Graham v Wiegand [1999] NSWSC 1024 | Case summary

1 MASTER: These are proceedings under the De Facto Relationships Act 1984 (which is now known as the Property (Relationships) Act 1984). 2 On 25 February 1999 Mr Justice Windeyer made an order committing to a Master the determination of all issues in the proceedings. However, in the light of the nature of the relief which was ultimately sought by each of the parties, it is probably unnecessary for the enhancement of my powers by that order to be invoked for the purpose of determining these proceedings. 3 By statement of claim filed on 18 July 1997 the plaintiff Shiauw Wie Graham claims relief adjusting the interests of herself and the defendant Michael Gerd Hugo Wiegand in property, pursuant to section 20 of the De Facto Relationships Act. In the alternative to declaratory relief (and consequential relief) concerning a residential property situate at and known as 19/34 Stanton Road, Balmoral ("the Balmoral property"), the plaintiff by prayer 4 of the statement of claim seeks an order that the defendant pay to the plaintiff the sum of $200,000. At the commencement of the hearing the plaintiff through her Counsel informed the Court, and it is was noted, that the only relief now being sought by her was that claimed in prayer 4 of the statement of claim, the amount of $200,000 claimed therein being amended to $100,000. That amendment was not opposed by the defendant. 4 Accordingly, the hearing of the matter proceeded upon the basis that the claim of the plaintiff was not for an interest in the Balmoral property, but was for an order that the defendant should pay to the plaintiff the sum of $100,000. 5 The defendant filed a defence and cross-claim and, subsequently (on 6 April 1999), an amended defence and cross-claim. By that cross-claim the defendant seeks an order that the plaintiff transfer to the defendant all her right, title and interest in shares held by her in Havenpearl Pty Limited and in Dewcode Pty Limited. The plaintiff does not oppose such an order being made. 6 The plaintiff and the defendant were in a de facto relationship from 8 January 1989 until 30 October 1996 (a duration of about seven years and ten months). Throughout a substantial period of their relationship both parties were resident within New South Wales, although at various times during the relationship the parties travelled interstate and overseas on holidays and on business; and, as will emerge later in this judgment, the defendant was overseas for periods of some months each year during a number of years of the relationship. It was not, however, disputed by either party that the relationship obtained without interruption from its inception on 8 January 1989 until its termination on 30 October 1996. 7 The plaintiff was born on 6 January 1954 at Bandung in Indonesia (and she is presently 45 years of age); the defendant was born on 1 June 1947 at Wiesbaden in Germany (and he is presently 52 years of age). The plaintiff has been resident in Australia since January 1973, and she is an Australian citizen. Her present occupation is stated to be that of a financial controller. The plaintiff, before the commencement of the de facto relationship with the defendant, had been married. She was subsequently divorced in 1986. The plaintiff had two children of that marriage (a daughter now aged 20, and a son now aged 15), who presently are, and throughout most of the period of the plaintiff's relationship with the defendant were, resident with their father. No children were born to the relationship of the plaintiff and the defendant. 8 The defendant qualified as a specialist obstetrician and gynaecologist in Germany before coming to Australia in November 1987. Subsequently he obtained permanent residence in Australia. However, for a number of years the defendant's medical qualifications were not recognised in Australia. It was in consequence of that fact that, until the defendant in about March 1994 obtained specialist qualifications in Australia (being membership of the Royal Australian College of Obstetricians and Gynaecologists) that it was the practice of the defendant to spend a substantial period of each year in Germany (or, on one occasion, in the United Arab Emirates), where he conducted his medical profession, in employment as a locum tenens. After he obtained the appropriate Australian qualifications the defendant then continued to practice his profession in Australia, mainly in New South Wales. 9 At the time of the commencement of the de facto relationship the plaintiff had the following assets (to which the following estimated values were by her ascribed): Home unit situate at and known as 4/20 New South Head Road, Darling Point ("the Darling Point property") - $100,000. Savings - $2,000. Household goods and furniture - $5,000. Volvo 244GL motor vehicle - $10,000. Clothing and personal effects - $2,000. 10 (The ownership and ascribed values of the last two items were expressly admitted by the defence.) 11 The plaintiff had purchased the Darling Point property in December 1984 for $51,250. At the commencement of the relationship the only liability of the plaintiff was her indebtedness under a mortgage secured over the Darling Point property, the amount outstanding under that mortgage being $40,000. 12 At the time of the commencement of the relationship the plaintiff was employed as accounts manager for an entity known as Megavision International, at an income of between about $40,000 and $48,000 a year. She retained that position until about early 1995 when she commenced employment as director of finance with Jackson Wells Communication, at an income of about $68,000 a year. She is still employed in that position. 13 At the commencement of the relationship the defendant had the following property (to which the following estimated values were ascribed): Mercedes-Benz 170E motor vehicle - $62,000. Ford motor vehicle - $3,000. Holden motor vehicle - $1,500. Savings (in a bank account in the name of one Manfred Schauer) - $24,000. Savings in Germany - $10,000. ANZ Bank Account, Rose Bay - $20,000. Clothing and personal effects - $2,000. 14 (The ownership and ascribed values of the three motor vehicles and of the last item were expressly admitted by the defence; the amount of the penultimate item and of the savings in the account held by Mr Schauer and the existence, but not the amount, of the savings in Germany were admitted by the defendant in his affidavit evidence.) 15 The savings of the defendant in Germany, in an amount of about $10,000 at the commencement of the relationship, would appear to represent a superannuation entitlement of the defendant. 16 The Mercedes motor vehicle had been brought by the defendant to Australia from Germany (where he had purchased it with the proceeds of sale of a yacht which he owned in Germany). At the time of the commencement of the relationship the defendant was residing in rented accommodation, being an apartment at 6/19 Eastbourne Road, Darling Point (for which the defendant was paying about $185 a week by way of rent; that rent was automatically deducted from the defendant's account with the ANZ Bank at Rose Bay). 17 At the commencement of the relationship the plaintiff moved into residence with the defendant in the Eastbourne Road apartment. However, she did not at that stage dispose of or lease out her home unit at Darling Point. 18 In December 1990 the plaintiff consolidated her liabilities in the form of a single mortgage, in an amount of $86,000, over the Darling Point property. 19 It has already been recorded that until about March 1994 the defendant was not able to practice his medical specialty in Australia, but that he engaged in professional employment in the field of that specialty in the capacity as a locum, essentially in Germany, but also, at least on one occasion in the United Arab Emirates. The defendant had also been employed for a period of about six months in 1988 - 1989 in the Northern Territory (where, apparently, he was legally entitled to practice his profession) not long before the commencement of the relationship with the plaintiff. In early 1994 the defendant was employed as a Registrar at the Royal North Shore Hospital for a period of about one month. 20 Throughout the period of the relationship, whilst the defendant was resident in New South Wales, he was (apart from the foregoing period of about one month whilst he was employed at the Royal North Shore Hospital) not in employment until about March 1994, when he obtained his Australian specialist qualifications. Whilst resident in New South Wales the defendant was studying for the purpose of obtaining those specialist qualifications. The plaintiff was throughout the entirety of the relationship in full-time employment. The defendant described his status as being that of a "house husband". For a period of about six months in 1989 - 1990 the defendant was, quite lawfully, in receipt of Australian unemployment benefits. 21 The defendant was not able to give any reliable estimate of what his earnings were in New South Wales after he obtained his Australian specialist medical qualifications. 22 During each period whilst the defendant was working overseas it was the practice of the plaintiff to join him for a holiday (frequently in Germany, but also in other countries in Europe, Asia and North and South America). On those occasions the defendant paid the air fares of the plaintiff, and the parties shared their other travel expenses, being accommodation, food and the like. It was also the usual practice of the defendant on each such holiday to give to the plaintiff a present (often a piece of jewellery). 23 In about May 1991 the defendant purchased in his sole name a residential unit situate at and known as 18/2-6 Clarke Street, Vaucluse ("the Vaucluse property") for $215,000. According to the defendant that property was purchased with moneys (in a total amount of about $250,000) advanced by his mother, which amount he is liable to repay to his mother. The balance of those moneys (about $35,000) was deposited in Mr Schauer's account with the Commonwealth Bank at Alice Springs. The Vaucluse property was sold in June 1995 for $305,000. 24 From the time of its acquisition until May 1995 the parties resided in the Vaucluse property. In that latter month they moved into rented premises at Cremorne, where they remained until the termination of the relationship on 30 October 1996. Upon that termination the defendant remained in residence in the Cremorne unit, whilst the plaintiff moved into other accommodation. 25 In December 1989 and January 1990 the defendant acquired respectively Dewcode Pty Limited ("Dewcode") and Havenpearl Pty Limited ("Havenpearl"), of which companies the defendant and the plaintiff were the sole shareholders and sole directors and the plaintiff was the secretary. The plaintiff did not make any payment for her shareholding in either of those companies. After the acquisition of those companies the defendant conducted his professional medical activities through the vehicle of those companies. 26 After the termination of the relationship the defendant paid to the plaintiff the sum of $10,000, (that payment being made through the vehicle of Dewcode) for her to continue to attend to the books of Dewcode throughout 1997. However, the plaintiff continued only until May 1997 to perform financial and accounting work for Dewcode. The plaintiff resigned as a director and as a secretary of Dewcode in May 1997. Dewcode (at the instigation of the defendant) thereupon sued the plaintiff in the Local Court for the balance of that pre-payment. After an arbitration there was an award in favour of Dewcode against the plaintiff in the sum of $8,081.5. The plaintiff unsuccessfully applied to pay that judgment debt by instalments, and subsequently paid to Dewcode the amount of that judgment debt. 27 In May 1997 (that is, more than six months after the termination of the relationship) the defendant purchased, for $405,000, a home unit situate at and known as 19/34 Stanton Road, Balmoral, in which home unit he presently resides. (That is the property in respect of which, until the commencement of the hearing, the plaintiff claimed an interest.) 28 The plaintiff disposed of her Darling Point property on 13 January 1993. She did not personally receive any financial benefit from that sale, since the entirety of the proceeds of sale (the sale price being $110,000) was disbursed in discharging the mortgage of $86,000 upon that property and in paying other debts of the plaintiff. 29 The defendant said that at the time of the sale of the Darling Point unit he lent to the plaintiff $18,000 to assist her in paying various debts which she still owed. That loan was denied by the plaintiff. According to the defendant part of that sum of $18,000 was repaid by the plaintiff over a period of time, and part of that loan was forgiven her by the defendant, according to whom an amount of $1,500 of that debt still remains unpaid. Further reference to this alleged loan will be made later in this judgment. 30 At the conclusion of the relationship on 30 October 1996 the assets of the parties consisted of: Shareholding in Dewcode Pty Limited (1 share held by each of the plaintiff and the defendant). Shareholding in Havenpearl Pty Limited (1 share held by each of the plaintiff and the defendant). BMW motor vehicle, registered in the name of the plaintiff (having an undisputed estimated value of $34,000). Compass sailing boat, registered in the name of the defendant (to which the plaintiff ascribes a value of $50,000, whilst the defendant asserts a value of $30,000). Furniture and household effects. Savings invested in the name of the plaintiff ($4,000). 31 In addition, it was asserted by the plaintiff that at the termination of the relationship the defendant had savings invested in his name totalling $400,000, and that those savings included the proceeds of sale of the Vaucluse property. That assertion was denied by the defendant. 32 I have already referred to the acquisition in the name of the defendant of the Vaucluse property. According to the defendant that purchase was funded by an advance of $215,000 from the defendant's mother, Mrs Stefanie Karola Annelies Wiegand (who is presently aged 88 and resides at Wiesbaden in Germany). 33 A very considerable quantity of evidence (by way of affidavit evidence, documentation and oral evidence, including an affidavit sworn by Mrs Wiegand in Germany --- on account of her advanced years and the fact that she is resident in Germany she was not cross-examined on that affidavit) was directed to the nature of the interest of the defendant in the Vaucluse property and in the Balmoral property (the purchase of which was largely funded by the proceeds of sale of the Vaucluse property). 34 At one stage a suggestion was made that the Balmoral property was owned by the defendant's mother and was held on trust for the defendant. At another stage the suggestion was made that the defendant held that home unit on trust for his mother. It was on account of the possibility that it might become necessary for the Court to make findings and determinations and, subsequently, declarations, concerning interests held on trusts, that Mr Justice Windeyer on 25 February 1999 made the order to which I have already referred. 35 However, in the light of the present attitude adopted by the plaintiff, stated by her Counsel at the outset of the proceedings, that she is not claiming any interest in the Balmoral property, but that the relief now claimed by her is only by way of the payment to her of a monetary sum, in the amount of $100,000, it will not be necessary for me to make any determinations concerning the beneficial interests in that Balmoral home unit (or, indeed, in the Vaucluse property). 36 According to the plaintiff, throughout the period from about January 1995 until July 1996 the plaintiff, at the request of the defendant each week drew a cheque on Dewcode payable to Zita Engels in the sum of $150, cashed that cheque, and paid the proceeds of that cashed cheque to the defendant. 37 There was considerable cross-examination of the plaintiff concerning those asserted financial transactions. 38 There was filed and read on behalf of the defendant an affidavit of Zita Engel [sic], nurse, of Stampe in Germany, in which the deponent said that she was a resident of Germany and was acquainted with both the plaintiff and the defendant. Paragraph 2 of that affidavit as follows, At no time have I received any monies [ sic ] whatsoever from Michael Gerd Hugo Wiegand or from Dewcode Pty Limited. 39 The plaintiff did not seek to cross-examine Miss Engel upon her affidavit. 40 It was implicit in the assertions of the plaintiff concerning these alleged financial transactions in relation to the regular drawing of cheques in favour of Zita Engels (or Zita Engel) that the defendant had received the benefit of $150 in cash each week from Dewcode, and that, presumably, that financial benefit was not disclosed either in the financial accounts of that company or to the taxation authorities. The defendant denied receiving the amounts asserted by the plaintiff and denied the asserted instructions attributed to him by the plaintiff. 41 That cross-examination of the plaintiff on this topic revealed significant correlation and a substantial degree of correspondence between cheques drawn on Dewcode in favour of Z. Engels (usually one cheque, in an amount of $600 each month) and deposits in identical, or similar, amounts made into the plaintiff's own cheque account. 42 I am not satisfied that the plaintiff has established her assertions concerning alleged weekly cheques for $150 drawn on Dewcode and cash payments to the defendant. On the contrary, however, I am satisfied, upon the balance of probabilities, that it was the plaintiff herself who received the benefit of $600 in cash from Dewcode in each of fourteen months during the period from March 1995 to June 1996. That benefit totals $8,400. 43 It was asserted by the plaintiff that her contributions to the relationship, both by way of direct financial contributions, and also by way of indirect financial contributions to the property and financial resources of the defendant, and by way of contributions in her capacity as homemaker, were such as to entitle her to an order of the nature which she presently claims. 44 The plaintiff relied upon the fact that throughout those periods of the relationship whilst the parties were residing together in the Eastbourne Road property, in the Vaucluse property and in the Cremorne property, the plaintiff was in full-time employment, whilst the defendant, until about March 1994 was not in employment in Australia (indeed, for a period he was in receipt of unemployment benefits); that the plaintiff substantially assisted the defendant in acquiring his Australian professional qualifications, that assistance including the typing of two separate theses required by the Royal Australian College of Obstetricians and Gynaecologists, and (in the absence of the defendant overseas) liaising with two of his medical colleagues concerning the final form of those theses; negotiating the sale of his Mercedes motor vehicle; attending to the defendant's banking and to the book keeping and financial records of the defendant (the plaintiff held the defendant's power of attorney and was authorised to operate his bank accounts); in general, attending to the entirety of the defendant's financial and business affairs whilst the defendant was overseas. 45 The nature and the extent of the contributions of the plaintiff to the relationship were the subject of considerable dispute between the parties. The defendant agreed that the plaintiff performed all the cooking for the household, although he pointed to the fact that he and the plaintiff ate out about twice a week. (The culinary standards of the eateries patronised by them was also a matter of dispute.)The defendant agreed that the plaintiff attended to the housekeeping aspects of their domestic establishment in the various residences which they occupied, and that she made direct financial contributions towards the living expenses of the parties, including the purchase of food and household supplies. The defendant asserted that he also made similar direct financial contributions. 46 During the course of the relationship the defendant in late 1990 acquired a 29 foot Compass sailing boat for $29,000. The plaintiff asserted that she gave considerable assistance in the maintenance, cleaning and outfitting of that sailing boat. The nature and extent of any such assistance was strongly disputed by the defendant. 47 It will be appreciated that, concerning the nature and extent of many of the contributions of the kind which I have just described which the plaintiff said she had made to the relationship, the evidence consisted of assertions on the part of the plaintiff and denials on the part of the defendant. It is appropriate, therefore, that I should express my views concerning the credibility of each of those two parties, each of whom swore a number of affidavits, and each of whom was cross-examined. 48 I considered the plaintiff to be a most unsatisfactory witness. At times during her oral evidence I regarded the plaintiff as being either deliberately obtuse or deliberately evasive. She constantly refused to answer the question asked of her. With frequency she resorted to responses of not recollecting matters which clearly would have been within the ambit of her memory. She refused to make any concessions where concessions obviously should have been made. She chose to be obstructive and evasive where agreement with a fact which was obviously true would not have been in any way detrimental to her case. The plaintiff's attitude and approach in the witness box did not attract the sympathy of the Court, and did not advance her case in any way. She constantly resorted to the response, "I can't remember". Although the plaintiff gave her occupation as "financial controller", her responses under cross-examination did not appear to me to be consistent with those of someone who was experienced in and had knowledge of financial matters. 49 The assertions of the plaintiff that it was she who, during the defendant's absences, paid the rent on the Eastbourne Road apartment, by weekly payments of $160, were patently false. 50 The plaintiff was cross-examined concerning the proceedings (to which I have already referred) brought against her in the Local Court by the company Dewcoode after the termination of the relationship. Her oral responses to that cross-examination concerning her liability to Dewcode were totally inconsistent with the sworn statement in that regard appearing in paragraph 55 of her affidavit of 26 February 1998. 51 It also reflects poorly on the plaintiff's credit that, despite an express request as long ago as September 1997, the plaintiff had to the time of the hearing failed to return documents of Dewcode and Havenpearl (including blank pages of the stationery of those companies bearing the defendant's signature). 52 By the same token, there were also a number of unsatisfactory aspects to the evidence of the defendant. For example, he was totally unable to explain the source of various deposits which had been made into his bank account for the period May - October 1991. Further, the assertion of the defendant that he lent to the plaintiff the sum of $18,000 at the time of the sale of the Darling Point unit, and his reference to records contained in blue cards (to which no previous reference had been made in either his affidavit evidence or his oral evidence to that point) I regarded as totally unsatisfactory. 53 However, where there is a conflict between the evidence of the plaintiff and the evidence of the defendant and where there is no other material (for example, independent evidence or documentary material) which would assist the Court in resolving that conflict, I prefer the evidence of the defendant to that of the plaintiff. It should also be appreciated that it is the plaintiff who, as the person making the claim, must discharge the burden of proof in satisfying the Court of her entitlement to the relief which she is seeking. (The only relief which the defendant seeks by way of the cross-claim, being the transfer to him of the plaintiff's shares in the two companies, is consented to by the plaintiff.) 54 The two areas in respect of which the plaintiff possibly appeared to have established contributions which would entitle her to relief in the present proceedings are, firstly, the inference which the Court is entitled to draw from the totality of the evidence that it was the earnings of the plaintiff which were supporting the defendant whilst he was unemployed in Australia; and, secondly, the contributions which the plaintiff made to the relationship in her capacity as homemaker. 55 In respect to the assertion that the plaintiff was supporting the defendant whilst he was unemployed in Australia, it should be recognised, however, that it was the explanation offered by the defendant that throughout those periods whilst he was not in receipt of income in Australia he was relying on his savings, which he had accumulated from his professional employment in Germany and in the United Arab Emirates. 56 It must also be recognised that at the commencement of the relationship the plaintiff's residence at Darling Point was subject to a mortgage (which she later consolidated with other debts when she obtained a single mortgage in the sum of $86,000), and that her liabilities at that time exceeded her assets. Those facts make somewhat unlikely the assertion of the plaintiff that for the periods whilst the defendant was resident in Australia from January 1989 until about March 1994 he was being supported by the plaintiff. 57 Further, the plaintiff had the benefit of free accommodation throughout a period of seven and a half years, and for about half of that period the plaintiff alone was enjoying the benefit of the totality of that accommodation (whilst the defendant was practising his profession overseas). 58 It reflected poorly upon the case advanced by the plaintiff that it appeared to be a complaint on her part that she contributed the entirety of the payments in respect to such outgoings in relation to the Eastbourne Road property, the Vaucluse property and the Cremorne property as telephone, electricity and gas (assertions which, in any event, were disputed by the defendant) during period whilst the only person having the benefit of those telephone, electricity and gas facilities was the plaintiff herself. 59 Further, it should be appreciated that the plaintiff also received the benefit of at least one overseas trip every year, in respect of which the defendant paid her air fares (although the plaintiff appears to have contributed equally to accommodation, meals and the like), and that she also received some gifts by way of jewellery. 60 The plaintiff also sought to rely upon direct assistance which she had given to the preparation of the defendant's theses and to the conduct of his service companies, and to his business and financial affairs in Australia. As to the theses, I consider that the evidence of the plaintiff's contributions was grossly exaggerated. Similarly, I am satisfied that the banking and other business activities performed by the plaintiff for the defendant were not of a particularly time consuming nature. 61 Throughout the periods whilst the defendant was overseas the plaintiff had the benefit of accommodation in premises either owned or rented by the defendant, and was responsible for the payment of outgoings in respect of which she had the exclusive benefit. For those periods the plaintiff was receiving a considerable financial and practical benefit from being in a de facto relationship with the defendant. 62 I have already expressed my conclusion that, in addition, the plaintiff in 1995 - 1996 received from Dewcode direct financial benefits totalling $8,400. 63 On the other hand, however, it should not be overlooked that there were practical advantages to the defendant in having someone available to live in and look after his various residences in Sydney and to attend to what might be described as the Australian part of his life whilst he was working and travelling overseas. 64 Throughout the periods whilst the defendant was resident with the plaintiff in New South Wales, I am satisfied that the plaintiff made contributions in her capacity as homemaker, and that she also made contributions by way of assisting the defendant in such matters as the preparation of his theses, attending to his business affairs and to his financial records and banking (which she also attended to during his absence). Since the plaintiff was in full-time employment throughout those periods, whilst (until about March 1994) the defendant was not in employment, but was, according to him, supporting himself from his savings, the inference is open to the Court that, at least to some extent, the plaintiff was supporting the defendant from her income. The plaintiff has not, however, established any quantification of such support. 65 The contributions of the plaintiff as homemaker (although considerably less than asserted by her) should not, however, be disregarded. I have reached the conclusion, consonant with the principles enunciated by the Court of Appeal in Evans v Marmont (1997) 42 NSWLR 70 per Gleeson CJ and McLelland CJ in Eq., that the plaintiff has established an entitlement to an order that the defendant pay to her the sum of $20,000, and I propose so to order. 66 Since that sum is considerably less than the limit of the jurisdiction of the Local Court the plaintiff, pursuant to the provisions of Part 52 rule 24A of the Supreme Court Rules, is not entitled to an order for her costs unless the Court otherwise orders. I have not heard any submissions concerning costs. Accordingly, unless within seven days of the date hereof either party arranges with my Associate to have the matter listed before me for argument as to costs, I make the following orders: 1. I order that the defendant pay to the plaintiff the sum of $20,000.

Graham v Wiegand

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Judgment (11 paragraphs)

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