Hughes v Egger

Hughes v Egger - [2005] NSWSC 18 - NSWSC 2005 case summary — Zoe

[13]

5 However the issue has been raised and should be determined, if only because it is not clear on the authorities whether the same weight can be given to contributions made before the commencement of the de facto relationship, as to those made after its commencement. In McDonald v Stelzer (2000) 27 Fam LR 304 Priestley JA (at [39]) considered that pre-relationship contributions could be given some weight, but not fundamental weight, in considering what adjustment, if any, is just and equitable having regard to the contributions falling within subs 20(1)(a) and (b), on the same principles as those on which other matters relevant to the nature and incidents of a relationship as a whole may bear upon what adjustment is just and equitable having regard to the contributions of the kinds referred to in paras (a) and (b), as discussed by Gleeson CJ and McLelland CJ in Eq in Evans v Marmont (1997) 42 NSWLR 70 at 74-5. It was implicit in his Honour's reasoning that pre-relationship contributions did not directly fall within paras (a) and (b) of subs 20(1). In Jones v Grech Davies AJA said (at [25]) that he agreed with the remarks of Priestley JA in McDonald v Stelzer. However his Honour went on to say (at [26]) that the factors specified in s 20 may include actions which have taken place prior to the commencement of the period of the relationship. If such contributions do fall within paragraphs (a) and (b) of subsection (1) there is no reason that they should be relegated to a subsidiary role, merely on account of their preceding the commencement of the relationship. Ipp AJA (as his Honour then was) said (at [82]) that there was no difference in principle between contributions made before the de facto relationship commenced and those made thereafter. 6 The question whether pre-relationship contributions may qualify directly under paragraphs (a) or (b) of subs 20(1), or whether regard may be had to them only as potentially relevant, but subsidiary, factors on a consideration of what adjustment is just and equitable, turns on the proper construction of paragraphs (a) and (b). In Roy v Sturgeon (1986) 11 NSWLR 454 Powell J (as his Honour then was) held (at 464-5) that although s 20 did not expressly limit the contributions to which the Court could have regard to those made only during the course of the de facto relationship, nonetheless, on the proper construction of the section, and consistent with the policy of the Act, the contributions to which regard could be had should be so limited. His Honour adhered to those views in Jones v Grech. However in Foster v Evans (1997) DFC 95-193 at 77,681 Bryson J disagreed with this view and the majority of the Court of Appeal departed from it in Jones v Grech. There is no express requirement that contributions under s 20(1)(a) or (b) be made during the period of the relationship. For the reasons given by Bryson J in Foster v Evans at 77,681 I am of the respectful view that there is no implied limitation as to the time at which contributions otherwise falling within those paragraphs must be made. I therefore respectfully consider that I ought to follow the opinion of Ipp AJA (as his Honour then was) in Jones v Grech that there is no difference in principle between contributions made before the de facto relationship commenced and those made thereafter.

[15]

8 A de facto relationship within the meaning of the De Facto Relationships Act 1984 before its amendment in 1999 by the Property (Relationships) Legislation Amendment Act 1999 meant a relationship between a man and a woman who lived together as man and wife on a bona fide domestic basis although not married. After that amendment it means a relationship between two adult persons who live together as a couple and are not married to one another or related by family (s 4(1)). 9 A de facto relationship is a "domestic relationship" to which s 20 applies. Also included within the ambit of a domestic relationship is a close personal relationship (other than a marriage or a de facto relationship) between two adult persons who are living together, one or each of whom provides the other with domestic support and personal care. The defendant's claim was that the parties were in a domestic relationship from about May 1988 constituted by a de facto relationship. She did not claim that there was a domestic relationship constituted by a close personal relationship within the meaning of the Act. 10 Subsection 4(2) sets out the matters to be considered in determining whether there was a de facto relationship between the parties. These factors were drawn from the judgment of Powell J (as his Honour then was) in D v McA (1986) 11 Fam LR 214, 227 which were thereafter frequently applied. (e.g Roy v Sturgeon (1986) 11 NSWLR 454 at 458-459). Subsection 4(2) provides: 4 De facto relationships (2) In determining whether two persons are in a de facto relationship, all the circumstances of the relationship are to be taken into account, including such of the following matters as may be relevant in a particular case: (a) the duration of the relationship, (b) the nature and extent of common residence, (c) whether or not a sexual relationship exists, (d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties, (e) the ownership, use and acquisition of property, (f) the degree of mutual commitment to a shared life, (g) the care and support of children, (h) the performance of household duties, (i) the reputation and public aspects of the relationship

[23]

19 Except when the plaintiff was interstate or overseas, from May 1988 until July 1991, the regular pattern of residence was that the parties spent each weekend either at the plaintiff's property at Fishing Point on the western shores of Lake Macquarie, or at the defendant's house in Seaforth. Usually this entailed overnight stays on the Friday and Saturday nights and often, when the plaintiff visited Sydney, an overnight stay by the plaintiff on the Sunday night, after which he returned to Newcastle on Monday morning. 20 The defendant claimed that on average the plaintiff also spent two days, that is one night, per week in Sydney during this period. The plaintiff attended to his consultancy work for clients in Sydney. He accepted that he did stay from time to time with the defendant at her house in Seaforth during mid-week periods, but estimated that the amount of such time was about ten per cent of such mid-week visits, that is about once a fortnight. This would seem to be a relatively narrow area of dispute. However a great deal of time and effort was spent on it. The parties analysed such records as were available to try to establish the frequency and length of the plaintiff's stays in Sydney. This included analysing motor vehicle log books or records of travel claims and expenses to establish the frequency and length of travel of the plaintiff between Lake Macquarie and Sydney; analysing cash withdrawals from ATM machines and credit card transactions to seek to locate the plaintiff in either the Sydney or the Newcastle area; comparing telephone records for the Fishing Point property for the periods preceding and succeeding July 1991; and analysing records of water use at the Fishing Point property before, during and after the period from May 1988 to July 1991. None of this evidence was conclusive. Little of it was helpful. 21 The principal basis upon which the plaintiff denied the defendant's contention as to the frequency and length of visits to Sydney was that from June 1988 until June 1991 he was head of the Department of Economics at the University of Newcastle, as well as being a professor with teaching responsibilities and a member of the University Senate Research Committee. He said that these duties precluded more frequent visits to Sydney, at least during the University term. He agreed however that there were quite a number of weeks when he spent a mid-week night in Sydney. 22 For the period 1989 to 1990 the defendant tendered a handwritten record prepared by the plaintiff recording the payment of Harbour Bridge tolls on seventy-two occasions during the periods from 17 July to 25 November 1989 and, it seems, between May and June 1990. Many of the records were for consecutive days during the week which would be consistent with the plaintiff then staying at the Seaforth property for a number of days together and crossing the harbour into the city for work purposes. 23 However, the evidence simply does not permit of a definitive conclusion as to the amount of time between May 1988 and July 1991 each spent at the house of the other. Nor is it necessary to attempt to reach a precise conclusion on the balance of probabilities. It suffices to conclude, as I do, that leaving aside the period of the summer holidays, the parties spent most weekends together, often alternating between their respective houses. I accept that more weekends were spent in Sydney than at Fishing Point, if only because the plaintiff had occasions to spend the next or the preceding business day in Sydney for work purposes. In addition, on average, the plaintiff spent between one night per week and one night per fortnight at the defendant's Seaforth property. 24 When the plaintiff stayed with the defendant, she continued to carry out the cleaning, washing and ironing for the household of herself and her son. She also washed and ironed for the plaintiff. She continued to clean the house. They did some shopping together. The plaintiff made no contribution to the purchase of food and other household items. He did not contribute to outgoings of the Seaforth property, nor to new furnishings for that property which the defendant purchased. The defendant prepared the meals. On Sundays the defendant often did work in the garden. The plaintiff usually read newspapers, watched TV or worked in the study. He rarely, during this period, assisted around the house or in the garden.

[29]

29 Indecs Llwynog was established as a shelf company and was acquired for the plaintiff on 4 July 1988. The plaintiff and the defendant were the only shareholders. They each held one share. They were also the directors. The defendant was a shareholder because of the then requirement that a company needed at least two shareholders if the shareholders were individuals. The plaintiff was advised that the shareholding could be left as it was, or the defendant could execute a declaration of trust in favour of the plaintiff or his nominee, or she could transfer her share to a nominee nominated by the plaintiff. The plaintiff said that the situation was left unchanged due to a combination of inertia, an expectation that the parties would contribute equally to the company, and the small extent of business then being undertaken. The company was acquired to be a tax effective vehicle through which to channel the parties' consulting income. The plaintiff also regarded it as an easier way of obtaining maximum tax advantages in relation to the use of motor vehicles. Although the defendant never executed a formal declaration of trust, in her oral evidence she said that at no time did she consider that she owned the share for her own benefit. She said that she told the plaintiff that "I'll hold the share for you". In a statement of financial circumstances sworn in the Family Court on 26 October 1989 the defendant stated that she held the share on trust for the plaintiff. 30 In the financial years ended 30 June 1989 and 30 June 1990 Indecs Llwynog derived income from the consulting activities of the plaintiff in the amounts of $45,575 and $53,122 respectively. It also earned interest on these monies. It paid or credited the plaintiff with a salary of $9,006 in the year ended 30 June 1989 and $7,360 in the year ended 30 June 1990. In the year ended 30 June 1991 it earned income from consulting work and royalties attributable to the efforts of the plaintiff for $57,602. It also derived income of $17,000 from consulting work carried out by the defendant. This was work which the defendant did for the Commonwealth Office of the Status of Women and for Australian Nationwide Opinion Polls. In the year ended 30 June 1991 the plaintiff was paid or credited with a salary of $7,680. The defendant was paid or credited with a salary of $5,000. 31 From May 1990 the defendant had the use of a company owned Hyundai Excel motor vehicle which was replaced in April 1991 by a company owned Nissan Pulsar sedan. Some of the costs of running the motor vehicles were met by the company. The plaintiff used a Mazda motor vehicle purchased by the company in about May 1990. 32 There was therefore from 1990 a degree of financial interdependence between the parties through their use of Indecs Llwynog as a vehicle to which to direct income which they otherwise would have earned personally, and from which they drew or were credited with salaries, and whose motor vehicles they used. Up to 30 June 1991 both the plaintiff and the defendant put more into the company than they drew from it. The appointment of the defendant as a director of the company in July 1988, and the transfer of a share to her without any written declaration of trust, are actions which indicate that the parties had a mutual trust in each other and in the future of their relationship, which is consistent with there then being a de facto relationship between them. Given that the defendant disclaimed any beneficial interest in the shares in the company, her directing her consultancy income to the company in 1991 is indicative of a degree of trust in the plaintiff and the future of their relationship which is consistent with there then being a de facto relationship between the parties.

[55]

57 In February 1990, the defendant settled her proceedings in the Family Court with her former husband. Pursuant to that settlement he transferred his interest in the 8 Jenner Street property to her subject to the existing mortgage. She paid him $27,000 and transferred to him her shares in Health Promotion and Research Pty Ltd. 58 In late May 1991 the parties noticed that the property at 22 Jenner Street, Seaforth was advertised for sale. The defendant purchased the property for $405,000. With stamp duty, legal fees and other costs, the cost of the purchase was $421,168. In order to fund the acquisition, the plaintiff agreed to purchase from the defendant a 30% interest in the property at 8 Jenner Street. The plaintiff says that this was more than a 30% stake in the property was worth. On 23 July 1991 the property at 8 Jenner Street was valued at $350,000 by a valuer who prepared a valuation for the use of Barclays Bank Australia Ltd. The valuer advised that with the satisfactory completion of repairs or renovations at an estimated cost of $2,500 he considered that the property would readily sell for $355,000. The same valuer valued the property at 22 Jenner Street at $385,000 or $20,000 below the selling price, which was itself an arm's length transaction. The plaintiff offered the sum of $130,000 for a 30% share in 8 Jenner Street after discussion with the defendant as to what would be a fair selling price for the property. In that sense it was an arm's length transaction. However, a purchase of a 30% interest for $130,000 was below an amount which would represent 30% of the then market value of the property on the only evidence of its market value which was adduced. The payment can properly be regarded as a contribution by the plaintiff to the extent of about $20,000 which indirectly assisted the acquisition by the defendant of the property at 22 Jenner Street. 59 The fact that the plaintiff paid more than the market value for a 30% interest in 8 Jenner Street does not however mean that he acquired a beneficial interest of more than 30% in the property. Nor do the monies which the parties later spent on renovations of the property effect a change to their beneficial interests in it. Such payments, to the extent they differ from the parties' respective beneficial interests in the property, should be recognised as contributions under paragraph 20(1)(a) to the conservation or improvement of the property of the parties, to be taken into account in considering what adjustment, if any, is just and equitable to the parties' property interests.

[56]

60 The property at 22 Jenner Street was purchased in the name of the defendant only. The plaintiff told the defendant that he wanted it to be in her name for tax reasons. Although the defendant was the sole registered proprietor of the property she did not dispute that the plaintiff was entitled to a beneficial interest in it. The quantum of that interest was not then agreed between the parties. It is to be presumed that the defendant held the legal estate in trust for herself and the plaintiff as tenants in common in shares proportionate to their contributions to the purchase price. (Calverley v Green (1984) 155 CLR 242). The better view is that "the purchase price" includes the aggregate costs of the acquisition including incidental costs, fees and disbursements (Currie v Hamilton [1984] 1 NSWLR 687 at 691; Jacobs' Law of Trusts in Australia, 6 ed para 1211; Ryan v Dries (2002) 10 BPR 19,947; [2002] NSWCA 3 at [53]). 61 There were slight differences in the parties' estimates, or assertions, as to the total purchase cost, including incidental costs, of the 22 Jenner Street property. There were also minor differences in their assertions as to how the parties contributed to those costs. The principal differences were in respect of an amount of loan application fees and the rates adjustments on the sale. The latter is not an appropriate adjustment to take into account for the purpose of determining the beneficial interests of the parties in the property. As the loan application fees were paid by the plaintiff I think it more probable that they related to his borrowing of $135,000 to acquire a 30% interest in 8 Jenner Street, rather than to the defendant's borrowing from the St George Bank of $105,000 to acquire 22 Jenner Street. In any event loan application fees do not represent part of the purchase costs. Accordingly I prefer the defendant's calculations, although the ultimate difference is minimal. The "purchase price" was $422,385. The defendant borrowed $105,000 and applied $117,898 from the sale of the 30% interest in 8 Jenner Street together with other payments totalling $11,645 from her savings. Those amounts total $234,543. The balance of the purchase price was contributed to by the plaintiff either from monies which he held personally, or from monies he borrowed from Indecs Llwynog. As a result the defendant contributed 55.5% and the plaintiff 44.5% of the purchase costs of 22 Jenner Street. 62 At about the time 22 Jenner Street was purchased and the 30% interest in 8 Jenner Street was transferred, the defendant discharged the existing mortgage over 8 Jenner Street. She did so partly by using monies from her Macquarie ADF account and partly by using the balance of $12,101.64 from the payment which she received for her 30% interest in 8 Jenner Street from the plaintiff. However this is not an additional matter to be taken into account in considering either the parties' beneficial interests in either property. Nor is it relevant to s 20. The defendant used her own money to discharge her own liability.

[62]

69 During the period between 1991 and 1999 the defendant spent various monies on fixtures and fittings for the 22 Jenner Street property and for trades improvements and repairs. She asserted that she spent $28,243 on fixtures and fittings during this period, $12,238 in trades for improvements and repairs and $4,534 in hardware, paint and other like purchases. The plaintiff submitted that some of the amounts which the defendant listed could not be classified as payments of a capital nature, but related to items of routine maintenance which are part of normal domestic expenses. However although this distinction is relevant, it is not of great significance in the present case. Insofar as the defendant made contributions to normal domestic expenditure they benefited herself, the plaintiff, and to a certain extent her son. However Samuel Egger's presence at 22 Jenner Street reduced after September 1993 as he spent many nights staying with his girlfriend. To an extent the defendant's normal domestic expenditure also benefited her father who started living at the 22 Jenner Street property after he became ill in April 1997. Thus her payments towards normal domestic expenditure contributed to the plaintiff's welfare by an amount which should be valued at less than half the amount of the expenditure. Given that the plaintiff had a 44.5% beneficial interest in 22 Jenner Street, her capital payments towards the improvement of 22 Jenner Street contributed to the improvement of his interest in the property by 44.5% of the cost of the improvements, (whilst recognising that the contribution to the cost of improvements would not necessarily equate to an increase in value to the same amount). It is not possible to make an accurate dissection of this expenditure as between capital and normal domestic expenditure. Taking a broad brush, I consider that it is appropriate to recognise 40% of this expenditure as a contribution made by the defendant to the improvement of the property of the parties or to the welfare of the plaintiff to be recognised for the purposes of subs 20(1). That amount is $18,000.

[70]

77 I cannot reconcile this evidence with the letter written in early 1992. Those conversations were deposed to with a wealth of circumstantial detail. But their inconsistency with one of the few contemporaneous documents that were tendered emphasises the need for caution before accepting the defendant's evidence of such conversations. In this case the processes of memory have been overlaid, even if subconsciously, by considerations arising from the later bitter breakdown of the parties' relationship and the current litigation. Discharge of Defendant's Liability to St George Bank 78 On 19 October 1995 Indecs Llwynog paid $40,000 and on 17 May 1996 paid $55,000 to reduce the defendant's obligations to St George Bank arising from her borrowing for the purchase of 22 Jenner Street. Initially in the accounts of Indecs Llwynog, the payments were treated as a loan from the company to the defendant. However full accounting records for the company were not kept. For example, there were no ledgers showing movements in the loan accounts of the plaintiff and the defendant. It is not possible to identify accurately what adjustments were made to the defendant's loan account. However it appears from a working sheet in the handwriting of the plaintiff that against the debt of $95,000 there was offset amounts totalling $10,955 owed by the company to the defendant and there were further offsets totalling $3,155, which I infer were for company expenses paid by the defendant. This reduced the loan account to $80,890. There is then recorded a "transfer" to the plaintiff of $44,525, which appears to have been an assumption by the plaintiff of that part of the defendant's debt owed to the company. This reduced the defendant's debt to $36,365 which with interest was recorded as $37,842. However these figures do not tally with the figures in the balance sheet which recorded a debt owed by the defendant to the plaintiff at 30 June 1996 in the amount of $44,161. In the following year the loan to the defendant was recorded as zero. It appears that the defendant's debt of approximately $81,000 owed to the company was assumed by the plaintiff. This is an amount which should be recognised as a contribution to her welfare made by the plaintiff. 79 Contrary however to the plaintiff's submissions, the reduction of the St George Bank's loan by $95,000 from monies borrowed from the company, and the subsequent assumption of the defendant's debt to the company by the plaintiff, did not alter the beneficial interests in 22 Jenner Street. Nor was the plaintiff subrogated to St George's rights as mortgagee. There was a small balance left owing to St George. Nor was there any basis for implying an agreement that the plaintiff, or Indecs Llwynog, would be entitled to a charge over the property to secure the indebtedness. Plainly no such charge was intended.

[89]

100 However Subsection 20(1) refers to making such order adjusting the "interests of the parties in the property" as to the Court seems just and equitable having regard to the matters stated in paragraphs (a) and (b). "Property" is defined widely to include any estate or interest in real or personal property. This must include equitable estates and interests under implied trusts. There is authority that the Court is not required in all cases to first ascertain in full detail what are the parties' property interests by reference to the general law, at least where the law of constructive trusts may define those interests. (Evans v Marmont (1992) 42 NSWLR 70 per Gleeson CJ and McLelland CJ in Eq at [84]. In Jones v Grech (2001) 27 Fam LR 711 Davies AJA said (at 722-3) that "the Court should start with an understanding of the property interests of the parties for it is those interests which are to be adjusted." His Honour went on to say that in a simple case where both parties are on the title as joint tenants then, unless the issue as to title is raised, the Court should proceed upon the footing that the parties' interests are as shown on the title. In that case his Honour went on to say why the parties' beneficial interests coincided with their legal interests. In Evans v Marmont Gleeson CJ and McLelland CJ in Eq considered the likely beneficial interests of the plaintiff under a constructive trust to be relevant to the inquiry under the Act. 101 As the Court is required to consider making an order adjusting property interests there can be no inhibition on its first ascertaining what those interests are, even if there are cases where it is not necessary to carry out such an exercise because it would be subsumed by the inquiry under s 20. As Davies AJA said in Jones v Grech the Court should understand what are the property interests which are to be adjusted. 102 I find it of assistance in this case to identify the parties' beneficial interests in 10 Abernethy Street by reference to their contributions to the purchase price, and then assess whether any adjustment to those interests is warranted by reference to their contributions falling within s 20 which have not been taken into account in determining those beneficial interests. 103 In my view, to do otherwise in this case would be an error because it would ignore the effect which the contributions to the purchase price have already had in determining the parties' proprietary interests. To assume such contributions have had no effect on the parties' proprietary interests, but are to be considered as part of a discretionary adjustment along with a mix of other factors, would be to treat s 20 as displacing rather than supplementing principles of equity. 104 The Act does not so provide. To the contrary, s 7 provides that nothing in the Act derogates from or affects any right of a party to a domestic relationship from applying for any remedy or relief under any other law. 105 In this case the evidence necessarily raises the issue of what the parties' beneficial interests in the property at 10 Abernethy Street are. As both parties have sought orders under s 20, they have, it seems to me, raised the question of what the parties' interests are of which each seeks an adjustment.

[93]

Defendant's Occupation of 10 Abernethy Street After October 1999 108 After October 1999 the defendant has been in sole occupation of the property at 10 Abernethy Street. She has not paid rent or an occupation fee for that occupation. For the reasons I have given, I consider that contributions made by either of the parties to the welfare of the other after the termination of the relationship are to be taken into account under subs 20(1). It is unnecessary to decide whether the defendant would be liable in equity to account to her co-owner for an occupation fee. (Ryan v Dries [2002] NSWCA 3, 10 BPR 19,947; Biviano v Natoli & Ors (1998) 43 NSWLR 695). In my view the plaintiff has made a contribution to the welfare of the defendant by her occupying the house of which he is a 41% beneficial owner without fee. The defendant points to contributions she has made in respect of the maintenance of the property from 7 September 1999 by way of repairs to the house, the installation of curtains and floor-coverings, general maintenance to the house and garden, and the payment of council rates, water rates, house insurance and electricity. The total amount spent by her on the property comes to $41,923. The evidence of the rental value of the property was not very satisfactory, but it was uncontradicted. On 28 October 2002 a local real estate agent expressed the opinion that once certain defects to the 10 Abernethy Street, Seaforth property were fixed it should realise a rental of around $1,100 to $1,200 per week. The work which the agents considered should be attended to involved fencing near steep drops on the property, the repair of sandstone walls, and the repair of rotting wood on the terrace. Making a slight discount for the cost of such alterations, I accept that the rental value of the property for the period of about four years and nine months from the parties' separation to the date of hearing is $271,000. The net contribution made by the plaintiff in relation to the defendant's occupation of the property between separation and the hearing is thus 41% of $230,000 or $94,000. I assume also that the defendant has had the benefit of occupation of the property without fee between the hearing and the date of this judgment. Other Financial Contributions by the Plaintiff

[98]

(a) Gas, electricity, water, council rates and house and contents insurance, and telephone: $65,686; (b) household commodities such as white goods, kitchenware and furniture: $38,429; (c) purchases of household fixtures from 1988 to 1999 including lights, carpets, restored fireplaces, curtains and the like: $28,244; (d) Costs of trades and services such as plumbing, electrical, washing machine repair etc: $12,238; (e) grocery bills for which records were kept from 1991 to 1999: $55,559; The defendant estimated she spent an additional $62,400 in cash on food and groceries for which records were not available. This estimate was based on her assessment that she spent about $150 per week on food. There may be some doubling up however with her recorded expenditure. Precision is not possible, but I think there should be some downwards adjustment from the estimated sum of $62,400 on food expenditure in addition to the recorded grocery bills. I have reduced the estimated cash expenditure on food to $50,000, a discount of approximately 20%. (f) other hardware, paint and similar purchases between 1991 and 1999: $3,394; (g) newspapers $2,453 (h) pharmacy bills: $1,362; (i) garden expenses: $10,863; (j) hardware payments: $4,160 in cash and $3,394 in recorded expenses, total $7,554. (m) cash for Manly Council stickers for extra garbage bins: $1,200; (n) cash for the plaintiff's drycleaning. Some relatively small amount was spent by the defendant for this purpose. I do not accept her claim that she spent about $1,000 per year of her money on the plaintiff's drycleaning. I would think that claim should be discounted by 60% to $3,200. (n) The defendant claims she spent about $30 per week on flowers for the house from 1991 to 1999. The defendant agreed with this estimate for the period after April 1997 when the defendant's father lived with them but claimed that before then there were only limited purchases for flowers, some of which were made by him and some by the defendant. I will allow $4,000 under this head. 116 This expenditure amounts to approximately $284,000. It is very difficult to say how much of this expenditure should be considered as a contribution to the welfare of the plaintiff as distinct from a contribution to the welfare of the defendant, or her son, or her father, or even, in relation to amounts such as council rates, to her boarder, Mr Piggott. Having regard to the extended periods of absence of her son Samuel, I consider that an appropriate apportionment to be treated as a financial contribution made by her to the welfare of the plaintiff from 1991 is 40% of the household expenditure made by her. This takes into account that Mr Piggott was not a beneficiary of most of the expenditure, and that after September 1993 the defendant's son spent a substantial part of his time staying with his girlfriend Ms Walker, although there was a period of between six and twelve months in around 1996 or 1997 when he spent a substantial period of time at 22 Jenner Street. It also takes into account the fact that the defendant's father lived in the house from April 1997 and that Mr Piggott was a boarder in separate accommodation for the whole of the period. Although it is impossible to be precise, my best estimate is that the defendant's domestic expenditure contributed to the plaintiff's welfare in an amount of about $114,000. 117 The defendant also made some payments directly for the plaintiff's benefit. She purchased presents on his behalf at a cost estimated to be $7,432. She paid vet bills for his cats at a cost of $2,595. She estimated that over the 11½ years of their relationship she spent about $14,000 to $15,000 of her money on gifts for the plaintiff. However there is no corroborative evidence and the plaintiff denied many of the purchases which the defendant itemised. I accept that the defendant spent more money on presents for the plaintiff than he did for her but I cannot quantify the difference except that it was no more than $15,000. 118 The defendant claimed that she paid the cost of the cleaner being $50 in cash weekly. However it is not possible to say that the cash for the cleaner came from the pocket of the defendant more than it did from the pocket of the plaintiff. 119 The defendant also spent money on liquor, as did the plaintiff. As it is impossible to say how much liquor was consumed by either party I have not included either's expenditure on liquor as being a material contribution to the welfare of the other. 120 The defendant also gave evidence of her own expenditure on clothes, on mortgage repayments between 1988 and 1991, on rent for a flat in which she lived in Manly for a time in 1996, on her own professional and personal expenses, on veterinary bills for her dog, and on medical bills for herself and her son. Except as a possible check of her claimed expenditure against her total income and cash receipts, that evidence is not relevant and it is unnecessary to refer to it further. 121 The defendant also gave evidence of motor vehicle expenses and petrol bills which she incurred. She suggested that because the motor vehicles which she used were owned by Indecs Llwynog, that by meeting these expenses she was conferring a benefit upon that company and indirectly upon the plaintiff. However those expenses were incurred in relation to her use of motor vehicles and their payment not a relevant contribution to be taken into account for the purposes of s 20. 122 The defendant also claimed to have paid substantial amounts for entertainment and travel, such as restaurant bills and the like. I do not think it possible to identify to what extent the plaintiff received a greater benefit from her expenditure on these items, than did she from his. I have not taken such expenditure into account in considering the plaintiff's claimed expenditure for the defendant. 123 The defendant claims also that by making the financial contributions which she did, she freed up the plaintiff from having to make such expenditures, thus enabling him to service the mortgage debts on the various properties which he owned. A substantial contribution to the increase in his wealth during the period of their relationship was the increase in capital value of the items of real estate which he owned. The defendant claimed that her expenditure for his benefit indirectly enabled him to reap those unrealised capital gains by putting him in the position to service debt on the properties. 124 However the evidence does not show that the plaintiff's ability to service his borrowings was directly or indirectly attributable to contributions made to him by the defendant. The properties in question were let, and from the financial year ended 30 June 1996 the plaintiff derived net profits from those properties. From the financial year ended 30 June 1989 to 30 June 1995 his tax returns show net losses from rented properties of $105,375. During that period his total net income after tax (and after meeting those losses) totalled in excess of $450,000. That was substantially more than the net income after tax earned by the defendant (approximately $291,000 over that same period). In addition Indecs Llwynog had retained operating profits after tax over that period of in excess of $162,000. In short the plaintiff was able to meet his borrowings and reap the capital appreciation of the properties he owned from the income which he and Indecs Llwynog earned. Indecs Llwynog Pty Ltd 125 The defendant claimed that she had made material contributions to the financial position of Indecs Llwynog Pty Ltd from which the plaintiff benefited. If the defendant did make contributions to the company for which she was not fully compensated then, by virtue of the plaintiff's beneficial ownership of all of the shares in the company, he would benefit from those contributions. The principal contribution made by the defendant to the company was through her directing income from her consulting activities to the company, which she could otherwise have derived for herself. 126 Between 1991 and July 1999 Indecs Llwynog derived income from consultancy work undertaken by the defendant in the amount of $60,187. It appears from the defendant's income tax returns that for the years ended 30 June 1991 to 30 June 1994, she received salary from Indecs Llwynog in the amount of $49,333. In the year ended 30 June 1992 she received a fully franked dividend from the company of $14,500. The company also made contributions in 1993 and 1994 for her superannuation of $1,150. In addition the defendant had the use of a motor vehicle owned by the company, some of the expenses of which were met by the company. 127 The defendant claimed to have made some other contributions to the company namely storing and filing documents at the Abernethy Street property in late 1997, taking some phone calls and cleaning the office area at the Abernethy Street property and purchasing some furniture, furnishings, office supplies and IT equipment for the company. I regard these matters as minimal. Nor do I consider the work that Mr Samuel Egger did in assisting the plaintiff with the home computer as a material contribution to his welfare, either directly or indirectly, whether or not it might have been said to have been made on behalf of the defendant, which I doubt. 128 I consider that the defendant has been fully compensated for the contributions which she made to the fortunes of the company. Conclusion on Parties' s 20 Financial Contributions 129 There is a risk in itemising and seeking to quantify each party's financial contributions to the welfare of the other, of creating an appearance of precision which would be misleading. In many, if not all cases, there is an element of subjective estimate in the claimed expenditures and of the extent to which they were a contribution to the other party's welfare or property. Moreover, even if the figures were entirely accurate, the picture they present would be skewed because there has been no attempt to adjust expenditures in the early period of the relationship for inflation. Nonetheless I consider that an attempt should be made to estimate what were the parties' respective financial contributions. Most of the plaintiff's financial contributions were in the latter years of the relationship or after its termination. Unless those contributions are quantified, it is impossible even to approach a reasoned assessment of what adjustment to the parties' property interests is just and equitable. 130 The plaintiff contended that his financial contributions heavily outweighed those of the defendant. Whilst it was acknowledged that she contributed more as a homemaker, it was submitted that her contribution in that respect did not displace to any substantial extent the heavy disparity in the plaintiff's financial contributions to the defendant's welfare or property. It was submitted that the appropriate adjustment to be made was that the defendant be entitled to 70% of the proceeds of sale of the 10 Abernethy Street property. That property has an agreed value of $2,900,000. Hence the effect of accepting the submission would be to increase the plaintiff's beneficial interest in that property by 29%. He would benefit by $841,000. However when all the financial contributions are quantified, it can be seen that even if all the non-financial contributions are ignored, such an adjustment would be greatly in excess of the amount by which the plaintiff's financial contributions for the defendant's benefit exceeded hers for his. 131 That only becomes apparent if the quantum of the financial contributions is identified. The sum of the financial contributions for which the plaintiff is to be given credit as referred to in paras 58, 64, 66, 67, 68, 70, 78, 93, 107, 108, 109, 110 and 111 is $597,000 (plus the value of occupation from the date of hearing to judgment). The sum of the quantified financial contributions by the defendant for the plaintiff's benefit referred to in paras 69, 116 and 117 is $142,000. In addition there are unquantified financial contributions made by her as referred to in paras 55 and 117. The plaintiff's financial contributions exceed those of the defendant by less than $450,000. 132 The parties adopted a common position that although all relevant contributions should be considered, an adjusting order should be made to the parties' interests in 10 Abernethy Street. At most the disparity in financial contributions would warrant an adjustment in the plaintiff's favour of about 15% in the beneficial interests in Abernethy Street. However such an adjustment would ignore their respective non-financial contributions. Defendant's Contribution as a Homemaker to the Welfare of the Defendant

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133 I accept the defendant's evidence as to the extent of the domestic work which she undertook for the plaintiff's benefit, even though I do not accept her evidence of frequent conversations with the plaintiff in which he acknowledged the unfairness of the situation. The defendant's evidence of what she did was given in some detail. It is not necessary to repeat the detail in these reasons. It is sufficient to say that at the Jenner Street properties, and later at the Abernethy Street property, the defendant did the cooking, she tidied up after the plaintiff, she did the dishwashing (including packing and unpacking the dishwasher), she cleaned the properties, she did the shopping, she did the washing and the ironing. She also did more work in the garden than did the plaintiff. The parties continued to visit the plaintiff's Lake Macquarie house on weekends and over Christmas until 1994. The defendant cleaned that house as well. She also assisted in the gardening. She did not visit the property after 1994 after an unfortunate incident with a rat. 134 She did this for the whole time the plaintiff was in the house. The domestic chores were onerous, even though from about 1994 until September 1999 a cleaner was engaged for 3 - 3½ hours per week. The plaintiff was described by Samuel Egger as the messiest man he had ever seen. The defendant performed these chores with a frequency and to a standard the plaintiff may have regarded as excessive. However it was a substantial burden on her, which benefited him, which she assumed when she also must have been burdened by heavy workloads in her profession. 135 I regard this domestic work, carried on as it was day after day, as being a substantial contribution to be taken into account in considering what adjustment to the interest of the parties in their property is just and equitable. That is so notwithstanding that the defendant did not devote her whole or substantially the whole of her time to performing duties as a homemaker. She was herself engaged in full-time employment. But the domestic chores were not reduced on that account. They had still to be done, and she did them.

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Allegations of Violence and Abuse 136 The defendant submitted that her contributions as a homemaker should be given additional weight because in the later years of the relationship they were more arduous due to the plaintiff's abusive conduct towards her. 137 The defendant claimed that on about four occasions in 1994 the plaintiff slapped her across the face during arguments. It was common ground that in 1995 there were altercations between them in which she hit him on the head with a shoe, an action which the defendant says was prompted by a physical attack upon her. The defendant gave evidence that on three occasions in 1996 she was pushed by the plaintiff and stumbled and on one occasion she was slapped across the face by the plaintiff. This was the incident which led her to leave the house in April 1996. The defendant also says that on or about five occasions between 1997 and early 1998 she was slapped once across the face by the plaintiff. She gave evidence that in June 1998 she approached the plaintiff and asked to talk and in response was slapped across the face. She said that a few days later when she asked the plaintiff whether they could at least talk he said "Get out of here" and pushed her out of the room and down a flight of six or seven stairs. A week or so later when she repeated her request that they talk he told her that he did not want to talk to her and hit her over the side of the head. She said that in December 1998 when she and the plaintiff were in Perth for her nephew's wedding, he kicked her in the stomach several times causing her to vomit and to be ill for several days. She claimed that in January 1999 she was verbally abused by the plaintiff and on one evening he repeatedly punched her causing many large bruises. She said that on this occasion Ms Walker, Samuel Egger's girlfriend, took her to stay at her place in Harbord for three days. Ms Walker was not called to corroborate the defendant's evidence. 138 The plaintiff also said that in the first week of March 1999, following a disagreement, the plaintiff slapped her across the face causing her earring to rip out of her earlobe and that he pushed her down a small flight of stairs. She said that in May of that year the plaintiff slapped her across the face several times and she moved her clothes downstairs where she spent about half of the next five months. From June 1999 the defendant claimed that she avoided contact with the plaintiff because she was in fear of physical assault. She said that on about two or three occasions at about this time she was hit across the face and her fingers were bent back and injured. She said that on another occasion she was choked to the point of unconsciousness and suffered a number of bruises around the throat. She said that there were further episodes of verbal abuse in August and that she was slapped on another four or five occasions at this time. Finally, for present purposes, on 7 September 1999 there was another physical altercation between the parties. 139 It was the plaintiff's case that from about August 1999 the defendant set out to provoke the plaintiff into some act that would provide a basis for a complaint of an apprehended domestic or personal violence offence. Following the incident on 7 September 1999 the plaintiff remained in the house. Certainly the defendant addressed a very abusive letter to him at this time, but I am not satisfied that that allegation (which goes only to credit) is made out. 140 The defendant filed a summons in the Local Court on 19 October 1999 seeking an apprehended violence order. In support of that summons she prepared a statement which stated that over the previous twelve months she had been subjected to verbal and physical abuse on several occasions. She also said in the statement that prior to September 1998 there had been physical and verbal abuse, but not as frequent or as serious as that after September 1998. In the statement she gave evidence, which she repeated before me, of the events from December 1998 to September 1999. On 26 October 1999 an order was made in the Manly Local Court that the plaintiff was not to enter upon the downstairs area of the dwelling at 10 Abernethy Street, Seaforth (except the laundry area which he might access externally). The plaintiff was permitted to occupy the upstairs area of those premises. A final order was made on 22 February 2000. By that order the plaintiff was excluded from entering the main house at Abernethy Street. He was permitted to occupy the small separate cottage of that street which had been occupied by Mr Piggott. However he vacated the premises, in fear, he said, of physical reprisals from the defendant's son if he did not. 141 I take the plaintiff to have denied the defendant's allegations. The plaintiff submitted that I should not be satisfied, having regard to the seriousness of the allegations, that the conduct alleged by the defendant occurred. It was a matter of word against word, with no corroborative evidence adduced by the defendant, although in respect of at least one of the incidents in which the defendant said that she received assistance from Ms Walker, corroborative evidence should have been available if the incident occurred as she alleged. Nor was evidence given by Mr Samuel Egger or Mr Piggott of having observed any injuries to the defendant. It was also submitted that some parts of the defendant's descriptions of being attacked were unbelievable and that her evidence must have been exaggerated. She described the incident of 10 December 1998 where she claimed that the plaintiff kicked her in the stomach several times. She said she was standing while the plaintiff was lying on the bed and that he half raised himself and repeatedly kicked her in the stomach. It was suggested that in those circumstances, she could have simply stepped back after the first kick. However I do not think that is necessarily so, nor that the circumstances can be accurately recaptured in questions and answers in cross-examination which seek a logical explanation for behaviour where the parties were not acting logically. 142 The plaintiff also said that if the incidents had occurred, as the defendant claimed, she would have gone to the police. However the defendant said that although she was fearful of her safety before and following the attacks in 1995, 1997, 1998 and 1999, she did not want the embarrassment that would follow from recounting her experiences in court if she approached the police. 143 The plaintiff also submitted that the defendant's evidence of events prior to September 1998 was inconsistent with her statement in the Local Court proceedings to which I have referred above. However I see no inconsistency. 144 I have previously explained that I have some reservations about the accuracy of the defendant's evidence in which she has recounted details of conversations which occurred many years in the past with the plaintiff and where I consider that the accuracy of her recollection has been affected by the stress of the breakdown of the relationship, the disputes between the parties and the litigation. That does not mean however that I do not accept her as a witness who endeavoured to tell the truth. In relation to her evidence of physical and verbal abuse, I consider that her evidence should generally be accepted. It is likely that she would remember those events if they occurred and I do not think she was making them up. I consider her memory of those incidents to be much more reliable than her reconstruction of conversations. On this subject, I consider her evidence more reliable than the plaintiff's denials. Also, in a number of cases, her conduct immediately after the incidents in question is consistent with events having occurred as she deposed. Thus although the plaintiff rightly points to the absence of corroboration from Ms Walker of the defendant's evidence of having been taken by Ms Walker to stay after she was repeatedly punched in January 1999, such that she had many large bruises on her body, the defendant did leave the house to stay with Ms Walker for a number of days and on her return she slept in a separate room from the plaintiff. Similarly, in 1996 the defendant left the house and rented a flat in Manly for a short period, which is consistent with her evidence that their relationship had deteriorated to the extent that she had been slapped across the face so that when the plaintiff went overseas for about two weeks, she moved out of the home. 145 Nor is the absence of corroborative evidence from Mr Samuel Egger and Mr Piggott a sufficient reason for preferring the defendant's denials. The defendant simply did not confide these events affecting her personal life in them. Mr Egger did give evidence of his mother being upset from time to time. But it is understandable that she did not confide in him, the reasons for her being upset. 146 I also accept the defendant's explanation for not having called the police. In her professional work, the plaintiff had written and worked extensively in the area of domestic violence. She would have regarded it as humiliating to have made a complaint to the police. It was that, coupled with a hope that matters would improve, or the parties' relationship would end, which is the explanation for her not complaining. 147 Notwithstanding the seriousness of the allegation which is made, I am satisfied on the balance of probabilities, having taken into account the gravity of the matters alleged, that the conduct as described by the defendant to which I have referred above, occurred. 148 Uninstructed by authority it would seem to me that this evidence is potentially relevant in three ways. First, the plaintiff's conduct may have increased the arduousness of the defendant's contributions as a homemaker such that they should be given greater weight. Secondly, this aspect of the plaintiff's conduct could be considered when making an assessment of the extent to which, overall, he contributed to the defendant's welfare. Thirdly, this aspect of his conduct could be assessed when considering the nature and incidents of the relationship as a whole as providing the context within which a judgment is to be made of what adjustment of property interests is just and equitable having regard to the parties' contributions within s 20(1)(a) and (b). 149 There is no doubt that the evidence is relevant in the first of these ways. (Jackson v Jackson [2000] NSWCA 303 at [29]-[31]. The plaintiff submitted that this was the only way in which the evidence could be relevant, and in support of this submission relied on the observations of Santow AJA (as his Honour then was) in Killick v Killick (1997) DFC 95-180 at 77,568 and the decision of the Full Court of the Family Court in Kennon v Kennon (1997) 22 Fam LR 1 at 22, 24.) 150 These authorities do support the plaintiff's submissions as to the limited basis on which the evidence is relevant and the defendant did not seek to support its relevance on any wider ground. Accordingly, I will not treat it as having a wider significance. 151 The plaintiff also submitted that there was no evidence that such conduct increased the arduousness of the defendant's contributions. It was submitted that it was not self-evident that it would do so. I do not agree. I think it is self-evident that the contributions made by the defendant as a homemaker were more arduous by reason of the fact that the person for whom she was working about the house descended, on occasion, to such conduct. It is a factor which increases the weight to be given to her role as a homemaker. Parties' Assets at the Hearing 152 As at the hearing the plaintiff had the following assets:

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(a) her interest in 10 Abernethy Street, Seaforth worth $1,711,000; (b) bank savings totalling $136,979; (c) financial resources comprising interests in superannuation accounts totalling $542,283; 155 On the basis that she had no liability to Indecs Llwynog, she had no material liabilities. Her assets, including her superannuation accounts, therefore totalled about $2,390,000. 156 The net worth of each party had substantially increased since the commencement of the relationship. A precise comparison of their respective increases in net worth is not possible as the evidence did not establish the value of the plaintiff's real property at the commencement of the relationship. I infer however that there was a substantial increase in their capital value. Leaving aside the 10 Abernethy Street, Seaforth property, this is not a case in which the financial or non-financial contributions made by the defendant contributed to the increase in the net worth of the plaintiff. The increase in his net worth is primarily due to the increase in capital value of the real property which he owned before the commencement of the relationship and to the value of Indecs Llwynog Pty Ltd. The assets held by that company are primarily due to the income generated by the plaintiff, or by employees of the company during the years 1996 to 1998. For the reasons I have given, I do not consider that the defendant made a contribution to the financial position of the company for which she has not been fully compensated. Nor, for the reasons I have given, do I consider that the plaintiff's ability to service and extinguish his borrowings is attributable to the efforts of the defendant. Accordingly I do not consider, in the circumstances of this case that a consideration of the disparity of the net worth of each of the parties at the end of the relationship, or a comparison of their positions at the end of the relationship compared with their positions at its beginning, is a useful guide to determining the impact of their respective s 20(1) contributions. However their respective assets have a subsidiary significance when considering what adjustment, if any, to their property interests is just and equitable. (Dwyer v Kaljo (1987) 11 Fam LR 785 at 793; Evans v Marmont at 75). What Adjustment is Just and Equitable? 157 I have not referred to all of the contributions which the parties raised for consideration under s 20(1). It seemed that almost no detail of the parties' eleven-year relationship was omitted as an arguably relevant consideration. Given the width of the criteria in s 20(1) everything which was raised had potential relevance. However not all that was raised had sufficient weight to require separate discussion. By way of example, the defendant often drove the plaintiff to the ferry. Doubtless that contributed to his welfare, but I cannot think that it could have any effect on what order, if any, should be made adjusting their interests in property. The matters which I have previously identified are the contributions falling within paras 20(1)(a) and (b) which I consider to be sufficiently material potentially to warrant an adjusting order. 158 For the reasons I have given the financial contributions under para (a) and (b) favour the plaintiff. But for the defendant's contribution as a homemaker, the balance of contributions would favour the plaintiff, even after taking account of the defendant's work in painting, maintaining and renovating Nos. 8 and 22 Jenner Street, Seaforth. 159 The difficulty is in assessing how the defendant's contribution as a homemaker, is to be assessed. It is not to be given a monetary value by reference to how much it would cost to have a third party provide those services, but is to be given "full and proper value" (Evans v Marmont at [74]). 160 It is neither necessary nor appropriate to put a monetary value on the defendant's contribution as a homemaker in order to reach an accounting balance. In Davey v Lee (1990) 13 Fam LR 688, McLelland J (as his Honour then was) said that rather than putting a monetary value on each alleged contribution to reach an accounting balance, the Court was required to make a holistic value judgment in the exercise of a very general discretionary power. The Courts are usually unable to say why contributions of a non-financial kind to the welfare of another party should be reflected in an adjusting order in any one particular sum rather than some other sum (eg Evans v Marmont at 85B and 97C; Powell v Supresencia (2003) 30 Fam LR 463; [2003] NSWCA 195 at [77], [78]). The criteria to guide a discretionary judgment are so general that in the final analysis, the outcome depends on the judge's impression of a mix of factors whose weight cannot be exactly weighed. 161 In paragraph 131, I identified the financial contributions of the parties as favouring the plaintiff by no more than $450,000. 162 If valued only in monetary terms, it may be doubted whether the defendant's non-financial contributions, including those as homemaker, would be valued as high, even recognising that she performed that role for over eleven years (although less completely in the first three years). 163 However I prefer not to attempt an assessment of the defendant's non-financial contribution in monetary terms. In my view, the defendant in making her contributions as a homemaker, including her contributions to domestic expenditure, but more significantly by her labour, carried out her role in the relationship at least as well and as fully as the plaintiff carried out his role in, principally, making financial contributions. (Mallet v Mallet (1984) 156 CLR 605 at 625, 636). If I am wrong in this, nonetheless, there are three other matters to be considered in the final judgment. The first is to recognise the substantial margin for error in the assessment of the parties' respective financial contributions. The second is that during the course of the relationship there would have been reciprocal benefits of an intangible kind such as companionship and emotional support passing between the parties. The third is that the parties' present means are relevant as a subsidiary consideration, in assessing what adjustment, if any, is just and equitable. The plaintiff has substantially more means than the defendant, although both are relatively well provided for and able to earn income. It is not obviously just that he should be enriched at her expense by the making of an adjusting order to reflect the fact (if it be a fact) that he, being richer than she to begin with, brought more money to the relationship for her benefit than she contributed in monetary and non-monetary terms for his benefit. 164 Having regard to these considerations I do not consider that any order adjusting the parties' beneficial interests in 10 Abernethy Street would be just and equitable. Section 19 165 Section 19 requires the Court, so far as practicable, to make such orders as will finally determine the financial relationship between the parties and avoid further proceedings between them.

At a glance

Court

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Before

Source

Judgment (107 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (20)