Findlay v Besley [2003] VSC 247

Supreme Court of Victoria|2003-07-03|Before: MORRIS J

Property of domestic partners - Part 9 of Property Law Act 1958 (Vic) - Order adjusting interests of domestic partners in property - Financial and non-financial contributions - Just and equitable - Constructive trust - Money had and received

Mr Daryl J Williams (on 23 April 2003 with Mr P Daniel Sweeney)

For many years the plaintiff and the defendant were involved in a domestic relationship, in which they derived support and comfort from each other. This relationship began in September 1988 and ended in February 2002. The actions before the Court flow out of the break up of that relationship.

The plaintiff is a man who was born on 5 November 1937 and who is now 65 years old. He has been a legal practitioner for many years, mainly practising as a solicitor, but with a short period of practice as a barrister. The plaintiff had previously been married and had two daughters from that marriage.

The defendant is a woman who was born on 28 April 1946. She was previously married to one Peter Besley, and had three girls, born in 1976, 1977 and 1980, by that marriage.

The plaintiff and the defendant met for the first time in about 1984. There was contact between them in the subsequent years, resulting in the defendant moving into the plaintiff's unit at Bruce Street, Toorak ("the Bruce Street dwelling") in September 1988. The defendant's three daughters, then aged 12, 10 and 7, moved in as well.

From that point, until February 2002, the plaintiff and the defendant lived in a domestic relationship, first at the Bruce Street dwelling and subsequently at Unit 1, 83 Grange Road, Toorak ("the Grange Road dwelling"). All three Besley girls, Claire, Michelle and Nicole, lived with the plaintiff and the defendant until about 1997 or 1998; and Michelle and Nicole lived with the plaintiff and the defendant for most of the period up until February 2002.

The relationship between the plaintiff and the defendant was a close one. Quite obviously they shared a dwelling, enjoyed each other's company and had sexual relations. But there was more than that. The plaintiff described the defendant as "his best mate". And the defendant oriented her life around her children and the plaintiff.

The domestic arrangements were fairly traditional. The plaintiff earned the lion's share of the income which came into the domestic unit; whereas, I find, that the defendant bore the lion's share of the homemaker duties.

During the course of the relationship most of the income earned by the plaintiff was in the practice of his profession as a legal practitioner. The defendant also earned income, in the early days in real estate and insurance, and in later days in the employ of the plaintiff, performing accounting and administrative duties. Unfortunately, the defendant contracted multiple sclerosis ("MS") in about 1995; and, as a result, was less able to engage in paid employment.

During the course of the relationship the plaintiff and the defendant also engaged in certain real estate development ventures. There were ventures involving the development of land at 733 Toorak Road, Kooyong ("the Toorak Road property"), land at John Street, Clifton Hill ("the Clifton Hill property") and 83 Grange Road, Toorak ("the Grange Road property"). As property projects go, these three projects could be described as being of modest success. However the exact profitability of the projects is not straightforward to discern. In all projects in which he was involved the plaintiff sought to minimise the tax paid on any profit; and this usually involved structuring the arrangement in such a way so as to shift the profit to family members (including the defendant and her children) who would then be required to pay the least amount of tax.

Subsequently I will identify some of my factual findings in more detail. At this stage, however, it is necessary to identify two particular matters. First, matters relating to the Grange Road dwelling and its acquisition. And second, matters relating to a payment of $500,000 into the defendant's superannuation account as an undeducted contribution.

In about March 1997 the plaintiff and the defendant became aware that the Grange Road property was on the market. Previously the plaintiff and the defendant had had arrangements with one Michael Healey, a builder, and proposed that there be a joint venture between the plaintiff, the defendant, Healey and Healey's wife to redevelop the Grange Road property. Initially it was proposed to redevelop the property with six units; although, after a protracted planning dispute, it was only possible to construct five units. The parties to the venture formed a unit trust, known as the MHDF Unit Trust, as the vehicle for the venture. Essentially it was the responsibility of the plaintiff and the defendant to finance the project, whereas Healey, together with his wife, would be responsible for building the five units. Part of the arrangements reached between the parties was that one of the units could be acquired by Healey and his wife at cost and another unit could be acquired by the plaintiff and the defendant at cost. Although this arrangement had the effect of reducing the (potentially taxable) profit which would flow to the MHDF Unit Trust, it meant that the Healey interests and the Findlay interests (embracing the plaintiff and the defendant) would each obtain a residential unit at a favourable price.

The Grange Road dwelling was the unit which was sold to the plaintiff and the defendant, at cost, by the MHDF Unit Trust. This dwelling was transferred into the names of the plaintiff and the defendant as tenants in common. However, the plaintiff claims that, one way or another, he actually paid for the whole of the dwelling.

The payment of $500,000, as an undeducted superannuation contribution, arose in the context of the defendant's employment for the plaintiff (or the firm in which the plaintiff was a principal). According to the plaintiff, in about July 1999 he discussed with his accountant how he could boost the earnings of the defendant from her superannuation. At that time, both the plaintiff and the defendant were members of a private superannuation fund, the DJF Pension Fund. As a result, by journal entry recorded on 30 November 1999, $500,000 was transferred from the plaintiff's loan account with the MHDF Unit Trust to the DJF Pension Fund as an undeducted contribution on behalf of the defendant. Following the contribution of this sum, the DJF Pension Fund earned income on the sum for the benefit of the defendant. Who is entitled to this income is not in dispute. In May 2001 the defendant retired from employment. At this time she was paid the whole of her entitlement from the DJF Pension Fund, which amounted to $655,918.61 after tax. On that day the defendant deposited this sum into her account with the National Australia Bank. On that same day, she drew a cheque on her account in the sum of $500,000, payable to the plaintiff; and this sum was then deposited into the account of the MHDF Unit Trust and subsequently credited to the plaintiff's loan account with the unit trust. Essentially, the defendant claims that she mistakenly paid the sum of $500,000 to the account of the plaintiff; that the sum was at all relevant times hers to keep; and that the plaintiff should repay the sum of $500,000 as money had and received.

The matters mentioned in the previous paragraphs must be understood in the light of the over-arching significance of Part IX of the Property Law Act 1958, which gives the Court wide powers in relation to the property of domestic partners. There are limitations upon the exercise of these powers: for example, there are residency requirements and a requirement that the relationship be for a period of at least two years. However none of these preconditions is in issue. The plaintiff has brought a claim seeking an order under Part IX of the Property Law Act, adjusting the interests of the partners in property, but this application was confined to certain chattels. During the course of the hearing the parties reached agreement in relation to this issue and I made an order by consent adjusting the interests of the parties in relation to chattels. The defendant, but not the plaintiff, has sought an order from the Court adjusting the interests of the partners in other property, which, for present purposes, can be described as financial property. I discuss the nature of the powers that are relevant upon such an application later in this judgment. For present purposes, it is sufficient to observe that the Property Law Act jurisdiction is over arching. Thus it would be possible to determine questions relating to a constructive trust, or money had and received, in a certain way and then to take such an outcome into account (and, effectively, to reverse it) in seeking to achieve a just and equitable adjustment of interests pursuant to the Property Law Act.

There are essentially three matters which the Court must resolve.

First, the Court must determine the plaintiff's claim that the defendant holds her half interest in the Grange Road dwelling subject to a constructive trust in favour of the plaintiff, by reason of the fact that the plaintiff paid the totality of the purchase price.

Second, the Court must determine the defendant's claim that she is entitled to be repaid the sum of $500,000 as money had and received.

Third, the Court must determine the defendant's application for an order adjusting the interests of the domestic partners in the property of one or both of them pursuant to s 285 of the Property Law Act 1958.

Prior to the introduction of Part IX of the Property Law Act 1958 property disputes between de facto partners typically relied upon doctrines such as that of a constructive trust in seeking to adjust the legal interests of the partners. Although the enactment of Part IX of the Property Law Act largely avoids the need to rely upon such doctrines, s 277 of the Act makes it clear that nothing in Part IX of the Act affects the right of a domestic partner to apply for any remedy or relief under any other law.

The High Court of Australia has considered the circumstances in which a constructive trust might arise, in the context of unmarried persons living together as man and wife, in Calverley v Green[1], Baumgartner v Baumgartner[2] and Muschinski v Dodds.[3] These cases establish that there is an equitable presumption that when two or more purchasers contribute to the purchase of property and the property is conveyed to them as joint tenants or tenants in common, they hold the legal estate in trust for themselves as tenants in common in shares proportionate to their contributions, unless their contributions are equal.[4] However this equitable presumption may be displaced, rebutted or qualified. In the case of a marriage, for example, the presumption would be displaced by the counter-presumption of advancement (that is, that the partner providing the funds intended that the other partner enjoy a legal and beneficial interest as an owner).[5] This presumption does not apply in the case of unmarried persons, living together as man and wife.[6] However, any presumption may be rebutted or qualified by evidence of the intention of the party paying the purchase price or of the common intention of the parties who contributed to that price.[7]

"However, both the presumption of advancement, and the presumption of a resulting trust, may be rebutted by evidence of the actual intention of the purchaser at the time of the purchase: see Charles Marshall Pty Ltd v Grimsley.[8] Where one person alone has provided the purchase money it is her or his intention alone that has to be ascertained."

"Where there are two purchasers, who have contributed unequal proportions, but have taken the purchase in their joint names, the intentions of both are material. Even if the parties had no common intention, the intentions of each may be proved, for the purpose of proving or negating that one intended to make a gift to the other."[9]

In Muschinski v Dodds Gibbs CJ elaborated upon these matters by adding:

"The evidence admissible to establish the intention of the real purchaser will comprise 'the acts and declarations of the parties before or at the time of the purchase ... or so immediately thereafter as to constitute part of the transaction' (Charles Marshall Pty Ltd v Grimsley); in addition, the purchaser may testify as to the intention which he or she had at the relevant time: Martin v Martin.[10] Subsequent declarations will be admissible as evidence only against the party who made them and not in his or her favour_: Charles Marshall Pty Ltd v Grimsley_."[11]

Returning to the facts, I find that the plaintiff contributed all (or virtually all) the money paid to the MHDF Unit Trust in respect of the Grange Road dwelling. It is certainly arguable that the "real" purchase price of the Grange Road dwelling was significantly higher than the nominal purchase price for the land and the construction of the dwelling; and it is arguable that some of the additional amount, was, in effect, contributed by the defendant as she was a unit holder in the MHDF Unit Trust. However it is unnecessary to resolve this question.

In my opinion, the real question to be determined is whether the actual intention of the plaintiff, at the time the Grange Road dwelling was purchased, was that the plaintiff and the defendant should hold both a legal and beneficial interest in the Grange Road dwelling as equal tenants in common.

The plaintiff gave evidence that, prior to the signing of the contract to purchase the land upon which the Grange Road dwelling was to be erected (which contract purports to be dated 11 March 1999), there was a discussion between the plaintiff and the defendant in which the defendant requested that the land be placed in the names of both parties. According to the plaintiff, the plaintiff agreed to this, provided that both the plaintiff and the defendant contributed equally to the purchase price. The plaintiff claims that the defendant agreed to this arrangement. On the other hand, the defendant gave evidence, in effect, that the plaintiff unconditionally agreed to put the land in the names of both the plaintiff and the defendant as tenants in common.

It would appear that on 29 February 2000 a number of journal entries were made in the books of the MHDF Unit Trust. One of these entries was to debit the cost of the land and building components of the Grange Road dwelling against the plaintiff's loan account. Subsequently an entry was made in the journal allocating half of that sum against the defendant's loan account (crediting the plaintiff) and a comment was made in the journal "being transfer of half purchase purchase [sic] of 1/83 Grange Road". However, when further journal entries were being made at the end of that financial year this latter entry was reversed, essentially because there were insufficient funds in the defendant's loan account with the MHDF Unit Trust to pay half the purchase price. Although the defendant's loan account was subsequently put in funds, so that she could have paid half of the purchase price for the land and the building components, no further entry was ever made.

The plaintiff gave evidence that he did not insist upon the defendant paying her share of the property as he was hopeful that the profits of the development of the Grange Road property would pay for her share of the Grange Road dwelling. I have no doubt that, before and during the development of the Grange Road property, both the plaintiff and the defendant (and, for that matter, the Healeys) believed that the project would return a substantial profit. However building costs were under-estimated; and selling prices were over-estimated. Further the selling period took longer than had been anticipated.

There are no contemporaneous documents which unequivocally demonstrate the actual intention of the plaintiff at the time the Grange Road property was purchased; or, for that matter, at the time when the said journal entries were made. However documents were subsequently brought into existence, which are admissible as evidence against the plaintiff, which demonstrate that the plaintiff's actual intention at the relevant time or times was that, notwithstanding a failure of the defendant to contribute to the purchase price, the defendant should be the legal and beneficial owner of half of the Grange Road dwelling as a tenant in common.

It is sufficient to refer to key documents as, in my judgment, these documents are decisive. Towards the end of January 2002 it was apparent that the relationship between the plaintiff and the defendant was breaking down. At this stage various demands were being made by the defendant and the plaintiff sought some form of accommodation. To this end, he wrote letters to the defendant and also sought a meeting with the defendant and with Graeme May, who had been the plaintiff's accountant for many years until about 1995. Shortly before the meeting the plaintiff wrote a letter to Mr May setting out background information in order to assist Mr May in his role as an informal mediator. This letter may not have seen the light of day but for the fact that the defendant secretly inspected the plaintiff's briefcase, discovered the letter, and obtained a photocopy. The plaintiff's letter to Mr May pointed out that he had made the financial contribution to the purchase of the Grange Road dwelling. Many other matters about the asset position of the parties, both before and after the relationship were set forth in the letter. The plaintiff set out the financial position of both himself and the defendant in spreadsheets, as at late 2000 and, also, as at January 2002. In both of the spreadsheets he stated that the plaintiff and the defendant each had a half share of the Grange Road dwelling.

In his letter to Mr May the plaintiff also canvassed the possibility of a particular settlement and commented:

"The result of this is that DJF is prepared to wear the gift of the half share in the house and take on the whole of the guarantee to Vesuvian provided that the tax losses can be used in Vesuvian to offset income."

"SMB's claim is that in order to be fair we should equalise the loan accounts in Vesuvian by transferring $320,000 to her loan account so that we would both have total assets including our half shares of Grange Road of $1,050,000 each. DJF is reluctant to lose control of his pre-Sue assets which include inheritances and pre-earned capital profits which Sue played no part in acquiring or maintaining. Since it is only one year since DJF made the gift of $500,000 of Grange Road to SMB he is reluctant to get 'bitten' again so quickly and it seems that the relationship will fade if it is not 'fair' and that DJF stops 'dominating' and 'controlling' the relationship by way of control over money."

The meeting with Mr May was unsuccessful. Nonetheless the plaintiff persisted in an attempt to settle all matters with the defendant. To this end, on 4 February 2002, he forwarded a letter to the defendant containing a draft agreement, designed to settle all financial issues. He supported his letter and the agreement with a cheque in the sum of $230,000 which he said was evidence "of good faith". The draft agreement contemplated that the parties would be equally entitled to the proceeds of the sale of the Grange Road dwelling, notwithstanding that it was asserted in the draft agreement that the plaintiff had contributed the whole of the purchase price of that dwelling.

Having regard to all of the evidence, as well as that specifically set out above, I find that, at the time of the purchase of the Grange Road property (whether this be the time the contract for the sale of the land was signed or the time relevant journal entries were made), that it was the intention of the plaintiff that, if the development of the Grange Road property was successful in generating a sufficient distribution to the defendant, the defendant would pay half of the purchase price of the land and building component, but that the defendant would not be liable to make any contribution from any other source. I find that at all relevant times it was the plaintiff's intention that, if the defendant could not make a contribution out of profits derived from the Grange Road property venture, she would take her half share in the Grange Road dwelling as a gift. It is, of course, common ground that the Grange Road property development did not return a profit, but in fact left the unit holders of the MHDF Unit Trust with a loss. Hence it follows that any presumption that the defendant holds her interest in the Grange Road dwelling on a constructive trust for the plaintiff is rebutted. In other words I find that, in the circumstances, the plaintiff intended that the defendant should be both the legal and beneficial owner of a half share in that dwelling, notwithstanding that he actually paid the whole (or most of) the purchase price.

Accordingly, the plaintiff's claim in relation to the Grange Road dwelling fails.

Following the formation of the MHDF Unit Trust, the plaintiff maintained a substantial loan account with the Unit Trust, upon which interest was payable. Other persons also had loan accounts with the MHDF Unit Trust, including the DJF Pension Fund. In July 1999 the plaintiff foresaw an advantage in interest being earned by the (lower taxed) DJF Pension Fund, rather than in his own name. To this end, undeducted contributions were made to the DJF Pension Fund, being recorded by a book entry in the books of the MHDF Unit Trust, in the sum of $650,000. The plaintiff decided to allocate $500,000 of this sum to the defendant's superannuation account, for the stated purpose of building up the defendant's superannuation earnings (that is, from interest on this sum), but also, possibly, because it was thought the capital sum could be more readily retrieved from the superannuation account upon the retirement of the defendant from employment in 2001.

The plaintiff claims that he discussed this arrangement with the defendant and that, during these discussions, the defendant agreed that when she retired from employment she would withdraw the whole of her entitlement (including the $500,000 advanced by the plaintiff) and repay the sum of $500,000 to the plaintiff. On the other hand, the defendant gave evidence that she knew nothing of this arrangement.

Having observed both the plaintiff and the defendant in the witness box, both generally and in relation to the specific topic, I find that the plaintiff's evidence in relation to this matter should be accepted. Certainly, on this topic, the defendant's evidence was too vague and uncertain to displace the evidence given by the plaintiff. I find that the defendant had only a basic knowledge of accounting and upon more sophisticated matters she was content to leave financial matters to the plaintiff. Thus, even though I find that the plaintiff did inform the defendant about the proposed arrangement, it does not follow that this information was fully understood by the defendant.

In May 2001 the defendant retired from work; or, perhaps more accurately, was officially "retired" from work. In any event, on this day the defendant was given a cheque in the sum of $655,918.61 drawn on an account of the plaintiff. She was told by the plaintiff to draw two cheques on her own account, payable to the plaintiff, in the sums of $500,000 and $155,918.61. The defendant did this. The plaintiff then told the defendant to bank the three cheques so as to effect a "round Robin", whereby the defendant would be paid out her superannuation entitlement, would repay the sum of $500,000 to the plaintiff and would pay the balance ($155,918.61) to the plaintiff to be invested on behalf of the defendant in the MHDF Unit Trust. The defendant then banked these cheques accordingly.

I find that when the plaintiff advanced the sum of $500,000 to the defendant's credit in the DJF Pension Fund he did so with the intention that this sum would be a loan, and not a gift. I cannot find that the defendant had any intention in this regard, save for the intention to go along with the plaintiff, as, at that time, she trusted the plaintiff in relation to money matters.

The behaviour of the parties on the day that the money was repaid to the plaintiff is also consistent with the parties' intentions being that the sum of $500,000 (but not the interest upon such sum) was a loan from the plaintiff to the defendant, which was being repaid on that day.

Unlike the situation with the Grange Road dwelling, there is no evidence whatsoever which demonstrates that it was the plaintiff's intention that the sum of $500,000 be paid to or credited to the defendant as a gift. The sum of $500,000 is conceptually different than a half share in the home of the domestic partners: there is a fundamental difference in emotional terms and this explains why the plaintiff should take the attitude he did in relation to the Grange Road dwelling, but not the $500,000.

Having regard to my findings, the defendant's claim for $500,000 as money had and received fails.

Property of domestic partners - relevant legal principles

Part IX of the Property Law Act 1958 applies to a person who has been a domestic partner of another person.[12] A domestic partnership arises where the parties are, or have been, in a domestic relationship, which is defined as a relationship between two people who, although not married to each other, are living or have lived together as a couple on a genuine domestic basis (irrespective of gender).[13] A domestic partner may apply to a Court for an order for the adjustment of interests with respect to the property of one or both of the domestic partners.[14] A Court may make an order adjusting the interests of domestic partners only if it is satisfied that there is a sufficient territorial connection with Victoria.[15] Further, a Court may only make an order adjusting the interests of the domestic partners if it is satisfied that the partners have lived together in a domestic relationship for a period of at least two years.[16] Generally speaking, an application for an order adjusting the interests of domestic partners must be made within two years after the day on which the relationship ended.[17]

Section 285(1) of the Act sets out relevant criteria for the making of an order for adjustment. This provides:

"285. Order for adjustment (1) A court may make an order adjusting the interests of the domestic partners in the property[18] of one or both of them that seems just and equitable to it having regard to- (a) the financial and non-financial contributions made directly or indirectly by or on behalf of the domestic partners to the acquisition, conservation or improvement of any of the property or to the financial resources[19] of one or both of the partners; and (b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the domestic partners to the welfare of the other domestic partners or to the welfare of the family constituted by the partners and one or more of the following- (i) a child of the partners; (ii) a child accepted by one or both of the partners into their household, whether or not the child is a child of either of the partners; and (c) any written agreement entered into by the domestic partners."

The Property Law Act 1958 makes it plain that it is the duty of a court, as far as is practicable, to make orders that will end the financial relationship between the domestic partners and avoid further proceedings between them.[20]

There has been considerable controversy, particularly in New South Wales, as to whether or not the matters contained in the paragraphs to s 285(1) of the Act are exclusive considerations or simply considerations which must be taken into account together with any other relevant matters. This controversy would now seem to have been resolved in New South Wales by the decision of five Judges of the Court of Appeal in Evans v Marmont.[21] The unusual composition of this Court of Appeal was the result of two previous conflicting decisions of the Court of Appeal.[22] The majority in Evans v Marmont consisted of Gleeson CJ and McLelland CJ in Equity (who delivered a joint judgment) and Meagher JA (who delivered a concurring judgment, albeit with its own twist). Dissenting judgments were given by Mason P and Priestley JA.

The legislation which was the subject of the decision in Evans v Marmont was substantially the same as that contained in s 285(1) of the Property Law Act 1958, save that it did not include what is in paragraph (c) of the corresponding Victorian provision. The history of these provisions would seem to be as follows. In 1983 the New South Wales Law Reform Commission identified inadequacies in the existing law concerning property rights of de facto couples. The Commission recommended that the Courts be given an "adjustive jurisdiction" to alter property rights, taking into account both financial and non-financial contributions. The Commission recommended a particular form of legislation in an Appendix 2 to its report, which was largely adopted in the enactment of the De facto Relationships Act 1984 (NSW). Part IX of the Property Law Act 1958 (Vic) was inserted by the Property Law (Amendment) Act 1987, which commenced on 1 July 1988. This Act was a modified form of the De facto Relationships Bill 1986, which had been rejected by the Legislative Council the previous year.[23] The 1986 Bill had been based upon the New South Wales legislation.[24]

In Evans v Marmont Gleeson CJ and McClelland CJ in Equity made observations about certain matters which were thought not to be the subject of disagreement, but settled by authority, namely:

"For example, it would not now be suggested that one should approach an application for adjustment of property interests by beginning with an assumption that an equal division of property is appropriate and then asking whether the circumstances of the case require some departure from that position: Mallett v Mallett [1984] HCA 21; (1984) 156 CLR 605. It would not now be contended that contributions of a de facto partner as homemaker and parent should be regarded as in some way inferior to the corresponding contributions of a spouse: Black v Black (1991) 15 Fam LR 109. It would not now be suggested that an appropriate way to value the contributions of a homemaker or parent is by reference to wage levels applicable to a domestic servant, or any other commercial provider of corresponding services or benefits: Black v Black. It is also established that it is important to give full and proper value to contributions of the kind referred to in paragraph (b): Singer v Berghouse [1994] HCA 40; (1994) 181 CLR 201; Green v Robinson (1995) 36 NSWLR 96."[25]

In relation to the key issue, which had been the subject of judicial division in New South Wales, Gleeson CJ and McClelland CJ in Equity said:

"It would be unrealistic to attempt to evaluate contributions of the kinds referred to in paragraph (a) and paragraph (b) for the purpose of determining what is just and equitable having regard to those contributions in isolation from the nature and incidents of the relationship as a whole relevant aspects of which may well include [other] factors ..."[26]

The other factors to which the Court was referring were factors which had been identified by Hodgson J in Dwyer v Kaljo, such as whether the contributions of a party have been sufficiently compensated by value received in return, the needs and means of the parties from which contributions have been made, the length of the relationship, any promise or expectations of marriage, and opportunities lost by a party by reason of the making of their contributions.

Gleeson CJ and McClelland CJ in Equity further explained:

"Most importantly, s 20 specifies, in paragraph (a) and paragraph (b), the matters to which the Court is to have regard. As was pointed out above, those matters will ordinarily have to be considered, and a judgment as to what is just and equitable having regard to those matters will ordinarily have to be made, in a context, and that context may well include factors of the kind referred to by Hodgson J at first instance in Dwyer v Kaljo. However, paragraph (a) and paragraph (b) prescribe the focal points by reference to which the discretionary judgment as to what seems just and equitable must be made. They are not merely two matters, or groups of matters, which take their place amongst any other relevant considerations. It is by having regard to those matters that the Court may adjust property interests in a just and equitable manner."[27]

In reaching their conclusion Gleeson CJ and McClelland CJ in Equity relied upon the grammatical structure of the section, the purpose of the legislation and the history of the legislation.

Meagher JA agreed with the construction placed upon the relevant statutory provision by Gleeson CJ and McClelland CJ in Equity. He added:

"Section 20 enables a court to 'make such order adjusting the interests of the partners in the property as it seems just and equitable having regard to' two specified factors. Those two factors both relate to the contributions, direct and indirect, made by each of the partners to either the property or the welfare of them both. As a matter of English that can only mean that the court may have regard to each of the two factors and not to any other factors. In particular it precludes the court, in a s 20 application, from having any regard to fault, needs, maintenance, compensation, expectation damages, reliance damages or quasi equitable damages."[28]

Although Mason P and Priestly JA delivered powerful dissenting judgments in Evans v Marmont, the majority view has prevailed in that State since 1997. This is so notwithstanding that this approach has been the subject of academic criticism.[29]

One of the earliest judgments concerning the equivalent Victorian provision is that of Vincent J in Conn v Martusevicius.[30] In that case the defendant had contended that the Court was entitled to approach the matter in a fashion similar to that which would be appropriate to claims made under the Family Law Act and that consideration should be given to a wider range of considerations than those set out in s 285 of the Property Law Act. The plaintiff countered this submission by stressing the limited range of factors specifically encompassed by s 285. After comparing the Commonwealth legislation, Vincent J said:

"Whilst it is, in my opinion, important to remain mindful of these differences, nevertheless the Court is vested with a wide discretion and must attempt to arrive at a result which is just and equitable in the circumstances. Accordingly, it must have regard to the whole of the relevant context within which an application is made. Any assessment of the significance and value of the assistance and support provided by de facto partners which did not place them within a framework provided by all of the circumstances of the relationship, would introduce a measure of unreality into the process and a degree of tension would arise between the adoption of a restrictive approach to the factors to be taken into account, and the duty of the Court to attempt to achieve equity between the partners. Whilst s 285 imposes an obligation upon the Court to have regard to a number of particular kinds of contributions which may have been made, the legislature has not attempted to confine narrowly the concept of 'contribution' and there is, in my opinion, no good reason for the Courts to do so. The fundamental limitations to the scope of the section in this context, are contained in the expression 'de facto partner' which makes it clear that any such contribution to be relevant must have been made by a person who fell within that description at the time of its making and possesses a sufficient nexus with the relationship."[31]

Vincent J then endorsed an approach which had been followed in New South Wales[32] that the Court should proceed, first, to identify and value the assets of the parties; second, to determine whether any, and if so, what, relevant contributions have been made by each partner; third, to determine whether, in the circumstances, the contributions of a partner have already been sufficiently recognised and compensated for; and, finally, to determine what order is called for so that a partners' contributions be sufficiently recognised and compensated for.[33]

As Nettle J of this Court has recently pointed out in Robertson v Austin[34], the decision in Conn v Martusevicius has been followed on a number of occasions.[35] I agree with Nettle J that the decision in Conn is not necessarily inconsistent with the decision in Evans v Marmont.[36] Nonetheless, to the extent that the decision in Evans v Marmont has refined the law, I believe it is appropriate that this refinement be followed in Victoria. This is not to say that Victoria should blindly follow New South Wales. However, on this occasion, the reasoning of the majority in Evans and Marmont is persuasive, the legislation is essentially the same, and this outcome would seem to best give effect to the will of the Victorian Parliament.[37]

Hence I proceed upon the basis that the relevant legal principles can be summarised thus. In considering whether or not to make an order adjusting the interests of domestic partners in the property of one or both of them, the Court must have regard to, and only to, the financial and non-financial contributions made by each of them of the type referred to in paragraphs (a) and (b) and to any written agreement entered into by the domestic partners.[38] However, in considering what is just and equitable having regard to these factors, the Court will ordinarily have to consider them in context. Contextual matters might include the financial circumstances of the parties, the length of the relationship, the extent to which the financial affairs of the parties have been integrated, and opportunities lost by a party by reason of their contributions. Another important contextual matter will be the consumption enjoyed, by or on behalf of a domestic partner, by reason of the financial and non-financial contributions. However these contextual matters are just that: they are not criteria to which reference should be had in determining what is just and equitable. Further, the word "contributions" is a flexible one: it could even embrace negative contributions (for example, where property was diminished by a partner)[39]; and there is a need to have regard to benefits enjoyed by a domestic partner as a result of a contribution.

In this case there is a substantial amount of evidence as to the financial contributions of the parties both before, and during the course of, the relationship. This evidence has been studied by forensic accountants and has been extensively documented. Hence, in this case, it is convenient to determine the contributions that have been made by each partner by first considering financial contributions and then considering non-financial contributions.

Another issue which arose in the context of the present case is the meaning of the expression "child" where used in s 285(1)(b)(ii) of the Act. Although the word "child" is defined in s 275 of the Act, this definition is only relevant "in relation to domestic partners". Hence, in my opinion, it is necessary to ascertain the intent of the legislature where it used the word child on the first two occasions in s 285(1)(b)(ii). This is not a straightforward task as the word can be used to describe the age of a minor or the familial relationship between a parent and his or her offspring. When used in the former sense it is often used to describe a person not having contractual capacity, that is, less than 18 years of age. However sometimes legislation is framed in the sense of a relationship between persons, rather than their age. This is the case with a number of provisions in the Family Law Act 1975. In Dougherty v Dougherty[40] the High Court of Australia was required to consider the meaning of the word "child" in the context of s 79 of that Act which enabled the Court to make an order requiring a party to a marriage to make a settlement of property "for the benefit of either or both of the parties or a child of the marriage". Mason CJ, Wilson J and Dawson J commented:

"It was suggested in argument that s 79 should be construed so as to limit the reference in the section to 'child' to a child under the age of 18 years of age. It was said that the entry into adulthood marks the end of the legal duty of nurture and care resting on the parties to a marriage in respect of the children of the marriage. But clearly, if dependency is to be the test by which the existence of the necessary connection to the marital relationship is to be determined, adulthood is a criterion that is too arbitrary. We do not think that s 79 should be read so as to confine the power to make an order for the benefit of a child to a child who has not attained the age of 18."[41]

However the context of s 285(1)(b)(ii) of the Act suggests that the word "child", where used on the first two occasions, is used in the sense of the age of a minor, rather than in the sense of a familial relationship. This can be illustrated by an example. Suppose that a woman ("W1") had a relationship with a man ("M1") who had an infant son ("S1") by a previous relationship. Further suppose that this domestic relationship ended and W1 commenced a domestic relationship with another man ("M2") and that S1 was accepted into the household of W1 and M2. In these circumstances, it would make sense for contributions to the welfare of, inter alia, S1 to be taken into account in adjusting the interests of W1 and M2. If the word "child", where used on the first two occasions in s 285(1)(b)(ii) of the Act, was a reference to a familial relationship between a parent and his or her offspring, then such contributions would not be relevant considerations. On the other hand, if the word "child", were used on the first two occasions in s 285(1)(b)(ii) of the Act is a reference to a person who is a minor, then the obvious legislative purpose is given effect to.

Expert evidence was given on behalf of both parties in relation to the financial contributions made by the parties. This evidence extended to contributions to:

* the acquisition, conservation or improvement of property of the partners;

* the acquisition, conservation or improvement of the financial resources of the parties; and

* financial contributions to the welfare of the other partner and to the welfare of the family of the parties.

The plaintiff called Mr Paul Lom of DMR Corporate Pty Ltd, who is an experienced accountant, particularly in forensic accounting. Mr Lom's second witness statement, dated 2 May 2003, contained a number of integrated spreadsheets which sought to ascertain what adjustment might be appropriate if regard was had _onl_y of financial contributions. I find that the methodology used by Mr Lom is the most appropriate methodology in this case for ascertaining the financial contributions of the parties. In the circumstances, it is convenient that Mr Lom's spreadsheets, with additional information reflecting the findings of the Court, form appendices to this judgment.

Reference to Appendix A reveals the methodology used by Mr Lom, and adopted by the Court. The starting point is to ascertain the assets of each of the parties at the commencement of the relationship. The next step is to add to these amounts the income of each of the parties, after tax, but including superannuation contributions funded by that party. The next step is to ascertain non-taxable funds received during the course of the relationship, such as funds received by way of inheritance or capital gain. The next step is to calculate, and take account of, funds applied during the relationship to the benefit of persons outside of the relationship. Next a calculation is made of assets created during the relationship, which, in the case of property developments, Mr Lom assumed accrued equally to the parties of the relationship. By reference to these various amounts, Mr Lom then calculated the total financial contribution of each party. A separate calculation was then performed of the assets of each party at the end of the relationship. The difference between the two sums was regarded as consumption during the relationship.

Using this methodology Mr Lom concluded that the plaintiff had contributed 88.6% of all financial contributions; whereas the defendant had contributed only 11.4% of all financial contributions. He then applied these percentages to the total value of the assets of the parties at the end of the relationship to determine what might be the adjusted position of the parties if regard was only had to financial contributions.

Thus Mr Lom concluded that, having regard to only financial contributions, any adjustment should be in the plaintiff's favour and in the sum of $514,045. The plaintiff's case was that, even if the Court found that the non-financial contributions of the defendant were greater than the non-financial contributions of the plaintiff, the difference could not be such so as to justify any final adjustments in the defendant's favour.

The defendant called Shane Raymond Casley, an accountant, who also sought to calculate the financial contributions of the parties. Mr Casley's method, which was encapsulated in Table A2 to his witness statement dated 11 May 2003, proceeded on a different basis to Mr Lom. Essentially, Mr Casley's method was to first calculate the net assets of the parties at the commencement of the relationship. Next, he calculated the income of the parties, after tax, plus superannuation contributions made for the benefit of a party (regardless of how it was funded). Third, he calculated, and took into account, non-taxable funds received; and then had regard to the application of funds outside of the relationship. So far, it will be observed that his method was substantially the same as the first four steps in Mr Lom's method. At this point, Mr Casley adopted a radically different approach to Mr Lom. Rather than calculating the contributions of the parties by reference to assets created during the relationship, so as to ascertain the total financial contribution of the parties, he calculated the estimated consumption of the parties so as, in effect, to produce as the residue the total financial contributions of the parties.

As a matter of strict theory, both methods are legitimate methods and, properly applied, should produce the same answer. However I prefer Mr Lom's method because it avoids the need to calculate consumption expenditure and the need to calculate this in respect of each of the parties. By its nature, consumption expenditure is inherently difficult to calculate. Much of it occurs with cash payment; it usually consists of many small transactions; there will rarely be records; and it will be prone to erroneous recollection.

In any event, a consideration of the two methods reveals that the fundamental disagreement between the experts turns on the net assets of the plaintiff at the commencement of the relationship. Mr Lom calculates the plaintiff's assets at the commencement of the relationship in the sum of $2,381,250. By contrast, Mr Casley calculates the plaintiff's net assets at the commencement of the relationship in the sum of $247,000. Hence, much depends upon the Court's findings in this regard.

The calculations of the accountants demonstrate a relationship between the asset position of the plaintiff at the commencement of the relationship and the consumption of the parties during the relationship. According to Mr Casley, the parties commenced the relationship with total assets of $309,000 (plaintiff $247,000; defendant $62,000), had annual consumption of $25,468, and ended the relationship with total assets of $3,030,833. On the other hand, Mr Lom gave evidence that the net assets of the parties at the start of the relationship were $2,443,250 (plaintiff $2,381,250; defendant $62,000), had an annual consumption of $137,140, and ended the relationship with total assets of $2,723,133. Each party points to the calculated consumption expenditure made by the opposing accountant and says that this is unrealistic: which would suggest that the opposing accountant has miscalculated the financial assets of the plaintiff at the commencement of the relationship.

Not only do I find Mr Lom's methodology preferable, but I find that his evidence was far more reliable than that given by Mr Casley. Mr Lom showed less partisanship, gave evidence that was far more consistent with the historic financial documents, and was generally a much more satisfactory witness in cross-examination. By contrast, Mr Casley was unwilling to give any recognition to a number of assets obviously held by the plaintiff at the commencement of the relationship, such as the Tooleybuc Motel or the Cobram Hotel.

Having regard to all the evidence - by the parties, the accountants and the documentary material - I have made the finding set out in the appendices to the judgment and which are summarised below.

Summary of Court Findings regarding Financial Contributions

Adjustment having regard to financial contribution only

Thus, I find that the plaintiff had net assets at the commencement of the relationship of $1,697,217. Incidentally, this finding, together with my other findings, would indicate that the parties spent approximately $1,612,798 ($116,000 per annum) upon consumption during their relationship; which sum I find is realistic having regard to their lifestyle during this period. By contrast, Mr Casley's approach, which depended upon consumption expenditure of about $25,000 per annum during the course of the relationship, is quite unrealistic, especially having regard to the parties' spending on motor vehicles, cigarettes, alcohol, food, entertaining and the like. (In this regard, it must be noted that consumption expenditure includes spending on all consumer items, including consumer durables and motor vehicles.)

As will be seen from Appendix B, I accept the plaintiff's evidence that at the commencement of the relationship he held a half share in the Tooleybuc Club Motor Inn. For the purpose of this exercise I have adopted the value of $525,000, which represents the realised values of the leasehold and freehold components. There can be no doubt that the plaintiff held this interest, via his family trust (which he controlled); and it is entirely appropriate that it be regarded as one of the plaintiff's pre-relationship assets. It would be anomalous if an asset in a family trust, controlled by a party, was to be disregarded having regard to the definition of "financial resources" in the Act.

It is also clear on the evidence, including the evidence of Mr Mackenzie, that the plaintiff had a loan interest in an investment in the Grand Central Hotel at Cobram. I have adopted a value of $364,967 in respect of this interest, once again based upon realisation values.

I find that the plaintiff had a deposit with the OST Friendly Society in the sum of $60,000 at the commencement of the relationship. The evidence in relation to this is murky, but what is important is that this sum (together with $6,898 in interest) appears to have been ultimately received from the OST Friendly Society; and I am satisfied that the capital portion was in place before the commencement of the relationship.

I am also just satisfied, on the balance of probabilities, that the plaintiff had a deposit with EIHL Pty Ltd of $160,000 at the commencement of the relationship. In making this finding I essentially rely upon the oral evidence of the plaintiff, because on this matter there does not appear to be clear documentary supporting evidence. However, in the 1989/1990 year, the plaintiff did receive a dividend of $11,209 from EIHL Pty Ltd and this receipt is consistent with my finding.

I further find that the plaintiff had an interest in land at Wagunyah, at the time of the commencement of the relationship, in the order of $131,250.

I find that the plaintiff beneficially owned Unit 3, 19 Rowena Parade, Richmond at the time of the commencement of the relationship and that the value of this property was in the order of $155,000. This is supported by the plaintiff's 1988 tax return as well as his oral evidence. Using Mr Lom's approach, much of this asset is, in fact, counterbalanced by the subsequent gift of money, in relation to this property, to the plaintiff's daughter Sasha Findlay. (Mr Casley sought to take this gift into account, but was not willing to credit Mr Findlay with the Rowena Parade asset: an approach which I find to be quite inconsistent.)

The plaintiff conceded that his one-third interest in the Sym Unit Trust arose after the commencement of the relationship. His evidence was that he held deposits with D & V Investments and Macquarie Bank prior to the commencement of the relationship, but I cannot ascertain any documentary evidence in support of this evidence. Although I generally found the plaintiff to be a credible witness, I am concerned that these investments may well have occurred after the commencement of the relationship and out of funds realised from other investments, such as the sale of the leasehold interest in the Tooleybuc Club Motor Inn. If this is the case the inclusion of these items as pre-relationship assets would involve double counting. In the circumstances, and on the balance of probabilities, I do not find that the plaintiff had these assets at the commencement of the relationship.

By contrast, I am persuaded that the plaintiff had a deposit with Heritage Building Society of $33,000 or, if not such a deposit, a tractor worth $33,000 at the commencement of the relationship. The plaintiff's evidence in relation to this particular matter rang true and should be accepted, notwithstanding a similar absence of documentary evidence.

I have adopted a value of $195,000 in respect of the Bruce Street dwelling, which is in line with Mr Casley's figure rather than Mr Lom's figure. However little turns on this as I have also adopted Mr Casley's estimate of capital gain in respect of Bruce Street, Toorak of $344,838. The ultimate difference essentially reflects transaction costs in the sale of this property, which I find ought legitimately be taken into account.

In relation to superannuation contributions I prefer the approach of Mr Lom which is to ascertain, and give credit to, the party effectively contributing to the superannuation accounts of the parties. This method is explained in more detail in Appendix C-1. It is significant that the superannuation contributions effectively credited to the plaintiff were made in 1998, 1999 and 2001, at a time when Mrs Besley's work as an employee was at quite modest levels and could not have justified such superannuation contributions if made at arms length.

In calculating the proceeds received by the plaintiff from his mother's estate, I prefer Mr Casley's approach which is to value these assets by reference to realisation value. The values put on the various assets at the time an inventory was prepared for probate purposes ought be regarded as no more than initial calculations and should give way to the actual sums received when the assets were realised.

There is clear support for Mr Lom's conclusion that $75,544 was rolled into the DJF Pension Fund in July 1995; and this sum should be taken into account as non-taxable funds received by the plaintiff.

I have also followed Mr Casley's approach in relation to the payment of school fees on behalf of Claire Besley, Michelle Besley and Nicole Besley. Strictly speaking, I would regard such payments as contributions within the relationship, as they were made to the welfare of the family within the meaning of section 285(1)(b) of the Act, rather than contributions made outside the relationship. This is not to say that such contributions by the plaintiff to the welfare of the defendant's daughters should be disregarded, but rather that such contributions should be taken into account in determining what is just and equitable following the exercise of looking at financial contributions.

As part of the exercise, I agree with Mr Lom's approach to attribute the profits of the various property transactions (733 Toorak Road, Exploration Lane, John Street and Grange Road) equally to each of the parties. It is certainly arguable as the plaintiff put it, that this method favours the defendant as it was the plaintiff's capital that permitted these projects. Nonetheless, for present purposes, it is a reasonable approach.

I have adopted Mr Lom's original figure in relation to the unsecured loan to Vesuvian Pty Ltd (that is, the sum of $1,036,904), notwithstanding some evidence that the sum should be a larger sum having regard to timing factors. However I have found that it is appropriate to take into account the write-down of the loan to Vesuvian of $203,924, as someone (and that someone will be the plaintiff) will need to bear this loss.

I have also preferred Mr Casley's estimate of the value of the plaintiff's interest in the legal practice of Findlay Arthur Phillips, although little turns on this.

The position I have reached in relation to financial contributions made by the parties is summarised in Appendix A. This summary shows that, if the assets owned by the parties at the end of the relationship were divided according to the proportional contribution of the parties, then the plaintiff should have 84.5% ($2,301,066) and the defendant 15.5% ($422,316). To achieve this result would require an adjustment, in favour of the plaintiff, of $402,825. The plaintiff does not seek any adjustment. Rather his case is that there should be no adjustment in the defendant's favour. Hence the question I now seek to address is whether, having regard to non-financial contributions, there is a case for making an adjustment in the defendant's favour of a sum greater than $402,825. If there is not such a case, then the defendant's counterclaim must fail.

Before turning to this question, I desire to make an observation about the manner in which consumption expenditure is dealt with using Mr Lom's methodology. It is inherent in his methodology that consumption was enjoyed in the same proportion as the financial contributions of the parties. Thus, on the findings contained in the previous paragraph, Mr Lom's method assumes that 84.5% of all consumption during the course of the relationship was for the benefit of the plaintiff; and that only 15.5% of consumption was for the benefit of the defendant. Clearly this assumption works in the defendant's favour; and is a matter which will need to be considered in finally determining what is just and equitable.

I have no doubt, and I find, that the defendant made significantly greater contributions than the plaintiff in the capacity of homemaker and parent. Some of the evidence suggested that, outside of work hours, the plaintiff was often a lazy slob, who preferred watching television to housework. There may be some truth in this evidence. On the other hand, the plaintiff contended that he pulled his weight in the house, often cooked his own meals, did his own washing and generally cleaned up the house. However I did not find this evidence convincing.

According to a short article by John S Croucher, Professor of Statistics, Macquarie University in "Weekender" dated 7 June 2003 the proportion of surveyed men who feel they can steer a shopping trolley better than a woman is 70 per cent. By contrast, the proportion of surveyed women who feel they can steer a shopping trolley better than a man is 60 per cent. I suspect that a similar disparity would be found if a survey was conducted of men and women as to who did the major share of housework in a domestic relationship. Hence my finding that the defendant did the lion's share of domestic work does not necessarily mean that the plaintiff was a bare faced liar in relation to housework issues: rather, it was more a matter of perceptions. [It may also have been the case that the plaintiff deliberately exaggerated his contribution to household duties, but I am not satisfied that this would justify any finding that his evidence in relation to financial matters should be totally disbelieved].

In considering what is just and equitable, it is relevant that much of the housework performed by the defendant was for the benefit of either herself or her three daughters. The plaintiff had no legal obligation to look after the defendant's daughters.[42] Further, having regard to my earlier holding, the plaintiff deserves additional credit for contributing to the provision of the Besley daughters, once they reached the age of 18 years.

The defendant gave evidence that she provided considerable assistance to the plaintiff in both his legal practice and in relation to the various property transactions conducted by the parties. In relation to the latter, the financial analysis assumes that each party shared equally in the profits of such ventures. This approach arguably could be justified having regard to non-financial contributions made by the defendant; but any further adjustment in the defendant's favour would be quite inappropriate. In relation to non-financial contributions by the defendant to the plaintiff's legal practice, I find that although these contributions (for example, entertaining clients) were useful and well meaning they did not make any substantial difference to the income that the plaintiff was able to earn. Further, to the extent that these non-financial contributions did make a difference, they are counter balanced by income earned by the defendant from the plaintiff's legal practice which, in some years at least, ought be regarded as greater than would have been received on an arm's length basis.

During the course of proceedings the court was informed that each of the Besley daughters had made a claim against the plaintiff in respect of sums distributed to the Besley daughters from the Findlay Family Trust, which, it was alleged, were never paid. The plaintiff gave evidence that these sums had been paid to the benefit of the Besley daughters, for example in the form of school fees, and that no amount was currently owing. I have proceeded on that basis as the evidence overwhelmingly points in that direction; although my ultimate conclusions would be no different if the Findlay Family Trust was indebted to the Besley daughters as alleged.

Another factor which warrants consideration is the consumption of the plaintiff when compared with the consumption of the defendant and the defendant's daughters, including school fees paid for the benefit of the daughters. Although the plaintiff no doubt consumed more on a per capita basis than any other member of the household, it is probable that he consumed less than half of the total consumption of the household, especially when one has regard to school fees. This factor must be taken into account as a counter-balancing factor in determining what is just and equitable. This is especially so in light of the inherent assumption, in relation to consumption, in Mr Lom's approach.

A further factor which I regard as relevant to what is just and equitable is the fact that since (at least) June 2002 the defendant has occupied the Grange Road dwelling to the exclusion of the plaintiff. [43] I do not accept that this fact is made irrelevant because the exclusion was the result of an order of the Magistrates' Court: regardless of the cause the defendant has benefited, and the plaintiff has been disadvantaged, by the arrangement.

Even if it is assumed that the income earned by the parties during their relationship should be apportioned equally, on the basis that the defendant's non-financial contributions roughly balanced the plaintiff's superior financial contributions, this would still not justify any adjustment of the assets held by the parties at the end of the relationship. This is illustrated by reference to Appendix A and by making a nominal adjustment to the parties' share of income after tax including superannuation so that these contributions were the same. The making of such an adjustment would reduce the final adjustment, in favour of the plaintiff, to about $125,000; but, importantly, it would not indicate that any adjustment was appropriate in favour of the defendant.

Counsel for the defendant strongly challenged the credit of the plaintiff and submitted that his evidence should not be accepted, unless there was documentary evidence in support. In a large part, the findings I have made do not rely upon the plaintiff's evidence alone, but do draw upon other evidence, especially documentary evidence. However, in any event, I simply do not accept the submission that the plaintiff's evidence was "a pack of lies"; on the contrary, I find that, save for certain inaccurate recollections and certain exaggerations, the plaintiff's evidence, particularly his evidence in relation to financial matters, was essentially reliable.

I am also satisfied that the financial evidence as to the plaintiff's pre-relationship assets put forward by Mr Casley cannot be correct. I have already adverted to the unrealistic, and anomalous, outcome that arises in relation to consumption expenditure if this evidence was to be accepted. But an approach which proceeds upon the plaintiff not having substantial pre-relationship assets is also inconsistent with his ability to fund various property developments, particularly the Clifton Hill and Grange Road developments. The attack launched on the plaintiff's credibility was broad and determined; but, in my judgment, was largely answered by counsel for the plaintiff in his reply. Certainly it is the case that, on financial matters, I generally found the plaintiff's evidence to be more cogent and reliable than the defendant's evidence. I say this without intending any criticism of the defendant. Notwithstanding that she appeared to be a competent bookkeeper, her knowledge of financial and taxation matters was limited. Further, the nature of the relationship was such that she left financial matters to the plaintiff and it is only natural that he would have a better understanding, and recollection, of such matters.

Taking into account both financial and non-financial contributions, as required by s 285(1) of the Act, it is not just and equitable that there be any adjustment, in favour of the defendant, of the interests of the parties in the property of one or both of them. The fact of the matter is that, even upon the most favourable conclusions to the defendant in relation to non-financial matters, there is no warrant for making any adjustment in her favour.

Upon my findings, the plaintiff had assets at the commencement of the relationship of almost $1,700,000. At the end of the relationship he has assets of about $1,900,000. This modest increment (which is probably negative in real terms) follows a 13 year period of working as a legal practitioner and engaging in a number of (modestly) successful property ventures.

By contrast, the defendant commenced the relationship with assets of $62,000, a low paid job, basic work skills, and three children, then aged 12, 10 and 7, who were fully dependent on her. For 13 years she lived, with her daughters, in accommodation provided by, or funded by, the plaintiff. The major share of income brought into the house came from the plaintiff. During this time each of the defendant's children attended a reputable and expensive private school. The family unit lived a good life. Yet at the end of the relationship the defendant has assets of $825,000, a very substantial increase upon the assets at the commencement of the relationship. In such circumstances it is simply not just nor equitable that there be any adjustment of the parties' property interests so as to increase the defendant's current assets.

Notwithstanding that all of the actions brought by the parties have failed, it may still be appropriate for orders to be made so as to end the financial relationship between the parties and to avoid further proceedings between them. This is particularly so in relation to the parties' co-ownership of the Grange Road dwelling. I will hear the parties as to the orders to be made.

In formulating any orders which should be made, the parties' position will no doubt be affected by the costs of this action. I will also hear the parties on this question.

Summary of Court Findings regarding Financial Contributions

Adjustment having regard to financial contribution only

Plaintiffs Income After tax with Superannuation Added Back

Add Superannuation contributions paid into DJF Pension Fund and credited to Besley but sourced from income generated by Plaintiff

Defendant's Income After tax with Superannuation Added Back

Application of Funds Outside the Relationship by the Plaintiff

Application of Funds Outside the Relationship by the Defendant

Difference between cost of Grange Road unit and its

After tax earnings on investments of DJF Pension Fund -

Profit on Exploration Lane (Annexure D to Plaintiffs

Note 2 After tax earnings on investments of DJF

Allocation of earnings based on contributed principal

Interest in legal practice of Findlay Arthur Phillips

[4] Calverley v Green [1984] HCA 81; (1984) 155 CLR 242, at 258 per Mason and Brennan JJ.

[5] See Calverley v Green, at page 259; but this counter-presumption could, in turn, give way to evidence as to the actual intention of the parties: see Martin v Martin [1959] HCA 62; (1963) 110 CLR 297.

[8] [1956] HCA 28; (1956) 95 CLR 353, at pages 364-365.

[9] Calverley v Green [1984] HCA 81; (1984) 155 CLR 242, at page 251_._

[13] Property Law Act 1958, s 275. See also s 275(2) which makes provision for determining whether a domestic relationship exists or has existed in a particular case.

[15] Property Law Act 1958, s 280. The nature of the territorial connection is set out in this section.

[16] Property Law Act 1958, s 281(1). There are certain exceptions to this principle, for example where there is a child of the domestic partners, which are set out in s 281(2).

[18] The word "property" is defined in s 275 of the Act to include "real and personal property and any estate or interest in real or personal property, and money, and any debt, and any cause of action for damages (including damages for personal injury), and other thing in action, and any right with respect to property".

[19] This expression is defined in s 275 of the Act to include a variety of valuable benefits, such as superannuation benefits and potential benefits under a discretionary trust.

[22] Wallace v Stanford (1995) 37 NSWLR 1 and Dwyer v Kaljo (1992) 27 NSWLR 728.

[23] The De facto Relationships Bill 1986 had provided for maintenance for the former de facto partner, adjustment of interests with respect to personal property and the use of cohabitation agreements. The Property Law (Amendment) Act 1987 was confined to the adjustment of interests in real property. This was further altered, so as to include personal property, by the Property Law (Amendment) Act 1998, with an effective commencement date of 29 June 1998.

[24] Hansard, Legislative Council, 17 September 1986, page 153.

[29] See, for example, "Where is the High Court when you need it!" by Robert Benjamin, (1998) 52 Law Society Journal 51.

[31] (1991)V Conv R 54-413, at page 64,942.

[32] D v McA (1986) 11 Fam LR 214, at 228, per Powell J.

[33] (1991) V Conv R 54-413, at page 64,942.

[35] See Hughes v Curwen-Walker (1994) 18 Fam LR 625, Leswiak v Fogginberger BC 9503944, Griffiths v Brodigan (1995) 129 FLR 102, Fleeton v Seddon BC 9707343 and Burns v Chazan [2000] VSC 328.

[36] Compare the analysis of O'Bryan J in Bennett v Parker [2000] VSC 401; (2000) 27 Fam LR 8.

[37] The Victorian provision was first enacted at a time when the Government did not control the Legislative Council. During the debate in the Legislative Council the Opposition moved an amendment which resulted in the insertion of s 285(1)(c). In the course of debate it was presumed that, for a matter to be considered in the adjustment of property interests, it needed to be specified in s 285(1); see Hansard, Legislative Council, 1 September 1987, page 240.

[38] There was no written agreement in this case.

[39] Compare Burns v Chazan [2000] VSC 328.

[42] In the marriage of Robb [1994] FamCA 136; (1994) 18 Fam LR 489.

[43] I do not regard the decision of Nettle J in Robertson v Austin [2003] VSC 80 as holding that the occupation of the domestic home, by one partner, after the cessation of the domestic relationship will always be irrelevant to what is just and equitable in the circumstances.

(1991) 15 Fam LR 109

(1991) 14 Fam LR 751

(1986) 11 Fam LR 214

(1994) 18 Fam LR 625

(1994) 18 Fam LR 489

At a glance

Court

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Judgment (179 paragraphs)

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Cases Cited (21)