NFO v PFA [2005] QSC 176

[1] MULLINS J: The applicant seeks a property adjustment order pursuant to s 286 of the Property Law Act 1974 ("PLA") in respect of the interests of the applicant and the respondent in the property owned by them and particularly in respect of the real property owned by them as joint tenants and which is situated at Paddington ("the Paddington property") and the sum of $180,000 held in the mortgage interest saver account ("the MISA account") in their joint names with the Commonwealth Bank ("the bank").

[2] The applicant was born in 1979 and the respondent was born in 1977. The parties' relationship commenced in September 1998 when each was still living with his or her parents. They commenced cohabitation in October 2000 when they moved into a house property in Brisbane ("the first property") which they acquired as joint tenants for $144,000 and for which they obtained a loan from the bank of $115,200. At the commencement of cohabitation the applicant was aged 21 years and the respondent was aged 23 years.

[3] The parties acquired the Paddington property as joint tenants for $430,000 on 19 November 2001. They obtained a loan from the bank in the sum of $410,000. Their sale of the first property settled on 1 January 2002 and the net proceeds of sale of $115,739 (after repaying the loan secured over the first property) was paid into their joint account with the bank.

[4] The applicant states that their relationship ended in September 2003. The respondent states that their relationship ended in November 2003. The respondent had completely removed himself and his possessions and other goods that he claimed from the Paddington property by 4 February 2004.

[6] Although most of the evidence-in-chief was in the affidavits relied on by the parties, each of the applicant and the respondent was cross-examined. Each of the applicant and the respondent had a tendency to overstate his or her contributions (both financial and non-financial) to the relationship and to understate the contribution of the other. It was not a case where the evidence of one was to be preferred generally to the other. Where it has been necessary to make a specific finding, I have identified the basis for doing so in those reasons.

[7] The other witnesses called for the applicant who were cross-examined were her parents and her current partner. The applicant also relied on an affidavit from a man who boarded at the first property and an affidavit from a woman who engaged the applicant as a babysitter for her two children during the period of 12 months from December 2000.

[8] The respondent relied on affidavits of his father who was cross-examined.

[9] On 6 October 2004 I had made an order in the proceeding, with the parties' consent, appointing valuer Mr Julian Aboud to value the Paddington property and file his valuation in the court. The order was made pursuant to r 429I of the UCPR. Mr Aboud's valuation which was dated 13 October 2004 became exhibit 5 in the proceeding. Mr Aboud attended at the hearing and was cross-examined by each of the parties. Leave was given to the respondent to call further valuation evidence. Mr David Mapleston had prepared a valuation of the Paddington property as at 3 April 2004 and that became exhibit 19 in the proceeding. Mr Mapleston's updated valuation dated 18 March 2005 became exhibit 20.

[10] Before the current proceeding was commenced by the applicant, the respondent had filed an originating application in this Court on 23 September 2004 seeking orders pursuant to s 38 of the PLA in respect of the Paddington property and also an order in respect of the amount held by the parties in the MISA account with the bank. The originating application in this proceeding was filed on 24 September 2004 and was the one that the parties pursued in order to resolve their dispute in respect of their respective interests in the Paddington property and the MISA account.

[11] Under s 286(1) of the PLA the court is empowered to make any order it considers just and equitable about the property of either or both of the de facto partners adjusting the interests of the de facto partners in the property. In deciding what is just and equitable, the court is required by s 286(2) of the PLA to consider the matters mentioned in subsubdivision 3.

[12] The matters in subsubdivision 3 that are relevant to this proceeding are:

(a) the financial and non-financial contributions made directly or indirectly by or for the de facto partners to the acquisition, conservation or improvement of any of the property of either or both of the de facto partners and the financial resources of either or both of the de facto partners (s 291 PLA);

(b) the contributions, including any homemaking contributions, made by either of the de facto partners to the welfare of the de facto partners (s 292 PLA); and

(c) the effect of any proposed order on the earning capacity of the de facto partners (s 293 PLA).

[13] Section 296 of the PLA (which is also within subsubdivision 3) requires the court to consider the matters mentioned in subsubdivision 4 to the extent they are relevant in deciding what order adjusting interests in property is just and equitable. To the extent that those matters are relevant in this proceeding, they are:

i. the age and state of health of each of the de facto partners (s 297 PLA);

ii. the income, property and financial resources of each of the de facto partners and the physical and mental capacity of each of them for appropriate gainful employment (s 298 PLA);

iii. the commitments of each of the de facto partners necessary to enable the de facto partner to support himself or herself (s 300 PLA);

iv. what standard of living is reasonable for each of the de facto partners in all the circumstances (s 303 PLA);

v. the contributions made by either of the de facto partners to the income and earning capacity of the other de facto partner (s 304 PLA);

vi. the length of the de facto relationship (s 305 PLA);

vii. any fact or circumstance the court considers the justice of the case requires to be taken into account (s 309 PLA).

[14] Counsel for the parties were agreed that the approach that should be taken to this application should accord with the approach taken to the similar provisions in the Family Law Act 1975 (Cth) which involves four inter-related steps:

(a) the court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing;

(b) the court should identify and assess the contributions of the parties and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties;

(c) the court should identify and assess the other relevant matters and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established in the preceding step; and

(d) the court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case.

See Phillips and Phillips [2002] FamCA 350; (2002) FLC 93-104 at [66].

Details of contributions to the parties' property

[15] At the commencement of the relationship the applicant was a fulltime student and the respondent was working fulltime for a salary of $35,000 per annum. The appellant had savings, but the respondent did not have any significant amount of savings. The respondent deposed to having $500 in the bank. The applicant had a significant HECS debt in comparison to the respondent. The applicant states that her HECS debt as at June 2001 was $11,494. The respondent estimated his HECS debt at $650 (although the applicant estimated it at $2,000). That difference in quantifying the respondent's HECS debt is immaterial. Each had a motor vehicle at the commencement of the relationship.

[16] According to the applicant's bank statements (exhibit 8) at or around the commencement of their relationship in September 2000 the applicant had savings of $21,893.56 in her account which was then closed. That sum of $21,893.56 included the sum of $4,000 that was transferred to that account on 1 September 2000 from the applicant's streamline express account. The applicant borrowed the sum of $7,000 from her mother for expenses incurred in purchasing the first property. The respondent alleges that he borrowed the sum of $8,000 from his sister to assist with the purchase of the first property. Having regard to the parties' circumstances at the time cohabitation commenced, I consider it likely that the respondent did contribute some funds towards the purchase. The applicant alleges that the sum which she provided to pay for the deposit and other expenses associated with the purchase of the first property was $38,751.80. The difference between the purchase price of the first property and the amount financed by the bank was $29,000. Although the applicant has not verified the calculation of the sum of $38,751.80, it is likely that the aggregate of the balance of the purchase price that was not financed by the bank and the expenses of the purchase of the first property (such as stamp duty, loan expenses and legal fees) was of the magnitude of $38,750. In the absence of being able to perform a complete tracing exercise that shows what funds were used to purchase the first property, I am satisfied that the applicant contributed $29,000 in round figures to the purchase of the first property from her savings account and funds borrowed from her mother and that the respondent contributed $8,000 in round figures which he borrowed from his sister.

[17] The applicant also had at the commencement of the relationship an investment in units with Commonwealth Managed Investments Limited. The value of those units was approximately $17,800 as at 6 October 2000. That investment was not used in respect of the purchase of the first property.

[18] The parties opened a joint account with the bank on 19 September 2000 with a deposit of $2,000. It is not apparent as to what the source of those funds was. From the time the account was opened, the respondent's monthly net wages of about $2,300 were paid into the joint account. The last payment from that employer was lodged in the joint account on 6 June 2001. The parties usually deposited their earnings into the joint account and paid their expenses from the joint account. The respondent's taxable income for the year ended 30 June 2001 was $33,895.

[19] The respondent went to Sydney in July 2001 for about a period of 3 weeks to look for work. The applicant alleged that it was a period of 2 months that the respondent spent in Sydney. The statements for the joint account which show various withdrawals in Sydney support the respondent's evidence on this point which I accept.

[20] Payments from the Department of Social Security for each of the parties were deposited to the joint account from July 2001. The applicant received the youth allowance. Payments for the youth allowance were made to the joint account between July and November 2001 and totalled $3481.20. The social security payments to the respondent ceased in mid August 2001 when the respondent commenced a contract for fulltime work with another employer. The respondent received a total of $1129.80 in social security payments of which $968.40 was taxable in the 2002 tax year.

[21] The applicant alleged that during the period the respondent was away in Sydney he contributed nothing to the first property mortgage or the household bills and that she was forced to take in boarders who were mainly international students to meet the parties' liabilities in respect of the first property and for the purpose of "preventing any bank foreclosure". These allegations are not borne out by the joint account which shows a balance of around $6,000 in credit during July 2001 which was primarily from the respondent's wages and ignores the deposits of social security payments on the respondent's account and wages earned by the respondent of $288.85 that was deposited on 10 July 2001. The respondent states that the arrangement to take in boarders was something that they had agreed upon prior to his going to Sydney. I accept that was the case. The set up with the boarders continued for the rest of the time that the parties lived at the first property and resumed when they moved to the Paddington property from March 2002 until August 2002. Payments for the boarders from Study Group Australia were deposited to the joint account as from 14 September 2001. The payments for the boarders were not taxable.

[22] The respondent conceded that the applicant did most of the cooking and washing for the boarders. He described that he "disciplined the international students" and "helped maintain their bedrooms once a week" and that he helped out "every now and then". I find that the respondent made little direct physical contribution to the provision of the services required by the boarders.

[23] Between 14 August 2001 and 5 June 2002 the respondent's weekly net wages from his fulltime employment were deposited to the joint account. The respondent's employment ceased when the project for which he had been engaged was completed. He was then self-employed as an industrial design consultant and worked from the Paddington property. The respondent's taxable income for the year ended 30 June 2002 was $40,541.

[24] The applicant was a fulltime student until late 2001. Her taxable income for the year ended 30 June 2001 was $1407. That included $712.77 which was earned on her investment in managed units and was reinvested. While the applicant was a fulltime student, she also worked as a babysitter on a casual basis for 3 families and earned amounts that are not identifiable by reference to the bank statements or any other documents. The respondent estimated that the applicant earned $60 per week from babysitting. The affidavit from the woman who engaged the applicant as a babysitter does not indicate the amounts paid to the applicant, but suggests that the applicant looked after the deponent's children on a regular basis (at least once or twice per week) and weekly when the deponent and her husband were away overseas on one occasion at a conference. The applicant estimated that she received around $7,000 from babysitting. The parties also appear to have earned income from selling computer programs together through the Weekend Shopper in the Courier Mail which the respondent estimated resulted in sales of $5,000, but did not give any details of the outlays required to make those sales. Before the applicant completed her studies, she commenced working as a sales representative for a company. The first deposit to the joint account from that company is 2 November 2001. Regular deposits from that company to the joint account continued until 11 April 2002. The applicant began her own business as a dietition in or around May 2002. The applicant's taxable income for the year ended 30 June 2002 was $23,710.

[25] The respondent claimed to have done renovations to the first property which he described as replacing the bathroom basin, painting the front fence, improving the presentation of the house such as digging up the front yard and nature strip to lay grass and putting in plants. The respondent also described that he and his father replaced the galvanised hot/cold water pipes with copper piping. The applicant asserted there was no renovation work done by the respondent at the first property. The respondent's father deposed to spending approximately 35 days with his son on renovations at both the first property and the Paddington property. During cross-examination the respondent's father conceded that it was not always full days that he worked and that there were some half days. The respondent's father had experience in renovating his own home. I accept the evidence of the respondent's father as supportive of the respondent's claims and I find that the respondent did do some renovation and/or maintenance work at Northgate, as described by the respondent.

[26] The drawdown for the loan of $410,000 for the Paddington property occurred on 14 December 2001. The difference between the loan amount and the purchase price was $20,000. This is difficult to reconcile with the allegation made by the applicant that the finance for the purchase of the Paddington property was by way of savings of $37,000. Even allowing for stamp duty (which was $3,800 withdrawn from the joint account), loan expenses and legal fees, that does not explain how the applicant arrived at the sum of $37,000, unless the applicant was referring to the deposit.

[27] The applicant's mother gave evidence that she lent the sum of $7,000 to the applicant for use in connection with the purchase of the Paddington property. The applicant's mother's bank statement shows that she withdrew the sum of $7,000 on 15 November 2001. There is a corresponding deposit of $7,000 to the joint account on 15 November 2001. There is also a withdrawal of $7,000 on each of 15 and 16 November 2001 from the joint account. On 16 November 2001 there was a deposit of $7,000 to the applicant's mother's bank account. Neither the applicant nor the applicant's mother was cross-examined about these additional transactions involving on each occasion the sum of $7,000. The net effect of the two transactions involving $7,000 in respect of the applicant's mother's bank account is that there was no payment of $7,000 made by the applicant's mother to the applicant at this time. In light of what is shown in the bank statements that are found within exhibit 6, I do not accept the evidence to the effect that the applicant's mother lent the sum of $7,000 to the applicant for the purchase of the Paddington property.

[28] The applicant redeemed units in her managed units investment on 15 November 2001 for which she received $9,580.50 and on 21 November 2001 for which she received $2,000. These respective amounts of $9,580.50 and $2,000 were deposited to the joint account.

[29] On 14 November 2001, the balance in the joint account, before a deposit of $9,119.49, was $18,564.52. It is not clear from where the deposit of $9,119.49 emanated, although some person has written on the bank statement "from home loan". It is one amount that the applicant does not claim credit for and it is reasonable to infer that it came from funds which were held to the credit of both the applicant and the respondent. The large withdrawal on 14 November 2001 from their joint account of $27,424.89 was for the purpose of obtaining a bank cheque in the sum of $27,419.49 that was paid to the agent as part of the deposit for the purchase of the Paddington property. Another bank cheque of $7,000 was also paid to the agent on account of the deposit for this purchase, the funds for which came from the joint account. Included in exhibit 6 are copies of the trust account receipts for the deposit for the purchase of the Paddington property. Apart from the respective sums of $27,419.49 and $7,000, the agent gave a receipt for a cheque from a person with the same surname as the respondent in the sum of $2,580.51. It does not appear that those funds were withdrawn from the joint account, but the respondent does not claim credit for this amount. That makes a total deposit paid for the Paddington property of $37,000. After the settlement of the purchase, the joint account was credited with the sum of $17,060.73 which, according to the loan account statement, came from the loan proceeds for the purchase of the Paddington property made available by the bank.

[30] A significant capital gain was made on the sale of the first property. The net proceeds of settlement from the sale of the first property of $115,739.80 were deposited to the joint account on 23 January 2002. That amount together with other funds from the joint account, making a total of $120,000, were then withdrawn from the joint account on 25 January 2002 and deposited to the MISA account. Having a significant sum on deposit in the MISA account resulted in savings of interest that would have otherwise been payable on the mortgage over the Paddington property.

[31] On 16 August 2002 the parties transferred $20,000 from the joint account to the MISA account. They withdrew the sum of $24,900 on 30 August 2002, but on 23 September and 12 November 2002 transferred from the joint account to the MISA account the respective sums of $14,900 and $15,000, leaving a balance of $145,000 in the MISA account. On 20 January 2003 the sum of $15,000 was transferred from the joint account to the MISA account. The sum of $10,000 on each of 13 May and 24 June 2003 was transferred from the joint account to the MISA account. As at 30 June 2003 the MISA was in credit for $180,000 and has remained in credit in that sum.

[32] The respondent's father described in his affidavit the renovation work he carried out on the Paddington property in conjunction with the respondent. This began with work opening up the doorway between the kitchen and dining room soon after the Paddington property was purchased. The applicant accepted that work was done. Both the respondent and his father described other work undertaken by them in or about September 2003 when they began to remove the exterior walls and windows from a built-in L-shaped veranda. This involved removing the old carpet, replacing some of the floor boards, removing the un-original ceiling and supports to show the original exposed beams, pulling away the exterior wall, replacing some fascia boards and fitting balustrade and hand railings. This work was not completed, as the relationship between the parties broke down. The applicant was scathing in her evidence about the quality of this work, offering the opinion that she would not consider it renovation whatsoever. The applicant relies on a report she obtained from a licensed building inspector dated 15 March 2005 to support her views on the quality of the work. That report primarily provides an estimate for completing the work and does not support the conclusion contended for by the applicant that nothing was achieved by the steps undertaken by the respondent and his father in these renovations. Some allowance needs to be made in favour of the respondent for his contribution and that of his father to these renovations.

[33] The applicant claims to have been the primary homemaker during the relationship of the parties and states that she took primary responsibility for the cleaning, cooking and general maintenance of their homes. The respondent asserts that the applicant did no more than 50% of the housework and described a typical week of division of chores which description the applicant rejected. In view of the respondent's acknowledgement of the applicant's role in relation to the boarders which bears out the assumption of the role of homemaker by the applicant, I am unable to accept the respondent's assertions on this aspect. It is not possible to be precise in quantifying the extent to which the applicant's contribution to household chores exceeded that of the respondent. I will proceed on the basis that during the relationship the applicant undertook about three-quarters of the household chores and the remainder were undertaken by the respondent.

[34] The parties also have disparate views on the respondent's contributions to the applicant's business. The applicant relies on referrals from general medical practitioners for her business. She attends at a number of medical centres were the receptionists have taken bookings for her. She also engages other dietitions and nutritionists to work as contractors in her business. After considering the parties' evidence, I accept that during the course of their relationship they discussed the proposed business venture of the applicant and that the respondent was supportive of the applicant's proposals. That provision of support does not justify the assertion made by the respondent that he played "a major part" in developing the applicant's business. In his affidavit filed by leave on 21 March 2005 the respondent asserted that he initially designed a full set of stationery for the applicant's business, sourced and managed the printing of those items, designed stamps to be put onto each of the applicant's contractors' business cards and developed plans to create new business. During cross-examination the respondent conceded that it was his sister's company that was engaged to design the stationery. The respondent conceded that the applicant had her business telephone diverted through to message bank when she was not at home. I formed the view that the respondent had elevated his support of the applicant to a much more tangible involvement in her business which was not established on the evidence.

[35] Each of the applicant and the respondent endeavoured to quantify their respective financial contributions from their earnings during their relationship. The applicant prepared a schedule that has been included as schedule 2 to her Counsel's written outline (exhibit 1). This schedule purports to disclose the applicant's estimate of the parties' respective gross incomes for the period January 2002 to December 2003. The schedule indicates that period was chosen as it reflects the period of time that the parties lived at the Paddington property together.

[36] This schedule can be criticised as the applicant has chosen to ignore the period from the commencement of the relationship in or about October 2000 until December 2001 (the financial contributions during which are also relevant to the making of the order sought in this proceeding) during which the respondent was in employment and earning income that was significantly greater than earned by the applicant during the same period. It can also be criticised for not comparing like with like. The applicant included her gross fees earned as a dietition without allowance for the expenses incurred in earning those fees. The income that came into the household from the applicant's business as a dietition was not her gross fees, but what remained of them after allowing for the payment of the expenses that were required to generate that level of gross fees. The justification put forward on the applicant's behalf for incorporating her gross fees in this schedule was that she was able to claim a lot of home expenses by reference to the gross fees which were expenses otherwise made for the benefit of the parties, such as a portion of the interest payments under the mortgage which would have been paid anyway for the Paddington property. It overlooks, however, that most of the expenses related directly to the production of the gross fees and upon the expenditure of those funds for that purpose, those moneys were not available to the parties to spend on themselves.

[37] Another problem with the applicant's analysis of income was that she attributed all the income from the boarders to herself. The basis for being able to generate the income from the boarders was providing them accommodation in the property that was jointly owned by the parties and in providing the meals for which the food and consumables were paid for out of the parties' joint account. Even allowing for the fact that the applicant undertook more of the chores associated with providing the services to the boarders than the respondent, an appropriate division of that income would still give significant credit to the respondent for his share of the relevant property and the funds that was used in this venture.

[38] In the week prior to the hearing the respondent prepared the schedule of what he described as each party's earnings and spendings by reference to the joint account. It became exhibit 10. It was not provided to the applicant's solicitors prior to the hearing, so that the first time the applicant saw it was when she was cross-examined. The applicant was not in a position to respond meaningfully to the schedule. In any case, it is not a particularly useful analysis. All that the respondent did was to take the information off the bank statements in relation to the period covered by each set of bank statements and summarise the total deposits and the total withdrawals and show the closing balance for that period. He then attempted to dissect some of the deposits and withdrawals and attribute them to himself or the applicant. He only attributed those about which he had no doubt. For each of the periods, the totals of the dissected entries for deposits fall short of the total deposits and the totals of the dissected entries for the withdrawals fall short of the total withdrawals. In fact, only a fraction of the withdrawals are analysed. The respondent also performed the exercise of comparing the deposits attributed to their respective incomes against the net income shown in the tax returns for the relevant years. One deficiency in the exercise is that the statements for the joint account that are disclosed in exhibit 6 do not cover the period 1 August 2003 to 30 January 2004, as statements 26 to 31 are missing.

[39] For the year ended 30 June 2003 the applicant was advised by her accountant to prepay the respondent for graphic design work he proposed to do for her business. The applicant did not actually pay the respondent the sum of $17,000 for this work, but took advantage of a tax deduction of $17,000 and, at the same time, the applicant's taxable income included the sum of $17,000 which he had not received for this work. The respondent's taxable income for the year ended 30 June 2003 was $40,154. The applicant's taxable income for the year ended 30 June 2003 was $58,794.

[40] It is difficult to compare the earnings of the parties that they contributed to their relationship in the period July to November 2003. The only bank statement for the joint account that is available in evidence relevant to this period is statement 25 for 1 to 31 July 2003. That shows deposits from Intercad Pty Ltd and Panbio Ltd totalling $5,013.34 which represents the respondent's earnings. That is consistent with the total figure shown by the respondent on exhibit 10 for his net income for the year ended 30 June 2004 of $52,803. In the year ended 30 June 2004 the applicant's taxable income was $59,494.

[41] As from 17 July 2003 the parties were obliged to make a monthly repayment of $2,349 on account of the loan secured over the Paddington property which equated to a weekly repayment of $587.25. The respondent made an enquiry of the bank on 10 March 2005 as to the current details of the loan. The results of that enquiry are found in exhibit 4. That confirmed the monthly repayment was still $2,349 and that the direct debit details were for a weekly debit from a specified account of $588. After the respondent moved his possessions from the Paddington property, he made one repayment of $587.25 on 26 February 2004 on account of the mortgage over the Paddington property. At the hearing the applicant stated that since the end of February 2004, she had made 25 payments under the mortgage each of about $587.00. As that was a period of approximately 1 year, that suggests that the applicant was making a payment of $587.25 per fortnight. No loan statements were included in exhibit 6 after the statement for the period that ended on 24 February 2004. It was common ground between the parties that, since the end of February 2004, all the repayments made by depositing or transferring funds to the loan account were made by the applicant until earlier this year when the respondent made a repayment of $587.25 on 17 February 2005 and another repayment of the same amount on 3 March 2005. The applicant also made repayments in the same amount on each of those respective dates.

[42] The respondent asserted that between 26 February 2004 and 17 February 2005 his half of the mortgage repayments were coming out of extra repayments that he had made in the past on this loan. What the respondent was referring to was a statement that was found at the foot of statements 9 and 10 for the loan account. The statement at the foot of statement 9 was in the following terms:

"Special Repayments You are ahead in your repayments by $11,939.00. You can redraw (withdraw) this amount on request."

The same words are found at the foot of statement 10, except the amount that was specified was $8,415.50. The problem with this claim is that the applicant continued making regular payments each of $587.25 and there is no suggestion in the material that the amount that was available for redraw from the loan account was, in fact, redrawn and used to make repayments. The fact that the parties were ahead in their repayments and had the facility to withdraw the amount of excess repayments was reflected by the balance of the loan account. I reject the respondent's assertion that he had made half of the mortgage repayments between 26 February 2004 and 17 February 2005. The amount owed under the mortgage as at 10 March 2005 was $360,925.03.

[43] At the hearing the respondent relied on evidence from an agent that the rental value of the Paddington property in the current market was $380 to $400 per week. That was not disputed. As this decision had to be reserved, the parties agreed that subsequent to the hearing the applicant would continue paying the regular repayment of $587.25 under the mortgage and that there would need to be an accounting between the parties for those payments and a notional rental value for the continued occupation of the Paddington property by the applicant. For that purpose I find that the rental value of the Paddington property is $400 per week.

[44] It was suggested on behalf of the respondent that the applicant had the ability to derive income from boarders at the Paddington property at $140 per boarder whilst she remained in occupation of the Paddington property. That was a venture embarked upon by the parties when the applicant was still a student and continued by them when they were both establishing their careers on a self-employed basis. It had ceased by the end of August 2002. For the purpose of this application I do not accept that the applicant had any obligation to maximise the income from the Paddington property by placing boarders in the spare bedrooms, when she was working fulltime in her own business.

[45] There was various evidence given about the paintings by the artist Jilly Dyson that were acquired by the parties including which painting was still in possession of which party and how much was paid for each of the paintings. The applicant produced a receipt in her favour for the sum of $1,500 for a painting entitled "Fields of Gold". The respondent produced a receipt for a painting by the same artist for the sum of $400. Resolution of this evidence has no bearing whatsoever on the outcome of this application. I found the evidence confusing, as Counsel and the parties appeared to be at cross purposes. Having regard to what was the real issue on this application it is not necessary to make a detailed finding on this matter.

[46] Ultimately there was no dispute about using the Red Book values for the motor vehicles owned by the parties at the date of the hearing. The value of the applicant's 2001 Subaru Impreza is $19,675 and the value of the respondent's 1990 Toyota Camry is $2,150.

[47] In March 2001 the respondent purchased an engagement ring which he gave to the applicant. The purchase price was $2,600. Although the respondent sought to rely on a valuation for that ring that was far in excess of the purchase price, I infer that the purchase price is a closer approximation to the true value of that ring.

[48] The respondent procured an accountant's valuation of the applicant's business which, in effect, valued the business at nil as any goodwill would attach to the applicant as personal goodwill and would not be transferable.

[49] The respondent organised a valuation of the chattels from the relationship that he claimed to have in his possession (including an oil painting on canvas of meadows or fields bathed in a golden glow of dimensions 75cm x 75cm) for a total amount of $2,670. The applicant claimed those chattels had a value of $10,500, but that claim was not seriously pursued. I accept the valuation obtained by the respondent. The applicant claimed that the value of the chattels which she kept was $1,500. That was not disputed. At one stage the applicant was seeking the return of a few chattels which her father claimed were given to her personally, but that was a minor matter and not pursued.

[50] There was no dispute between the parties that each had superannuation. The value of the applicant's superannuation at the date of the hearing was $1,700 and the value of the respondent's superannuation was $8,282.

[51] As each of the applicant and the respondent is in good health and is capable of earning an appropriate income to support his or her reasonable standard of living there is nothing in the factors provided for in ss 297, 289, 300, 303 or 304 of the PLA which has any significance in this proceeding.

[52] It is relevant that the length of the de facto relationship of the parties was only about 3 years. That justifies a close examination of the parties' financial contributions to the relationship: Quinn and Quinn (1979) FLC 90-677 at 78, 615.

[53] The Paddington property contains an area of 779m2 within the Low Density Residential Area under the Brisbane City Plan. The dwelling was built around 1915 and is described as a four bedroom Colonial/Federation style dwelling with an L-shaped veranda, single carport, in-ground swimming pool and basic appurtenances. The property has remained in a partly renovated state since the parties' separation.

[54] The applicant was at home when Mr Aboud attended to do the valuation of the Paddington property on 13 October 2004. She asked him whether it would be appropriate for him to see the quotations that the parties had obtained for termite protection and for rectification of a problem with drainage that resulted in sewage overflow. Mr Aboud took copies of the quotes which are exhibited to his report. One quote for termite protection was for $1,888 and the other quote was for $4,646. One plumbing quote was for $6,831 and the other was for $7,645. The applicant also had obtained appraisals of the Paddington property from five local real estate agents which were dated between 4 and 11 October 2004 which she provided to Mr Aboud. As Mr Aboud is a valuer who has access to databases of comparable sales and the expertise to apply that information, it was not necessary for him to be provided with opinions from local real estate agents. As the parties had solicitors acting for them when they agreed to the obtaining of a valuation from an independent expert, any information that was to be provided by the parties to the valuer should have been the subject of agreement between them or by arrangement through their respective solicitors.

[55] The appraisals provided by the applicant to Mr Aboud ranged from between $480,000 to $550,000. Mr Aboud's valuation as at October 2004 was $530,000. He arrived at that figure on the basis that the market value of the Paddington property without known termite and drainage defects was $550,000. He then deducted the sum of $10,000 for risk to prospective purchases for known defects and a further $11,120 for the costs of rectifying the known defects. The rounded result of $530,000 was the valuation arrived at by Mr Aboud.

[56] Mr Aboud acknowledged that he would not have been aware of the drainage problem without being given that information by the applicant. His inspection did suggest that there had been damage from termite activity. Although Mr Aboud prepared his valuation primarily by direct comparison with known sales, he frankly conceded that the appraisals that the applicant had given him did influence his valuation.

[57] One of the reasons that I gave leave to the respondent to adduce valuation evidence, despite the order that had been made on 6 October 2004 for an independent expert's valuation, was the applicant's dealings with Mr Aboud at the time of his inspection.

[58] Mr Mapleston had done a valuation of the Paddington property at the respondent's request in April 2004 (exhibit 19). That valuation was for $650,000. The three sales relied on Mr Mapleston to support that valuation were for greater sums and each of the comparable properties was described as superior to the Paddington property. That detracted from the reliability of that valuation. It suggested that Mr Mapleston was using sales that were not within the same range of value as the Paddington property.

[59] For his updated valuation of $630,000 that was done on 18 March 2005 (exhibit 20), Mr Mapleston relied on seven sales. One of those was in common with Mr Aboud which was the property at 35 Tooth Avenue, Paddington. Whereas Mr Mapleston described that property as being comparable with the Paddington property, Mr Aboud considered it to be superior. It comprised a land area of 701m2 and its location was superior due to high elevation and outlook. Mr Aboud described the dwelling as a larger high set, refurbished chamferboard dwelling of 1940's period with three bedrooms, two bathrooms (including ensuite), double lockup garage, swimming pool and established gardens. The sale price of the property at 35 Tooth Avenue, Paddington in July 2004 was $625,000. I preferred Mr Aboud's analysis of this property than Mr Mapleston's analysis. Overall, I considered that Mr Aboud's selection of comparable sales gave a more reliable guide to the market value of the Paddington property than those relied on by Mr Mapleton. It was surprising in the light of the respondent's wish to adduce additional valuation evidence that the respondent had failed to provide a copy of Mr Aboud's report to Mr Mapleston.

[60] It was not suggested that the valuation of Mr Aboud undertaken in October 2004 was out of date by March 2005. In fact, Mr Mapleston considered that a valuation done in October 2004 of the Paddington property would be similar to that done in March 2005.

[61] Although I prefer Mr Aboud's valuation evidence to that of Mr Mapleston, some allowance needs to be made for the deflating effects of the appraisals provided by the applicant to Mr Aboud. I do not see any difficulty with the approach of Mr Aboud in making a deduction for defects, because the termite damage was apparent and a prudent purchaser would seek to make a deduction from the purchase price to allow for the risk of the unknown rectification costs. I propose to fix that value of the Paddington property at the date of hearing by increasing Mr Aboud's valuation by a factor of about 5 per cent. That allows for the deflation which Mr Aboud acknowledged. I therefore find that at the date of hearing that Paddington property had a market value of $560,000.

[62] Despite the applicant's significant contribution of funds towards the purchase of the first property which exceeded that of the respondent by $21,000, it was primarily the earnings of the respondent that allowed the parties to make the 35 mortgage repayments of $388 each ($13,580) and meet their living expenses whilst at the first property. The wages of the respondent deposited to the joint account until 31 December 2001 were approximately $35,000 compared to the deposited wages of the applicant of approximately $7,000. Allowing for the applicant's greater contribution to household chores and her earnings from baby sitting and the youth allowance, but giving some credit for the contributions of the respondent and his father to renovation work carried out at the first property, I find that at the time the parties sold the first property, their interests in it had equalised. The moneys earned from boarders in this period was only about $3,500. The slightly greater proportion that should be attributed to the applicant for her doing the cooking and the washing for the boarders does not affect the equality that the parties had achieved in their interests in the first property.

[63] It is significant that the assessment of their interests in the first property was equal, because it follows that the parties should be treated as benefiting equally from the net proceeds from the sale of the first property. That gives them notionally a half interest in the sum of $120,000 with which the MISA account was opened.

[64] The applicant should be given credit for the sum of $11,580.50 that she provided from redemption of her managed units for the deposit on the Paddington property. Although the actual deposit paid for the purchase of that property was $37,000, in reality only $20,000 plus the expenses for sale were financed by the parties themselves as the loan from the bank was only $20,000 less than the purchase price. As the balance of the sum of $20,000 came from the joint account which was primarily contributed to by the respondent in the period up until the purchase of the Paddington property, I find that the parties contributed to the sum of $20,000 by $15,000 from the applicant and $5,000 from the respondent.

[65] From the time of completion of the purchase of the Paddington property until separation the living expenses and mortgage payments were paid out of the joint account. As the further deposits to the MISA account also came from the joint account, it is not necessary to separately analyse those further deposits to the MISA account. The joint account started off in January 2002 with a healthy balance, because of the sum of about $17,000 which had been advanced to the parties equally by the bank. Thereafter they contributed to that account, in round terms, the following:

(Deposited wages and net income from business after adding back interest of $3,970)

(Net earnings adjusted for $10,000 to reflect non-payment of $17,000)

(Net earning adjusted for $10,000 to reflect non-receipt of $17,000)

I added back interest of $3,970 to the net income of $1,559 earned by the applicant from her business as a dietitian in the year ended 30 June 2002, as I inferred that payment of interest was in respect of the Paddington property that was paid by the parties irrespective of the business. A perusal of the expenses claimed for tax purposes did not suggest any such adjustment was necessary for the applicant's income from her business in the year ended 30 June 2003, other than to accommodate the sum of $17,000 that was not paid but claimed as a deduction. There was little information for the period from 1 July to 30 November 2003, but as there did not appear to be any significance difference between their earnings in that period I have not attempted to work out what the figure would have been net of tax, but have apportioned the figures found in exhibit 10.

[66] The financial contributions of the parties between the purchase of the Paddington property and the date of separation can be worked out as follows:

Contributions to difference between purchase price and amount of loan for Paddington property

[67] During this period the applicant has to be given credit for her greater contribution to the household chores, but the respondent has to be given some credit for the renovation works which he and his father commenced. This results in a further modest adjustment of around 5% in favour of the applicant.

[68] The nub of the dispute between the parties at the hearing was how their interests in the Paddington property and the MISA account should be adjusted. In view of the significantly greater value of those assets compared to the relatively small values attributable to the items of chattels, superannuation and the like, it is the significant assets that should be subjected to the exercise of apportioning the parties' contribution-based entitlements.

[69] After doing the above calculations which are not entirely precise, but which I am satisfied on the evidence give a much better indication of the parties' contributions than the approach taken by either of them in this proceeding, I have concluded that the applicant's contribution should be assessed at 62.5% and the respondent's contribution should be assessed at 37.5%. These assessments are done to the date of separation. I am also satisfied that these percentages are just and equitable in the circumstances and are consistent with the overall impression that I gained when evaluating the evidence that over the period of 3 years of the relationship the applicant's contribution in money and kind were greater than the respondent, but her claim that she was entitled to 75% was inflated, as the respondent's claim he was entitled to 50% was also inflated.

[70] By the time the parties had separated the Paddington property had increased in value at least to a similar level to that which it had at the date of the hearing. This is reflected by the valuation evidence that was given at the hearing of a softening market and also supported by Mr Mapleston's initial valuation, even allowing for it being on the high side. The overstatement of the claims of each of the parties has obviously contributed to this matter being unable to be resolved without a hearing.

[71] Although the applicant was using the Paddington property as the address for her business, most of her consultations are held at medical centres and the goodwill of the business attached to her, rather than any location. This was a case of 2 young people who had worked hard and made good investments in real estate during a short 3 year relationship. The fact that the applicant elected to stay in the Paddington property upon separation does not give her any superior right to keep the Paddington property. The disputed assets should now be sold and divided. It makes sense for the Paddington property to be sold in order to ensure the repayment of the loan which is a liability of the parties and secured over the Paddington property. Another reason for selling the Paddington property is the nature of the MISA account. According to the agreement that the parties entered into with the bank when setting up the MISA account, there are restrictions in their dealing with the funds held in the MISA account while any amount remains owing under the mortgage. The court has a discretion in choosing to exercise the powers it has under s 333(1) of the PLA and, if it decides to exercise those powers, a discretion as to whether it orders the transfer of property or orders the sale of that property. In the circumstances of this matter, it is appropriate to exercise the discretion to order the sale of the Paddington property.

[72] An allowance has to be made for the payments of outgoings made by the applicant since separation. Although in an appropriate case that can be taken into account as a contribution in assessing a party's entitlement, having regard to the fairly stable valuation of the Paddington property since separation, I have concluded that the applicant's interest in the assets should not be altered as a result of her continuing to pay the outgoings in respect of the Paddington property since 26 February 2004, but a compensating adjustment should be made: cf VG v OM [2005] QCA 183. There should therefore be an adjustment in the applicant's favour of 37.5% of the mortgage repayments, rates and building insurance made by her in respect of the Paddington property from 26 February 2004 until the property is sold, provided the applicant continues to make those payments. As further rates and mortgage repayments have been made since the hearing and the actual mortgage payments should be verified by reference to the relevant statements for the loan account which were not in evidence, I will give the parties an opportunity to agree on the relevant figures, but if they fail to do so, I will determine them at a further hearing. There should be a set-off against the adjustment calculated in favour of the applicant for the sum of $150 per week for rent from 26 February 2004 until the applicant vacates the Paddington property and the sum of $734 for the respondent's share of the 2 mortgage payments made by the respondent early in 2005.

1. The property situated at Paddington of which the applicant and the respondent are registered owners as joint tenants ("the Paddington property") be sold.

2. Subject to the payment from the proceeds from the sale of the Paddington property of the net payment due to the applicant on account of mortgage repayments, rates and building insurance paid by her in respect of the Paddington property since 26 February 2004 and to be assessed at a further hearing between the parties in accordance with paragraph [72] of these reasons if not agreed between the parties, the interests of the applicant and the respondent in the balance of the net proceeds from the sale of the Paddington property after repayment of the loan to the Commonwealth Bank of Australia secured over the Paddington property and the selling costs and the interests of the applicant and the respondent in any amount remaining in the Mortgage Interest Saver Account in their joint names with the Commonwealth Bank of Australia be adjusted pursuant to s 286 of the Property Law Act 1974, so that the interest of the applicant is 62.5% and the interest of the respondent is 37.5%.

3. Liberty to each party to apply on 3 days' notice in writing to the other.

[74] I will hear submissions from the parties on the issue of costs.