KTA v ANE[2008] QSC 315

SUPREME COURT OF QUEENSLAND

LYONS J:

The claim

[1] The plaintiff met the defendant, an aircraft restorer and pilot, when she sold him one of her paintings from her art gallery in mid 2003.  At the time they met the plaintiff was living in her own unit at New Farm and she had an investment property at Highgate Hill.  The defendant had a large home on acreage at Brookfield together with other assets.  During their three year relationship the plaintiff moved from her unit to live with the defendant at his property at Brookfield.

[2] Their established careers provided each of them with a steady income stream which they expended on their life together including a number of trips and holidays together.  Each spent money on joint activities and they both paid for expenses in varying proportions at various times.  Throughout the relationship, however, they kept their financial and business affairs completely separate and there were no jointly owned assets.

[3] They became engaged to marry in October 2005 but after a heated argument in September 2006 separated permanently.  There were no children of the three year relationship.  In May 2007 the plaintiff instituted proceedings seeking orders in relation to the defendant’s property.  As the parties never married this application involves a claim and counterclaim for property adjustment orders pursuant to Part 19 of the Property Law Act 1974 (Qld) (“the PLA”).  The plaintiff seeks an order for the sale of the defendant’s home at Brookfield and a division of the sale proceeds such that she receives a monetary sum in the order of $100,000 to $150,000 or a figure of 10 to 15 per cent of the property pool.  By his counterclaim, the defendant seeks an order that the plaintiff pay to him the sum of $50,000.

The legislation

[4] Pursuant to Part 19 of the PLA the Court may make orders adjusting property interests to ensure a just and equitable distribution of property at the end of a de facto relationship.  Section 286(1) of the PLA provides that the Court may make any order it considers just and equitable about the property of either or both of the de facto partners, adjusting the interests of the partners.

[5] Section 286(2) then provides that in deciding what is just and equitable the Court must consider the matters set out in subdivision 3 of the Act which includes the following:

(a) The financial and non-financial contributions made directly or indirectly by or for the de facto partners or a child of the de facto partners to the acquisition, conservation or improvement of any of the property of either or both of the de facto partners;[1]

(b) The financial and non-financial contributions made directly or indirectly by or for the de facto partners or a child of the de facto partners to the financial resources of either or both of the de facto partners;[2]

(c) The contributions, including any homemaking or parenting contributions, made by either of the de facto partners or a child of the de facto partners to the welfare of the de facto partners or the family consisting of the de facto partners;[3]

(d) The effect of any proposed order on the earning capacity of the de facto partners;[4] and

(e) The matters mentioned in subdivision 4 to the extent they are relevant in deciding what order adjusting interest in property is just and equitable.[5]

[6] The matters in subdivision 4 which are then relevant include:

(a)The age and state of health of each of the de facto partners;[6]

(b)The income, property and financial resources of each of the de facto partners;[7]

(c)The physical and mental capacity of each of the de facto partners for appropriate gainful employment;[8]

(d)The commitments of each of the de facto partners necessary to enable the de facto partner to support himself or herself;[9]

(e)The standard of living which is reasonable for each of the de facto partners in all the circumstances;[10]

(f)The contributions made by either of the de facto partners to the income and earning capacity of the other de facto partner;[11]

(g)The length of the de facto relationship;[12]

(h)The extent to which the de facto relationship has affected the earning capacity of each of the de facto partners;[13]

(i) If either de facto partner is cohabiting with another person, the financial circumstances of the cohabitation;[14] and

(j)Any fact or circumstance which the court considers to the justice of the case requires to be taken into account.[15]

[7] Financial resources are defined under s 263 of the PLA to include the following:

“A person’s financial resources include the following–

(a)a prospective claim or entitlement under a scheme, fund or arrangement under which superannuation, resignation, termination, retirement or similar benefits are provided to, or in relation to, the person;

(b)property that, under a discretionary trust, may become vested in, or applied to the benefit of, the person;

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

(d)any other valuable benefit of the person.”

[8] The types of orders that a court may make are set out in Division 6 of Part 19 of the PLA.  The Court is given extensive powers to ensure that it can make orders to give effect to a just and equitable distribution of property between the de facto partners.  The duty of the Court in those circumstances is to make orders that, as far as practicable, will end the financial relationship between the de facto partners.[16]

De facto relationship

[9] There is no dispute in the present case that a de facto relationship existed for a period of approximately three years.  There is, however, a dispute as to the precise length of that relationship with the plaintiff maintaining it commenced three months earlier than the date acknowledged by the defendant.  Section 260 of the PLA provides that a reference to a de facto partner in the Act is a reference to s 32DA of the Acts Interpretation Act 1954 (Qld) and the definition of de facto partner in that Act.  That Act provides that a reference to a de facto partner is a reference to either one of two persons who are living together as a couple on a genuine domestic basis but who are not married to each other or related by family.

[10] Whilst the plaintiff states that the de facto relationship commenced in September 2003 and finished in September 2006, the defendant says that the relationship did not in fact commence until December 2003, when the plaintiff moved into the defendant’s residence at Brookfield.  In this regard I prefer the defendant’s evidence, as his evidence is substantiated by reference to other events.  He states that he did not commence an intimate relationship with the plaintiff until he had finished paying for the painting he had bought from her and that this date is verified by reference to his cheque book.  Accordingly, I accept that the parties commenced an intimate relationship in October 2003.

[11] The commencement of an intimate relationship, however, does not mean that there was a de facto relationship in existence from that time.  For there to be a de facto relationship there must be something more; there must be a relationship whereby the couple are actually living together as a couple on a genuine domestic basis.  I do not consider there is any evidence to establish that the parties commenced living together, on a genuine domestic basis, prior to the plaintiff’s move to Brookfield.  Whilst I accept that the defendant did stay overnight at the plaintiff’s unit on some occasions prior to her moving and that the plaintiff did stay at times at the defendant’s home at Brookfield prior to moving there, I do not consider that they were living together as a couple or had set up a household together prior to the plaintiff’s move to Brookfield.  The plaintiff states that when she moved to Brookfield she moved her personal items there, including her crockery and cutlery.[17]  I consider that the move to Brookfield was when the de facto relationship can be considered to have commenced.

[12] The question remains, however, as to when the plaintiff moved to Brookfield.  The plaintiff states this was in September or early October, whereas the defendant says it was December.  The plaintiff gave evidence that when she moved in with the defendant she started paying for groceries and items for the home for them both to use.[18]  A perusal of the plaintiff’s credit card statements, however, does not reveal a pattern of spending in the Brookfield area in the months September to December 2003.  Furthermore, the evidence indicates that the plaintiff and defendant did not immediately move in together after their relationship commenced, but that they stayed in each other’s residences from time to time.  On the basis that I am satisfied that an intimate relationship commenced in October, I consider that it is more likely that the parties moved in together some weeks later and that it is more likely to have been December rather than October.   Accordingly, I accept the defendant’s evidence that the plaintiff moved into his residence in December 2003.  I do not consider that there is sufficient evidence to indicate that there was, in fact, a de facto relationship prior to December 2003.  I consider, therefore, the de facto relationship commenced in early December 2003.  For the purposes of some later calculations I consider that the relationship lasted some 145 weeks.

[13] Whilst I must determine when the de facto relationship commenced, I do not consider that the precise commencement of the relationship has any particular significance in the circumstances of this case other than for the purpose of the calculations.  In the present case, the parties were clearly in a de facto relationship for a period of close to three years and they obviously satisfy the requirements of s 287 of the Act which provides that the de facto partners must have lived together in such a relationship for at least two years.

[14] I turn then to the substance of the plaintiff’s claim for a property adjustment order.

The four step process

[15] The approach to be adopted in property adjustment matters under the PLA was set out in FO v HAF,[19] where the Court of Appeal approved the approach of the Family Court of Australia in relation to the exercise of the discretion with respect to the Family Law Act 1975 (Cth) equivalent of s 286(1) of the PLA.  This approach requires a four step process as explained by the Court:[20]

“The Full Court of the Family Court explained in Hickey v Hickey in relation to the Family Law 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.”

[16] It is clear, however, that whilst the Court has a very wide discretion, that discretion is not unlimited and its exercise is conditioned on the requirement that it must be just and equitable to make the order and the Court must take into account the matters specified in the Act and the general principles embodied in the Act.

The first step - identification and valuation of the property, resources, and liabilities of the parties

[17] The first step in the four step process requires an identification of the assets of both parties as at the date of trial.

[18] This first step of the identification and valuation of the property pool is attended by profound difficulties in the present case.  There are no up-to-date valuations for a number of the assets including the defendant’s Brookfield property, the plaintiff’s investment property at Highgate Hill, or the Bulimba property the plaintiff purchased when she sold her New Farm unit in October 2007.  Neither has the stock of the plaintiff’s gallery been valued or even identified with any particularity.

[19] In addition, there is the further difficulty that much of the plaintiff’s claim is not supported by any verifying documentation and many of the claims are simply not substantiated in any way.

[20] Neither do I consider that the plaintiff had a good recollection of events.  I also have concerns about the accuracy of the plaintiff’s memory of a number of events she does remember.  In particular, the plaintiff emphatically denied having purchased a $12,000 spa prior to moving to Brookfield.[21]  The plaintiff stated “…[i]t was paid for September and November of 2003 when I was already there in Brookfield.”[22]  The Purchase Agreement,[23] however, was later produced which showed that the plaintiff had purchased the spa on 12 August 2003 and her New Farm address is clearly indicated as the address on that document.  Even on her own evidence, the plaintiff did not submit that she was at the Brookfield residence in early August 2003.  Her evidence was clearly wrong.

[21] I also consider that she was less than fully frank in her evidence and that her knowledge of her own financial affairs was either appallingly poor or evasive.  I note that numerous financial documents, including cheque books and medical accounts, were called for by Counsel for the defendant during the hearing but they were not produced by the plaintiff.

Plaintiff’s property and assets

Highgate Hill

[22] The plaintiff owned a one bedroom investment unit at Highgate Hill at the commencement of the relationship and the real estate appraisal of its value by dated 21 August 2007 is $205,000.  I accept that there is a housing loan of $70,539.37[24] in relation to this unit which was originally with another lender but since the plaintiff reorganised her financial affairs in October 2007 this is now part of her indebtedness to Westpac.

Bowen Terrace, New Farm

[23] The plaintiff was living in and renovating a unit at Bowen Terrace, New Farm at the time she met the defendant.  During some of the period that the plaintiff lived with the defendant at Brookfield she rented out the unit to friends.  A year after the couple separated the plaintiff sold the unit with settlement occurring on 1 October 2007.  The settlement figures[25] indicate that the sale price was $595,000.  The mortgage debt to Westpac in relation to the unit was $288,780.63 and at settlement therefore the plaintiff received a cheque for $277,763.29.

[24] This was then used to purchase a one third interest in a property at Bulimba which was purchased with her current partner for $1.3 million in October 2007.  The plaintiff’s current indebtedness in relation to the housing loan over this property is $195,818.08.[26]  The plaintiff’s current interest in the property based on the purchase price 12 months ago would be approximately $433,335.

Plaintiff’s business interest

[25] The plaintiff has a business as an artist where she sells artworks which she produces.  She keeps a studio which she rents and she has a stock of artworks for sale.  In my view, the plaintiff was deliberately vague and unconvincing as to her stock on hand.  She maintained that she kept stock valued at $50,000 on hand at all times but could give no basis as to how this figure was arrived at or how many paintings were involved in this calculation.  It would appear that she does not keep a stock list or an inventory of any sort.  I consider it frankly surprising that she would not keep a portfolio of her artworks, a catalogue of her current works, and a list of her current prices.

[26] I agree with Counsel for the defendant, that there is simply no valuation of the plaintiff’s art business and no factual basis for her valuation of her stock at $50,000.  The plaintiff’s evidence in this regard is clearly unsatisfactory. 

[27] The defendant’s submission is that one can extrapolate out a value of the stock based on the images on the plaintiff’s website.  Whilst I do not accept the defendant’s valuation of $400,000 in this regard I consider that a value in excess of $50,000 should be assigned.  The plaintiff has a gallery which displays her artworks and there clearly needs to be a number of works on display at any one time.  The plaintiff gave evidence that she sells her original paintings for between $500 and $2,500.  The evidence indicates that the defendant paid the plaintiff $6,500[27] for a painting which he purchased in October 2003 and Exhibit 4 indicates prices of $1,500 and $3000 for her artwork.  I also note that she has canvas or acrylic prints of those artworks which are readily available.  I will assign a value of $150,000 to the artworks based on 50 paintings with an average price of $3000.

[28] The plaintiff also runs a business involving the sale or distribution of Nikken Wellness products.  The basis of this business was not explained but it would appear to generate substantial income at times.  On the evidence before me, there is no stock in hand in relation to this business.  I also consider that the plaintiff’s evidence was less than frank when it came to full disclosure in relation to this business.

[29] The defendant gave evidence that the plaintiff sold her paintings for cash.[28]   There is other evidence which also indicates that the plaintiff paid for items extensively with cash, including larger transactions.[29]  The evidence also indicates that the plaintiff would exchange her paintings with others using a barter system.  I accept this evidence.  I also consider that the plaintiff paid for some of the renovations to her unit involving either cash or barter.  The plaintiff admitted to her involvement in ‘contra’ deals including the painting of a wall at the defendant’s home.[30]

[30] In August 2006 the plaintiff started using Bartercard.  Whilst there is a Bartercard Statement[31] in evidence which shows that the plaintiff had a Bartercard debit of $41,990.69 as at 29 September 2008, there was no explanation as to how this system worked or what this figure represented, particularly as the Statement indicated that the trade volume for the current calendar year was $98,285.66.  The basis upon which the figure of $41,990.69 is a liability has simply not been explained let alone proved, particularly as the plaintiff had a credit on this account of some $20,000 in the previous year.

[31] The defendant gave evidence that the plaintiff told him and his daughter during an argument that she had a lucrative business and that she earned in excess of $300,000 per year.  That evidence was verified by the defendant’s 27 year old daughter who was present during the conversation.  I consider she was a careful and credible witness and I accept her evidence as to the content of the conversation.  Whilst I accept that the plaintiff made this statement, I consider that given some of her other evidence it is more than likely that this statement was not accurate.  I consider that she made the statement but that it was probably an exaggeration. 

[32] I consider that generally the plaintiff’s evidence in relation to the income she has available to her from all of her businesses was less than frank.[32]

Investment of $50,000

[33] The plaintiff gave evidence that she increased her loan over her unit at New Farm in order to invest $50,000 in a high risk business venture called Risqy.  I accept that this company was wound up pursuant to orders of Daubney J[33] and it is highly unlikely that she will receive any of these funds.

Household furniture

[34] The plaintiff states that she has minimal household furniture and has assigned no value to her household items.  The plaintiff clearly had an established and furnished unit at New Farm at the beginning of the relationship which must have included basic items such as a refrigerator, household crockery, linen, and a bed.  These items were apparently subsequently sold.  It would appear that the plaintiff did not move any furniture into the Brookfield house but did move crockery and personal items.  When she left the relationship in September 2006 I consider she would have needed to re-establish a household and would have needed basic items of furniture such as a bed and a refrigerator in order to live comfortably.  The evidence, in fact, indicates that she acquired a queen size bed.  I accept that the plaintiff had medical equipment and a sleep system which was worth several thousand dollars as she received an amount of $2,800 from the defendant to replace these items.[34] I consider that even minimal household furniture would equate to at least $10,000.  Given that the insurance on the contents of the house which she shares with her current partner is $100,000, I consider that an amount of $10,000 would be reflective of minimal household furniture.  I do not consider that the plaintiff’s zero figure is accurate.

Cash at bank

[35] The plaintiff submits that she has $2,000 in the bank but there is no documentary evidence to support this.  I accept that, in the circumstances, an amount of at least $2,000 should be factored into the calculation.

Gift of the motorbike

[36] I accept the plaintiff’s evidence supported by the evidence of two witnesses that the defendant gave her a Harley-Davidson motorbike as a gift.  The defendant acknowledges that the bike was purchased but states that he did not give it to the plaintiff as a gift but, rather, he intended that it was simply for her to use.  I consider that the evidence supports a finding that it was indeed a gift and no such qualification was expressed by the defendant.  I accept that at all times the bike was registered in the defendant’s name but accept the evidence that he told the plaintiff that he would transfer the registration into her name. 

[37] It is clear that the defendant subsequently sold the bike and he received $25,000 for it.  This figure needs, therefore, to be factored into the equation.

Debts

[38] The current credit card debts have not been substantiated.

[39] On the basis of the evidence of which I am satisfied, I consider the plaintiff’s assets and liabilities are as follows:

[40] I consider that this total represents the minimal calculation of the plaintiff’s assets.

Defendant’s property and assets

[41] The defendant has substantial assets including his home, a shareholding in his registered business, as well as an interest in several aircraft, two motorbikes, and two vehicles.  I have already indicated the difficulties which attend the valuation of the house and the business.

Haven Road, Brookfield 

[42] The defendant owns a property at Brookfield which he purchased in 1999.  The property had a valuation as at 26 April 2005 of $900,000 by a valuer for the ANZ Bank.[35]  The defendant gave evidence that he thought its value would be the same.  It would appear to be a large, four bedroom, air-conditioned house on a sizeable block.  Given the rise in property values in the last three years, in my view it would be unusual if the value had not increased.  I consider that the property is clearly worth in excess of $900,000.

[43] The ANZ Bank holds a mortgage over the property.  There is an overdraft of $50,000 as well as a business saver loan with a balance of $342,854[36] in the name of the defendant’s registered business as at 30 September 2008.  There is also a fully drawn down home loan of $149,400 as at 30 September 2008.[37]

The business of aircraft maintenance and restoration

[44] The defendant runs a business of aircraft maintenance and restoration which is operated through the defendant’s registered business as trustee for the Family Trust (“the Trust”).  There is no current valuation for the business and the business relies on the personal exertion of the defendant.  The most recent financial statements for the Trust are for the financial year ending 30 June 2006.  Counsel for the defendant states that the Trust figures need adjustment and that the item headed ‘receivables’ should be adjusted to reflect the fact that the loan to an individual of $353,481.93 should be written off as he is now bankrupt.  Whilst there is no direct evidence of the bankruptcy before me, the defendant pleads, in his defence to an action against him, that it is a matter of public record that the individual was made bankrupt on 26 April 2002 and was discharged from that bankruptcy on 4 September 2005.[38]  I accept that this amount should be taken into account as it is unlikely to be recovered.

[45] Counsel also submits that the asset figure needs to be increased by $75,161 to reflect the fact that the defendant’s registered business is currently involved in an action against another company for this amount.

[46] Furthermore, some assets of the Trust have been sold since the last financial statements, particularly the 1989 Yakolev Yak 52 which was sold for $135,000 in July 2007.  The Piper J - 3 Cub was sold in December 2003 for $35,000.

[47] The Trust also owns a Ford utility valued at $52,000, a BMW X-5 valued at $72,000 as well as a 2002 Harley-Davidson V–Rod valued at $25,000.  The value of the two motor vehicles, however, represents a leased value only.

[48] The defendant submits that the best evidence of the value of the Trust is as follows and as I have no basis to dispute these calculations they are accepted:[39]

“(d)

(i)     Net assets(133,111.03)

(ii)    Less loan to individual receivable 353,481.93

(iii)   Plus additional receivable (litigation)

   75,161.00

(iv)   Less sale of Yak 52 135,000.00

(v)    Less sale of Piper J-3   35,000.00

(vi)   Plus ANZ business overdraft   34,412.25

(vii)  Plus ANZ business saver loan 350,000.00

(viii) Plus loan owing to the defendant 551,156.71

________________

           $354,137.00”

Motorbike

[49] The defendant also owns a 2005 Harley-Davidson Screaming Eagle motorbike which he values at $35,000 based on advice from a Harley dealer and on-line information.  Whilst the plaintiff states it is worth more, there is no evidence to substantiate the plaintiff’s value of $45,000 and I, therefore, accept the estimate of $35,000.

Aircraft

[50] I accept that the defendant has an interest in three aircraft, namely the 1962 Vintage Glider valued at $8,000, a 50 per cent interest in a 1941 Boeing Stearman worth $105,000, and a 50 per cent interest in a 1942 Beechcraft Staggerwing worth $90,000.  I am not satisfied that the defendant has a proprietary interest in any other aircraft.

[51] I note that Exhibit 38 lists the defendant as being the Registration Holder or Registered Operator of six aircraft, but there is no evidence that registration in those terms equates to ownership.  The defendant, in fact, gave evidence to the contrary and stated that he was not the owner of all six planes despite being registered as either the Registration Holder and/or Operator for Civil Aviation Safety Authority purposes.[40]  The defendant’s evidence was that some of the aircraft belonged to overseas owners.  The Civil Aviation Safety Authority documentation which is in evidence[41] also indicates that registration in these terms does not connote legal ownership.  In particular, a Certificate of Registration states, “…[t]his certificate is not conclusive evidence of the existence of a legal or beneficial property interest in the aircraft” and the Certificate of Appointment of a Registered Operator states, “…[t]his confirmation does not confer legal title in the aircraft to the registered operator.”

[52] I accept the defendant’s evidence that he is not the owner of the other three aircraft, as alleged, and that they are owned by other entities unrelated to him.  It would seem that he is listed as the registration holder or operator to allow restoration work to be done on the aircraft in Australia.

Legal proceedings

[53] There are other legal proceedings on foot whereby a registered entity is suing the defendant.  Whilst the defendant seeks to have the amount of $500,000 considered as a liability, there is simply no evidence to establish this figure.  The amount claimed is a “global” figure and is not particularised.  I cannot accept a liability of $500,000 on this basis.  

[54] I consider the defendant’s assets and liabilities which I am satisfied of are as follows:

Total property pool

[55] The total property pool would therefore be the addition of the plaintiff’s assets of $533,977.55 and the defendant’s assets of $666,401.07.

Income

[56] In terms of the income available to both parties, it is clear that they both had an income stream available to them from their business which supported their lifestyle.  Both parties have claimed they spent extensive amounts of money on the other or that they funded the weekly living expenses.  In terms of trying to understand the income available to both parties, it is necessary to consider the tax returns of the businesses as well as their individual tax returns.

[57] I am not satisfied that the plaintiff’s tax returns disclose her full income given the fact she was paid in cash for paintings, she had a history of substantial trading through Bartercard and she was involved in ‘contra’ deals.  Furthermore, the plaintiff’s income from the sale of Nikken products is not reflected in her figures.  Neither has she set out the details of the income earned from the rental of her unit at New Farm for some of the period she resided at Brookfield.  The plaintiff conceded in evidence that amended returns would need to be done for some years.  The current tax returns however indicate the following:

The plaintiff’s tax returns

The defendant’s tax returns

[58] It would also appear that the defendant had the ability to expend more than he actually earned which, he submits, was because he increased his borrowings from the bank.  His tax returns are as follows:

The second step – an assessment of the financial contributions

[59] The next stage requires the Court to identify and assess the contributions of the parties and determine the contribution based entitlements of the parties.  This is usually expressed as a percentage of the net value of the property of the parties.  However, Brereton J in a 2007 decision in relation to similar legislation in New South Wales stated:[42]

“The legislation does not dictate the employment of any particular method in the formulation of an appropriate order for the adjustment under s 20 of property interests, and it is not desirable to attempt to formulate principles or guidelines deigned to constrain judicial discretion within a predetermined framework, although in the majority of cases, a global approach is likely to be more convenient than an asset-by-asset approach, provided that those who take the global approach heed the warning that the origin and nature of the assets ought to be considered [cf Norbis v Norbis (1986) 161 CLR 513; (1986) 10 Fam LR 819; (1986) FLC 91-712].

…

An approach which focuses on the valuing of individual contributions item by item not only fails to pay regard to the overall picture, but risks serious injustice by devaluing those contributions which are not readily capable of evaluation in monetary terms. On the other hand, the ‘fruits of a totality of efforts of wage earning, homemaking and mutual support’, referred to by Deane J in Mallet, do not usually encompass property which each party had before the relationship, or which either party introduced, not by way of their mutual efforts at wage earning, homemaking and mutual support, but independently through gift or inheritance from third parties.” (emphasis added)

Financial contributions - welfare

[60] As I have indicated, the real property of both parties essentially remained the same throughout the relationship.  Both parties have submitted that they made substantial financial and non-financial contributions throughout the relationship.

●   Plaintiff

[61] The plaintiff claims that she paid the majority of the costs of the cleaner, which was initially $90 per week but which increased to $100 per week.  Both parties essentially agree that the cost of the cleaning over the course of the relationship was approximately $10,000.  Each party should, therefore, be responsible for half of this amount.  It is clear from the defendant’s records that he paid for cleaning by cheque and the verified amounts are in the order of $4,000.[43]  The plaintiff has claimed half of the total figure of $10,000 but there is no documentary evidence in support of this.  I accept that she would have paid the cleaner in cash.  Having accepted that the total figure is $10,000 and that each should be responsible for half, it is clear that the defendant has paid $4,000.  Accordingly I consider that the plaintiff would have paid some $6,000 for cleaning which is a contribution $1,000.

[62] Similarly, I accept that given there was a cleaner who came weekly I do not consider that either party has established that they made a contribution in excess of 50 per cent in terms of additional cleaning.

[63] The plaintiff also claims a contribution of $15,760 for medical expenses in relation to a paragliding accident and $4,008.53 for medical expenses in relation to a miscarriage.  I accept that the plaintiff had a serious accident and a miscarriage during the relationship.  There are two difficulties with this claim for these medical expenses.  The first is that the plaintiff has not established the cost of her out-of-pocket expenses in relation to these medical expenses.  The plaintiff obviously paid these expenses but the evidence establishes that she was in a health fund.  The plaintiff has not provided any detail as to the amount she was reimbursed by her health fund or Medicare so that the real cost to her is established.  Second, the plaintiff has not provided any authority for the submission that these expenses should be considered as a contribution.  I consider that these matters are more appropriately considered as part of the final step in the process and should be taken into account when considering what is just and equitable in all the circumstances of the case.  Accordingly, this figure is not accepted at this point.

[64] The plaintiff claims that she paid an amount of $31,200 during the relationship for groceries on the basis that she spent an average of $200 per week.  She claims half this amount as her contribution.  The defendant denies this claim and states that he paid for 70 per cent of the groceries.  The plaintiff accepts that the defendant spent about $80 per week and he has, in fact, established expenditure in the vicinity of $15,000 in the three year period[44]and I accept that other food would have been purchased with cash, at times.

[65] I cannot accept the plaintiff’s claim that she paid for the majority of the groceries because it is not substantiated in any way.  Furthermore, I accept the evidence of the defendant’s daughter that the cooking was shared during the time she resided at the home.  I therefore consider that in the absence of evidence to the contrary payments for the groceries for such meals were also shared.  I consider that an amount of $160 in total for grocery shopping per week for a couple who ate out frequently would be within range.  I do not find, therefore, that there is sufficient evidence that either party made a contribution in excess of 50 per cent each and will not allow any amount for a contribution from either party over and above that of the other.

[66] I do not consider that five hours per week should be allowed for grocery shopping on the part of the plaintiff as this has not been established and I consider such an estimate to be excessive given that only modest expenditure was involved.

[67] In relation to entertainment, the plaintiff claims she expended an amount of $36,000 during the period of the relationship on the basis she contributed $200 per week. There is no documentation in support of the plaintiff’s claim.  I accept, however, that it was her practise to pay cash for restaurant meals and other activities.  The parties agree that they ate out frequently and I accept this evidence.  The defendant, in fact, claims an amount of $14,478.84 in this regard.  The majority of the defendant’s expenses have been substantiated by credit card or bank statements but there is no substantiation of the defendant’s claim for these entertainment expenses.  I accept that the plaintiff had a regular cash income stream from the sale of her paintings and from the rent of her unit.  I consider that she would be likely to pay for these restaurant expenses in cash as she had the available funds.  I accept, therefore, that the plaintiff paid for most of these expenses in cash.  Whilst the extent to which she did this has not been established, I accept that the plaintiff paid for more than her share of these expenses. I therefore accept the amount of $18,000 which is claimed as the plaintiff’s contribution.

[68] I accept the plaintiff’s evidence that she would purchase decorative items for the home, such as flowers and candles.  The defendant acknowledges that she did purchase some of these items.  I consider, however, that an amount of $100 per week is excessive and not substantiated.  I will allow the amount of $780, which is claimed.

[69] In relation to the framing of the certificates, which the defendant agrees were framed, I accept the amount of $1,000.

[70] In relation to the purchase of the golf clubs in the amount of $650, I accept the evidence of the plaintiff that the defendant had intended to purchase the clubs as a gift for his son but, when he was not able to use his own credit card to do so, the plaintiff had used her card. The defendant agreed that he had not been able to use his card, and had subsequently asked the plaintiff to put the purchase on her card, but submitted that it was intended as a joint gift.  I do not consider that the evidence supports a finding that it was a joint gift.

[71] The plaintiff claims an amount of $4,725 as mobile phone expenses for the defendant and his daughter which she paid.  The defendant acknowledges that the plaintiff paid this account and I will, therefore, allow the claim in full.

[72] I also accept the plaintiff’s claim of $2,697 for reimbursement for her payment of the health insurance for the defendant and his daughter.

[73] In terms of holidays taken by the parties, I accept that the plaintiff paid for some of the travelling costs of the defendant travelling to Singapore and some of the accommodation in Bali.  I will allow the amounts of $2,425 and $500 claimed by the plaintiff.

[74] Accordingly, I consider that the following table represents the plaintiff’s contributions to welfare which have been substantiated or which I have otherwise accepted.

●   Defendant

[75] In relation to the defendant’s claim for his contributions, as previously stated, I consider that with respect to the groceries an amount of 50 per cent each is the appropriate figure and neither party should have a contribution in excess of this figure acknowledged.  Whilst the defendant has claimed an amount of $14,478 for restaurants and cafés, this has not been established by any receipts or credit card statements.  He has established an amount of $15,462 for food and wine, but this is for purchases mainly from Woolworths, Coles, Kenmore Cellars, the Grape Cellar, and Sirromet wines.  As I have indicated, I consider that neither party has established that they spent more than their half share in relation to groceries.

[76] In relation to the expenditure by the defendant on holidays of $30,964, he has set out a breakdown of these expenses.[45]  The plaintiff has conceded that some of these amounts were spent and the defendant agreed that he was reimbursed an amount of $5,000 by others for some of the yacht charter expenses.  His claimed amount is, therefore, approximately $25,964.  I consider he has substantiated his claim and that half of this amount should be considered as a contribution by the defendant to the plaintiff.

[77] The defendant claims an amount of $67,038[46] as a contribution by him to the relationship given these were expenses that he expended with respect to their lifestyle at the residence at Brookfield.  These expenses comprise payments for such things as the pool cleaning, gardening, Energex, security, Telstra, water, spa costs, and landscaping.

[78] It would appear that an amount of approximately $13,000 was spent on water in the three years.  This amount was paid not by way of water rates but to a water carrier and in my view it has not been shown that the water was used for personal consumption or use as opposed to the upkeep of the grounds.  This figure should not be included in the calculation.

[79] On my calculations, an amount of $16,040 was also paid to Energex to fund air-conditioning installation.[47]  I consider these amounts more accurately relate to the upkeep or improvement to the property and I will not allow this figure as a contribution by the defendant.

[80] The defendant claims an amount in relation to a fish tank of $1,399[48] and the cost of the installation of the spa of $3,647 as contributions by him to the plaintiff.  The defendant however continues to have the benefit of these items.  I accept that the spa was clearly installed at the plaintiff’s request but ultimately the defendant agreed to its installation and it is now part of his property, despite the fact he does not now want it.  Similarly, the fish tank remains at his premises.  These amounts, therefore, are not a contribution by the defendant to the plaintiff.

[81] A total amount of $34,086, therefore, needs to be deducted from the figure of $67,038, which leaves an amount of $32,952.  This figure primarily represents electricity, gas, pool work, rates, and Telstra for the three years.

[82] It is clear that the defendant paid all the rates, insurance, phone bills, electricity, and some of the pool costs.  As the defendant has also had the benefit of these items, I consider that half this figure would represent the defendant’s contribution to the plaintiff, which is an amount of $16,476 or $113 per week.  The plaintiff resided rent free at Brookfield for three years.  I consider that a total sum of $200 per week more accurately reflects the defendant’s contribution to the plaintiff in terms of accommodation costs.  This is a total of $29,000.

Financial contributions – property

[83] In relation to the contributions to the property, I am satisfied in relation to the following matters.

●   Plaintiff’s contributions to defendant’s property

[84] I accept the plaintiff’s evidence that she paid for some landscaping and gardening in an amount of $1,000 as the defendant’s material indicates he also made substantial payments in this regard.  I also accept the plaintiff’s evidence that she would occasionally pick up pool products and will allow $200.

[85] I accept that the plaintiff put in laundry shelving and the defendant accepts that such shelving was put in. Whilst the amount has not been substantiated, clearly the work was done and the amount claimed is reasonable.  I accept the figure of $1,000.  There was no evidence in relation to the purchase of further shelving for the defendant’s study and it would appear there was only one set of shelves purchased.

[86] The defendant admits that the wall was painted and I accept the evidence of the plaintiff that the amount charged was $800.

[87] I also accept the plaintiff’s evidence that a designer was engaged to come out and look at designing another level for the defendant’s home.  The defendant admits that the designer came out and that there were discussions in regard to adding another level.  He disputes receiving plans, however, and whilst I accept this evidence I accept that, in any event, the plaintiff gave the designer a painting in return for his services.  The painting was worth $2,800 and I will allow this amount.

[88] I also accept the expenditure on cushions and the toaster in a total amount of $500.

[89] I accept that the plaintiff paid $780 (not $2,000) in cash for fish, as a receipt has been produced.[51]  It would seem the defendant accepts the plaintiff paid $1600 for the fish tank.[52]

[90] It is clear that the spa was purchased by the plaintiff prior to the commencement of the relationship and the fact remains that it was installed with the defendant’s consent at Brookfield.  The defendant has the use of it and it is, in fact, there.  I consider that the defendant, having agreed to its installation, cannot now say he does not want it.  The plaintiff’s payment of the spa is a contribution which must be acknowledged.  The invoice indicates that the total price was $10,180 (rather than the $12,000 claimed) which was made up of a deposit of $2,180 with a final payment due of $8,000.[53]

[91] I will also allow an amount for the decorative items which the plaintiff purchased or made specifically for the Brookfield property, which includes $1000 for three pear shaped paintings, $800 for a bamboo piece, and $1,800 for a bronze statute.  I do not consider that there is any evidence to support a finding that the Sheldrake paintings belong to the plaintiff.

[92] Accordingly, I accept the following amounts as a contribution by the plaintiff to the defendant.

●   Defendant’s contributions to plaintiff’s property

[93] The defendant’s contributions to the plaintiff’s property were supported by documentary evidence in the main and I accept the following contributions.

[94] I accept that the defendant gave the plaintiff two cheques to assist with her business.  He gave her one cheque for $5,000 on 11 August 2005 and a further amount of $2,000 on 23 October 2005.[54]  There was a third cheque from the defendant to the plaintiff in the amount of $2,800, however, this was clearly a reimbursement for equipment and should not be considered as a contribution.  I accept, however, that the amount of $7,000 was a contribution from the defendant to the plaintiff.

[95] It has also been established that the defendant gave the plaintiff a plasma television for her business which cost $2,140.[55]

[96] I accept that the defendant assisted the plaintiff with the renovation of her New Farm unit by overseeing the project from time to time.  The defendant gave evidence that he had worked as a builder previously.  The defendant produced receipts which indicated expenditure of $20,234 on the unit.[56]  The plaintiff now disputes this figure as being high and in particular disputes two figures.  One is a cheque in the amount of $4,000 and the other is a payment of $6,000 in December 2006 which relates to an invoice dated 16 December 2004 for $6,149.37.  All the figures in relation to the renovation are substantiated by credit card statements or by reference to cheque numbers, except for the figure of $6,000 which was apparently paid by two cheques in December 2006.  This amount was paid apparently significantly after the event and after the parties separated.  It has also not been substantiated.  I will not, therefore, allow the amount of $6,000 but I will allow all renovation expenses other than this figure.  An amount of $14,234 is, therefore, allowed as a contribution by the defendant to the plaintiff in respect of renovations.

[97] The evidence also establishes that the defendant paid $6,779 by way of cash advances to Nikken Wellness products.  Both parties were using the products and I consider that half of this figure should be attributed to the defendant’s use.  Accordingly, an amount of $3,389 should be allowed as a contribution.

[98] I do not accept that the purchase of a computer which the plaintiff used but which is retained by the defendant is a contribution, as it is now used by him as a home computer.[57]

[99] I, therefore, accept the following figures:

Non-financial contributions

[100] I do not consider there is any evidence to support a finding that either party made non-financial contributions over and above the contribution of the other.  The evidence indicates that the defendant helped the plaintiff to renovate her unit and that he would re-hang paintings at her studio.  He clearly took an interest in her work and cared for her while she was recovering from the paragliding accident and the miscarriage.  There is also evidence that the plaintiff contributed to the life of the defendant and made improvements to his home at Brookfield, particularly by way of decorating and painting.  I consider that the plaintiff used her artistic talents to improve the ambience of the home.

[101] In my view, when they were a couple they had a full life together and were busy socially and had joint recreational pursuits.  They were a couple who both cooked and both shopped.  On the evidence before me, I consider that they shared domestic tasks or employed a cleaner.  I can find no evidence that one party made a significant non-financial contribution over and above the contribution of the other.

[102] As I have previously indicated, I do not accept that the plaintiff did grocery shopping which took five hours per week and I do not accept that either party did extensive cleaning or washing for the other.

Other factors relevant to property distribution

[103] It is clear that the first step in making a property adjustment order is the identification and valuation of the property, resources, and liabilities of the parties.  Whilst this has been achieved in this case, I have already set out the factors which have made the valuation of some of the items problematic.

[104] 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 which includes a consideration of the financial and non-financial contributions to property or financial resources, contributions to welfare and the effect of the proposed order on the earning capacity of either party.  As I have already indicated, it has been difficult to assess with any accuracy the financial resources available to the parties during their relationship.  This has been set out above to the extent that I am satisfied about the contributions on the basis of the evidence before me.  I am also satisfied that there have not been significant non-financial contributions by either party.

The third step – identification and assessment of the factors

[105] 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.  This includes the age and health of the parties, their financial resources and employment capacity, their responsibility to support others, their standard of living, the effect of the relationship on their earning capacity, and whether they are currently cohabiting with another person.

[106] The plaintiff is 41 years old and the defendant is 51 years old.  Neither party has a disability or medical condition which affects their ability to earn an income.  Whilst I accept that the plaintiff did receive serious injuries in an accident, she was able to paint to an extent during her convalescence and there is no evidence that it has affected her ability to produce an income in a substantial way.  Given the plaintiff’s age and the nature of her occupation, she is likely to be able to generate a good income for many years to come.  There is no evidence before me to indicate that either party will have their ability to earn an income restricted in the future.  Both parties apparently still have a good income and live in comfortable million dollar properties.

[107] Both parties have re-partnered and are otherwise continuing with their lives and careers.  I do not consider that currently there is any real disparity between them in terms of their assets or their income.

[108] I do not consider that either party has foregone opportunities so that the personal resources of the other person have been enhanced and I do not consider that the income of one party has been enhanced at the expense of the other.  Neither do I consider that there have been lost opportunities to either party because of the relationship.

The fourth step – whether the result is just and equitable

[109] 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.  Section 309 provides that the Court may also consider any fact or circumstance the Court considers the justice of the case requires to be taken into account.

[110] I consider that there are two factors which must be taken into account.  First, the fact that the plaintiff was in a serious accident during the relationship and second, that the plaintiff also had a miscarriage during the relationship.  In the accident she broke her back and had severe injuries to her foot.  The plaintiff has claimed medical expenses of $15,760 for the accident and $4,008 for the miscarriage, but has not supported these claims in any way.  Clearly, the plaintiff had medical expenses but she had health insurance and there would have been Medicare repayments as well.  As I have indicated, I do not consider that these costs are strictly a contribution, but the fact remains that these two substantial events during the relationship would have had a financial impact.

[111] Accordingly, I consider that there should be some adjustment to recognise that these events occurred and to accept that there would have been some financial impact on the plaintiff.   I will allow an adjustment of $10,000 in favour of the plaintiff in this regard.  This is obviously an arbitrary figure but I accept that these injuries occurred within the relationship and that they were significant events.  Given the serious injuries from the accident and the fact there were complications from the miscarriage, there were obviously extensive medical expenses and I accept that there would have been a shortfall in the amounts which would have been reimbursed.

What approach should the Court take?

[112] In property adjustment cases the courts usually take one of two approaches.  There is the asset by asset approach or the global approach to the assets of the parties.  In Norbis v Norbis[58] the High Court of Australia held that either approach is appropriate and that in a particular case one approach may be adopted in whole or in part.  The Court considered that what was just and equitable in the circumstances of a particular case called for an overall assessment of the factors set out in the Act.  Mason and Deane JJ stated:[59]

“Because these assessments call for value judgments in respect of which there is room for reasonable differences of opinion, no particular opinion being uniquely right, the making of the order involves the exercise of judicial discretion.”

[113] The global approach involves a division of the parties’ assets, taking a global view of the assets as a whole, whereas the asset by asset approach involves a determination of the interests of the parties in individual items of property.  This approach was discussed in the decision of McMahon v McMahon[60] where the Full Court of the Family Court held:

“In our view, the particular circumstances of this case made an asset by asset approach preferable to a global approach. The short duration of and the unhappy nature of the marriage, coupled with the parties’ strict division of assets and their method of dealing with them lent itself to an asset by asset approach, particularly where they had separately identified another group of assets as joint.”

[114] Whilst it is clear that a global approach is often the more convenient approach, I consider that in the circumstances of this case an asset by asset approach is appropriate because this was a short relationship of three years.  Furthermore, this was not a case where there was ever a partnership in a financial sense between the parties.  There were clear “Chinese walls” in that there would always seem to have been a strict division of assets.  No assets were ever acquired in joint names.  In addition, each party had property in their own name at the commencement of the relationship and it remained in their own name.  The property each party brought into the relationship was clearly identifiable as that party’s property.  In terms of assets, therefore, there was a strict separation at the commencement of the relationship.  In addition, both parties kept their property totally separate throughout the relationship and there was no jointly owned property ever.  There were no jointly owned bank accounts or credit cards in joint name.  Their separately owned properties remained in their individual names and were intact at the conclusion of the relationship.

[115] In the case of In the Marriage of J A and S M Gill[61] Nygh J said:

“In my view despite what was said in Norbis, both approaches are legitimate unless the High Court rules otherwise provided that those who take the global approach heed the warning that the origin and nature of the different assets ought to be considered and that those who favour the more precise approach do not mistake the trees for the forest, ie add up their individual items without standing back at the end to review the overall result in the light of the needs of the parties.”

[116] Whilst there was no intermingling of assets during the relationship, it is clear that what did occur was that over the three years each party expended their disposable income profusely.  The real question in this case is to what extent one party paid for a disproportionate amount of the expenditure during this time.  It is the adjustment between the parties as to this figure which lies at the very essence of this case.

[117] It is clear that the legislation confers a discretion upon the Court which, provided the required matters are taken into account, does not require the use of any particular method to arrive at an appropriate order for the alteration of property interests.  As the High Court held in Norbis v Norbis,[62] “…[i]n some cases either approach may be adopted in part or in whole.”  I consider that an asset by asset approach is the most appropriate course in this case and clearly in adopting such an approach the manner in which the particular assets have been acquired or contributed to by each party is vital in determining the overall distribution.

[118] It is clear that each party came into the relationship and left the relationship with their assets essentially intact.  Their real property and their business assets were substantially untouched by the relationship.

[119] I consider the following findings are relevant:

(a) The parties were in a de facto relationship from December 2003 to September 2006.

(b) There were no children of the relationship.

(c) Each party has re-partnered and lives in a comfortable million dollar residence.

(d) Clearly identifiable property was owned by each party at the commencement of the relationship.

(e) The identifiable property was kept separate throughout the relationship.

(f) The identifiable property remained as the property of each party at the end of the relationship.

(g) The net value of the plaintiff’s assets is a minimum of $533,977.55 and is likely to be considerably more.

(h) The net value of the defendant’s assets is $666,401.07.

(i) There were no jointly owned assets during the relationship.

(j)Each party had an established career and a steady income.

(k) Neither party has established that they made significant non-financial contributions to a greater extent than the other.

[120] I would also make the further observation that it is not possible to value the total property pool with any precision given the fact there are no up-to-date valuations for some of the assets and that it is not possible to be satisfied about the accuracy of the income available to both parties.  I also consider that the assets of the parties are not disproportionate.

[121] In the circumstances, I consider that in the present case the assets of the parties should be largely taken out of the equation and that a just and equitable result involves an examination only of the contributions of the parties and an evaluation of the other factors I have referred to.  I consider that, in determining what is just and equitable in the circumstances, the assets of the parties should not be taken into account.

[122] I do not consider, therefore, that a just and equitable order will be achieved by the calculation of the contribution-based entitlements of the parties expressed as a percentage of the net value of the properties.  Whilst as a matter of practice it is common for courts to determine a property settlement “…principally on the basis of percentages, however, that is not the only way of determining property cases…”[63]  It is also clear that within a property order the court can confirm and declare the existing title or rights of the parties in particular items of property and that within certain limits the court is “…free to make any property order it considers appropriate.”[64]

[123] I consider that the appropriate property adjustment in the circumstances of this case should be calculated on the basis that the financial contributions of each during the three year relationship should be calculated and a determination made as to what moneys are owing:

[124] Accordingly, I consider that a just and equitable order involves the payment of $20,492, plus interest, to the plaintiff by the defendant.

[125] I will hear from Counsel in relation to the formulation of the appropriate orders and in relation to the question of costs.

Orders

[126] That within thirty days, the defendant pay to the solicitors for the plaintiff the sum of $20,492 together with interest calculated at ten per sent per annum from 28 May 2007 until 18 November 2008 being $3,031.69.

[127] There are to be no orders as to costs.