KQ v HAE [2006] QCA 489 at 16]-[20] and FO v HAF [2006] QCA 555 at [25]-[26] and [65]. 

The parties’ property and their financial contributions to it

4. At the beginning of their relationship the applicant had savings of $40,000 that she had used towards the purchase of a unit at Carina Heights for $159,000 that was later sold for $205,000. She also had furniture for the unit and a small car sold for $3,300 in March 2006. The respondent owned some tools whose value is difficult to determine, some personal belongings including a drum kit, some savings of a small amount, few household goods, no real property and no motor vehicle. He had previously left another relationship which explains in part why he had few assets then.

5. During their relationship they acquired seven properties. By the time of the hearing there were three left. One, a property at Jimboomba, had been transferred to the respondent on 24 July 2006 as part of a partial property settlement in the matter. Two other properties at Daisy Hill remain in joint names. A fourth property at Cornubia was sold in June 2006 and its net proceeds of sale used by Mr Charlton, the chartered accountant appointed to manage the parties’ properties, to reduce a mortgage over the Daisy Hill properties.

6. The values of the Daisy Hill properties total $650,000 with a mortgage debt of $103,750. The Jimboomba property had been valued at $610,000 and had an outstanding mortgage of $117,000. The applicant was paid $246,500 by the respondent for her share of that property in a partial property adjustment on 24 July 2006. That figure represented approximately 50 per cent of the equity in the property.

7. The parties were able to accumulate these properties during the period of almost 5 years between 1997 and 2001 by their own astuteness in buying properties, their hard work in renovating them and then by renting them out to tenants to help discharge the loans used to buy them. The equity in the unit at Carina Heights that was owned by the applicant at the start of their relationship assisted them to borrow the money needed to make later purchases.

8. The applicant, at the start of the relationship, worked at a bank and obtained loans from her employer to help her buy the unit. She serviced the repayments, rates and body corporate fees for that unit from her own income. In September 1999 that loan and separate loans over the Daisy Hill properties were refinanced into an investment property loan with another bank when the parties bought another property at Bethania. The unit was sold on 6 December 2001 for $205,000. The net proceeds were used to fund renovations and capital improvements to the Jimboomba property apart from $27,343.65 that the applicant retained for herself and a member of her family.

9. The history of the purchases of the properties was conveniently tabulated by the applicant as follows:

10. The first property bought at Daisy Hill was in the applicant’s name only but was used as the parties’ residence between May 1999 and June 2000. It was transferred into joint names at the applicant’s expense in February 1999. Otherwise it was tenanted most of the time apart from when it was being renovated. The other Daisy Hill property has been tenanted most of the time and the mortgage payments and other associated costs were met largely from the rental incomes.

11. The Bethania property’s sale proceeds were used partly to pay out a credit card debt in the sum of $26,316 and otherwise for other joint debts and for $17,000 worth of capital improvements to the Jimboomba property. In that context the applicant calculates that she has contributed $19,107.84 personally to the reduction of the respondent’s credit card debts.

12. She also used a redundancy payment of $61,779.86 partly to meet expenses associated with the property at Carina Heights where the parties lived between November 2000 and April 2001. It was spent also on a jet ski costing $14,500, some office furniture at $1,400 and living expenses amounting, approximately, to $33,000.

13. The parties also lived in the Jimboomba property together from November 2001 until the applicant moved out in May 2004. The respondent continues to live there. While they lived there they undertook capital improvements using the proceeds of the sale of the unit and house at Carina Heights to an extent of about $107,000.

Improvement of the property and contributions to income and earning capacity – non-financial contributions

14. One of the contentious issues in the case was the extent to which the applicant contributed to the physical work of renovating these properties. There is no doubt that the respondent did most of that work, drawing on his experience in the building industry as a plumber and roofer. At the same time, the applicant continued in full time employment at the bank where she worked and later in the public service over most of this period. She kept meticulous records of the parties’ financial affairs, no doubt drawing on her experience and training as a bank employee. She also managed the rental properties.

15. The respondent also worked during the relationship and, if he was not in full time employment, spent his spare time working on the properties, renovating, repairing and improving them. It is clear that both parties were hard workers intent on accumulating assets and improving those they already owned. The respondent says that he worked much more energetically than she on the properties and for much longer hours. I have little difficulty in accepting that he worked longer than she because she was normally working in her regular employment. Building work was also where his expertise lay and when he was not otherwise employed he worked on their properties. It seems to me that each of the parties were hard workers who focussed on the areas where they were most capable and experienced.

16. The respondent also claimed to be a skilled negotiator in purchasing property for significantly less than the prices first offered for it. If that was the case, I place little weight on it as an issue as each of the parties seemed to me to be reasonably astute in purchasing investment properties and to have shared their views with each other.

17. A property valuer, Mr Albiston, expressed the view that some of the work done by the respondent was properly characterised as maintenance of the properties rather than renovation of them. In his view maintenance had very little impact on value even though it might have required a significant amount of work to be done to keep the properties well maintained. His view was that superficial improvements did not greatly increase the value of property. His opinion about the main reason for the increase in value of properties owned by the parties was that there have been significant increases in land value in and around Brisbane during the relevant periods.

18. He also held the view that some improvements, for example the stables at the Jimboomba property, were not particularly valuable even though they were significant structures. He did say, however, that the renovation done to the Jimboomba property had a significant effect on the market value of that land and buildings. Even so, his estimate of the increase in value of the improvements of that property while it was owned by both parties was only $30,000. The property as a whole increased in value from $245,000 to $610,000 between 2001 and 2005.

19. It was clear from the applicant’s evidence that she had kept careful records of the financial transactions entered into by her and the respondent. It seemed to me that her calculations, summarised in exhibit 4, were reliable ones where based on the documentary records. I am not so confident of the calculations where they purport to be records of the number of hours of work done by each of the parties. In particular, the estimates of her average working hours devoted to the properties and her horses appeared to be unrealistic when compared to the length of time she also spent in her job and travelling to and from it; see at T248 ff. Admittedly she spent about six to seven months working full time on the properties after she had taken a redundancy from her first job and before taking up her new position but, even so, her estimates of the time spent on average appeared unlikely to be accurate.

20. The applicant also spent a considerable amount of time during the relationship looking after horses at their Jimboomba property for a volunteer branch of a group called Riding for the Disabled. The parties argued about the horses and the applicant says that the respondent claimed to have bought her two extra horses whose ownership he later called into question, taunting her with the suggestion that they really did not own them. Their presence at the Jimboomba property was one reason why she continued to live there until 2004, although the relationship ceased in 2002. The respondent removed the horses from the property in May 2004 about the time the applicant stopped living there.

21. There was also an issue as to the period during which the horses were on the Jimboomba property being cared for by the applicant. There were other horses on the property which she also cared for and the relevance of the issue relates to a claim by her in respect of the work done by her over a period of three years in caring for horses as work which she argues should be offset against the respondent’s work in maintaining and repairing the properties. It assumes some significance because of the amount at which she assessed the value of the work she had done at $57,330.

22. There was some unsatisfactory evidence from a witness associated with a group called Riding for the Disabled about the time during which that organisation’s horses were kept by the applicant. That witness, Mr Wright, estimated that the horses had been with the applicant and the respondent for between six and eight months but he was very difficult to pin down about the starting and finishing dates of that period and I am much more inclined to believe the applicant’s evidence about the period she spent looking after horses including the horses from that organisation. It does seem to me to be another question, however, how much her work in looking after those horses and some cats for which also cared should be taken into account as offsetting the work done by the respondent in adding to the value of the property amassed by them during their relationship. It was hardly work that added to the value of the property owned by them and the reliability of the evidence of the hours she spent on that work is affected by my doubts that she could have worked as much as she claimed she did on average.

23. In saying that, I do not mean to accede to the respondent’s contention that the applicant was idle or lazy. It seems to me that she was anything but that. It is unlikely, however, that she worked consistently for all the hours she claimed. The respondent’s assertions that the applicant was lazy are also affected by his failure to call his brother as a witness. He said that his brother worked with him often on the houses and one assumes that he would have been in a position to give evidence about the hours also worked by the applicant.

24. My conclusion is that the applicant, as well as contributing her income to the relationship, and sharing in the purchase of the assets, also did a significant amount of physical work when she had the time, including during periods of leave. She accumulated so much overtime that she was able to take three months away from work with pay from November 2002 to January 2003 when the parties lived at Jimboomba. During that period she assisted significantly with the renovations to that property. She also spent about six months between finishing work at the bank in November 2000 and commencing in the public service in April 2001 at home with the respondent and also attended to paperwork for the properties, as well as assisting significantly with the physical work during other periods of the relationship.

25. There is a good argument, therefore, that the parties’ non-financial contributions through the work they put into purchasing, renovating, maintaining and managing the properties were roughly equivalent in value, taking into account their respective and different roles in the operation. If the applicant may not have contributed as many hours as she calculated and if some of those hours spent caring for animals may not have been financially productive, much of the respondent’s maintenance work probably did not add significantly to the capital value of the properties. If they had been partners in a commercial sense as well as de facto partners there would have been every reason to regard them as equal partners.

Contributions to family welfare

26. The applicant generally did the cooking although they ate out or had takeaways reasonably regularly. Otherwise they lived quite frugally and seem to have made roughly equal contributions to the running of their household.

Effect of the proposed order on the parties’ earning capacity

27. It seems unlikely that my proposed orders will affect the parties’ earning capacity as, at the end of the relationship, each retained the ability to work in the areas of their experience, they will each receive some of the jointly owned property and there are no children of the relationship.

Child support

28. The respondent has one child from a previous relationship in New Zealand. He owes an amount that may be NZ$65,000 for child support. That child was 20 at the time of the trial and the amount of money is for the period after he and the child’s mother separated until she achieved the age of 18 or 19. The amount of the child support said to be owing was not clear on the evidence and the respondent did not seek to clarify it. Mrs Anderson’s submission about the respondent’s liability for child support was that the daughter was 20 years old so that the obligation in respect of it accrued mostly before the beginning of the respondent’s relationship with the applicant. She also criticised the lack of clarity of the amount said to be owing and submitted that I should have no regard to that obligation for those reasons. The respondent’s inability to clarify this evidence was caused partly, he said, because his sister was dealing with this matter for him and he was not fully aware of the details. He did not seek to call her as a witness. I am reluctant, on the state of the evidence, to place much weight on this obligation as an issue between the parties.

Other matters – Age and health

29. I have previously referred to the parties’ dates of birth. They are now 43 and 41 respectively. They were both generally in good health with the exception of a stress condition the applicant suffers from that stems at least partly from the relationship and its aftermath.

30. The respondent often behaved aggressively towards the applicant, both verbally and sometimes, physically, not, as she said by punching her, but by shoving, pushing, kicking and slapping her and throwing plates of food at her. She sometimes suffered bruising and began to fear the respondent and opted to stay away from him on some occasions after their relationship had ceased but while she was still living at Jimboomba. She spoke to police several times between 3 October 2002 and March 2004. She applied for a domestic violence protection order in July 2004 and received a temporary protection order later that month which led to an agreed settlement of that issue. The respondent’s verbal aggression included derogatory comments accusing her of laziness. She also believed he tried to control her behaviour too closely.

31. The applicant’s evidence was that there was violence shown to her by the respondent constantly through the relationship. She took notes of many incidents which were recorded in her affidavit and originally written in diaries she kept in respect of incidents where she was most traumatised by the acts that had occurred. She applied for an apprehended violence order against the respondent just before the parties needed to attend the sites of the properties so that they could be valued. She was afraid that he might verbally abuse her during those visits to the properties. She was not challenged on this evidence although the respondent clearly disagreed with the allegations made against him. He said he did not wish to challenge the applicant on these issues because of her recent pregnancy.

32. Since the separation the applicant has not worked as much as previously, partly from stress caused by the separation and associated legal proceedings and the difficulties she has faced in trying to resolve the disputes stemming from the respondent’s behaviour to her during the relationship and his attitude since. She has been on sick leave and has also been receiving income protection payments from her superannuation fund. She has not been able to put herself forward for positions with higher classifications where she works.

33. She claims that this has caused her to lose income and respect in her position at work. She has been treated by a psychiatrist and had ceased work completely by the time of the trial. Her treating psychiatrist does not believe that she is permanently incapacitated by her condition and says that once her current stressors have been resolved there will be no significant impact on her future occupational functioning. That evidence was unchallenged.

34. Mrs Anderson pointed to the failure of the respondent to cross-examine on that evidence. His explanation was that he wished to curtail his cross-examination because the applicant was then five weeks pregnant. In spite of that he cross-examined her at some length by reference to a number of documents which he put to her. There was also some photographic evidence of bruising caused to the applicant by the respondent which I accept and I accept that the respondent was an aggressive person, particularly when intoxicated. His correspondence both to the applicant and to Mr Charlton provides ample evidence of his aggression and willingness to use abusive language.

Other matters – Resources and employment capacity - Applicant’s financial resources in May 2004 apart from the real property

35. When the applicant left the Jimboomba property in May 2004 she owned 250 Westpac Ltd shares valued at approximately $4,000. She also had $62,340 in superannuation entitlements, a liability in respect of a credit card of $17,300 including $7,465 for legal fees incurred as a result of a drowning incident that occurred at one of their properties. She also took with her some chattels including two cars and left many other chattels with the respondent including a utility and a jet ski. She estimated the value of all the chattels in the possession of both of them at $53,900 based on their insured value and including the value of tools and equipment owned by the respondent.

36. She retains her employment and her basic ability to work but has suffered from the problems of stress to which I have referred which have affected the amount of work she was able to do during the period leading up to the trial to some extent.

Other matters – Resources and employment capacity - Respondent’s financial resources in May 2004 apart from the real property

37. There were difficulties in obtaining a complete valuation of the chattels possessed by the respondent because of his failure to provide the nominated valuer with a list of items to value and his imprecision in indicating to the valuer when he visited the Jimboomba property what chattels were to be valued as his. The applicant described a number of tools purchased by her and the respondent during the period of their relationship. She also said that a number of tools were purchased for the respondent to use in his own business and that she did not take any of them with her when she left the Jimboomba property. She had at one stage made an estimate of $10,000 of the value of those items which included two water blasters and a generator. Mr Carlton, the chattel valuer did not have the opportunity to value those items, largely because of lack of cooperation by the respondent.

38. The respondent was very evasive in his evidence when asked about what tools he continued to possess and what their values were. He admitted that there were water blasters on the property at Jimboomba bought during the relationship but avoided answering questions directed to whether he had identified those chattels to the chattel valuer when the time came to value them; see at T274-276. He also admitted to the continuing ownership of a generator that was owned by the two of them during their relationship but said that he had never owned an oxyacetylene cutting equipment although he did own such a tank which he said was owned by somebody else. Nor did he ask Mr Carlton, the asset valuer, to value a drum kit which he owned before the relationship began.

39. The respondent appeared to accept that the value of the tools that he and the applicant owned together during the course of their relationship was about $10,000; T355 l. 60. He also identified a number of items not valued by Mr Carlton but did not accept any particular valuation attributable to them. Nor did he proffer such a valuation himself.

40. The applicant also contends that as the respondent had the sole occupation of the Jimboomba property between May 2004 and his purchase of it in July 2006, that this benefit should be brought to account in calculating the proper distribution of the property between the parties. The argument was that the respondent occupied the property without paying a commercial rent during the period and that that benefit was worth approximately $55,930 at a rental income of $490 per week over 114 weeks half of which should be apportioned to the applicant.

41. The respondent’s capacity to work appears to have been unimpaired.

Other matters - Appropriate standard of living

42. The skills and financial resources available to the parties appear to be sufficient to allow them to maintain an appropriate standard of living on any likely result attributable to this litigation.

Other matters - Financial circumstances of cohabitation

43. The applicant is now married and living with her husband. They married in April 2006. She was said to have been in the early stages of pregnancy at the trial. There was no suggestion of any particular difficulty relating to the financial circumstances of that relationship and the applicant appeared likely to retain her earning capacity in spite of the stress condition from which she was suffering at the trial.

44. There was little evidence to suggest that the respondent was now living with someone else although there was some evidence that he had commenced another relationship that did not persist. His earning capacity was, on his own account, considerable.

Other matters - Other facts and circumstances - Difficulties in managing the properties leading up to the hearing and in the conduct of the litigation

Payment towards joint expenses and appointment of receiver/manager

45. In March 2003 the parties agreed each to contribute $1,000 per fortnight to a joint account to meet their joint expenses. The applicant’s calculation is that she paid $32,000 towards that account while the respondent paid $22,750. That account was meant to be used for joint expenses but sometimes was used to pay the respondent’s expenses including some telephone accounts.

46. By June 2004 both parties had ceased contributing to their joint expense account. When the mortgage payments could not be paid they received default notices from their bank. When the respondent failed to reply to the applicant’s solicitors’ correspondence about these issues she took steps to file an application for the appointment of a statutory trustee for the sale of the properties. The respondent appeared to believe that if a loan account with a bank was not in arrears, the obligation to make monthly repayments did not continue. The applicant, through her own experience as a bank officer, was well aware that, even if the repayments of their loans were well ahead of what was required by their agreement with the bank, they were still obliged to continue to make monthly repayments of the amounts they had agreed to make. That difference in understanding by the parties seems to have caused the respondent to believe that they were not obliged to continue making repayments so long as their loans were not in arrears. Of course he was wrong in that belief and I have difficulty in accepting that he held it genuinely. That may well have been the reason why the applicant felt obliged to continue making the payments out of her own funds and why the respondent refused to cooperate in ensuring that the regular payments were made. On occasion, however, the applicant was not able to make the full mortgage repayment nor was she prepared to pay a half mortgage repayment as the obligation was joint and several.

47. Her application for the appointment of statutory trustees for sale led, initially, to the appointment of Mr Charlton as receiver and manager on 7 December 2004 but before his appointment the applicant incurred a number of expenses in respect of the Daisy Hill properties, the Cornubia land and the Jimboomba property. She also met some expenses associated with chattels bought during the relationship.

48. It is clear from the evidence that the degree of distrust between the parties was such that it was necessary for a receiver/manager to be appointed in respect of the properties before the hearing. It was also necessary having regard to their different views about valuation and how to sell the properties that he be given the power to sell them which he has in part exercised.

49. The respondent was aggressive in his relations with Mr Charlton, making extravagant allegations against him and his management of the properties. It was not surprising that Mr Charlton refused to deal with him except in writing. The respondent also created problems by paying bills directly when it was clear he should have been paying Mr Charlton for outgoings on the properties.

Management of the properties

50. After the applicant ceased living at the Jimboomba property there was no agreement between them about who should manage the rental properties at Daisy Hill. There were difficulties associated with the appointment of a real estate agent to manage them instead of her which again required the applicant to return to Court to resolve that issue. That was the application that resulted in the appointment of Mr Charlton.

51. There were also difficulties associated with the sale of the Daisy Hill properties. Attempted sales at auction did not achieve bids in line with the valuations that had been obtained for the properties. Mr Charlton also postponed the sale of the Daisy Hill houses because of complaints he received from the applicant and people associated with her about the marketing of those properties which he felt obliged to investigate. When the properties were auctioned they were passed in because the bids made were significantly less than the valuations.

52. There were also difficulties associated with settlement of the transfer of the applicant’s interest in the Jimboomba property to the respondent because of delays in his obtaining finance to be in a position to settle by the initial settlement date of 5 June 2006. That required another application to the Court on 20 July 2006 where the respondent and the applicant reached an agreement during the course of the hearing. The costs of that application were reserved.

Obtaining valuations

53. The applicant had problems in obtaining the respondent’s cooperation to valuations taking place of the real property. An order of this Court was required to permit access to the properties for that purpose. There were subsequent difficulties in arranging a time for the valuer to visit. The respondent was acting for himself at this time although he had previously been represented by solicitors. He also acted for himself during the trial although he was represented by solicitors from time to time while the matter was being prepared for trial.

Disclosure and other court proceedings

54. There were also disputes between the parties leading up to the trial about the extent of disclosure that had been made and about the location of certain documents which the respondent alleged the applicant had taken from him and not returned. There was much correspondence about these issues. The respondent refused to pay for and collect some photocopied documents in January 2005 which led to further contentious correspondence. The applicant then caused six boxes of documents to be delivered to the respondent at her expense in March 2005. He did not disclose his own documents until March 2006.

55. There were numerous directions hearings and listings associated with this application during its progression to trial that the applicant argues were caused by delays and lack of cooperation by the respondent. These issues were prominent during evidence and arguments in the trial as well.

56. Mrs Anderson submitted that the respondent’s complaints about disclosure were without substance and not supported by the evidence. There did not seem to me to be any substantial issue affecting the proper resolution of the property dispute between the parties raised by this question. On the evidence it seems clear to me that proper disclosure was made by the applicant and that, if he wanted to, the respondent could have retrieved information contained on the computer kept at the Jimboomba property either from it or from the copies of that information. Any delay associated with the retrieval of any such information does not seem to me to be one that should be attributed to the applicant or one that should affect the division of the property between the parties.

Problems between the respondent and Mr Charlton

57. Mr Charlton had difficulties in communicating with the respondent and in obtaining payment of money and instructions from him about his role as receiver and manager of the properties at Daisy Hill, Cornubia and Jimboomba. One stumbling block related to the provision of security by him where the respondent asked him to provide at least $750,000, representing his half share of the assets at risk where Mr Charlton took the view that $5,000 was sufficient given that it was twice the balance of funds that he expected to hold in his trust account in relation to the management of the properties at any one point in time. The applicant was willing to agree to security in that amount. Mr Charlton characterised his dealings with the respondent as involving other aggressive responses, no responses at all or delayed responses. He said that the respondent ignored his requests for funds, placed funds directly with the payees without reference to him causing real difficulties in his management of the properties and increasing his professional costs by about twice what he expected they should really be.

58. That level of intransigence in the respondent’s behaviour is reflected in other conduct by him relating to the progress of the litigation with the applicant and her solicitors. It is also reflected in his willingness to use abusive language and offensive characterisations of the applicant, her solicitors and Mr Charlton in his own affidavits, to lead irrelevant evidence and make unsustainable assertions creating real problems in any attempts to resolve the dispute between him and the applicant. He was not an impressive witness nor was he a persuasive advocate in his own interest.

59. Mr Charlton’s difficulties with the hostility expressed to him by the respondent both in writing and by telephone were such that he elected to communicate with him only in writing to ensure that what he wrote was not misinterpreted. The tone of the correspondence and of the respondent’s affidavits were such that it became difficult to rely upon the accuracy of his evidence and his submissions.

60. Mr Charlton decided to instruct solicitors to act for him because of the nature of some of the correspondence from Mr IS, a reaction which was perfectly understandable having regard to the tenor of the correspondence and which added to the expense of the administration, an extra expense really attributable to the respondent’s irrational behaviour.

61. The respondent’s argument with Mr Charlton was, in effect, that he was not managing the properties effectively and that this required the respondent to write to him regularly and take up more of his time than would have been the case otherwise. The respondent also seemed to take the view that Mr Charlton should have been willing to sell the properties he was appointed to receive and manage more rapidly than he felt able to, particularly taking into account the valuations that he had received in respect of the properties. It may also have been the case that he was concerned that the properties were not marketed properly but the evidence of value of those properties put before me was not challenged and there is significant evidence that Mr Charlton’s correspondence with the defendant was lengthy and, in many respects, made lengthy by the need to respond to numerous misdirected claims by the respondent. He had to communicate with both parties but his evidence was that he had to spend a huge amount of time responding to correspondence and complaints from both parties but in particular from the respondent or his lawyers.

Delay in offers to buy the properties by the respondent

62. The respondent says that he has been willing to buy the properties since May 2004 and made a number of other assertions that he had offered to give the applicant every property they owned, pay all legal bills and $1,000 per week in damages if she passed a lie detector test and answered questions as to the truthfulness of her affidavit. These sorts of assertions did not assist me greatly in determining what their respective interests in the property were.

63. The respondent made a number of offers to purchase the jointly owned properties at a figure of about half their value. Mr Charlton pointed out to him that if it were an offer for 50 per cent of the property or an offer for 100 per cent of the property but at 50 per cent of the valuation prices he had difficulties in responding. If it was 50 per cent of the property to which the offer to purchase related then he did not have the power or authority to deal with it under the Court order and if it was for 100% of the property then the offer was rejected because it was significantly less than the proper value. There was such an exchange relating to the property at Cornubia which went to auction. It was passed in at auction but was sold eventually to a purchaser who bid $285,000 unconditionally. The respondent had previously offered $280,000 subject to finance but Mr Charlton accepted the higher unconditional offer without giving the respondent a second opportunity to bid against that bid. The respondent then complained to him about his sale in those circumstances.

64. The respondent’s submission was that if Mr Charlton had agreed to his proposal to purchase the applicant’s half interest in the properties that could have been resolved at an early stage and his cost of administration of the properties would not have accumulated to anything like the sum eventually charged. This submission ignores the problem that Mr Charlton could not sell only half of the properties pursuant to the orders binding him. Nor was it possible to agree the prices with the applicant in respect of such a transaction before a valuation had occurred, a process itself affected by delays caused by the respondent.

65. The respondent also contended that he had been unable to purchase the properties at an earlier stage because he said that the applicant removed relevant documents from the Jimboomba property and wiped the hard disk of the computer there. The applicant’s evidence was that she merely took a copy of the contents of the hard disk and left it behind with the respondents. She admitted taking some documents and inadvertently taking documents that were his but says that she returned them and provided copies of what she had taken in a timely fashion. The respondent claimed that the computer when returned did not work properly and that many of the spreadsheet files on it were either password protected or became infected by a virus once opened.

66. Even if he was delayed in seeking to obtain finance to allow him to offer to purchase the properties from the applicant, which I doubt, these issues seem to me to be peripheral to the major issue that I need to consider which is how the property should be divided between the parties.

67. The respondent’s complaint that his ability to purchase the properties was reduced because of delay and the consequent increase in their value and that this should be taken into account in his favour runs into the problem that the properties had to be valued before the parties could arrive at a settlement that was properly informed. That valuation did not take place until after the inspection by the valuer on 7 July 2005. He reconsidered certain issues about one of the Daisy Hill properties on 15 May 2006 and those properties at Daisy Hill had been the subject of unsuccessful attempts to sell them before the trial. Having regard to the increase in property values during the period the parties were in a relationship and since they broke up, Mrs Anderson for the applicant submitted that the prospects of the parties deciding on a value without having a proper valuation was slim in the circumstances. There is significant force in that submission.

68. Mrs Anderson also pointed to the delays caused by difficulties in obtaining the respondent’s consent to the valuation of the properties. Those delays also delayed any possibility of resolution of the dispute because there could be no sensible resolution of it before the worth of the properties was known, especially in a rapidly rising market.

Vandalism to one property at 19 Daisy Hill Road

69. The respondent was anxious to point out that some paint damage apparently done by vandals to the property at 19 Daisy Hill Road was not his fault because paint apparently used by the vandals was on the property through no particular fault of his. Again this seemed to me to be a side issue of little if any relevance to the need to divide the parties’ property between them. Were it relevant to any question of value I do not see how it can, on the evidence, be laid at the feet of the respondent. The damage appears to have been done by children or people unassociated with either party and to have affected them equally.

Costs of the appointment of Mr Charlton

70. It seems to me that these costs are preferably dealt with in submissions in respect of costs of this application and the order reserving costs of the application to appoint Mr Charlton. Mrs Anderson submitted that the costs incurred by the trustee, as opposed to the costs of his appointment which were reserved to the conclusion of the trial, should be dealt with as part of the declaration of interests in the property. Fryberg J has ordered, however, that the receiver and manager was to be remunerated by the applicant and that the remuneration paid by her should be considered to be her costs in the cause. That appears in para. 5 of his Honour’s order of 8 December 2004.

71. That was the order by which Mr Charlton was appointed as a receiver and manager of the four jointly owned properties of the applicant and respondent. No variation to that order for costs was made by Atkinson J when her Honour extended Mr Charlton’s powers by her order of 22 June 2005 and appointed him as trustee for sale of the properties. In those circumstances it seems to me that items 28, 29 and 30 in ex. 4, the applicant’s calculation of payments to which she claimed to be entitled, should more properly be dealt with in submissions in respect of the costs of these proceedings. That also includes the solicitor’s costs incurred by Mr Charlton in respect of his dealings with the respondent. In a case of this type, where costs orders are subject to a particular regime under s. 341 of the Act, those costs should be dealt with at the conclusion of the proceedings.

72. Mrs Anderson also submitted that any complaint that the respondent had in respect of Mr Charlton was not being litigated in these proceeding and that, prima facie, the extra costs Mr Charlton said were attributable to the behaviour of the respondent should not be borne by her client.  There was a significant body of evidence on which she relied to submit that the costs incurred by the trustee were increased significantly by the respondent’s behaviour to the trustee either in delaying or refusing to respond to him or in refusing to provide money required of him.  She also submitted that the respondent’s submission that he had made many efforts to settle the matter did not amount to bona fide offers.  They included requirements, for example, that the applicant take a lie detector test, which would not have assisted to resolve the issues that were important in the case.  There is also evidence that the applicant attempted to resolve the matter at mediation and made proposals to attend a settlement conference. 

Submissions

73. The applicant argues that she and the respondent made similar non-financial contributions to the maintenance and up keep of the properties and that the work they did in making those contributions should be treated as equivalent. She also submitted, however, that an adjustment should be made for her greater financial contribution, first through her equity in the unit at Carina Heights when it was bought with her $40,000 savings and the increase in the equity of that property which she estimated at $51,676.95 after its sale at a profit in December 2001. She also submitted that her contribution of her redundancy payment of $61,779.86 was a significant financial contribution made by her and not matched by the respondent.

74. She also submitted that an adjustment should be made because of the respondent’s sole occupation of the house at Jimboomba since May 2004 calculated as half of the likely rent estimated to be available for a house of that type in size of $490 per week. That amounted to a claim of $27,968.50. A further claim for $5,000 as an adjustment is made for expenses incurred from delays in the partial settlement that occurred when the Jimboomba property was transferred to the respondent; that amount was accepted as payable by the respondent.

75. A further $72,106.85 is claimed for half the cost of Mr Charlton’s work as a receiver/manager and trustee for sale because of additional costs said to have been incurred by Mr Charlton as a result of the difficulties posed by the respondent in dealing with him. These are the costs that have already been ordered to be the applicant’s costs in the cause which I propose to deal with when it comes to the hearing of submissions in respect of costs.

76. The applicant also claims to have lost earning capacity totalling approximately $42,000 because of the stress of the relationship she had with the respondent, stemming from his violent behaviour and abusive conduct to her, leading to her inability to work properly for a significant period.

77. The applicant’s submission in respect of what should be paid to her then became rather elaborate, focussing on a money sum to which she claimed payment rather than a percentage of the property. She commenced by seeking half of the net value of the joint assets. The calculation of the value of the joint assets on which she relied was that they totalled $1,067,475.16. That figure did not include the figure of $10,000.00 in respect of the tools bought during the relationship and retained by the respondent. The approach led to an initial amount claimed by her of $533,737.58.

78. To that she argued should be added a reimbursement of $454,994.11 in respect of a list of matters set out in her ex. 4. They included motor vehicles owned by her before the relationship, other assets consisting of household contents previously owned by her, her superannuation and some Westpac shares owned by her before the commencement of the relationship whose value she estimated at $108,042.50 plus an indefinite amount for her share of tools owned by the parties as at April 2004 and retained by the respondent. She also included as part of that total figure of $454,994.11, joint expense contributions paid by her in excess of such contributions by the respondent totalling $41,545.30, half the cost of property valuations, capital gains tax and a general interest charge in respect of properties where she had paid the full amount of those costs.

79. Further she claimed extraordinary financial contributions of $153,456.81 representing her equity in the Carina Heights unit when it was sold of $91,676.95 and her redundancy payments of $61,779.86. Another component of that total of $454,994.11 was the rental adjustment for the respondent’s sole occupation of the Jimboomba property between May 2004 until mid 2006 at $490 per week amounting to $27,968.50. She also included in that figure the amount of $72,106.85 in respect of what were called trustee and settlement costs arising from the fact that she paid 100% of costs associated with the engagement of Mr Carlton as trustee, receiver and manager where the respondent had not paid anything.

80. Finally as part of that figure of $454,994.11 she included $41,190.02 as a “future needs impact” arising from her loss of income caused by the stress condition from which she suffered.

81. She then submitted that she should be entitled to a total of half of the net value of the joint assets of $533,737.58 and the whole of her reimbursement claim of $454,994.11 which together came to $988,731.69 from which she then argued that the value of certain assets totalling $319,492.50 already received by her or which she retained should be deducted. Those assets were the proceeds of the sale of the Jimboomba property that went to her of $246,500, the value of her motor vehicles totalling $4,950, her superannuation totalling $62,340, her Westpac shares worth $5,702.50, the partial proceeds of sale retained by her of the unit at Carina Heights of $22,000 that went to a relative to which should be added a further $5,343.65 for personal purchases made by her from those proceeds of sale. When one deducted that figure of $319,492.50 from the equity share sought by her of $988,731.69 she arrived at the figure for her claim from the respondent of $669,239.19.

82. Those and other matters referred to by the respondent led her to argue that she was entitled to 83.9% of the net value of what she described as the “equity pool” of $1,178,817.66, a figure she calculated in ex. 4 as $988,731.69 although the precise figure appears to be $989,028.02. Exhibit 4 contained this calculation seeking to explain the approach.

83. Exhibit 4 also contained a calculation of the deduction she argued should be made from that figure of $319,492.50 leading to her submission that she should be paid $669,239.19 by the respondent. The calculation was in the following terms:-

84. Mrs Anderson’s submission was that the applicant’s superannuation should not be taken into account nor should the relatively small sum representing the respondent’s superannuation. It is available to be taken into account at least as a resource but her submission through her counsel was that the superannuation of each party should be left as a separate asset for that party. In these circumstances, where they own significant other assets, the respondent appears to have little superannuation and the applicant a relatively modest amount accumulated to a significant extent outside the period of the relationship, it seems to me to be an appropriate stance to take.

85. The respondent’s submission was, essentially, that the property pool should be divided evenly.

Discussion

86. Keane JA for the Court of Appeal in the recent decision in FO v HAF [2006] QCA 555 discussed how to approach the exercise of the statutory discretion in cases of this type at [51]-[52] in these terms:

“[51]It has frequently been emphasised that the judicial discretion conferred by s 286(1) of the PLA and its analogues in other statutes should not be constrained by pre-determined guidelines. 51 It is essential, however, that the matters referred to in the provisions set out above be taken into account, and that they are "seen, in the reasons for judgment, to have been taken into account". 52 To this end, the four step approach explained by the Full Court of the Family Court in Hickey v Hickey 53 provides a useful discipline to ensure clarity of thought and transparency of judicial reasons.

[52]The Full Court of the Family Court explained in Hickey and Hickey, 54 in relation to the Family Court Act analogue of Pt 19 of the PLA, that the first step in making a property adjustment order is the identification and valuation of the property, resources and liabilities of the parties. The second step is the identification and assessment of the contributions of the parties to their pool of assets and the determination of their contribution-based entitlements in accordance with s 291 to s 295 of the PLA. The third step is the identification and assessment of the factors in s 297 to s 309 of the PLA to determine the adjustment to the contribution-based entitlement. The fourth step in the process is consideration of the result of these earlier steps to determine whether that result is just and equitable in accordance with s 286 of the PLA. While this approach should be understood as a guide to the exercise of the statutory discretion, it also serves to focus attention upon the importance attached by the legislature to the identification of the contributions of the parties to the parties' assets as the basis from which the process of adjustment is to proceed.”

87. The properties that seem to me to be particularly relevant to this exercise are the three properties at Jimboomba and Daisy Hill identified in ex. 4 as items 1, 3 and 4 whose net value is $1,049,875.16 after deduction of a mortgage to National Australia Bank of $103,000.00 on one of the Daisy Hill properties. To that should be added a further $27,600.00 as the value of the vehicles bought by the parties during their relationship and including $10,000.00 for the tools retained by the respondent and purchased during the relationship; items 6, 7, 8, 9, 10 and 12 of ex. 4. That gives a total property pool of $ 1,077,475.16. I accept that the applicant’s furniture, shares and car she owned before the relationship and both parties’ superannuation entitlements may be left out of account for present purposes.

88. The financial contributions of the applicant from the $40,000.00 initial deposit on the Carina Heights unit, its net increase in value of $51,676.95 and the contribution by the applicant of her redundancy payment of $61,779.86 (items 23-25 of ex. 4) totalling $153,456.81 and the greater contribution by her to joint expenses and other property expenses totalling $48,929.43 (items 16-22 of ex. 4) should be recognised as going to her credit in a figure of $202,386.24. From that figure should be deducted $27,343.65 that she retained from the sale of the Carina Heights unit either for herself or for a member of her family. She is also entitled to a credit for half the value of the respondent’s occupation of the Jimboomba property in the figure claimed of $27,968.50 in item 26 of ex. 4. They seem to be the main matters relevant to financial contributions of the parties pursuant to ss 291-294 of the Act apart from the vague possibility of child support under “the Child Support (Assessment) Act 1989 (Cwlth)” that may need to be provided by the respondent but of which there was very little satisfactory evidence.  On such an “asset by asset” approach it is clear that the financial contributions of the applicant to the creation of this asset pool start off at $203,011.09 or 18.84 per cent of the total property pool before taking into account the work done by the parties to build up those assets; as to the complementary nature of an asset by asset approach compared to a global approach in these inexact exercises see Kardos v Sarbutt (2006) 34 Fam LR 550, 564-565 at [50]-[55].  

89. I have already expressed the view that the contributions of the parties to the acquisition of the properties by their work and the income from their other jobs that they used for daily living expenses should be treated as equivalent. That is a global approach to that issue but one that seems to be particularly appropriate to this relationship where both parties were very focused on achieving their goals and worked hard together to attain them.

90. The applicant’s health and working capacity, insofar as it has been affected by the respondent’s behaviour also needs to be considered as one of the main relevant factors arising under ss 297-309 of the Act and particularly under s. 306 but the assessment there is more of an imponderable as it seems likely to me that the applicant has suffered from a combination of stressors, including the fact of this litigation itself, that are not all readily reducible to monetary terms but which also may have consequences for her health that are likely to be limited in time but not simply financial. The psychiatric evidence also supported the view I formed of the applicant in evidence that she had a resilient personality that would allow her to recover from her condition relatively quickly. Taking that issue into account together with her more substantial financial contributions, but recognising the worth of the work that the respondent as well as the applicant put into the properties it seems to me that the asset pool constituted by the properties I have identified should be divided 60:40 in favour of the applicant.

91. I shall hear further submissions as to the form of the orders that should be made, taking into account the effect of the partial settlement that has already occurred and as to costs.