SPD v DRH[2008] QSC 254

SUPREME COURT OF QUEENSLAND

[1] The applicant, a man now aged 60 and the respondent, a woman now aged 50, lived together at a house at the Gold Coast from 1992 until January 2007.  He says that for all of that time they were de facto partners for the purposes of Part 19 of the Property Law Act 1974 (Qld).  She agrees that they were de facto partners until 2003.  But on her case, although they continued to live together from 2003 until 2007, their de facto relationship was at an end.

[2] In April 2007 he commenced these proceedings seeking a property adjustment order under Part 19.  If, as she contends, the relationship ended in 2003, then the proceedings were brought out of time and an order cannot be made unless the applicant would suffer hardship and should be given leave to make this application: s 288.  I will return to the question of the duration of the relationship in discussing the events from 1992.

The relationship begins

[3] They met in 1991.  Each of them was separated from his or her spouse, and each had children from that marriage.  The applicant was then living with his 18 year old son in the applicant’s former matrimonial home at Robina, which I will call “the house”.  The registered owners of the house were then the applicant and his former wife.

[4] The respondent moved into the house in 1992 and about a month later, the applicant’s son moved out.  She had two daughters from her marriage, who were born in 1982 and 1985.  Her older daughter moved into the house in about 1996 and stayed until 2001, after which she returned to live there from time to time.  The younger daughter had lived in the house since 2002, and her boyfriend lived there for about a year until April 2006.

[5] In 1992 the house was advertised for sale, as part of the division of property between the applicant and his former wife.  But the house was withdrawn from auction and the applicant made the mortgage payments month by month through 1992.  He was working (and still works) as a carpenter.  Neither the applicant nor the respondent then had much money.  Until November 1992 when she commenced work as a sales representative, she was unemployed.

[6] In June 1992 the applicant’s mother died and the applicant needed money to go to the United Kingdom for the funeral.  The respondent says, and I accept, that she provided him with $5,000, which she managed to obtain as an advance from her husband towards their property settlement.  The respondent also made that trip to the United Kingdom.

[7] There is an issue about when she moved into the house.  He says that this was in “early 1992”.  In support of that, there is a bank statement of hers, dated 10 April 1992, which shows her address as that of the house.  In her first affidavit (filed 10 July 2007) she swore that they began living together in 1992 although their de facto relationship began in 1993.  In her second affidavit (filed 17 April 2008) she swore that “while still paying rent as per my lease [at another place] I partially moved in to clean up the applicant’s house and yard before I commenced my job … in November 1992”, but that cohabitation commenced “in January 1993”.  In her third affidavit (filed 7 July 2008) she swore that in April 1992 she was using the house as her personal address because she “didn’t feel comfortable directing mail to a rental premises, so I asked a friend (the applicant)” for the use of his address.  Whilst denying that cohabitation commenced some time prior to 10 April 1992, she swore in this third affidavit that “cohabitation commenced on or about August 1992.”

[8] I find that they lived together in the house from no later than August 1992.  I find also that the de facto relationship commenced when they began to live together.  Undoubtedly the relationship was sexual and had been for some time.  That is not the only criterion, of course, but there is no realistic basis for distinguishing some early period of their cohabitation from any later period, until at least 2003.

Co-owners of the house

[9] In May 1993 an agreement was reached with the applicant’s former wife for the purchase of her one half interest in the house, subject to the existing mortgage, for a price of $27,000.  The respondent disputes that she was a party to this agreement but nothing comes of that, because undoubtedly the respondent did pay $27,000 and receive a conveyance of the former wife’s interest.  That price reflected the then value of the house of $140,000, less the mortgage debt of $86,000.  From 7 May 1993 until mid 2006, the applicant and the respondent were the registered owners as tenants in common in equal shares.

[10] Her payment of $27,000 was made from funds she received from her husband as part of a property settlement.  There is a substantial issue here as to how much she received, and in turn how much she contributed towards the repayment of the debt on the house and to other household expenses, to which I will return.  The evidence of the financial records, and in particular the relevant bank statements, is incomplete.  But it is clear enough that on 4 February 1993, she received $36,013 from her husband, from which she paid $33,281.29 to an account she opened on 2 March 1993 with the then Suncorp Building Society (in her name) and that she paid the $27,000 from this account on 7 May 1993.  It appears that from those funds she also paid $1,543, which were arrears on the mortgage on the house, and stamp duty and legal fees on the transfer to her.  I accept the applicant’s evidence that this payment of $1,543 was the first payment from her funds towards the mortgage, and that from the commencement of the de facto relationship until then, he had made all of the mortgage payments.

The 1993 Deed

[11] In June 1993 the applicant and the respondent executed what I will call the “1993 deed”.  It recited that they then lived together in a de facto relationship and were the registered proprietors of the house.  It further recited that she had paid “certain debts” of his, and had contributed towards the improvement of the house, and in “sundry ways towards the joint finances of the Parties”.  The operative clause was as follows:

“In the event that the Parties cease to cohabit in a de facto relationship, then the Land will be sold and all assets held by the Parties jointly shall be liquidated, and NINETY PER CENT (90%) of the clear equity in the Land and in all such joint assets shall be paid to [the respondent]”.

[12] His version about the 1993 deed is that he executed it:

“on the basis that [the respondent] came to the relationship with the property which she told me she had received from her former husband, namely some $125,000.  … I made no enquiry at that stage as to whether she was being truthful in those representations, nor did I take any legal advice in respect of the effect of the agreement.” 

I accept that evidence, which I did not understand to have been challenged.  There is, as I have said, a substantial issue as to how much she did receive from her husband.

[13] Her version about the 1993 deed is that it was made because of her payment of a number of the applicant’s debts, and to reflect her “overwhelming contribution to the assets”.  She swears that part of the “deal” done with the mortgagee of the house, when she agreed to become a half owner, was that $50,000 had to be placed into an offset account against the loan account.  She says that this was done on 23 April 1993.  However there is no document which evidences that.  Then she says that “as a result of the 1993 deed”, she paid several debts on behalf of the applicant.  The first was $5,000, a debt owed for the applicant’s car, which seems to be undisputed.  The second was another $5,000, which the applicant had borrowed for work upon the house, and again it seems undisputed that she repaid this for him.  Thirdly she says she paid unpaid rates of $2,719.71.  I accept that she paid them.  But I also accept, as the applicant says, that they included rates for the period in which they were in the de facto relationship.  She paid legal fees of $1,855, some of which were the applicant’s responsibility under his matrimonial settlement but some of which were for legal work done for the respondent.  Accordingly the outstanding debts of the applicant which she paid, and which are said to have justified the apportionment in the 1993 deed, were relatively small.

The offset account

[14] But then, as already mentioned, she says that she deposited $50,000 into an offset account in 1993.  According to her affidavit evidence, this was the same offset account from which the mortgage debt was ultimately repaid in 2000.  I accept, because the documentary evidence proves it, that the mortgage debt was repaid in 2000 and from an offset account.  More precisely it was repaid on 26 May 2000 by a payment of $36,589.24 from an offset account in the joint names of the parties.  However that account was not opened in 1993.  It was opened on 29 November 1994, with an initial deposit of $32,000, as appears from the passbook for the account.  The applicant’s case is that this was the only offset account.  He concedes that this $32,000 was provided by the respondent.

[15] Thereafter there were deposits made to this account from the earnings of each of the parties and funds were withdrawn regularly to meet the mortgage payments.  By this offset account, of course, the interest on the house loan was reduced.  I have the passbook which shows the transactions on the account from November 1994 to April 1997 and during that period the account balance ranged from about $29,000 to about $39,000.  I have also the bank statements from October 1998 through to the closing of the account in April 2000, during which time the balance ranged from an initial $52,004 to the closing balance of $36,589.

[16] The respondent, in her oral evidence, said that this account was preceded by an earlier offset account, being that which she says she opened in 1993 with $50,000 from her former husband.  At about this time the parties went to the United States of America for a holiday and the respondent says that about $14,000 for this trip was paid from this (first) offset account.  She contends that she transferred the remainder of this account to that which she opened, in joint names, in November 1994.  At one stage when cross-examined, the applicant seemed prepared to accept that the American holiday was paid from an offset account; but his evidence as to that has little weight because, as I will discuss, all of the banking was conducted by her and he had no knowledge of the state of relevant accounts.  In my view, he is unlikely to have known from which account the money for the holiday came.

[17] I accept the applicant’s evidence that there was only one offset account.  All of the relevant bank accounts were managed and controlled by the respondent.  She was unable to produce a document evidencing an offset account to which $50,000 had been deposited.  Nor was she able to provide documentary evidence of her receipt of that $50,000 from her husband.  Had there been an earlier offset account which was replaced by that opened in November 1994, it would be expected that the entirety of the funds from the first account would have been deposited to the new account, and yet here the amount deposited was exactly $32,000, indicating that this was not the closing balance of an earlier account.  The respondent does not claim that at some stage there were simultaneously two offset accounts.

[18] I accept, as the respondent says, that $10,500 was withdrawn from the offset account on 29 January 1996 for the purchase of a car for the applicant.  She says that he bought a further car in 1997 at a cost of about $15,000 and that this also was withdrawn from the offset account.  I have no statement of the account for that date but I accept that evidence because it is undisputed.

[19] I return to the question of how much she received from her husband.  She tendered a written agreement signed by him (but not by her) dated 10 August 1993, which records an agreement of “$123,907 to be paid” to her, together with the transfer of a Nissan car.  However there is also an unsigned document (disclosed by her), headed “Terms of Settlement”, which if effective, recorded an agreement to the making of certain orders in the Family Court.  According to that document, her husband was to pay her $123,743 (and transfer the car), and it was acknowledged that she had received $41,000 as a part payment.  This document was exhibited to an affidavit of the present applicant and her response to that affidavit contained an apparent acceptance that a signed version of this “Terms of Settlement” existed and was given effect.  I infer that it was signed.  The acknowledged receipt of $41,000 is consistent with her receipt of the $36,013 in February 1993 and the $5,000 for the trip to the United Kingdom in 1992.

[20] In her oral evidence she was unable to satisfactorily explain any sequence of payments by which she might have received as much as $123,000.  The applicant accepts that in addition to the $41,000 referred to in the document, she received a further $32,000 which she deposited to the offset account in November 1994.  However the applicant denies that she received anything else.  I am prepared to accept that she received something beyond those sums, because the cost of the American holiday was probably paid mostly from her funds.  If she did ultimately receive the balance of the $123,000 from her husband, she offers no credible explanation for what she did with it, and it did not become a financial contribution to the relationship.  It is curious that she has the bank statement recording her receipt of $36,013 in early 1992, yet not any statement showing any later receipt from her husband.  It is also curious that her marriage was not dissolved until 1999.  She did not call her former husband to give evidence, because, she said, of her hostility towards him.  I find that she received from him, and brought to this de facto relationship, amounts totalling no more than $85,000.[1]

[21] She did receive the Nissan car.  She swears that it was then worth $40,000.  This is plainly an exaggeration: it was then three years old and the price when new was $32,000.

Their finances

[22] Throughout the entire period of cohabitation his wages were paid to an account in their joint names, and he thought that her salary was being paid to the same account.  But as he discovered after commencing these proceedings (and as she admits), all of her income was deposited to an account in her own name.

[23] She managed all of the bank accounts and cash, and handed him an amount of cash each week, of the order of $50, as “pocket money”.  Undoubtedly then, all of his wages, save for the pocket money, went to meeting the expenses of the household, including mortgage payments through deposits to the offset account.  He accepts that she also made deposits to the offset account.  But the extent of her contributions is not as clear, because I have the statements of her bank account (into which she paid her income) only from 1 January 2003.

[24] I accept that some of the household expenses were paid from this account of the respondent as well as from the joint account into which the applicant’s income was paid.  But overall, his contribution was greater than hers, as this comparison of their taxable incomes shows:

[25] The respondent says that she had other income which should be included for this comparison.  First she seeks to include the amount of a car allowance paid year by year by her employer.  The amounts varied from $2,076 (2001) to $4,950 (1997).  However these are already within her taxable income, according to her tax returns, so they should not be counted twice.  She also sought to include amounts for each of the four years from 1997 to 2000, of $3,000 to $4,000 per year, by way of so called “social security payments”.  However most of this was an allowance paid to one of her children.  She also claims to have received maintenance from her former husband, which she described in her oral evidence as both child maintenance and “alimony”.  There is no documentary evidence of these payments and there were no such payments, even on her version, in 1995, 2001 and 2004.  In other years she says there were payments varying from $5,500 to $8,860.  Precisely $5,500 is said to have been received in each of the years 1998, 1999 and 2000, which appears to be unusual.  I accept that she received some payments for the maintenance of her children.  I would not accept that this resulted in none of the incomes of the parties being used for the benefit of her children, at least while one of them lived in the house.  I do not accept that there were within these payments any amounts for her own maintenance, because there is no documentary evidence of that fact and it is contrary to the evidence as to her property settlement.

From 2003

[26] Their sexual relationship ended in 2003.  She insisted upon that and he reluctantly accepted it.  She argues that this was the end of their de facto relationship. 

[27] However, there are many indications that they remained de facto partners.  They continued to sleep in the same bed.  She says that he refused to sleep elsewhere and that she had to sleep there because she needed a water bed for health reasons.

[28] They continued under the same financial and banking arrangements.  All of his income continued to go to the joint account, except for a short period in which he opened his own account.  When she discovered this, she insisted that he close the account and resume the old arrangement, which he promptly did.  Thereafter he continued to receive the “pocket money” which she drew from the joint account.

[29] They continued to share household duties as they had before 2003.  Each did work around the house although overall her contribution was greater.  She does not suggest that either had a sexual relationship with anyone else.

The 2006 transfer

[30] In June 2006 she asked him to transfer his interest in the house to her.  She instructed solicitors to prepare the necessary documents.  He signed them without his own legal advice.  He knew that he was transferring his interest, but he believed the relationship still existed and he wanted it to continue.  On 29 June 2006, he executed what I will call “the 2006 agreement”.  It recited that:

“The Parties have maintained a relationship since in or about [blank]”.

It further recited that they had agreed that the house “should be” and remain her property “solely”.  It then provided that he would transfer his interest for “no consideration”.

[31] The 2006 agreement said nothing about the end of their de facto relationship.  The recital was incomplete as to when the relationship commenced, but still it was in terms which suggested that the relationship then existed.  It said nothing about other property, and in particular, any division of funds from joint accounts.  Nor did it say anything about his leaving the house.  I accept that he believed that the relationship had not ended, and that it was in the hope that it would continue, that he signed this document and transferred his interest in the house.

[32] A few days later each of the parties made a will.  Each will was prepared by the same firm of solicitors.  By his will, the proceeds of his superannuation would be given to “my partner [the respondent]”, as would any monies in their joint bank accounts.  In the event that she predeceased him, funds from any joint bank accounts would be given to her children and to his children in equal shares.  The balance of his estate was to go to his children. 

[33] By her will, the proceeds of her superannuation were to go to him and there were provisions for joint bank accounts corresponding with his will.  The house would be left to her daughters.  Importantly, her will referred to him in several places as “my partner”. 

[34] These documents provide a strong indication that the parties were still in a de facto relationship and there are the other circumstances already mentioned, such as the continuation throughout the period of cohabitation of the same financial and domestic arrangements.  I find that the de facto relationship continued at least until July 2006.  Accordingly these proceedings were brought within time. 

[35] After the house had been transferred and the wills had been made, I find, as the applicant says, that the relationship deteriorated.  Nevertheless he continued to pay all of his income to the joint account and the sleeping and domestic arrangements remained much the same.  In January 2007, after an argument about his pocket money not being paid, he left the house and has lived elsewhere since. 

The bank accounts

[36] As mentioned already, the mortgage was paid out from the offset account in 2000.  After then, the parties accumulated substantial savings which were placed upon interest bearing deposits.  All of this was managed by the respondent.  Throughout all of this she had her own bank account.  By August 2002 the joint savings were more than $40,000 and by January 2003, they were more than $60,000.

[37] By 22 March 2004 there was $91,204.36 on an interest bearing deposit in their joint names.  On that date the respondent withdrew $50,000 and placed it on a term deposit in her name alone.  I accept his evidence that he was unaware that she had done this until after disclosure in these proceedings.  Her explanation is that in some way he owed her $25,000, and that she was effecting a repayment by withdrawing that amount, and that at the same time, she saw fit to withdraw a corresponding $25,000 of her own.  As to why she withdrew these funds when she did, she claimed that she needed $25,000 towards the expense of her daughter’s wedding.  But her daughter was not engaged to be married until two years later.  The respondent has no credible explanation for this appropriation of their joint funds.

[38] Moreover, she withdrew further amounts from their joint account, and in each case, paid them to her own account, again without his knowledge, as follows:

[39] At the same time the joint account was linked to a Visa card and it is clear that at least much of the household expenses were paid by the use of the card operating on this account.  So it is difficult to see that these payments to her own account were necessary so that their money could be spent for the benefit of both of them.

[40] In summary, in the years 2004-2006, she paid approximately $85,000 from their joint funds to her own account.  It should be added that there was a deposit by her to the joint account of $11,000 in June 2005, as well as a few other deposits from 2003 totalling less than $2,000.

[41] When they separated in January 2007, this joint account was closed. He then received $9,650 from the account, and she received $10,644.09.  As at 1 January 2003, the respondent had a credit balance in her own account of a little over $1,000.  By the transfers from the joint account, including that payment to her on closure of the joint account, the account in her own name had grown to a credit balance of $74,135 as at 31 January 2007.  Undoubtedly she paid some household expenses from this account of her own.  But she also made substantial payments which had nothing to do with him.

[42] In summary, on the most favourable view for the respondent, in net terms she misappropriated at least $70,000 from their joint funds, and for the most part, still had the proceeds of that when they separated.

The 2007 agreement

[43] After the commencement of these proceedings, the parties met with a mediator from an organisation called Relationships Australia.  They did this without legal representation, and at least on the applicant’s side, without legal advice.  They reached an agreement by which she would pay him $5,500, as she then did.  The agreement was recorded by a print out from an electronic white board.  It was in these terms:

“Agreements

1[The parties] willingly agree after careful consideration and exploration of the facts that by way of full and final property settlement they will split the asset pool approximated [sic] ($20,000)

27.5 : 72.5 the sum of $5,500 being transferred to [the applicant] from [the respondent] via Suncorp bank transfer within 24 hrs of today’s date

2[The parties] willingly agree that neither party will seek further legal action against the other for any purpose”.

That was preceded by some notes which give some indication of how the “pool” was said to have a value of $20,000.  These notes are not easy to understand or explain.  But by some process, the parties appear to have arrived at the conclusion that the house alone constituted the “asset pool”, and that it had a value of but $20,000.  The amount agreed to be paid was then 27.5 per cent of that figure. 

[44] What is clear is that the parties did not include all of the relevant assets within this pool, and in particular the substantial funds which the respondent still held on bank deposit.  According to her own affidavit, filed a few weeks after this agreement, she had assets worth, in total, $435,400, including the house to which she attributed $330,000 and the “balance of my bank accounts”, to which she attributed $53,000.  In addition each party had superannuation entitlements.

The effect of the agreements

[45] Before going to the present financial positions of the parties, I will discuss the threshold argument made for the respondent, which is that the effect of one or more of the 1993 deed, the 2006 agreement and the 2007 agreement is that no order can be made.  This involves a question of the construction of certain provisions of Part 19.

[46] Section 274 of the Property Law Act provides that, with some qualifications[2], the court must not make a property adjustment order which is inconsistent with provisions on financial matters within a “recognised agreement” between the parties.  A recognised agreement is defined by s 266 as follows:

“Meaning of recognised agreement

(1)A recognised agreement of de facto partners is a cohabitation or separation agreement of the de facto partners that –

(a)is a written agreement; and

(b)is signed by the de facto partners and witnessed by a justice of the peace (qualified) or solicitor; and

(c)contains a statement of all significant property, financial resources and liabilities of each de facto partner when the de facto partner signs the agreement.

(2)Whether all significant property, financial resources and liabilities of a de facto partner are stated depends on whether the value of a property, financial resource or liability of the de facto partner that is not stated is significant given the total value of the de facto partner’s stated property, financial resources and liabilities.”

[47] Section 264(1) defines a “cohabitation agreement” as follows:

“Meaning of cohabitation agreement

(1)A cohabitation agreement is an agreement –

(a)made by de facto partners –

(i)in contemplation of starting their de facto relationship; or

(ii)during their de facto relationship; and

(b)dealing with all or some of the de facto partners’ financial matters.”

Section 265(1) defines a “separation agreement” as follows:

“Meaning of separation agreement

(1)A separation agreement is an agreement –

(a)made by de facto partners –

(i)in contemplation of ending their de facto relationship; or

(ii)after their de facto relationship has ended; and

(b)dealing with all or some of the de facto partners’ financial matters.”

[48] The respondent’s argument rightly concedes that none of the 1993 deed, the 2006 agreement nor the 2007 agreement constitutes a recognised agreement.  In particular, in no case does the agreement contain a statement of all of the significant property, financial resources and liabilities of each de facto partner at the time of the agreement.  Accordingly s 274 is not engaged, and that section does not preclude the making of a property adjustment order which is inconsistent with the terms of any of these agreements.

[49] However the respondent argues that the agreements still have effect as contracts and they should be enforced.  The argument goes further, to the point that there is no jurisdiction to make an order which would be inconsistent with the rights and liabilities of the parties according to three contracts.  The argument relies on s 272 which provides as follows:

“Law of contract applies

A cohabitation or separation agreement is subject to, and enforceable according to, the law of contract except as otherwise provided by this part.”

[50] But the effect, if any, to be given to cohabitation or separation agreements which are not recognised agreements is the subject of s 277, which is as follows:

“Other cohabitation or separation agreements may be considered

(1)This section applies if, on an application for a property adjustment order, a court is –

(a)satisfied there is a cohabitation or separation agreement of the de facto partners; and

(b)not satisfied the agreement is a recognised agreement.

(2)The court may make any order it could have made if there were no cohabitation or separation agreement.

(3)However, in making its order, the court may consider the agreement’s provisions on financial matters, in addition to the matters the court is required to consider under division 4, subdivisions 2.”

[51] The respondent’s argument cannot be accepted.  The effect of any of these agreements is made clear by s 277: the court may consider the agreement in deciding the case, but such an agreement need not be considered in every case, and the agreement need not be given effect in deciding whether an otherwise appropriate order should be made.  If the respondent’s argument were to be accepted, there would be no difference according to whether or not a separation or cohabitation agreement was a recognised agreement.

[52] Section 272 preserves the operation of the law of contract but it does so “except as otherwise provided by this part”.  In particular, it does so subject to the exercise of the jurisdiction under Part 19 to adjust property interests.  One purpose of s 272 is illustrated by the example given at the foot of the section:

“The effect of mistake, fraud, duress, undue influence or unconscionability in relation to a cohabitation or separation agreement is decided by the law of contract.”

More generally, s 272 makes it clear that apart from the operation of Part 19, a cohabitation or separation agreement is enforceable or otherwise, according to the law of contract.  Not surprisingly, Part 19 allows the Court to alter contractual rights in the course of altering proprietary rights.

[53] In this case, consistently with s 277(3), I have considered the provisions of each of these agreements.  The 1993 deed is relevant, in showing the extent to which the respondent was already dominating the applicant, because had he known the facts of what property she had or had not brought to their relationship, he could not have considered that it was fair that he would have only ten per cent of their property if their relationship should end, regardless of when the relationship ended or what had happened to their finances in the meantime.  At this point in 1993, her contribution to the acquisition and maintenance of the house had been no more than his, she had paid out some small loans and (perhaps by then) paid for the American holiday.  The 2006 agreement is relevant because, as already noted, it is more consistent with the relationship being ongoing, than with the respondent’s case that it had ceased in 2003.  The 2007 agreement is significant for the fact that it shows that she had not disclosed the large bank deposit which she then held.  It is also significant because she paid $5,500 in consequence of that agreement, which must be considered.

[54] In the alternative, the respondent argues that the applicant is estopped from seeking any order.  This is said to come from a combination of the 2006 and 2007 agreements.  It is argued that he thereby represented that the house would be her property “solely and permanently”, and that on payment of $5,500 he would not further prosecute these proceedings.  She says that in reliance upon those representations, she “assumed the responsibility of paying the outgoings of the property”, made the 2006 Will and paid him the $5,500, such that it would now be unconscionable for him to resile from those representations.  This estoppel is not said to affect the jurisdiction to make an order, but rather the exercise of the court’s discretion.

[55] The estoppel argument has no merit when the facts are considered.  It is said that she altered her position by assuming a responsibility for outgoings, but it is far from clear that thereafter she paid all outgoings.  In the bank statements for the joint account for the second half of 2006, there are apparent references to the payment electricity and for building and landscaping materials and furnishings for the house.  Moreover, because each of the 2006 and 2007 agreements was made by the applicant in ignorance of the respondent’s secret appropriation of most of their considerable savings to her own account, it could hardly be thought that she could claim equitable rights on the basis of these transactions by cries of unconscionability.

The financial positions of the parties

[56] The most valuable asset is the house.  The applicant was its builder.  Unfortunately a small part of it encroaches upon adjoining Crown Land, which is a park.  There seems no reason to think that this could not be remedied by an adjustment of the boundary.  I am unable to make a finding as to exactly how much that would cost the proprietor of the house.  However the respondent is well aware of the encroachment issue and she concedes, within her most recent statement of financial circumstances, that the house has a value of $475,000.  As already discussed, she claimed that some of the monies she appropriated to her own account were for the expected cost of remedying this encroachment, which she estimated at $25,000.  But I will proceed upon the basis, accepted by the applicant and the respondent[3] that the house is worth $475,000.

[57] The respondent has two cars of a combined value of $4,250, furniture worth $3,000 and superannuation of approximately $45,000. 

[58] The respondent no longer has any funds on deposit.  I accept her evidence that they have been spent on legal fees for these proceedings.  Since the parties separated, she has borrowed from a friend $20,000 which she still owes. 

[59] The applicant has no real property and lives in a rented apartment.  His car is worth $19,400 but he owes $28,000 on a loan for it.  He has superannuation of about $81,000.  He has about $11,500 in a bank deposit.

[60] He owes $8,500 to Channel Seven, being the amount of costs he was ordered to pay in an unsuccessful application to enjoin Channel Seven from making a publication about him and the house earlier this year.  This arose because the respondent contacted Channel Seven and provided it with details of the encroachment and, it would appear, at least some details of the dispute the subject of these proceedings.  For example, it appears that she provided Channel Seven with a copy of the 1993 agreement.  Channel Seven then contacted him, indicating that it proposed to broadcast a story about him and the house.  Within the present proceedings, he applied for an injunction against Channel Seven, joining the respondent to that application, to restrain its broadcast, upon the ground that Channel Seven was likely to publish an account of these proceedings contrary to the prohibition in s 344(1) of the Act on a publication of an account of a Part 19 proceeding.  His application was dismissed because it was not demonstrated that the proposed publication was likely to contravene s 344 and the applicant was ordered to pay to Channel Seven its costs assessed at $8,500.[4]  The applicant was also refused an order that the respondent disclose what she had provided to Channel Seven.  The costs between the applicant and the respondent were reserved to the present hearing.

[61] I have discussed already the financial and non-financial contributions made directly or indirectly by each party to the acquisition, conservation or improvement of any of the property.[5]  As to the house, their contributions were much the same by the time she acquired her one half interest in 1993.[6]  From then on, he contributed more because of his higher income, as well as from the fact that all of his income went into the joint account.  Against that, she contributed the $32,000 on the opening of the offset account in 1994, and this substantially increased their capacity to repay the mortgage debt.  Overall their respective financial contributions to the acquisition of the house and its maintenance were about equal.  It would be artificial to attempt a more precise calculation.  As to non-financial contributions, as I have mentioned, she appears to have done more about the house.  But this was not a case where she did not work and did everything around the house, thereby significantly improving his capacity to earn income. 

[62] After the discharge of the mortgage in 2000, the substantial savings which were accumulated came mainly from his income.  His taxable income from 2000 through 2006 was in total $354,750, and hers for the same period was $119,190.  There is no serious case here that he was extravagant or that any of his income was misapplied.  He had a debit card from which he made purchases from the joint account but no ATM card.  As I have said his cash came only from his “pocket money”.

[63] For the respondent it is argued that she substantially contributed to his financial resources which are represented by the amount of his superannuation funds.  But her contribution to his earning income and in turn to his superannuation, as I have said, was not significant.

[64] The applicant is 10 years older than the respondent and is nearer the end of his working life.  He appears to be in good physical condition but as a 60 year old carpenter, he is quite likely to have to retire within a few years.  The respondent appears to be in fairly good health and she is in regular employment.  The orders which will be made will not affect his or her earning capacity.[7]  Neither has the burden of the care of a child under 18.  Neither is cohabiting with another person in a sense relevant for s 307:  the respondent’s younger daughter still lives with her but the circumstances of that are not significant.

Conclusion

[65] The applicant has demonstrated that there should be an adjustment of the property in the house.  By the time the mortgage was discharged in 2000, the contributions to the acquisition of the house were about equal.  In addition, she has had the benefit of the funds she took from their joint account.  As I have found, she took at least $70,000, and allowing half of that for her, she has had at least $35,000 of what should have been his money at the end of the relationship.  She has also had the interest on these funds and the use of the house since January 2007, although she has had the expense of maintaining it.

[66] On the basis of a value of $475,000 for the house, I infer that it should realise net sale proceeds of no less than $450,000.  In my conclusion he should be entitled to half of that amount plus $35,000 for what she took from their savings.  She should have an allowance for the $5,500 which she paid last year.  But there should also be some allowance for the use which she has had of the house since 2007, and importantly, the use she had of the joint funds for some years.  In all it is just and equitable that she pay him $260,000.

[67] She should be allowed the opportunity to raise those funds rather than there being at this stage an order for the sale of the house.  And the present encroachment could be an impediment to an immediate sale.  If she is unable to raise $260,000 within 60 days, then trustees for sale should be appointed.  It would then be for them, perhaps with the advice of the court, to decide what to do about the encroachment before selling the house.  This period of 60 days would also provide the respondent with enough time to move house.

[68] There remains the matter of the costs reserved between the parties in the application against Channel Seven.  In my view the respondent was motivated to go to Channel Seven because she thought that this would put pressure on the applicant to not prosecute these proceedings.  At this trial it was revealed that Channel Seven indemnified the respondent for her costs of that application.  On the other hand, his application was unsuccessful.  In the circumstances there should be no order that applies to that application filed on 3 March 2008.

[69] It will be ordered that unless the respondent pays to the applicant the sum of $260,000 within 60 days of this judgment, the house presently owned by the respondent will be sold by trustees to be appointed by further order, and the net proceeds of sale shall be distributed first by a payment of $260,000 to the applicant, and the balance of the proceeds to the respondent.  There will be liberty to apply.  It will be ordered that there be no order as to costs between the applicant and the respondent for the application filed 3 March 2008.