Magera v McIntosh [2005] NSWSC 314 | Case summary

1827/04 ANDREW MAGERA v MIRIAM McINTOSH JUDGMENT 1 HIS HONOUR: This is a claim for adjustment of property interests under section 20 of the Property (Relationships) Act 1984. The claim is one by the man, in a heterosexual de facto relationship. An unusual feature of the case is that the plaintiff is aged 85, and the defendant is aged 89. It is this which led to it being given an expedited hearing. Reserved Evidentiary Question 2 In re-examination of the plaintiff a document was tendered, which the plaintiff identified as a photocopy of his cash book. I reserved the question of whether it should be admitted in the proceedings. On looking at it, many of the narrations are written in Hungarian. No reliance was placed on any individual entries in it. Because of many of the narrations being written in Hungarian, it is impossible to obtain an overall picture of the plaintiff's expenditure by reference to it. I reject it on the grounds of (a) relevance, and (b) section 135 Evidence Act 1995. The Facts 3 The defendant was born on 29 September 1915. She was married once only, to Ivor Ernest McIntosh, who died on 18 May 1974. She and her late husband had two children, Charles McIntosh (born 29 March 1935) and Kathleen McPherson (born 7 February 1944). 4 The plaintiff was born on 13 July 1919 in Hungary. He had one marriage which ended in divorce in Hungary. He and his second wife, Anna, had one child. They escaped from Hungary in 1956, and migrated to Australia, settling in Sydney in June 1957. The plaintiff and Anna separated in 1974, and were divorced in 1975. In consequence of property settlement proceedings connected with that divorce, which were concluded before the relationship between the plaintiff and the defendant began, Anna came to have a house property at Kogarah Bay, and the plaintiff a parcel of vacant land at Gwandalan (at the southern end of Lake Macquarie). 5 The plaintiff and the defendant met in June 1978. They went out socially for about eighteen months. In January 1980 the plaintiff commenced living with the defendant in her home at 12 Bulwarra Street Caringbah. He continued to live there until recently. 6 The defendant's home had been purchased by the defendant and her late husband in 1945, with their savings and money borrowed on mortgage. By January 1968 the mortgage on it had been discharged. The defendant was the sole beneficiary under her husband's will. 7 At the time the plaintiff and defendant commenced living together in January 1980 the plaintiff's assets consisted of the block of vacant land at Gwandalan (worth, he says, about $2,000), a motor vehicle (which he values at $1,000), and personal effects of no particular value. Prior to moving in with the defendant the plaintiff had been boarding with a family in Sans Souci. There, he had a room, and use of a garage to store some things, and breakfast and dinner, for $30 per week. The plaintiff had trade qualifications as a fitter and turner, and his personal effects included tools, materials and equipment of a kind useful in engineering. 8 At the commencement of the relationship the plaintiff was employed as either a machine setter (according to his affidavit) or a tool-room storeman (according to an allegation in his Statement of Claim which is admitted). He received a wage from his employer of $120 per week. 9 The defendant's income at that time was derived from a widow's pension. She has continued to receive a widow's pension continually thereafter. 10 In 1982 the plaintiff's employer closed down, and the plaintiff became redundant. He received a redundancy payment of $4,704.86. That cheque was banked into the defendant's bank account. 11 From that time until the plaintiff turned 65 he received unemployment benefits. Once he turned 65, in July 1984, he started to receive the aged pension. At all times until June 2003 he received the aged pension at the single rate. He says that he was under a misapprehension that he was entitled to receive benefits at the single rate from the time of his redundancy, and that it was only in April 2003 that he found out that that might not be the case, whereupon he informed Centrelink that he was living in a de facto relationship. He had been receiving pension at the rate of around $400 per fortnight, but in June 2003 his pension was reduced to $300 per fortnight, and it still remains around that figure. He has a liability to Centrelink to repay the overpayments he received from the time of his retirement until June 2003. 12 The defendant's pension is presently being paid at the rate of $632.90 per fortnight. 13 The issues in this case were defined by pleadings. The defendant did not admit the existence of a de facto relationship. At the hearing, large parts of the affidavit which the plaintiff had sworn, and which denied the existence of a de facto relationship, were not read. The defendant's written outline of submissions contained an admission (said to be for the purpose of these proceedings) that the plaintiff and the defendant lived in a domestic relationship from January 1980 or thereabouts, up to 31 October 2003 or thereabouts. Activities Together Before and During the Relationship 14 The plaintiff and the defendant met, in June 1978, at a dance at Kogarah RSL Club. Over the ensuing years they would go dancing three to four times a week. There was a period during 1979 when the plaintiff regularly stayed overnight with the defendant, with increasing frequency. From December 1979 the plaintiff was staying with the defendant more than he was staying at his boarding place at Sans Souci. The plaintiff and the defendant had Christmas in 1979 at the defendant's daughter's home. On Boxing Day of 1979 the plaintiff and the defendant together visited the defendant's son. In January 1980 the plaintiff and the defendant went camping together, on the defendant's block of land at Gwandalan, for nearly a fortnight. 15 At the end of January 1980 the plaintiff became ill with shingles. The defendant nursed him until he was well. In February 1980 the plaintiff gave up his boarding arrangements at Sans Souci. 16 Over the period from February 1980 to 31 October 2003 the plaintiff and the defendant shared the same bed, had sexual intercourse, shared the living expenses, had their meals together, holidayed together, and went out socially together. During the time that the plaintiff was working, the defendant made him breakfast each morning. While the plaintiff was working they went out regularly to local clubs for dinner, and dancing. 17 After the plaintiff was made redundant in 1982 their social life was curtailed to some extent, but by no means completely. The plaintiff was a member of a bowling club when he started living with the defendant, and each year until 1987, when the plaintiff gave up bowls, the plaintiff and the defendant went on a trip connected with bowling to Merewether for the weekend. There were occasions when they travelled to Dubbo, where the defendant's son was then living. When they were there, they shared the same bedroom in the son's home. In June 1983 they holidayed for a week at a farm in Berridale, owned by the plaintiff's daughter and her husband. While there, the defendant saw snow for the first time, which excited her. They went on a day trip to the Snowy Mountains, to look at the ski resorts. There were other holidays they had together away from Sydney over the years. 18 The plaintiff is involved in freemasonry. For eleven years after the plaintiff moved in, the defendant would accompany him to lodge meetings and assist ladies in the kitchen in preparing meals. She accompanied the plaintiff to formal balls and dinners connected with freemasonry, at which on occasions she was given a name tag, and place name for dinner, which bore the plaintiff's surname, and on occasions she was introduced as "Andrew's wife". 19 The plaintiff took the defendant to the Royal Easter Show on three occasions in the 1980s, to the Bolshoi Ballet in March 1979, and to a light opera at the Opera House in about 1989. 20 Generally, it was the plaintiff who bore the larger part of the entertainment expenses. 21 Various friends of the plaintiff or the defendant have given evidence of their observations of the relationship. That evidence confirms their fondness for dancing, and attendance at social functions together. One neighbour, Mrs Gould, gives evidence which I accept, that in May 1982 the defendant said to her: "… we aren't getting married because it would cause problems for our families. He had property, I own this place and it would make it very complicated for both families. I like having him here, he looks after the house and garden. I do the inside and cooking. We are good company for each other. We go dancing together." 22 The defendant was right in saying that the plaintiff and the defendant were good company for each other. Even as early as Boxing Day 1979 the defendant told her son "I have been over Captain Cook Bridge more times in the past few weeks than I have been all my life. Your father never took me anywhere." Another neighbour, who has lived in the same street as the defendant since 1950 observed that "prior to Andrew's arrival, Miriam dressed rather matronly but when he came she seemed to blossom out and dressed much smarter." 23 The plaintiff had a car from the start of the relationship until 1998, when hip problems forced him to give up driving. The plaintiff was able to perform any necessary repairs and maintenance on the car himself, so repairs and maintenance for the car were not a drain on the finances of either of them. The plaintiff paid the running expenses connected with the car. He and the defendant would drive together on various of their holidays. For some other holidays, they travelled by train. As well, the plaintiff's car was often used to take the two of them to various social functions in Sydney, or to other local destinations. After the plaintiff gave up driving, he often walked to the local shops, to do shopping for the defendant, and brought shopping back home. 24 After the plaintiff was made redundant, he arranged for a garage to be erected in the backyard of the defendant's house. It was financed from the redundancy payment he had received, together with a further sum of $3,000 which his daughter gave him. I accept that all, or substantially all, of those amounts, totalling around $7,700, were used in the construction of the garage. 25 The garage was erected at the plaintiff's request, so that he could use it as a place to store items he wanted to keep. It is a solid structure, with a six-inch thick concrete floor, and brick walls. It is larger than the size needed to accommodate a single car. It has never actually been used to garage a car, because it was being used for storage, and in any event the access between it and the street has always been blocked by some azalea bushes which the defendant did not want to have moved. However, if those azalea bushes were moved, there would be sufficient clearance between the house and the fence to be able to drive a family sized car from the street to the garage, though it would be a tight fit. 26 Even though it was the plaintiff who instigated the building of the garage, the defendant also used it to store boxes and various household items which she had no immediate occasion to use. 27 The plaintiff mowed the lawns at the defendant's house regularly until about 1995 when his hip trouble started, and by February 2001, when he had a hip replacement, he had to stop completely. From the earliest time of the relationship until now, the plaintiff has grown vegetables in the back garden. In those years when his health was not good, starting from about 1995, the plaintiff's vegetable growing activities had become more curtailed. After the plaintiff's hip replacement the defendant engaged a man to mow the lawn, who charged $45 a time. The plaintiff did not contribute to the payments for lawn mowing, except for the very last payment. 28 The plaintiff's presence in the home was not all advantage to the defendant, however. He did not maintain the gardens as well as the defendant's husband had done. As well, he was someone she described as "a hoarder of junk and accumulator of items", and he was not particularly tidy around the home. 29 The plaintiff did minor repairs around the home. Other repairs were done by tradesmen, who the defendant called in. Sometimes the plaintiff contributed to the expense of those repairs, when the defendant asked. I have the impression that usually the defendant did not ask. 30 The plaintiff's two grandsons were attending high school in the early 1980s, at a school near the defendant's home. The boys would go to the defendant's home after school, until their mother (who was working) collected them around 6:00pm in the evening. The defendant always made the boys welcome. 31 When he first moved in, the plaintiff gave the defendant $30 per week, as a contribution to the food bills. He also contributed what he described as "my share" of the electricity bill, water bill, and phone bill. He did not contribute to the council rates, or to the cost of insurance of either the house or its contents. He offered to contribute to the council rates, but the defendant would not accept. His cash contributions increased over the years, until towards the end of the relationship he was paying $100 to $180 per fortnight, depending on their financial commitments. 32 The plaintiff's daughter has a husband who, throughout the period of the relationship between the plaintiff and the defendant, has run butchery shops. He would supply the plaintiff and the defendant fairly regularly with meat, without payment. He did not supply meat in sufficient quantity or with sufficient frequency for the plaintiff and the defendant not to also need to purchase some meat themselves. As well, the plaintiff's daughter, who runs a take-away food shop, would on occasions supply the plaintiff and the defendant with items from that shop. 33 Around 2000, the defendant became less able to do heavy housework. The plaintiff took over performing the heavier housework, including taking out the wet washing from the washing machine, and hanging it on the clothesline, and cleaning the house. She began to get cramps in her legs at night, which the plaintiff massaged for her. 34 Initially, the bulk of the cooking was done by the defendant, although the plaintiff always did some of the cooking. From 1999, the plaintiff took over all the cooking. 35 On 31 October 2003 the defendant suffered a fall. She was hospitalised. It eventuated that she had suffered a spiral fracture to the upper left femur, requiring insertion of a rod. 36 Her fall marked the beginning of a rapid deterioration in relations between the plaintiff and defendant. Some seeds of it were sown in 2002, when the defendant's children carried out what they regarded as a massive clean up at the house, in the course of which various items belonging to the plaintiff, which they regarded as rubbish, were thrown out. After the defendant was hospitalised, a conversation occurred between the plaintiff and the defendant's children, in which Mr McIntosh asked the plaintiff, at the defendant's request, not to bring any Mormons into her house. (The plaintiff is a member of the Mormon Church). This caused the plaintiff to become angry, to order the children out of the house, and to accuse Mrs McPherson of being a thief. (Mrs McPherson, who with her brother had had a power of attorney from the defendant since 2000, periodically went to the defendant's handbag to get money to do shopping for the defendant, or to put money there after she had been to the bank for the defendant.) Mrs McPherson returned the compliment by telling the plaintiff that he had been sponging off her mother for years, and was a parasite. This conversation was reported to the defendant, and the plaintiff received a message that she did not wish to see the plaintiff again. The last time the plaintiff saw the defendant was on 2 December 2003. 37 The defendant has been advised that she needs 24 hour care. On 4 December 2003 her solicitors wrote to the plaintiff saying it would be necessary to sell her home so that she could be placed in an aged care facility, and asking the plaintiff to vacate the home. The letter said: "Miriam would like to make the change that you will have to make in your residence as trouble free as possible and accordingly we would like you to tell us of your request for a reasonable timetable in which to vacate and when you would expect this to be completed including the removal of your possessions." 38 The letter also notified the plaintiff of her request that he stay away from the hospital, and not try to contact the defendant other than through her solicitors. 39 The defendant is now living in an aged care home at Kirrawee. Her home has been sold, with contracts being exchanged on 13 January 2005, and settlement having taken place on 24 February 2005. The sale price was $650,000. The net proceeds were paid into the trust account of her solicitor. From that account, $240,000 has been released by agreement between the parties to pay a fee connected with the placement of the defendant in the nursing home. The defendant's son has paid an amount of $20,000 as a deposit for her position in the nursing home, which has not yet been reimbursed to him. An amount of $394,741.06 remains in the trust account of the defendant's solicitors. That amount is the stake at issue in these proceedings. 40 The plaintiff continued to live in the defendant's house after the defendant had her fall. In that time he paid all of the phone bill, the water rates, and the electricity bill, but he made no other payments. He improved the condition of the grounds and garden, so that by January 2005 they had lost the unkempt appearance they previously had. In all, he stayed there for around fifteen months after the defendant had her fall. Since leaving, he has been living in a Housing Commission flat, which costs him $45 per week. During the time after her fall, the defendant has paid around $2,140 for rates, and house and contents insurance, on the property that was occupied by the plaintiff. 41 At the conclusion of the relationship, the plaintiff's only substantial asset was the block of land at Gwandalan, which he accepts now has a market value of between $230,000 and $240,000. At the conclusion of the relationship, the defendant's only substantial asset was her home and contents. Application of the Law to the Facts 42 During the relationship, the plaintiff has not made any contributions which, either directly or indirectly, enabled the defendant to acquire any assets or any financial resources. It was submitted, for the plaintiff, that the plaintiff's presence in the house, doing some of the work, and contributing to some of the outgoings, must inevitably have assisted the defendant to keep the house. Senior Counsel for the defendant submits that drawing any such inference is too speculative, on the evidence, to be appropriate. 43 The evidence which the plaintiff filed suggests that, at the time the affidavits were drawn, it was not contemplated that such a claim would be made - the affidavit evidence of the plaintiff is not presented with a focus which would be expected if such a case were to be made. In these circumstances, I accept that submission of counsel for the defendant. 44 There is one clear contribution which the plaintiff has made to the improvement of the defendant's property, namely the erection of the garage. It is the sort of improvement which one would ordinarily expect would increase the market value of the home. That can be taken into account under section 20(1)(a). The Law 45 The section under which the plaintiff claims, section 20 Property (Relationships) Act 1984 says: "(1) On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to: (a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and (b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely: (i) a child of the parties, (ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties. (2) A court may make an order under subsection (1) in respect of property whether or not it has declared the title or rights of a party to a domestic relationship in respect of the property." 46 In Sullman v Sullman [2002] NSWSC 169; (2002) DFC ¶95-248 at para [246] - [253] I set out principles applying to the construction of section 20. I will not repeat those here. As well, I bear in mind that, as McLelland J said in Davey v Lee (1990) DFC ¶95-084; (1990) 13 FamLR 688 at 689, that under section 20 "the court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind" and that (as the Full Court of the Family Court of Australia (Fogarty, Murray and Baker JJ said in Ferraro v Ferraro (1993) FLC ¶92-335 at 79,578 concerning section 79 Family Law Act 1975), the task of the court in proceedings under section 20 "is not akin to an accounting exercise". 47 In deciding whether any allowance should be made under section 20(1)(b) I take into account that the plaintiff, in the latter years of the relationship, took on some of the functions of a carer for the defendant. As well, for many years he provided and maintained the motor vehicle, which was a great assistance to both their social activities and ordinary daily living. 48 It is permissible, for the reasons I gave in Sullman v Sullman at para [247], to take into account post-relationship contributions. The defendant has made a significant post-relationship contribution to the plaintiff, in providing him with a roof over his head and some contribution towards the cost of continuing to live at the home. While the plaintiff's work in improving the grounds has offset that to some extent, the balance of the post-relationship contributions is clearly in the defendant's favour. 49 During the relationship, the plaintiff paid somewhat less than half of the ordinary cash outgoings of the household. The plaintiff's payment of the bulk of entertainment expenses, and provision of meat and food through his daughter, need also to be taken into account. A most significant contribution, on the defendant's part, however, was that she supplied the house in which they lived. 50 Taking all these contributions into account, including the post-relationship contributions of both parties, it does not seem to me that, overall, the contributions which can be taken into account under section 20(1)(b) of one party are outweighed to any significant extent by the contributions of the other. 51 That leaves the only item calling for adjustment by an order as being the plaintiff's improvement of the property by erection of the garage. There is no evidence of the extent to which the present value of the house has been contributed to by the presence of the garage. It is appropriate to recognise that the garage was erected 22 or 23 years ago. The likelihood is that it would improve the present value of the property by more than its original cost of construction. As well, I can take judicial notice of there having been significant inflation over the last twenty two or twenty three years. However, when the plaintiff has not given the Court the evidentiary material on which to assess the contribution which the garage makes to the present value of the home, it is appropriate to be fairly conservative in recognising an increase in value. 52 In all these circumstances, it is appropriate to order that the property interests of the plaintiff and the defendant be adjusted by the defendant paying to the plaintiff the sum of $20,000. 53 I was concerned by the situation disclosed in the evidence, in which the defendant, notwithstanding that she and the plaintiff had lived in a de facto relationship for over twenty years, appears to have never disclosed that fact to Centrelink, and to have continued to have received payment of pension at the rate appropriate to a single person. The plaintiff did likewise during the relationship but (as mentioned in para [11] above) has since remedied that situation. 54 It is not only the defendant who has failed to disclose this information to Centrelink; nor have her attorneys, who are the people who would be the natural recipients, eventually, of her estate. 55 I enquired of counsel for the defendant whether there was any reason why I should not direct that a copy of these reasons for judgment be made available to Centrelink, gave time for a considered and written response, and also made clear that if there was nothing he wished to say on the topic, there was no need to make a submission. No written submission arrived within the time I had limited. Hence I shall also order that a copy of these reasons for judgment be forwarded to Centrelink. Orders

Magera v McIntosh

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Judgment (12 paragraphs)

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