Alvarez v Cadarso

PARTIES : Maria Cruz Alvarez v Felipe Cadarso (By his tutor the Protective Commissioner)

COUNSEL : Mr A Hill for plaintiff Mr M Stevens for defendant

SOLICITORS : Villari & Co Lawyers for plaintiff Makinson & d'Apice Lawyers for defendant

• 1 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

No. 1603 of 2007 MARIA ALVAREZ v FELIPE CADARSO (By his Tutor, the Protective Commissioner)

JUDGMENT 1 HIS HONOUR: This is an application in which the plaintiff seeks orders for adjustment of the parties' property interests under s 20 of the Property (Relationships) Act 1984. 2 The plaintiff and the defendant met in December 1980 and they commenced living together in 1982 in a property owned by the defendant and another person at Bondi. The relationship continued until the parties separated in December 2005. CHRONOLOGY 3 The plaintiff was born in January 1936 in Madrid, Spain. She is presently aged 73 years of age. The defendant was born in May 1933 and is presently 75 years of age. He suffers from Parkinson's disease and dementia and he presently resides in Spain. The Protective Commissioner manages the defendant's affairs pursuant to a Financial Management Order made by the Guardianship Tribunal on 17 July 2006. The Protective Commissioner is the defendant's tutor in the proceedings. 4 The defendant has not provided evidence and is apparently unable to provide evidence by way of affidavit in the proceedings. History of the relationship[ 5 In 1958 the plaintiff married Honorio Alvarez and they had two sons born in 1959 and in 1966. 6 In 1967 the plaintiff with her husband and her two sons, Robert and Carlos, migrated to Australia settling in Victoria after which they moved to Sydney where they rented a house in Newtown. 7 In 1972 the plaintiff and her husband purchased a property at Callagher Street, Mount Druitt as joint tenants and the property is still held in their joint names. In 1978 the plaintiff received $20,000 in compensation for a work related injury and she used that money to discharge the mortgage on the Mount Druitt property. In December 1978 the plaintiff's husband left the plaintiff and the last occasion that the plaintiff that saw her husband was in 1980 or 1981 and she believes he lives in Brazil.

8 On 19 September, 1980 on the application of the plaintiff's husband the marriage between them was dissolved by the Family Court of Australia at Sydney but there has been no property settlement between the parties. 9 As I have mentioned when the plaintiff moved in to live with the defendant it was at Dudley Street, Bondi, a property owned by the defendant and a partner which was partly used as a boarding house. 10 In 1985 the defendant went to Spain for a holiday and he told the plaintiff he had purchased an apartment in the province of Alicante in the suburb of Benidorm, Spain. 11 In 1989 the defendant and his partner sold the Bondi property and with his share the defendant looked for other premises to purchase. He purchased a property at Livingstone Road, Petersham. The property was partitioned into two dwellings. The plaintiff, the defendant and a tenant from the Bondi property moved in to one half of the Petersham property and he rented the remaining half for many years. The purchase price was provided by the defendant. 12 In the 1990s the plaintiff's son, Carlos, who ran a roofing business installed a new roof on the Petersham property at the cost of materials but he did not charge for the labour.

13 In 1999 the defendant showed signs of Parkinson's disease when his hands started trembling. In 2002 the defendant's symptoms worsened after he returned from a visit to Spain. 14 In November 2005 after another visit to Spain the defendant returned to Australia from Spain with his nephew, Carlos Cuadrado.

15 At this time the defendant informed the plaintiff that he had sold his shares in Spain which many years previously he had told the plaintiff he owned. 16 In November 2005 the plaintiff fractured her right wrist and as a result she had difficulty cleaning, cooking and assisting the defendant. In December 2005 the plaintiff went to stay with her son, Robert, at the Mt Druitt home and sought legal advice about a settlement of the property affairs of her and the defendant. This effectively was the end of the relationship. 17 Although the relationship had ended, when the defendant was admitted to Liverpool Hospital in May 2006 followed by a transfer to the Brentwood Care Facility at Parramatta, the plaintiff continued to visit the defendant and assist him. 18 In May 2006 the defendant's nephew, Carlos Cuardrado, made an application to the Guardianship Tribunal and on 17 July 2006 the Guardianship Tribunal made an order that the management of the defendant's estate be committed to the Protective Commissioner. The Tribunal declined to make an order in respect of the person of the defendant but allowed the existing informal arrangement to continue in place. In due course the defendant's nephew, Carlos Cuardrado, took the defendant back to his sister's family in Spain. 19 In Howlett v Nelson [2005] NSWCA 149 at [25]the Court of Appeal indicated that the exercise of jurisdiction under section 20 involves three main steps:

1. Identification and valuation of the property of the parties. 2. Identification and valuation of the respective contributions of the parties, of the types referred to in section 20. 3. Determination of what if any order is just and equitable having regard to those contributions. Property of the parties at the commencement of the relationship 20 At the commencement of the relationship the plaintiff had a one half share as joint tenant in the property at Callagher Street, Mount Druitt. There is no evidence of its value at the date of commencement of the relationship but it was purchased in April 1972 for $14,000. Originally there was only $1,000 deposit paid and the balance of the mortgage was paid off by the plaintiff from her own funds which she received from compensation for an injury she sustained. 21 At the commencement of the relationship the defendant had a half share as joint tenant in the property at Dudley Street, Bondi which he purchased in September 1976 for a total consideration of $49,000 for the whole property. There is also evidence that he had shares in a company, Telefonica in Spain. The plaintiff the defendant had said to the plaintiff that he had a large number of shares in that company. Property of the parties at the conclusion of the relationship 22 At the conclusion of the relationship the plaintiff continued to own her interest in the Mount Druitt property, subject to a remote possibility of a claim by her former husband for a property adjustment. However, her interest was still as a one half share as joint tenant. Apart from some personal effects she has little assets other than the Mount Druitt property. 23 The defendant and his partner sold their interest in Dudley Street, Bondi in June 1984 for a total of $436,000. For the purpose of this application I assume half that sum was used to purchase Livingstone Road, Petersham. The defendant purchased the Petersham property in 1989 for $215,000. The purchase was in his name and he owned this property at the date of the cessation of the relationship. 24 In October 2007, after the cessation of the relationship, the Office of the Protective Commissioner sold the property for $645,500. At present there is an amount held by the Office of the Protective Commissioner of $654,253 resulting from that sale. The costs of the Protective Commissioner have yet to be deducted and are estimated to be $30,000. 25 There some debate about what other property the defendant may have owned at the date of cessation of the relationship. 26 The first property is the unit in Spain which I accept was purchased for the equivalent of $50,000 in 1985. The question is whether the defendant owned this unit at the time of separation. Shortly prior to the separation when the defendant had returned to Australia from Spain he told the plaintiff that he had sold all his shares. One document found by the plaintiff at this time in his papers is a document in Spanish which appears to indicate a transfer on 22 October 2005 of Euros 100,000 from him to his sister, Maria Rosario Cuadrado shortly before he returned from Spain. 27 There is no direct evidence before me of what were the defendant's assets at the date of cessation of the relationship. 28 The principles to be applied in this regard are important and need some discussion. The Family Court of Australia has consistently held that there is a clear obligation on a party to proceedings in that Court to make full and frank disclosure of all relevant financial circumstances. That Court has adopted what was said by Lord Brandon for the House of Lords in Livesey v Jenkins (1985) AC424 at 437: "I stated earlier that, unless a court is provided with correct, complete and up-to-date information on the matters to which, under s25(1), it is required to have regard, it cannot lawfully or properly exercise its discretion in the manner ordained by that subsection. It follows necessarily from this that each party concerned in claims for financial provision and property adjustment (or other forms of ancillary relief not material in the present case) owes a duty to the court to make full and frank disclosure of all material facts to the other party and the court. This principle of full and frank disclosure in proceedings of this kind has long been recognised and enforced as a matter of practice. The legal basis of that principle, and the justification for it, are to be found in the statutory Provisions to which I have referred." I have also taken the same approach in this jurisdiction. See a judgment of Taggart v Gaston Supreme Court of New South Wales, 7 December 1992, unreported). A similar approach is also taken in the Equity Division in Family Provision Act matters see Westreat v Corban Supreme Court of New South Wales, Young J, 29 September 1989, unreported). In my judgment in Taggart v Gaston I referred to the need to identify in this context the amount of the assets which had not been disclosed to the Court pursuant to the obligation which I accepted arose in the proceedings. Such obligation incidentally arises independently of any order for discovery. Family Court judgments indicate that the upper limit of what could be ordered to be transferred to one of the parties pursuant to s79 was the "whole of the ascertained property of the parties". The difficulty this causes has been adverted to in a number of cases. For instance in Monte v Monte (1986) FLC 91-757 the Full Court said: "that to find jurisdiction under s79 in relation to property, other than the fund, Her Honour was obliged to make a finding as to the existence and value of that other property, even though the unsatisfactory nature of the evidence made it necessary to express that finding in the most general terms both as to identity and value." Those comments were addressed recently by the Full Court of the Family Court in Weir v Weir (1993) FLC 92-338 as follows: "We confess to have some difficulty with this proposition. We should have thought that the Court's jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets. The difficulty then arises as to what order should be made. However, we are troubled by the proposition which seems to arise from Monte that if a party is either cunning enough or vague enough to cover his or her tracks sufficiently to prevent a court making a finding as to amount that has not been disclosed, then the other party fails. We do not believe this to be the law but in so far as the decision in Monte supports such a proposition, we do not believe that it should be followed." This case particularly shows a move away from the proposition to which I have referred in Taggart v Gaston and certainly it is appropriate. In the present case, however, one does not have the potential for a situation such as is referred to in these cases. Here the asset in respect of which it might be said there has not been full disclosure is identifiable." 29 In the present circumstances it seems to me unlikely that given the defendant's dementia that the Office of the Protective Commissioner could reasonably be expected to obtain evidence from the defendant. Accordingly, I will not adopt the approach which might be adopted if the court were of the view that the defendant had deliberately failed to make proper financial disclosure. 30 It is plain that shortly before his return to Australia the defendant disposed of $200,000 to his sister and whether that came from the sale of the unit, the sale of shares or some other source I cannot determine. 31 In these circumstances Cross on Evidence (6th ed, (1996) at [90553]) neatly summarises the correct approach to drawing inferences in civil cases and criminal cases in these terms: "Where satisfaction of the civil standard of proof depends upon inference, there must be something more than mere conjecture, guesswork or surmise. That is, there must be more than "conflicting inferences of equal degrees of probability so that the choice between them is a mere matter of conjecture". If there is the test is as follows: "the difference between the criminal standard of proof in its application to circumstantial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence, while in the latter you need only circumstances raising a more probable inference in favour of what is alleged. "

32 Having regard to the evidence that the defendant disposed of a large sum of money shortly prior to cessation of the relationship when he was in Spain I do not think the circumstances make it more probable that he still held his unit. Contributions 33 The parties had no children as a result of the relationship and by the time they commenced their de facto relationship the plaintiff's youngest son, Carlos, had completed his schooling. He was living with his older brother, Robert, at the plaintiff's home at Mount Druitt and there were thus no children living with the parties during the course of the relationship. 34 So far as non-financial contributions are concerned the plaintiff cleaned and cooked for the defendant. She says she spent her money on food for the defendant and herself as well as clothing, bed linen, towels, curtains and household cleaning items. According to the evidence the defendant appreciated this assistance. 35 There is also evidence about the contributions made by the plaintiff in relation to cleaning the common areas, bathrooms, toilets at the Bondi property. She also cleaned the Petersham property before and after they moved in to the property. In particular there was a tenant, Mr Velazco, who rented part of the house at Petersham for $100 a week which was paid to the defendant. The plaintiff cleaned and cooked for Mr Velazco and she did his washing and ironing for a period of four years. 36 There was also roofing work on the Petersham property which was performed by the plaintiff's son. The plaintiff helped the defendant from time to time to paint the Petersham property. Financial contributions 37 It is clear that the plaintiff made no contribution to the Petersham property which is the asset in which the parties resided during the last period of the relationship. 38 The plaintiff injured her back before the relationship commenced and during the relationship she only worked on four or five occasions for a few hours at a time. She received the disability pension and later the aged pension. 39 There is no evidence that the defendant worked during the period of the relationship and he seems to have collected the rent at the Bondi property which he would have shared with his co-owner. He also received the rent from the Petersham property which for most of the time would have been in the order of $200 a week. This is based upon the only evidence available of rents received at a point in time during the relationship. Discussion 40 It is also necessary to consider the property held by the parties at the time the court makes its order. In respect of the Mount Druitt property there was a market appraisal in November 2008 of between $265,000 and $275,000. In addition there was a market appraisal by another agent of between $240,000 and $250,000 at October 2008. 41 The value of the Petersham property has been determined by the sale and there is now approximately $620,000, perhaps less after legal costs have been assessed. 42 In this case the parties kept their finances separate. Throughout the relationship they lived in the properties owned by the defendant and the plaintiff's property at Mount Druitt was used exclusively by her family. None of the contributions alleged were directed to that property and it is appropriate that they are not taken into account apart from the question of whether there was a benefit to the plaintiff as a result of her relationship flowing from the ownership of this property. 43 In this case there is a situation where the only relevant property for the purposes of adjustment is the defendant's property and that plainly was acquired as a result of funds he obtained prior to the relationship. The defendant's other interests in Spain also came from interests he had prior to the relationship and there would have been no contributions from the mall amounts of money which either the plaintiff or defendant received during the course of the relationship. 44 The plaintiff received a benefit from the relationship which was the fact that she was able to make her home available to her children for many years during the period of the relationship. Although this was not a financial benefit it was still a benefit obtained by her as a result of the parties' living arrangements. 45 In the circumstances of this case it seems to me that the non-financial contributions by the plaintiff are not substantial. There was cleaning for the rental properties and the usual homemaking, care and attention she provided which was appreciated by the defendant. There was also a time over the last ten years of the relationship when the plaintiff looked after the defendant in his declining years and the onset of Parkinson's disease. 46 The relationship was a long one lasting for some 22 years. In my view, an appropriate order after taking these matters into account, would be that the plaintiff receive a payment out of the proceeds of sale of the Petersham property of $175,000. 47 I order that the defendant pay by way of property adjustment to the plaintiff the sum of $175,000 within 28 days of today's date. 48 I will hear submission the parties' submissions on costs. **********

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