Ground 4
40 Is the contention put in Ground 4 of the Further Amended Notice of Appeal that the Master failed to take account of the extent to which the defendant's position improved soundly based? It improved, arguably, in three respects. One is the rise in value of North Curl Curl, to the extent of $75,000 (Red 133B). The second is the acquisition of 39 Griffin Rd, North Curl Curl in which the defendant had an equity of about $60,000 at the time of acquisition (Red 125U). The third relates to cash and shares.
41 As to the cash and shares, the Master made no explicit finding that there was any improvement in the defendant's position. He started with $20,000 in cash (Red 125T). He finished with "Some savings" and "Telstra and AMP shares worth several thousand dollars" (Red 126L-P). The "savings" were said to be worth $35,000 and the shares $3,000 (Red 63F-G). That reveals an improvement of $18,000. In my opinion failure to deal explicitly with this improvement would not be an appellable error in view of the relatively small amount involved and the necessarily indeterminate nature of the overall inquiry.
42 As to the rise in value of North Curl Curl, the Master analysed the valuation evidence and arrived at the following conclusions (Red 32L-133F). Its value in January 1993 with the new residence on it was $385,000; by January 1996 it had risen by $75,000 to $460,000; by the trial in 1999 it was worth $650,000. Had the old residence not been demolished, the property would have been worth about $310,000 in January 1993, $365,000 in January 1996 and $510,000 in 1999. The Master used these figures to arrive at the conclusion that the property was overcapitalised. The difference of $140,000 between the 1999 value of the land with the new house on it of $650,000 and the 1999 value with the old house of $510,000 had been achieved at the price of $140,000 in cash from the defendant, and the totality of the labour put in by the defendant and his friends as well as the labour put in by the plaintiff. But leaving aside issues of overcapitalisation, the fact is that in the period of cohabitation, the value rose by only $75,000. The Master said (Red 133C-F):
"How much of this was due to the matters such as the landscaping and other minor matters done by the plaintiff in contrast to the natural effects of inflation, does not appear in the evidence. It is appropriate, however, that I give consideration to this work and take some account of it in the figure to which I will arrive."
43 The Master thus took account of the extent to which the value rose and endeavoured to take account of how much of that value was caused by the plaintiff. In my judgment it cannot be said that he failed to take into account or give any or any sufficient weight to the extent to which the defendant's position had improved by reason of North Curl Curl.
44 As to 39 Griffin Road, North Curl Curl, the Master made findings about the purchase of the property, the source of funds, the fact that it was rented, and its present value (Red 125S-W, 126H, N and R). He also noted that the defendant "has had the benefit of the very substantial increase in the value of [the property] between the time of its acquisition and the present time" (Red 134N-Q). He did not explicitly state how, if it all, he took into account the increase in value between 1995 and 1999, except that he found that the plaintiff made a small contribution to work in relation to the Griffin Road property (Red 130B-K).
45 Counsel for the plaintiff contended that the acquisition of Griffin Road (and the rise in value of Griffin Road up to 1999) should have been taken into account. So far as the plaintiff's direct contribution to whatever value it had is concerned, it was taken into account. Counsel for the plaintiff contended, however, that the rise in value in all the assets of the defendant should have been taken into account, and a conclusion should have been arrived at that the plaintiff's efforts must have materially contributed to this. The plaintiff cited passages from authorities in support of a submission that in some types of case including the present, an appropriate starting point was to assume equality of contributions in relation to assets fairly to be seen as representing the fruits of a totality of efforts of income earning, home making and mutual support: Mallet v Mallet (1984) 156 CLR 605 at 635-6 and 640-1; Wallace v Stanford (1995) 37 NSWLR 1 at 5; Evans v Malmont (1997) 42 NSWLR 70 at 75-76, 85 and 98. It was also submitted that:
"the search is to be for proportion between the burdens of the relationship and the economic benefits from the relationship and if at the end of the relationship one party gains economic benefits disproportionate to the manner in which the parties have borne the burdens of the relationship, that is a strong indicator, if not a demand for an adjusted property order" (transcript page 43).
46 The plaintiff also made a more specific submission that while the Master may have erred in failing to take account of the benefits which the plaintiff gained by being able to obtain rental income from her house at 66 Duncan Street, Maroubra, and the house she bought in place of it at North Curl Curl, in substance he had taken those benefits into account because he "in effect … set off against the benefit which the plaintiff got from Maroubra the benefit which the defendant got from Griffin Road" (page 68). However, the plaintiff submitted that in this process of set off the Master had erred:
"what that exercise overlooked was that it wasn't just a set off, the benefit which the defendant got was $60,000, he accumulated $60,000 to put into Griffin Road as against the plaintiff's $35,000 for Maroubra."
47 The latter submission, based on erroneous application of set off, is unsound. It was not the case that the plaintiff got only $35,000 by being able to rent her own houses to tenants. Over the three years she got nearer $50,000, which is not far short of the $60,000 equity in Griffin Road.
48 As to the more general submission about the balance of relative burdens and benefits, the principal burdens of the relationship borne by the plaintiff lay in the fact that she carried out the greater part of the housework and the parental duties and paid the greater part of the household expenses. It must be remembered that the work thus done had to be done not only because of the presence of the defendant, but also because of the presence of her and her two children. Had there been no de facto relationship, she would have had to have done the work in any event. The principal burdens of the relationship borne by the defendant were that he provided accommodation to three people for three years, and that advantage was worth about $60,000 (that being the approximate rent which the plaintiff's two houses could have generated if leased over the whole three years, which is an approximate guide to the cost of alternative accommodation). It has not been established, balancing these burdens, that they fell disproportionately heavily on the plaintiff.
49 The submission requires an assessment of what the economic benefits to the parties arising out of the relationship were. Before attempting this, it is necessary to decide whether the Master was correct in excluding the benefits to the plaintiff of being able to move out of 66 Duncan Street, Maroubra, and if he was wrong in doing so, to arrive at an estimate of what they were. It will be remembered that the Master's reasons for leaving the benefits out of account were as follows (Red 134E-Q):
"… the suggestion that the plaintiff received benefits from her Maroubra properties ignores two crucial factors. These are:-
1. That it was the parties' decision to live together jointly at North Curl Curl . At that time the defendant well knew that the plaintiff would be letting her house and the decision to live together was one made in that knowledge. There is some incongruity later, after the relationship ceases to exist, in maintaining a different position.
2. During the relationship the defendant himself acquired the Griffin Road property and he has had the benefit of the very substantial increase in the value of that between the time of its acquisition and the present time."