Currie v Schmidt

1829/03 Anita Carlotte Currie v Mark Darren Schmidt JUDGMENT 1 Master: This is an application under the Property (Relationships) Act 1984 in which the plaintiff is seeking orders under s 20 of the Act. There is no appearance for the defendant on the hearing and I am satisfied on the affidavit evidence that the defendant has had adequate notice of these proceedings.

2 The defendant has in fact filed a notice of appearance and has been directed to file any affidavit evidence on which he wishes to rely on a number of occasions. He has filed no such affidavit evidence. As I have said, I am satisfied that he has had adequate notice of today's hearing.

3 The plaintiff was born on 26 February 1963 and the defendant on 26 February 1969. They commenced cohabitation in May 2000 and lived together for various periods, ultimately separating on 20 August 2002. The plaintiff, in her evidence, refers to her cohabitation having had separations on a number of occasions, mainly, she said, because the relationship was volatile and a somewhat rocky one.

4 They lived together in the periods from May 2000 to August 2000; October 2000 to March 2001; May 2001 to August 2001 and February 2002 to August 2002. I am satisfied that the parties lived together in a domestic relationship during those periods.

5 There are no children born as a result of the relationship between the two parties. The plaintiff had to dependent children who were living with them during part of the period of the relationship. They were in their early teenage years.

6 The defendant had three children by an earlier relationship. However, they lived with their mother and their father paid child support for those children.

7 Prior to the parties cohabiting, the plaintiff owned a house in Del Mar Drive, Copacabana and the defendant moved into that property in February 2000. In June 2002 that property was sold for $385,000. Any alterations to that property prior to its sale appear to have been financed by the plaintiff.

8 During the period of cohabitation the plaintiff worked as a teacher's aide and the respondent worked as a plumber.

9 At the commencement of cohabitation the plaintiff had assets which comprised a quantity of furniture, a 1994 Hyundai Lantra motor vehicle worth $7500 and 600 Telstra shares estimated to be worth $3000. The defendant owned a motorbike valued at approximately $3500, a small amount of furniture and had debts which totalled $11,754. While the parties were living at Copacabana owned by the plaintiff all the fixed costs, mortgage instalments, water rates, telephone, electricity and other fixed expenses and food were paid for by the plaintiff. She paid for her own clothing, petrol and travel expenses. Apparently the defendant paid some irregular amounts for food to the plaintiff in the sum of $100 a week.

10 In June 2002 the plaintiff decided to sell the Copacabana property and the parties found a new house which they wished to buy and which they did buy jointly. That was funded as to at least one half by the plaintiff paying cash from the proceeds of the sale of her property. The net amount received by her before repayment of mortgages and other payments was $309,000.

11 There was a proposal that the defendant would purchase his share by taking out a mortgage over the new property. Enquiries were made to try and obtain that mortgage and because of his lack of income the bank or the building society would not grant the mortgage unless the plaintiff also became a borrower on the mortgage. This she agreed to do. The new house in High Street, Saratoga was bought for $265,000 and contracts were exchanged in April 2002. The amount contributed by the plaintiff, including stamp duty and legal costs, was $144,734,92.

12 The house was bought by them apparently as tenants in common. They also opened a bank account in May to which the defendant paid his salary until separation, and a number of payments were made from that account, including mortgage payments. The plaintiff also made payments into that account.

13 As at the time of separation in August, which was only a couple of months after the new house was purchased, the plaintiff had a Mitsubishi Lancer wagon motor vehicle worth $20,000, furniture worth about $25,000 and an investment account in which there was $116,000. This was the balance of the amount which she had received on the sale of the Copacabana property and still held at that stage. 14 So far as the defendant's assets on separation are concerned, there is no evidence as to that situation.

15 One of the issues in this case is the fact that the parties did not cohabit in a domestic relationship for more than the requisite two years. Under s 17 (2)(i) when the applicant has made substantial contributions that would otherwise not be compensated for if an order is not made by the Court, the Court can make an order under s 20.

16 In the terms of this case it is obvious - and I will refer to the contributions that the plaintiff has made a little later - the plaintiff has made very substantial contributions to the parties' property, which is basically the house.

17 She in her summons claimed a trust claim in respect of the property but clearly on the evidence before me there is no such claim at all. Her only remedy, apart from an action under the Act, is to have the property sold and there could be some dispute then as to the entitlements to the proceeds, particularly paying out the mortgage which may mean she would not be properly recognised for her contributions. Any such sale, apart from providing hardship, would also provide other expenses, agent's costs on sale which are not insubstantial, and this would mean that her contributions to the house would not be adequately recognised.

18 Accordingly, I am satisfied that her contributions, particularly to the house, would not be adequately compensated for if an order was not made in this matter.

19 I turn to the question of contributions. So far as non financial contributions are concerned, the contributions in respect of the household arrangement appear to favour the plaintiff. Her evidence is that the defendant only occasionally cooked, did not help much with the washing and matters of that nature, and only assisted with the outside work, for instance, the plaintiff mowed the lawns.

20 So far as parenting contributions are concerned, the evidence before me is the plaintiff attended to all those contributions in respect of her own children that were with the parties.

21 So far as financial contributions are concerned, the plaintiff, of course, has made fairly substantial contributions. This is, of course, the amount which contributed to the purchase of the property in the sum of $144,734.92, and I have referred to that previously. Since separation she has made mortgage payments of $15,900, and the current amount of the pay out figure on that loan is $126,679.68. She has also spent $20,541 on improvements to the property.

22 The other financial contributions are contributions from the joint account. In effect the plaintiff paid out the defendant's debts which totalled $11,754 and they have been paid out substantially from the plaintiff's contributions. There have been some payments by the defendant to the joint account and they amount to $3392 between the period when the property was purchased and the separation in August. The joint account has ultimately been closed.

23 When one looks at the matter the contributions substantially favour the plaintiff and it is notable that there is evidence before me that the value of the property did not increase in the period from its purchase until 25 October 2002. Accordingly, there is little increase that has been obtained in the value of the property over the period the defendant was contributing towards the mortgage payments.

24 The property has now been re-valued and at the date of the hearing the amount of that value was $355,000. Of course, that increase in value must be attributed to the plaintiff's maintaining of the property, having repaid and kept the mortgage on foot since the time of separation.

25 It seems to me that upon the basis that the plaintiff would take over the mortgage and make appropriate arrangements to have the defendant released from that with the balance of contributions made by her it would be appropriate to order a transfer of the whole of the property to her. The amount owing on it is not insubstantial and apparently the plaintiff believes she may be able to refinance it and terminate the defendant's liability once the transfer is made to her.

26 Accordingly, it seems, on the basis she use her best endeavours over the period of two months to ensure that happens or otherwise indemnifies the defendant, that there should be a transfer to her of the defendant's share of the property.

27 Accordingly, the orders that I make pursuant to S 20 of the Act are as follows: 1. The defendant transfer to the plaintiff for no consideration the whole of his interest in the property known as 50 High Street, Saratoga, being the whole of the property contained in folio identification 5/216113. 2. Order that the defendant do all such things and execute all such documents as being necessary to transfer such interest. 3. Order, should the defendant default in complying with order 2 above, that the Registrar in Equity do all of those things and sign all necessary documents in order to give effect to that order.

4. Order that the plaintiff use her best endeavours to re-finance the property on the transfer of the defendant's interest to her to the intent that the defendant shall be released from any liability under the existing mortgage to the Greater Building Society account number 8891945.

5. Order that the plaintiff shall indemnify the defendant with respect to his past and future liability under the mortgage to the Greater Building Society under registered account number 8891945.

6. Declare each party is entitled to beneficial ownership of any property which he or she has under his or her possession at the date of these orders. I give liberty to apply on seven days' notice.

28 There has been an application for costs on an indemnity basis. That is based on a letter dated 1 October 2002 in which a proposal was made to the defendant's then solicitors to settle the matter, which is on the basis that I have ultimately decided the matter today. That was not accepted. However, the whole point about this case is that the defendant has in fact not defended it after that offer was made. He was not obliged to accept it. There is no relevant delinquency on his part in my view. All that has happened is that he has failed to defend the matter. I do not think that is a sufficient reason for an order for indemnity costs. I order the defendant to pay the plaintiff's costs on a party/party basis. **********

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