Davey v Lee [2007] NSWSC 357 | Case summary

13 At the commencement of the de facto relationship in 1982 the Plaintiff had the following assets: Toyota Corolla motor vehicle Entitlement to a property settlement from her former husband. 14 At the time of the commencement of the relationship the Defendant had a successful business as a butcher in Wauchope, which he had been conducting since 1972, as well as various other assets, as follows: Residential property situate at and known as 14 Warlters Street, Wauchope (purchased in May 1975 for $27,500) Butcher shop, 25 High Street, Wauchope (purchased in 1982 for $52,000) Savings Motor vehicle Furniture and household contents Real property situate at Port Lane, Wauchope (purchased in 1979 for $60,000) Superannuation entitlement (in an amount not quantified) 15 At that time the Defendant had the following liabilities: Housing loan, secured by mortgage to the Commonwealth Bank over the Warlters Street property Overdraft in respect to butcher shop Loan to JA and RJ Baker, the Defendant's parents $10,182 16 After the Defendant's separation from his wife in 1982 he sold the Port Lane residence (which had been the matrimonial home of his wife, himself and their children) and purchased a house property situate at and known as 26 Hastings Street, Wauchope. According to the Defendant, the sale of Port Lane and the purchase of the Hastings Street property were in the nature of a house swap with a cash adjustment. The owners of Hastings Street purchased Port Lane for $180,000, whilst the Defendant purchased Hastings Street and received a cash adjustment of $120,000 from the vendors, who also paid to the Defendant an additional amount of $10,000 for plant. Of the amount of $120,000 received by the Defendant by way of the cash adjustment on those two transactions, an amount of about $37,400 (that figure representing the amount which the Defendant received, after payment of various liabilities) was paid into the account of the Defendant and his wife. The Defendant's wife and their children then moved into the Hastings Street residence, whilst the Defendant (who at no time lived in the Hastings Street property) moved into one of the flats at Warlters Street, Wauchope (where, it will be recalled, the Plaintiff was already residing in the other flat). 17 During the course of the relationship the Defendant in or about 1989 sold the butcher shop business, together with the freehold at 25 High Street, Wauchope, for $140,000. From those sale proceeds the Defendant discharged a mortgage of $90,000 over a property owned by him known as Rosevale (which be had purchased in January 1987). The Defendant then paid the net balance of the proceeds of sale of the butcher business and of 25 High Street, being an amount of about $36,500, into his account with the State Bank. Part of that amount was expended in paying out the overdraft which the Defendant maintained in respect to the butcher business. 18 The Plaintiff sought employment shortly after she separated from her husband, and eventually obtained work in a shoe shop for two half days a week. She continued in that position for twelve months. It was the Plaintiff's recollection that throughout that period she earned about $80 a week. That money was expended on household and family expenses. 19 In about 1986 a property settlement was reached between the Plaintiff and her former husband. After payment of legal costs the Plaintiff received $40,000. From that amount the Plaintiff in 1991 paid $26,000 towards the purchase of Yippen Creek and also purchased a new lounge suite for $3000. The balance, together with interest earned thereon, is represented by a term deposit, presently in an amount of $17,555. Throughout the period of her relationship with the Defendant, the parties each maintained separate bank accounts. 20 The Plaintiff said that with the moneys which she received by way of her property settlement she purchased fabric which she made into curtains for the Warlters Street residence (where, she said, there previously had been no curtains, only Venetian blinds). 21 The Plaintiff gave detailed evidence concerning the domestic activities which she performed during the period whilst she and the Defendant were residing in the Warlters Street premises, and, subsequently, at Yippen Creek. Throughout the entirety of the period at the Warlters Street residence the Plaintiff's youngest son Troy (who was born in on 25 July 1971, and was aged only about eleven when his parents separated) was residing with the Plaintiff. According to the Plaintiff, the Defendant did not assist her with the care of Troy, and she was solely responsible for his welfare. Throughout that period the Plaintiff received little or no child support or maintenance from Troy's father. 22 Whilst the Plaintiff was in residence at Warlters Street she traded in her Toyota Corolla motor car for a Ford Telstar motor car. It was her recollection that she received $4000 by way of the trade in. 23 The Defendant was throughout the earlier part of the relationship a butcher by occupation. He worked in his butcher shop for about five and a half days each week. Throughout most of that period the Defendant employed two members of staff, although towards the end of his conduct of the business he had reduced his staff to one employee. 24 It was the case for the Plaintiff that throughout the period of the de facto relationship, extending over twenty-two years, she made significant financial and non-financial contributions to the Defendant and to his business, as well making contributions in the capacity of homemaker and parent. 25 The financial contributions included a direct contribution of $26,000 towards the $200,000 purchase price of Yippen Creek, as well as the expenditure of $3000 towards a lounge suite (which was retained by the Plaintiff after the termination of the relationship). The Defendant admitted each of the foregoing financial contributions. 26 The non-financial contributions included various activities in respect to the maintenance of the two residences which the parties sequentially occupied, and, in particular, in respect to the furnishing of Yippen Creek and to performing domestic functions and activities of the kind which are frequently performed by a female householder. The Defendant did not admit the extent of those activities which the Plaintiff said that she had performed. Essentially, the Defendant asserted that he also had a significant input in the performance of those activities, especially the activities associated with the acquisition of Yippen Creek and the furnishing and decorating of the residence upon that property. 27 The Plaintiff said that she assisted the Defendant in the butcher shop business on about two or three days a week, usually in the afternoon. Her activities in that regard included collecting sheep from the abattoirs and delivering them to the butcher shop, and also cleaning the shop. However, she did not serve customers. The Plaintiff was not paid for the work she did at the butcher shop, and said that she did not expect to be paid. 28 It was the Plaintiff's evidence that after the termination of their relationship the Defendant, in response to an enquiry from her, said that he had sold the butcher shop for $70,000. The Plaintiff also said that during the period of their relationship the Defendant did not discuss the proposed sale of the shop and did not discuss money matters with her. 29 It was asserted by the Plaintiff that she made a non-financial contribution to the acquisition, conservation and improvement of cattle owned by the Defendant upon Yippen Creek. The Defendant admitted that the Plaintiff attended to grain feeding of about two cows and two calves during the relevant period, and said that upon the sale of those beasts the proceeds were divided equally between himself and the Plaintiff. 30 The Defendant also gave evidence concerning various alterations and improvements which were effected to the Yippen Creek property and the residence thereon during the period of his relationship with the Plaintiff. Those improvements included the installation of a double car port, the construction of a work shed (used by Baker & Thompson Transport) to park vehicles and to store plant and equipment, re-roofing of the house, construction of a covered rear patio, construction of a gazebo, building a fernery, tiling the entertainment room and bathroom, painting the interior and exterior of the house. 31 According to the Defendant, all the foregoing improvements, except for the cost of tiling the entertainment room, were paid for by the Defendant. The Plaintiff also paid for the bathroom vanity. 32 It was the Defendant's evidence that he attended to the financial aspects of the relationship, and wrote out the cheques for the payments of bills, those cheques being drawn on the Defendant's own bank account. The Defendant also said that whilst it was the Plaintiff who ordinarily undertook the grocery shopping, the grocery purchases were paid for by the Defendant's credit card. He said that he also provided $200, a week in cash to the Plaintiff for "other expenses". Any savings which the Plaintiff might have accumulated were, according to the Defendant, retained out of those amounts of $200 a week. 33 Whilst admitting that the Plaintiff made significant contributions as a homemaker, the Defendant asserted that he also was involved in such domestic activities as regularly preparing barbecues, providing assistance with domestic chores, and attending to and operating the dishwasher. 34 The Plaintiff asserted that she made an indirect financial contribution to Baker & Thompson Transport Pty Limited, a company which was owned and operated by the Defendant and by the Plaintiff's son Tony Thompson. According to the Defendant, the benefit of the Plaintiff's indirect financial contribution towards that company was received by both the Defendant and Tony Thompson. 35 It was part of the case for the Plaintiff that during the period of the relationship the Defendant made a number of loans, to a company in which he had the principal interest and to various of his children. The Defendant did not dispute that on or about 25 December 2001 he made a loan of $50,000 to Baker Pastoral Company Pty Limited. He said that he had previously disclosed the existence of that loan to the Plaintiff, and that that loan was recorded in the Defendant's financial statements. That loan remains unpaid, and is admitted by the Defendant to be an asset of the relationship between himself and the Plaintiff. 36 In or about November 2003 the Defendant made a loan of $4109 to his son Bradley Baker. That loan was repaid in the following financial year. 37 In April 2004 the Defendant made a further loan to Baker Pastoral Company Pty Limited, in an amount of $3500. That loan remains unpaid, and is admitted by the Defendant to be an asset of the relationship. 38 The Defendant agreed that he operated an overdraft account in respect to his business, which account was also treated by him as his own "operating account". According to the Defendant, funds drawn from this account in overdraft were applied to the liabilities and expenses of both parties, including the costs of maintaining the household at Yippen Creek. 39 It was part of the case for the Plaintiff that during the course of the relationship the Defendant provided moneys to assist his children in the purchase of various rural properties. The Defendant agreed that he contributed funds to the acquisition, with his son Scott Baker, of a property at Fairmont Gardens. Otherwise, he denied providing any money in relation to the purchase of properties asserted by the Plaintiff to have been purchased by or for his children at Yarrowitch; at Tia River, Tamworth; at Dahlsford; or on the North Shore, Port Macquarie. 40 The Defendant agreed that he purchased a property at Rosevale, Walcha in his own name before 1984 and that that property was sold by him in or about 1989. 41 During the course of the relationship between the parties the Plaintiff's son Tony (who was her third child and who had been born on 1 June 1962) was living, for at least part of each week, with his mother at the Warlters Street premises. That arrangement continued for about two years after the Plaintiff and the Defendant entered into the relationship. 42 In mid-1984 Tony Thompson and the Defendant set up a business known as Baker & Thompson Transport, which was essentially a milk cartage business, used by the Hastings Co-operative, although at times it also transported water. It would appear that that business was conducted from the Yippen Creek property. Tony Thompson and the Defendant sold their business in June 2004. From that sale Tony Thompson received cash of almost $149,000, what he described as "$77,000 worth of warrants", and a vehicle. He also had a superannuation entitlement of about $70,000. According to Tony Thompson, the Defendant at the time of that sale also received equivalent amounts in cash and in the value of warrants, and received a superannuation entitlement of about $106,000. At that time also the leases on the two motor vehicles of the Defendant and of Tony Thompson were paid out by the business, the Defendant's payout figure being $32,000, and that of Tony Thompson being about $36,000. 43 Tony Thompson gave evidence, essentially along the lines given by his mother, concerning the nature of the non-financial contributions made by the Plaintiff to her relationship with the Defendant, especially in her role as homemaker and parent. Similar evidence was also given by the Plaintiff's youngest son, Troy Thompson, who had resided with his mother and the Defendant throughout the period of their relationship until Troy removed from Yippen Creek when he was aged about 22. (Since he was born on 25 July 1971, that would have been in about 1993 or 1994.) 44 At the termination of the relationship the parties owned the following assets: House property at 13 Yippen Creek Road, Wauchope Household furniture Moneys in bank accounts Holden Rodeo utility Holden Statesman motor car Property at Yarrowitch Truck Plant, equipment and machinery Cattle 45 Yippen Creek is said to have a present value of $575,000, but there is no precise evidence as to its value at the time when the relationship came to an end. 46 The Plaintiff at the time of the termination of the relationship owned the following property in her own name, ANZ term deposit $17,555 Holiday Coach Credit Union deposit $5,061 47 The Plaintiff also became aware in mid-2005 that she had a superannuation entitlement of about $2600, representing contributions made by Baker & Thompson Transport Pty Limited. I gather from the Plaintiff's evidence that she was not previously aware of that superannuation entitlement. 48 Although the Plaintiff said that the contents of Yippen Creek (which contents were retained by her at the termination of the relationship and which had been acquired by the parties during the relationship) were of not much value, somewhat curiously she has currently insured those contents for $45,000. That fact suggests that the contents were probably worth about that figure at the termination of the relationship. 49 In December 2005 the Plaintiff became aware that she had provided a guarantee and indemnity for the amount of $50,000 over an account in the name of the Defendant with the National Australia Bank at Port Macquarie. 50 At the time of the termination of the relationship the Defendant owned in his own name, Telstra Shares Bank Accounts Superannuation entitlement, Baker & Thompson Superannuation Fund 51 At the time of the termination of the relationship the parties had the following liabilities: Mortgage debt secured over 13 Yippen Creek Road $150,000 National Australia Bank overdraft $50,000 52 It was also asserted by the Plaintiff that the parties owed an amount of $10,000 to Troy Thompson, son of the Plaintiff. The Defendant, however, said that he lent to Troy Thompson the sum of $9264, and that that debt is in fact an asset of the relationship between the parties. 53 The purpose of that loan was to assist Troy in acquiring a residential property at 69 Cameron Street, Wauchope. That property was registered in the joint names of the Plaintiff and of Troy. I am satisfied, however, that the Plaintiff has never held any beneficial interest in that property, and that it should not be treated as an asset of the Plaintiff for the purposes of the present proceedings. 54 The Defendant further said that at the time of separation he owed the sum $42,896 to his son Bradley Baker. That loan was said to have been made to the Defendant by way of three advances, on 30 June 1997, 30 June 2000 and 30 June 2001 respectively, the funds thus advanced being applied to the Defendant's general expenses. In October 2004 an amount of $35,699 was repaid by the Defendant. The balance of $7,197 remains a debt owed by the Defendant to Bradley Baker. 55 Regarding the alleged indebtedness of the Defendant to his son Bradley, I am in agreement with the submission on behalf the Plaintiff that the evidence of the Defendant and of Bradley concerning these alleged cash advances (in respect of which Bradley said there were no documentary records) was quite unsatisfactory. It is possible (as the Plaintiff submitted) that the purpose of these transactions was to divest the Defendant of assets. 56 Further, the Defendant owes his parents the sum of $10,182, although it was by no means certain that the Defendant would ever be required to repay that loan. 57 Since the termination of the de facto relationship between the parties, the Plaintiff has continued to reside at the Yippen Creek property, whilst the Defendant resides at the Yarrowitch property, which property is owned by Baker Pastoral Company Pty Limited, and of which the Defendant states that he is a tenant. Since the termination of the relationship the Defendant has continued to pay one half the mortgage payments and the rates and insurance in respect of the Yippen Creek property. The Plaintiff pays the other half of the mortgage payments, her share being at the time of the hearing about $586 a month. At that time the Plaintiff was also paying municipal rates in an amount of about $1300 a year. At the time of the hearing the Plaintiff's only income was the age pension which she receives from Centrelink. That pension was in an amount of about $470 a fortnight at the time of the hearing. There was no evidence as to when the Plaintiff commenced to receive that pension. 58 By her statement of claim the Plaintiff seeks the transfer to her of the Yippen Creek property, subject to the existing mortgage, the Plaintiff accepting that she will be responsible for meeting the mortgage payments and that she will indemnify the Defendant in respect to that mortgage. The Plaintiff also seeks that the Defendant transfer to her the Holden Statesman motor car, as well as a sum equivalent to 25 per cent of the increase in the value of the Defendant's business between the date of the commencement of the business and the date of sale; a sum equivalent to 50 per cent of the savings of the Plaintiff and the Defendant; a sum equivalent to 50 per cent of the value of the Defendant's superannuation acquired during the course of the relationship; a sum equivalent to 50 per cent of the value of the property acquired during the relationship, including the Yarrowitch property, plant and equipment, machinery, motor vehicle, and cattle. The Plaintiff also seeks consequential and auxiliary relief. (It should here be noted that during the course of her cross-examination the Plaintiff acknowledged that she made no claim to the plant and equipment on Yippen Creek and said that it was available to be collected by the Defendant.) 59 The Defendant, although not formally making a claim by way of a cross-claim opposes much of the relief sought by the Plaintiff and seeks orders in terms which are set forth in his defence. Essentially, the effect of those proposed orders is that the Plaintiff should pay to the Defendant the sum of $250,000, and should receive in return the Yippen Creek property, subject to the existing mortgage. That is, that the Plaintiff should pay $250,000 for three quarters interest in Yippen Creek, subject to a mortgage of about $115,600. 60 It is in the light of foregoing facts and circumstances that the Court must proceed to a consideration of the claim of the Plaintiff. 61 I have had the benefit of receiving a chronology from Counsel for the respective parties and a written outline of submissions from Counsel for the Defendant. Those documents will be retained in the Court file. 62 It will be appreciated that the Defendant has not filed a cross-claim. It is for the Plaintiff, therefore, to establish her entitlement to relief of the nature claimed by her in her statement of claim. 63 Section 20 (1) of the Property (Relationship) Act provides, in respect to a domestic relationship (which phrase is by section 5 (1) of the Act defined to include a de facto relationship), On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to: (a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and (b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely: (i) a child of the parties, (ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties. 64 In approaching the claim for adjustment of the interests of the parties in property pursuant to section 20 (1) of the Property (Relationships) Act, the Court makes a wholistic judgment and should not attempt to evaluate the respective contributions of the parties as if it were undertaking a reductionist process analogous to the taking of partnership accounts (notoriously one of the most time consuming and expensive of litigious exercises). (See Davey v Lee (1990) 13 Fam LR 688.) 65 At the commencement of the relationship, which obtained for more than twenty-two years, the Plaintiff had little in the way of assets, whilst the assets of the Defendant were quite significant. For the first nine years of the relationship the parties lived in a residence owned by the Defendant. Subsequently the parties purchased Yippen Creek for $200,000, of which price the Plaintiff contributed $26,000, and the Defendant, apparently contributed a cash amount of at least $4000 (probably considerably more, when stamp duty, legal costs and associated expenses are taken into account). The major part of the purchase price, $170,000, was funded by way of a mortgage loan. 66 Throughout most of the relationship the Plaintiff was not in receipt of income, whilst the Defendant was the principal breadwinner of the household. It was from his income that the mortgage payments on Yippen Creek were made, and the household outgoings and expenses were paid. 67 However, the Plaintiff made significant and substantial contributions of a non-financial nature towards the acquisition, conservation and improvement of Yippen Creek, and gave assistance to the Defendant in his business activities. The Plaintiff's participation in those activities was probably not as great as she asserted, but was probably greater than the Defendant was prepared to concede. 68 The Defendant did not dispute that the Plaintiff was the primary homemaker and parent in the relationship. Her contributions in those roles were significant and substantial, and their importance should not be disregarded or diminished. 69 At the termination of the relationship the Plaintiff had only a one quarter interest in Yippen Creek, together with the contents of that residence, two deposits (totalling about $22,600) and a replacement motor vehicle, to show for her twenty-two years as the Defendant's de facto partner and as the primary homemaker and parent to those of their respective children who at various time resided with them. 70 It is quite obvious that the Court, in the exercise of its discretion under section 20 (1) of the Act, should proceed to an adjustment of the interests of the parties in property. 71 I consider that the respective contributions of the parties to the relationship should appropriately be recognised by the transfer to the Plaintiff of the three-quarters interest which the Defendant holds in Yippen Creek (subject to the existing mortgage, and the Plaintiff to be responsible for meeting the entirety of the mortgage payments and to indemnify the Defendant in regard to that mortgage). The Plaintiff should also receive the contents of Yippen Creek (apart from the plant and equipment) which are presently owned conjointly by herself and the Defendant, and should also receive the Holden Statesman motor car which is presently in her possession and which is owned jointly by herself and the Defendant. 72 I am not persuaded that the Plaintiff has established an entitlement to the other relief sought by her in the statement of claim. 73 It will be appreciated that the Plaintiff will therefore receive considerably less than she originally claimed, but will receive considerably more than the Defendant proposed that she should receive. In these circumstances, I consider it appropriate that the Defendant should pay three quarters of the Plaintiff's costs of proceedings. However, if either party wishes to seek some other costs order, an opportunity will be given to that party to do so. 74 Accordingly, I stand the matter over to a date to be fixed by arrangement with my Associate, for the bringing in of short minutes to reflect my foregoing views and conclusions and, if desired, for argument as to costs.

Davey v Lee

At a glance

Court

Decision date

Before

Source

Judgment (12 paragraphs)

Parties

Cases Cited (1)

Cited By (2)