Kozjak v Oswin

Court of Appeal (NSW)|2010-10-07|Before: Beazley JA, Hodgson JA, Hodgson J

CITATION: Kozjak v Oswin [2010] NSWCA 260

JUDGMENT OF: Beazley JA at [1], [55], [57]; Hodgson JA at [2]; Handley AJA at [56]

DECISION: 1. That the parties are directed to bring in agreed short minutes of order reflecting the court's judgment within seven days from today's date. 2. Should the parties not be able to agree to the orders to be made, then the appellant should bring in his form of short minutes within seven days and the respondent is to bring in her form of short minutes within seven days, together with any accompanying submissions, not exceeding three pages, and that these documents be lodged in the Court of Appeal submission box located on Level 12.

CATCHWORDS: FAMILY LAW - De facto relationships - Adjustment of property interests - Whether error by primary judge - Re-determination by Court of Appeal.

LEGISLATION CITED: Conveyancing Act 1919 s.66G Property Relationships Act 1984 s.20

PARTIES: Richard Charles KOZJAK (appellant) Kerin Jayne OSWIN (respondent)

COUNSEL: R THOMAS (appellant) E A COHEN (respondent)

SOLICITORS: Trevor Barker (appellant) Broun Abrahams Burreket (respondent)

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT JUDICIAL OFFICER: McLaughlin AsJ

LOWER COURT DATE OF DECISION: 22 May 2009, 5 August 2009

LOWER COURT MEDIUM NEUTRAL CITATION: Oswin v Kozjak [2009] NSWSC 433, Oswin v Kozjak [No 2] [2009] NSWSC 1232

16 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 2007/255779 SC 3604/2007

BEAZLEY JA HODGSON JA HANDLEY AJA

THURSDAY 7 OCTOBER 2010 Richard Charles KOZJAK v Kerin Jayne OSWIN Judgment 1 BEAZLEY JA: I will ask Justice Hodgson to deliver the first judgment. 2 HODGSON JA: This appeal arises out of proceedings in which the respondent, Ms Oswin, sued the appellant, Mr Kozjak, claiming relief under the Property (Relationships) Act 1984 (the Act), and in which Mr Kozjak put on a cross-claim. 3 In reasons for judgment given on 22 May 2009, McLaughlin AsJ determined to the effect that: (a) each party was entitled to retain beneficially his or her share of the property in Keith Street, Clovelly; (b) Ms Oswin was entitled to receive from Mr Kozjak one half of the net rental income from that property from 25 July 2005 to the date of the orders in the case, and Mr Kozjak was entitled to retain the other half of that income; (c) Ms Oswin was entitled to be paid a sum calculated at $182,272 at the time of the hearing, by Virtual Developments Pty Limited (Virtual Developments) a company owned and controlled by Mr Kozjak; (d) unless the parties reached some other agreement, trustees should be appointed for the sale of the Keith Street property under s.66G of the Conveyancing Act 1919. 4 On 16 November 2009, the associate judge gave a second judgment, and made orders giving effect to his determination providing, inter alia, that Mr Kozjak should pay Ms Oswin $600,000, which was half the agreed value of the Keith Street property, and $15,000, agreed to be half of the net rental income from that property; and that Mr Kozjak should cause Virtual Developments to pay Ms Oswin $191,952, which was agreed by the parties to be the sum owing in relation to loans made by Ms Oswin. 5 The associate judge also ordered Mr Kozjak to pay Ms Oswin's costs of the proceedings, those costs being on an indemnity basis after 7 August 2008. 6 Mr Kozjak appeals from the decision of the associate judge. 7 The following facts are either common ground or clearly established. 8 Ms Oswin was born in 1965; Mr Kozjak in 1969. They lived in a de facto relationship from June 1997 to 25 July 2005. There were no children born of that relationship. 9 At the time of the commencement of the relationship, Ms Oswin was employed as a flight attendant with Ansett earning a taxable income of about $60,000 a year. She was residing in rental accommodation at Waverley, and had little by way of assets, other than a motor car and a superannuation entitlement estimated at $30,000 to $40,000. 10 At that time, Mr Kozjak was working as a property developer and builder in a partnership called R&R Kozjak trading as Hapning Homes. His assets were found by the associate judge to consist of a Holden utility; savings of $24,610; a share in a company Sentient Pty Limited (Sentient) given no value; a half interest in Hapning Homes then worth $29,363 according to Mr Kozjak; $355,099 advanced to Xcel Properties Pty Limited (Xcel Properties) in which Mr Kozjak owned half the issued shares; and furniture and personal effects. 11 I note that the accounts of Hapning Homes for the year ended 30 June 1998 (2 Blue 329-333) indicate that around $300,000 of the $355,099 referred to had been borrowed by Sentient from Hapning Homes and, inferredly, on-lent to Mr Kozjak. So, of the $355,099, it seems clear that only about $55,000 can be considered as a net asset of his. 12 Mr Kozjak moved into residence with Ms Oswin in her rented flat in about June 1997. They later moved to another apartment in the same complex, and remained there until about August 1999. 13 In November 1997, Xcel Properties purchased a property in Collins Street, Annandale for a little over $1.5 million, financed by a loan of about $1 million and contributions from Mr Kozjak and the then other half owner of Xcel Properties. A development of eight residential units was constructed and these units were sold. According to a statement in evidence (1 Blue 77), as at 24 March 1999 there was a net profit on this project of around $320,000. It would appear that Mr Kozjak or one of his companies must have received in the order of $160,000 from this development, in addition to his original advance. 14 In August 1999, Mr Kozjak and Ms Oswin purchased a residential unit in Margaret Street, Redfern for just under $280,000. Prior to this purchase, Ms Oswin had paid $17,000 to Sentient. The property was purchased with the aid of a loan of $240,000 from Aussie Home Loans, and the balance was provided by Sentient. 15 In July 2000, Mr Kozjak and Ms Oswin arranged for the loan from Aussie Home Loans to be divided into two loans of $120,000 each, in the names of Ms Oswin and Mr Kozjak respectively, after which each made payments on her and his own mortgage. 16 In August 2001, the Redfern property was sold for $341,000, and the net proceeds of sale after payments of loans were an amount of $92,571. The whole of this amount was paid to Virtual Developments. 17 Meanwhile, in April 1999, Virtual Developments had purchased a property in Flood Street, Clovelly for $755,000. It appears that about $586,000 of this was provided by St George Bank, about $132,000 by Sentient and about $118,000 by the other of the two original shareholders in Virtual Developments, who later transferred his share to Mr Kozjak. At the time of the hearing, Virtual Developments was wholly owned by Mr Kozjak. 18 A redevelopment of this site took place between October 2000 and late 2001, and it resulted in four townhouses. One of these units was sold in December 2001 for $77,000, and another in March 2002 for $81,000. 19 After the sale of the Redfern property in August 2001, Mr Kozjak and Ms Oswin moved into unit 3 of the Flood Street development, where they resided until the end of their relationship in June 2005. 20 In March 2002, Ansett went into liquidation. Ms Oswin's employment was terminated. Over the following year, she worked on a casual basis in a variety of employments. In March 2003, she obtained a position with Impulse Airlines, later Jetstar, as a flight attendant instructor, and she continued in that employment until the hearing. 21 In December 2003, the property in Keith Street was purchased in the names of Ms Oswin and Mr Kozjak as joint tenants for $950,000. The purchase was funded by a deposit of 10 per cent paid by Virtual Developments and a loan to Virtual Developments from GE Finance secured over the two units in Flood Street. The books of Virtual Developments show the purchase price for this property was loaned by Virtual Developments to Mr Kozjak and Ms Oswin. 22 A development application in respect of that property was granted, but no development has proceeded. The house on the site was rented at $420 per week, with Mr Kozjak retaining the entirety of this rent. At the time of the separation the loan from GE amounted to just over $1.1 million. 23 After separation Ms Oswin continued to reside at Unit 3 Flood Street until June 2006. This unit was sold in March 2007 for $1,231,000, and from those proceeds the loan from GE was discharged, and the remaining sum of around $110,000 went to Virtual Developments. 24 It was agreed that the value of Unit 2 at Flood Street, which remained in the ownership of Virtual Developments, was $800,000 as at 25 July 2005 and $1 million at the date of the hearing. It was also agreed that the value of the Keith Street property at the date of the hearing was $1.2 million, with the benefit of the development application, and $1,080,000, without that benefit. 25 A statement of the assets and liabilities of the parties as at the date of separation and as at the date of hearing is complicated by the existence of companies owned by Mr Kozjak, notably Virtual Developments and Sentient. In my view, this statement is best made by treating the assets of those companies as assets of Mr Kozjak. 26 The associate judge treated money paid by Ms Oswin to Virtual Developments and money paid to Virtual Developments from Ms Oswin's share of the proceeds of sale of the Redfern property as loans by her to Virtual Developments. In my opinion, it is best, in the first instance, to leave out of account the loans as between Ms Oswin and Virtual Developments. 27 On that basis, very broadly, the assets of the parties at the date of separation were the Keith Street property in joint names; the Flood Street units owned by Virtual Developments; furniture owned by both parties; shares in ING, Ms Oswin's shares being worth $2,036, and Mr Kozjak's shares being worth $2,045; Telstra shares owned by Ms Oswin; savings of Ms Oswin of around $20,000; and superannuation of Ms Oswin of around $49,000. 28 At that time, the major liabilities were the loan to Virtual Developments from GE of a little over $1.1 million, and a loan to Mr Kozjak from his parents of a little over $122,000. 29 At the date of the hearing, the assets were the Keith Street property in joint names, then valued at $1.2 million; the last Flood Street unit owned by Virtual Developments agreed at $1 million; the furniture; the ING shares then worth a little less; the Telstra shares owned by Ms Oswin then said to be worth $1,836; Ms Oswin's savings then about $1,000; and her superannuation then $67,796. 30 The major liabilities at that time were a liability of Mr Kozjak to the ING Bank, replacing his liability to his parents, of just under $154,000; and Ms Oswin's credit card liability of $11,675. 31 However, it is also relevant to the assets of the parties at the time of separation and hearing that there were loans recorded as involving Ms Oswin and Virtual Developments. Loans involving only Mr Kozjak and Virtual Developments can be ignored because Virtual Developments was wholly owned by Mr Kozjak. Firstly, there was a recorded loan from Ms Oswin to Virtual Developments, partly from the proceeds of sale of the Redfern property, agreed by the parties to be $191,952 at the end of the orders. Second, there was Ms Oswin's share of the loan from Virtual Developments to both parties to provide for the purchase of the Keith Street property, which at the time of the termination of the relationship was recorded at $1,112,817. 32 The primary judge, having set out the facts, made the following findings and gave the following reasons in support of his decision: [56] At the commencement of the subject relationship the Plaintiff had little by way of assets, apart from a motor vehicle and a superannuation entitlement. The real property assets which were acquired by the parties during the course of the relationship were essentially acquired as a result of borrowings made by the Defendant (or companies in which he had an interest), and property development work then performed by the Defendant, which required the exercise of the Defendant's expertise and experience in that field. Although the Plaintiff asserted that she had a significant input of a non-financial nature into the acquisition of property sites, and into the decorational work performed in a number of the residential units (especially that at Flood St, which was for a significant period the residential home of the parties), the extent of that input was disputed by the Defendant.

[57] It will be appreciated, first, that the Plaintiff throughout the relationship was in receipt of a relatively small income from her employment by Ansett and later by Jetstar (and an even smaller income during the year when she was not employed by either of those airlines). Further, that the nature of her employment, at least by Ansett, required absences from Sydney for substantial periods.

[58] Where the evidence of the Plaintiff and that of the Defendant were in conflict, especially regarding the extent of the financial and non-financial contributions of the Plaintiff towards the relationship (including, for example, household expenditure), I prefer the evidence of the Defendant to that of the Plaintiff. I regarded the Plaintiff as not a particularly reliable historian. Her response to many of the questions asked to her in cross-examination was that she could not remember. The Defendant, on the other hand, provided very full documentary material in support of his oral evidence regarding the extent of his financial contributions during the course of the relationship, especially regarding household outgoings, and regarding the various property development projects.

[59] Whilst I accept that the Plaintiff made contributions as a homemaker, I do not accept that those contributions were as great as she asserted. Further, whilst she made contributions of a financial nature towards the outgoings of the household throughout the relationship, again, I am not satisfied that they were as great as she asserted.

[60] The Plaintiff made a significant financial contribution towards the acquisition of the Flood St property, by advancing the sum of $81,085 to the Defendant. That sum included the amount of $46,285, representing the Plaintiff's one half share in the net proceeds of sale of the Redfern property.

[61] The foregoing sum of $81,085 was treated by the parties as an advance by way of loan to Virtual Developments at an interest rate of 12% per annum. Further, the Plaintiff also received the Peugeot motor vehicle during the course of the relationship, although I recognise that it was the Plaintiff herself who made the significant payments (indeed, almost the totality thereof) towards the leasing of that vehicle and towards the final residual payment thereof.

[62] At the termination of the relationship the Plaintiff had, essentially, a motor vehicle, savings of $20,000, a superannuation entitlement, her interest in the Keith St property, and the indebtedness owing to her by Virtual Developments (together with accrued interest thereon), in a total amount of $130,855. The Plaintiff is entitled to receive repayment of that amount, together with interest at the agreed rate of 12% per annum. At the time of the hearing that indebtedness was calculated to total $182,222.

[63] The assets of the Defendant (either in his own name or held by him through the vehicles of Virtual Developments and Sentient) at the termination of the relationship essentially consisted of the two unsold residential units in the Flood St development (one of which units was subsequently sold in March 2007 for $1,231,000), and his interest in the Keith St property.

[64] I consider that the contributions of the Plaintiff of the nature set forth in s 20(1) of the Act entitle her to retain beneficially her one half interest in the Keith St property (which has a present agreed value of either $1,200,000 (inclusive of DA) or $1,080,000 (exclusive of DA)) and to receive from the Defendant one half of the net rental income from that property from 25 July 2005 to the date of the orders herein.

[65] I turn now to the cross-claim of the Defendant. Essentially the Defendant seeks that the Plaintiff should transfer to him her interest in the Keith St property, he, in return, indemnifying her in respect to the asserted joint liability of the parties to Virtual Developments.

[66] It should be recognised that the Plaintiff and the Defendant were in de facto relationship. They were not conducting a commercial partnership of the kind recognised by the Partnership Act of 1890. The fact that the Plaintiff had an input and made a contribution (either directly by way of cash advances, or indirectly by way of assistance in choosing furniture, décor and decorations) into some of the commercial activities of the Defendant does not have the consequence of imposing upon the Plaintiff a burden of the liabilities resulting from those commercial enterprises of the Defendant. As I have already observed, in claims under the Property (Relationships) Act the court should not be diverted from the express words contained in s 20(1) of the statute, and should ground its decision, in the exercise of its discretion, upon the respective contributions of the parties of the nature described in that subsection.

[67] The accounts of Virtual Developments disclose a joint indebtedness of the parties to that company in the sum $1,241,542. That indebtedness is described as a loan to the parties. It is apparent that the Plaintiff never received the benefit of that sum or any part thereof from Virtual Developments. I observe that there was some suggestion on the part of the Plaintiff that although her signature appeared on photocopies of certain documents relied upon by the Defendant, her signature was not on the originals of those documents. Whether or not the Plaintiff did, in fact, sign the originals, she did not ever receive from Virtual Developments the foregoing sum or any part thereof.

[68] Further, it should not be overlooked that, while the Plaintiff and the Defendant are asserted to have a joint liability to Virtual Developments, the Defendant is the sole shareholder and sole director of that company. The effect of the liability of the Plaintiff to Virtual Developments, asserted by the Defendant in his cross-claim, would be to reduce by half the liability of the Defendant, through Virtual Developments, in respect to the Flood St property, while in no way benefiting the Plaintiff through the sale of the various units in Flood St or the beneficial interest which the Defendant currently has in the remaining unsold unit in Flood St (which has a current agreed value of $1,000,000 and which at 25 July 2005 had an agreed value of $800,000). The Defendant cannot have it both ways. Either the Plaintiff has a joint liability to Virtual Developments, and also has a joint interest in the assets of that company and in the proceeds of sale of the units in Flood St which have already been sold (and the benefit of which sales have been received by the Defendant); or, if the Plaintiff is not entitled to any interest in the Flood St property, then she can have no liability to Virtual Developments in respect to the Flood St project.

[69] Whilst I recognise that a commercial loss resulting in the parties, or one of them, having assets of a reduced or non-existent value at the conclusion of the relationship may (indeed, probably will) have the practical consequence that the contributions of the other party to the relationship, will not be able to be adequately recognised, I not understand that the effect of the subsection is to require that one of the parties contribute to the liability of the other party.

[70] I consider that the contributions of the Defendant of the nature set forth in s 20(1) of the Act entitle him to retain beneficially his one half interest in the Keith St property and one half of the net rental income from that property from 25 July 2005 to the date of the orders herein. 33 There is an error in par [60], in that Ms Oswin's advance of $81,085 was not for the acquisition of Flood Street, because Flood Street was acquired in 1999 before the Redfern property was sold. It may have been used, however, for the development of Flood Street. No-one suggests that any particular consequences flow from this error. 34 Mr Kozjak relied on the following grounds of appeal: 1 The learned judge erred in law in failing to identify with precision the assets of the parties acquired during the course of the relationship.

2 The learned judge erred in law by failing to identify with precision the liabilities of the parties and the liabilities which attached to the assets identified in the proceedings.

3 The learned judge erred in law by failing to identify with precision the financial contributions of the parties to the acquisition of the assets identified in the proceedings and by failing to identify and evaluate the nature and source of those contributions.

4 The learned judge erred in law by failing to adopt an asset by asset approach to the determination of the adjustment of the parties' interests in the assets.

5 The learned judge erred in law by failing to recognise and acknowledge the interests of third parties in assets identified in the proceedings where those third parties were not joined in the proceedings.

6 The learned judge erred in law by proceedings [sic] upon the basis that the appellant was responsible for the repayment of monies lent by the respondent to third party corporate entities.

7 The learned judge erred in finding that the respondent "made a significant financial contribution towards the acquisition of the Flood Street property, by advancing the sum of $81,085 to the" appellant, the finding being against the weight of evidence.

8 The learned judge erred in finding that the "assets of the [appellant] (either in his own name or held by him through the vehicles of Virtual Developments and Sentient) at the termination of the relationship essentially consisted of the two unsold residential units in the Flood Street development ...and his interest in the Keith Street property".

9 The learned judge erred in finding that the "contributions of the [respondent] ... entitle her to retain beneficially her one half interest in the Keith Street property... and to receive from the [appellant] one half of the net rental income from that property from 25 July 2005 to the date of the orders herein".

10 The learned judge erred in finding that it would be "inappropriate... to leave the [respondent] to her rights in debt against Virtual Developments in respect to the present liability of that company to her ...".

11 The learned judge erred in failing to take into account the liability of Virtual Developments Pty Ltd to the [respondent] in respect of the monies advanced by her to that company.

12 The learned judge erred in ordering the appellant to pay the respondent's costs.

13 The learned judge erred in ordering the appellant to pay the respondent's costs upon an indemnity basis from 1 August 2008. 35 As argued at the hearing, the challenge to the associate judge's decision focused primarily on the way he dealt with Ms Oswin's share of the debt to Virtual Developments of a little over $1.1 million. The effect of his decision was that Ms Oswin had no liability in respect of that alleged loan from Virtual Developments. (See par [13] of the second judgment of the associate judge of 16 November 2009.) Reasons for that finding appear at pars [67] and [68] of his first judgment set out above. 36 Mr Thomas, for Mr Kozjak, submitted that the statement of the associate judge in par [67] to the effect that Ms Oswin did not receive the benefit of any part of that loan was an error, because the purchase by the parties of the Keith Street property was financed by that loan; and that, insofar as the associate judge in par [68] relied on the circumstance that Ms Oswin got no interest in Flood Street, this was not to the point. 37 Ms Cohen, for Ms Oswin, submitted that the amount borrowed for Keith Street was paid back from the proceeds of sale from the Flood Street unit, and that what the associate judge said in par [67] amounted to justification for treating Ms Oswin's share of the debt to Virtual Developments as being of no substance. 38 In my opinion, pars [67] and [68] of the first judgment do disclose error. It is clear that the whole purchase price for Keith Street was provided by Virtual Developments, so that, in the absence of transactions indicating otherwise, or of an intention to make an advancement, there would be a resulting trust in that property to Virtual Developments. It was not submitted by either party that there was such a resulting trust. 39 In my opinion, what effectively rebutted what would otherwise have been a presumption of resulting trust in this case was the circumstance that Virtual Developments treated its provision of the purchase price as a loan to Mr Kozjak and Ms Oswin. Ms Oswin did not assert that the Keith Street property was a gift from Virtual Developments to herself and Mr Kozjak (Black 60) and, although she denied having a loan agreement with Virtual Developments as shown in the books, in my opinion she cannot, in the circumstances, claim a beneficial half interest in the Keith Street property without acknowledging a liability to Virtual Developments in respect of the money provided by Virtual Developments which wholly paid for that interest. 40 It is not necessary to decide whether this would amount to one half of the loan of over $1.2 million said to have been owing at the date of the hearing. In circumstances where the purchase price was $950,000, in my opinion it is clear that the liability Ms Oswin had to Virtual Developments would have been at least of the order of about $500,000. 41 In circumstances where Virtual Developments is owned by Mr Kozjak, it would have been open to the associate judge to make orders under s 20 of the Act, which had the effect of removing that liability; but the fact is the judge did not purport to do that. Rather, he simply decided to the effect that, quite apart from s 20, Ms Oswin had no liability to Virtual Developments in respect of that loan. 42 In my opinion, that was a material error, and in my opinion that means that this Court must either order a new trial or decide itself. Neither party suggests that there should be a new trial; and in my opinion it is appropriate for this Court to decide the case itself, using the record of evidence and the findings of the associate judge that are not affected by error. 43 In undertaking this exercise this Court can and should take into account some events which have occurred since the decision below. In August 2010 the Keith Street property was sold for $1.455 million, with the agent's and legal costs amounting to about $34,000. From those proceeds $216,185.28 has been paid to Ms Oswin, reflecting the debt of just under $200,000 held to be owing to her by Virtual Developments, and the $15,000 share of rent held to be due to her from Mr Kozjak. The sum of $1,205,019 has been invested in a controlled account. 44 I would approach a decision under s 20 of the Act in the following way. I would take the assets of the parties at the commencement of the relationship, and consider to what extent the value of those assets has increased up to the present. (I leave out of account motor vehicles, furniture and personal effects.) I would not take the date of separation as the cut-off point in this case, because it is from existing assets that any adjustment must be made, and any adjustment should be made on the basis of present day values; and also because the difference between the value of assets at the date of separation and the value at the date of hearing is simply due to movements in values of property held at both dates. I would consider whether the value of the assets now held by each, apart from the effect of any s 20 order, is appropriate, having regard to contributions of both parties; and if not, consider what adjustments should be made. 45 In round terms, the assets at the commencement of relationship were about $40,000 in the case of Ms Oswin, and about $110,000 in the case of Mr Kozjak, making a total of about $150,000. 46 As far as Ms Oswin is concerned, the assets now held are her interest in the remaining balance of the proceeds of Keith Street, namely about $600,000, less half the debt to Virtual Developments which I will take to be also around $600,000; her shares, her savings and superannuation amounting to about $70,000; the amount she has received to date of $216,000. I will assume that her credit card debt is of the same order, that is about $12,000, giving a net figure of $274,000. 47 As regards Mr Kozjak, he has half the balance of proceeds of Keith Street, that is $600,000, plus half the debt to Virtual Developments, another $600,000, giving $1.2 million. There is the remaining Flood Street unit, $1 million. His shares are said to be worth $1,400. I will take it that his debt arising from the earlier debt to his parents is still around $154,000, and that gives a net figure of around $2,047,400. 48 The increase in the assets of both parties since the commencement of the relationship is of the order of $2.17 million. Of that increase, it would seem that Ms Oswin has about $234,000, being the $274,000, less the original $40,000. In my view, for her to have property representing that increase is not reasonable, having regard to her contributions to the relationship and the property of the relationship over the eight years that it endured. 49 However, I do not think this is a case where those contributions would justify a 50/50 apportionment. In accordance with the findings of the primary judge, I think there was a very substantially greater contribution to the increase in assets from the activities of Mr Kozjak. To some extent the parties kept their own assets separate, and there were no children of the relationship. There does not appear to have been any giving up by Ms Oswin of opportunities that she otherwise might have had in order to devote herself to the relationship. There does not appear to have been a very great imbalance in home-making and other non-financial contributions. The relationship lasted eight years. 50 However, the parties did share their lives for eight years, and there were not insignificant contributions made by Ms Oswin to the business activities of Mr Kozjak. I think an appropriate reflection of the respective contributions would give her one third of the increase in the value of the assets over the period in question. 51 That figure is about $720,000 and, adding that to her original $40,000, in my view she should end up with around $760,000. She presently has around $274,000, and the result of this exercise would indicate that, in my view, she should receive from the amount held in the controlled account, another $486,000. 52 The ultimate effect of this gives her around $100,000 less than provided by the associate judge's order. To that extent the appeal has been successful, and I think that success is sufficient to carry the costs of the appeal. There is no severable issue in my view that has increased those costs. 53 For those reasons, in my opinion orders should be made which, in substance, provide for the following: Payment of $486,000 to Ms Oswin from the controlled account. Payment to her of a proportionate share of the interest on that account that has accrued since August 2010. Payment of the balance in that controlled account to Mr Kozjak and/or Virtual Developments in a way that ensures that there will be an effectual discharge by Virtual Developments of any liability of Ms Oswin to Virtual Developments. The costs order below should be maintained, and Ms Oswin should pay Mr Kozjak's costs of the appeal and have a Suitors' Fund certificate, if otherwise eligible. 54 Rather than attempt to formulate the exact orders, I would direct the appellant to bring in short minutes of order within seven days. 55 BEAZLEY JA: I agree. 56 HANDLEY AJA: I agree. 57 BEAZLEY JA: The only orders the court makes today are:

That the parties are directed to bring in agreed short minutes of order reflecting the court's judgment within seven days from today's date.

Should the parties not be able to agree to the orders to be made, then the appellant should bring in his form of short minutes within seven days and the respondent is to bring in her form of short minutes within seven days, together with any accompanying submissions, not exceeding three pages, and that these documents be lodged in the Court of Appeal submission box located on Level 12. oOo

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