Determining the parties' s 20 contributions
11 It is convenient to set out the steps by which the primary judge determined the parties' s 20 contributions as it illustrates the position of the Filicudi properties in the factual matrix.
12 His Honour recognised (at [50]) that in approaching the s 20 adjustment, it was necessary that he undertake a three-step process: first, identify and value the property of the parties; secondly, identify and value the respective contributions of the parties of the type referred to in s 20; and, thirdly, determine what order is just and equitable having regard to those contributions: see Howlett v Neilson [2005] NSWCA 149; (2005) 33 Fam LR 402; Chanter v Catts [2005] NSWCA 411; (2005) 64 NSWLR 360; Kardos v Sarbutt [2006] NSWCA 11; (2006) 34 Fam LR 550.
13 He also recognised (at [57]) that in considering the second step:
"…(that is, identification and valuation of the parties' contributions): first, that where there is a division of roles in the relationship between homemakers and breadwinner, the intangible contributions of the first kind are in no way inferior to the material and financial contributions of the second kind; second (and as noted by Hodgson JA in Howlett v Neilson ), contributions brought to the relationship at inception are relevant; so too are contributions made after separation and before trial. Third (at [36]):
'… the court is not required to undertake a reductionist process analogous to the taking of partnership accounts by examining every alleged 'contribution' of the kinds described in the section with a view to putting a monetary value on each in order to reach an accounting balance one way or the other, then to be eliminated by the requisite financial adjustment; rather, the court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind [ Davey v Lee (1990) 13 Fam LR 688; (1990) DFC ¶95-084 (McLelland J)].' "
14 His Honour considered (at [58]) that while the Court may have regard to contributions made before the relationship began, it could do so only in a subsidiary or contextual way, referring to Jones v Grech [2001] NSWCA 208; (2001) 27 Fam LR 711 (at [24]) per Davies AJA; (at [77] to [82]) per Ipp AJA.
15 In approaching the matter of the parties' contributions, the primary judge began with some observations he considered uncontroversial (at [73]):
" … First, the plaintiff acquired no property of consequence during the relationship. Second, there was no joint ownership or co-ownership of property by the parties at any time, although the plaintiff was given by the defendant an 8.35% shareholding interest in the company Gemini Industries Pty Ltd. Third, the plaintiff did not make any financial outlay by way of contribution to the acquisition, conservation and improvement of any of the defendant's property or (except perhaps incidentally) to their domestic life, her case being that she made non-financial contributions to the defendant's business and homemaker contributions. Fourth, the only skills and experience the plaintiff had when she became the defendant's secretary were in that field, that is, stenography, typing, filing, telephone answering and basic office administration - plus proficiency in both English and Italian.
74. The plaintiff was employed as the defendant's secretary in 1981. Payment of wages continued until late 1993 or early 1994. The defendant provided the plaintiff with accommodation and meals at the Gemini Hotel as previously described. He later took her into his home at Point Piper at no cost or expense to her and provided everything she needed, again at no cost or expense to her. He maintained her in an extremely comfortable lifestyle. The plaintiff said (and it was not disputed in cross-examination) that before the separation her own sole weekly expenses totalled $1,960, being $800 for clothes and shoes, $600 for hairdressing, toiletries and personal care and $560 for holidays. Her total weekly expenditure, as estimated by her, including household expenses, was $3,965. The defendant paid all this. Her total credit card expenditure in 1999 and 2000 (wholly met by the defendant) was $50,220.64 and $62,283.22. The defendant also took the plaintiff on overseas trips (which she described as 'luxurious') at least once a year between 1983 and 1999 at a cost per trip estimated by the plaintiff to be between $35,000 and $65,000. The defendant paid for all these. The defendant, according to the plaintiff, gave her gifts of a mink coat ($30,000), a watch ($20,000) and a bracelet ($18,000) and other jewellery. She has returned the watch, says the bracelet was lost and has retained the rest. The plaintiff had unlimited access to cash and credit cards provided by the defendant. The plaintiff gave the defendant some gifts but there is no evidence of their value. The funds to buy these must have come from the defendant.
75. While the plaintiff lived at Point Piper, there was usually a full-time housekeeper and a part-time gardener. Staff from the Gemini Hotel also helped with housekeeping particularly between housekeepers. Meals were often brought to the house from the hotel restaurant. The plaintiff made no financial contribution to any of this.
76. It is, however, clear (and not disputed by the defendant) that the plaintiff made non-financial contributions of the kind contemplated by the Property (Relationships) Act. There is, however, a dispute as to whether those non-financial contributions were confined to domestic and homemaker contributions or extended also to contributions related to the business and property assets and activities of the defendant."
16 The respondent conceded that the appellant made contributions to his welfare and that of the domestic unit. She looked after the home, albeit in a context where housekeeping, gardening and other staff were employed: primary judgment (at [77]). In the course of setting out the evidence of these contributions, his Honour said (at [83]):
"83. I should make particular comment about another matter. Submissions made on behalf of the defendant emphasised the level of comfort to which the plaintiff was introduced by the defendant and which she enjoyed throughout the de facto relationship - with domestic staff, nurses to care for the defendant's mother, meals delivered from the hotel and other similar facilities which, for most people, would represent luxuries. (Mr Cox, the airconditioning repairer, says he was usually let into the house by a domestic worker.) I am not persuaded that these matters deserve much weight in assessing the plaintiff's contributions. A partner who washes up by hand in the sink and goes to the supermarket by bus does not, because of those factors, make a contribution superior to that of a partner who has a dishwasher and orders groceries online for delivery to the home. Domestic or homemaker contribution, in the sense of committed pursuit of the domestic happiness of the other party and the couple, has an intangible quality that does not lend itself to measurement by reference to the relative ease or hardship of the surrounding circumstances. The nature of the kind of homemaker contribution referred to in s.20(1)(b) was described by Cole JA in Green v Robinson (1995) 36 NSWLR 96 at p.119:
'The concept of 'homemaker' or 'making a home' has a different and wider connotation than housekeeping or maintaining a house. It involves the creation of an emotional ambience of stability.'
84. As Clarke JA observed in Black v Black (1991) 15 Fam LR 109 at p.117, a homemaker may perform domestic services 'but her contribution to the family unit will usually be infinitely greater than that'."
17 One of the appellant's complaints is that the primary judge's recognition of the importance of a partner's intangible contributions, acknowledged in these passages of his judgment, was not reflected in his award.
18 The appellant contended she had made non-financial but nevertheless substantial contributions to the respondent's various businesses which fell within the terms of s 20(1)(a) of the Act.
19 One of the respondent's assets was a site at Randwick on which the Gemini Hotel was subsequently built which had been owned for many years been by companies he owned. It was the headquarters of his business. He maintained his main office there. The respondent admitted that, from about March 1984, the appellant undertook work which assisted him to improve the hotel. The primary judge concluded that she performed some useful functions in relation to the Gemini Hotel business, observing that "[s]he was, after all, the defendant's employee". The dispute between the parties related to the extent of her contributions: primary judgment (at [91]).
20 The primary judge undertook a meticulous examination of the evidence about the appellant's involvement in the Gemini Hotel which it is unnecessary to repeat: primary judgment (at [90] - [118]). He found (at [119] - [120]) that, she made some non-financial contributions to the hotel business beyond those of an employee and which were, to some extent, the product of her relationship with the respondent. He concluded her contributions were "of the same general kind as a wife might make to her husband's business and transcended an employee's contributions", but also that "they were very much of an ancillary and supportive kind and, with the exception of matters of taste and decoration, of little consequence in the successful development and operation of the hotel business". His findings related both to contributions the appellant made before the de facto relationship began in 1988 and those she made after 1988, which was when the primary judge concluded the preponderance of the contributions to the hotel business were made. The primary judge acknowledged that regard may be had to those antecedent contributions in a subsidiary or contextual way: primary judgment (at [121]).
21 The appellant also said she had made business contributions to the Filicudi properties, a proposition the primary judge examined (at [122] - [126]). His Honour concluded (at [126]) that:
"… from the 1970s, the defendant expended money and effort in acquiring properties and that, from 1982 to 1999, the plaintiff performed certain services upon the instructions of the defendant or within areas of discretion afforded by him to her, but always in circumstances where he was in control. In the earlier years, the services were exclusively those of an employee but, as the relationship developed, the plaintiff was allowed more initiative and freedom consistently with her being the defendant's domestic partner. As with the Gemini Hotel matters, certain aspects pre-date the commencement of the de facto relationship."
22 Next the primary judge considered the appellant's contention that she had made business contributions to the respondent's Mitre 10 business at Randwick. These contributions principally appear to have related to the design and layout of the premises: primary judgment (at [127]). Having considered the evidence (at [129] - [139]), the primary judge concluded (at [140]) that the appellant made negligible contributions to that business. He reached the same conclusion in relation to the appellant's claim that she had made relevant contributions to another of the respondent's businesses, the Gemini Hotel at Griffith: primary judgment (at [141] - [147]). The respondent controlled a company called Gemini Industries which imports and sells bathroom ware and related products. The primary judge concluded (see [148] - [152]) that the appellant's contributions to it were isolated and negligible.
23 Another controversy concerned the appellant's involvement in assisting the respondent to develop a sugar cane farm at Smithfield in Queensland as a "a resort and palm nursery", including assisting him in litigation regarding the Smithfield land which led to him being awarded compensation of some $3.3 million following resumption of a substantial part of the land for road purposes: primary judgment (at [153] - [166]). The primary judge appears to have concluded the appellant made more than a negligible contribution in this respect. While he described her contributions to the substance of what was happening at any given time as "not of great objective value" he acknowledged "she did, however, provide personal support and assistance to the defendant throughout": primary judgement (at [166]).
24 After the relationship ceased, the appellant's "exclusively non-financial contributions produced by her personal exertion" ceased. However the respondent's contributions continued until trial. The primary judge gave weight to the fact that the values of the Gemini Hotel, the Mitre 10 store, Gemini Industries, the palm nursery and, until 2003, the Griffith hotel had appreciated since 2001 as a result of the respondent's endeavours to the exclusion of the appellant. This was significant because the respondent submitted that the s 20 question, as it related to property, should be answered by reference to values at the time of the end of the de facto relationship.
25 The primary judge also took into consideration the fact that since 2001, the respondent had made financial contributions to the appellant of $733,978.47. This included weekly payments totalling $275,100.00, made voluntarily until February 2002 and thereafter pursuant to court orders. Also, from termination of the relationship until about February 2002, he provided her with rent-free accommodation at the Gemini Hotel and the Point Piper home: primary judgment (at [168]). The respondent made the weekly payments, as well as making available to the appellant the use of a serviced car as the result of an interim agreement the parties reached pending resolution of her claim: primary judgment (at [172]).
26 The primary judge regarded the interim agreement as well as the appreciation in the value of the respondent's assets since separation as a result of his endeavours as tending to support the date of separation as the date at which to value the parties' contributions. However he concluded there was a stronger case for adherence to the generally accepted approach which has regard to values at the date of trial, although with recognition of the fact that the appellant had made no contributions since separation and that the respondent had made financial contributions to her financial upkeep since separation: primary judgment (at [173]).
27 The respondent also owned properties on the island of Filicudi off the coast of Sicily at both the commencement and end of the relationship. The parties did not agree at trial on the value of the Filicudi properties. The primary judge rejected the appellant's expert evidence of their value. The respondent gave evidence of various properties and their acquisition, but did not adduce any evidence of their value. After the appellant's expert evidence of the value of the Filicudi properties was rejected, the respondent withdrew his tender of an expert report as to the value of the Filicudi properties prepared by a Mr Scafidi.
28 The primary judge recognised whichever approach he adopted to the date of valuation issue, there would be a gap regarding the Filicudi properties as there was no agreed value of those properties as at either the end of the relationship or the time of trial; nor any evidence from which he could determine their value: primary judgment (at [174]).
29 The appellant sought to argue at trial, in the course of argument on the admissibility of the valuation evidence concerning the Filicudi properties, that the respondent had failed in the discharge of the duty of frank disclosure of assets that applies to proceedings under the Act. The primary judge rejected that submission, saying:
"176 In the course of argument on the admissibility of valuation evidence the plaintiff sought to tender, it was suggested that the defendant had, in this respect, failed in the discharge of the duty of frank disclosure of assets that applies in proceedings of this kind: White v White [2004] NSWSC 208; Wilson v Vine [2003] NSWSC 341; Parks v Thompson (1997) DFC 95-182; cf Livesey v Jenkins [1985] AC 424. But no such suggestion was ever put to the defendant in cross-examination. Nor, as I see things, can a failure of someone in the present defendant's position to give evidence of the value of property (as distinct from its existence and ownership) amount to a failure to discharge the duty of disclosure. People can reasonably be expected to know what they own. That is in the realm of fact. They cannot reasonably be expected to know the value of each item they own (a matter of expert opinion), so if there is no agreement, the question of value must be determined by the court in the usual way, that is, by reference to evidence properly adduced and admitted. In the present case, there is no such evidence about the value of the Filicudi properties and the court can come to no concluded view about the value of them."
30 Accordingly he concluded (at [177]) that he had to leave the Filicudi properties out of account in undertaking the valuation task required by s 20 of the Act. The question of the value of the Filicudi properties is one of the substantial issues which arise on appeal.
31 There was also a dispute about the value of the land at Smithfield. The primary judge concluded its value was $7,150,000 as at the date of hearing: primary judgment (at [194]). The appellant does not challenge that conclusion.
32 It was common ground that the appellant had not at any time owned any valuable property: primary judgment (at [65]). As at 1988, the respondent's assets, subject to one matter to which we will come, had a net value of $15,123,368: primary judgment (at [66], [196]).
33 The primary judge found that at the time of separation the respondent's assets were valued at $18,664,819 (at [69], [197]).
34 It was agreed that at the time of trial the appellant's property was of negligible value. The respondent's property, subject to the Filicudi properties, had a net value of $29,075,120: primary judgment (at [198]). The primary judge held (at [207]) that the respondent's assets had increased in value by $13,951,752 from the commencement of the relationship to the date of trial.
35 In assessing the parties' respective contributions, the primary judge concluded that while account had to be taken of the contributions of both the parties to the acquisition, conservation or improvement of property and financial resources, in the present case, contributions of this kind were virtually confined to the respondent: primary judgment (at [199]). He said:
"199. …He was the successful businessman who, at the commencement of the relationship, had assets (apart from the Filicudi properties) of more than $15 million, being a home valued at $6.25 million and business assets with a value of some $9 million. During the relationship, the defendant continued to operate his businesses and to expand his business interests. The capital he deployed and the personal exertion he expended in planning, managing and supervising were the dual forces that enhanced business value both before and after the commencement of the relationship. The plaintiff made no financial contribution. She can be said to have made some very minor non-financial contribution to the improvement of the Gemini Hotel business but otherwise made negligible non-financial contributions to the acquisition, conservation or improvement of the defendant's business assets and other property. Although she interested herself in some aspects of the business, she did so in a way that really involved no more than personal support for the defendant as her domestic partner.
200. In relation to the Point Piper home, it was the defendant who provided financial inputs both before and after the commencement of the parties' relationship. The financial contributions to the conservation and improvement of that property came from him alone. Both parties made non-financial contributions to the home life, but I do not regard the plaintiff as having contributed to the conservation and improvement of the building and contents as physical items. She did devote time and effort to matters of decoration and upkeep at times when the defendant was involved in business matters but that, in my view, is relevant under s 20(1)(b) rather than s 20(1)(a).
201. The only area in which the plaintiff made relevant contributions of any significance is that comprehended by s 20(1)(b). She made appreciable non-financial contributions to both the domestic unit constituted by the defendant and herself (and thereby to the welfare of the defendant) and directly and separately to the welfare of the defendant, including by way of providing him with personal support in matters of business. But the defendant likewise made appreciable non-financial contributions - as well as very significant financial contributions - to the domestic unit (and thereby to the welfare of the plaintiff) and directly and separately to the welfare of the plaintiff.
202. Looking at property and the s 20(1)(a) inquiry, the only element of adjustment in favour of the plaintiff I would consider to be just and equitable is a very small proportion of the increase in the value of the Gemini Hotel. Having regard to the findings at paragraphs [119] to [121] above and the fact the successful and profitable operation of the hotel business was overwhelmingly the achievement of the defendant, I would regard, say, two per cent of the accretion in value as attributable to the plaintiff's contribution.
203. As to the homemaker and domestic (or personal welfare) aspects within s 20(1)(b), the defendant's contributions considerably outweighed those of the plaintiff. It was his pre-existing wealth and his willingness to be generous to the point of lavishness in the expenditure of his fortune that was the main factor in the maintenance of the way of life the parties enjoyed. All s 20(1)(b) contributions of a direct financial kind came from the defendant. It was he who provided the large and well-appointed home, the extensive home comforts, the holidays and the amenities generally that the parties enjoyed in material terms. As for the intangibles of mutual support, comfort and assistance, I am of the opinion that, subject to one qualification, each party contributed to generally the same extent as the other.
204. As regards the intangibles, the plaintiff spent more time than the defendant in actually attending to domestic, household and lifestyle matters. This raises an issue that can be of significance in cases of this kind. The valuation of contributions under s.20 may take account of the cost of each contribution to the person making it. In Howlett v Neilson (above), there is, in relation to s 20(1)(b) contributions, reference at paragraph [36] of Hodgson JA's judgment to the hypothetical example of a woman who spends ten years as a homemaker rather than in developing skills and advancing a career. The cost to the woman in terms of loss of opportunity for development of skills and advancement of a carer is then a factor to be taken into account in valuation contributions.
205. The factor I have just mentioned is relevant to the plaintiff's case. She was, at the beginning of the relationship, someone with secretarial skills. Had she not committed herself to the relationship, she may, over the twelve year period, have undertaken education or training and, by those means or simply by experience in employment, have acquired greater and higher level skills. There is, of course, no evidence that she would or could have done so. But the potentiality is, I accept, an intangible to be taken into account in valuation.
206. In relation to s 20(1)(b) contributions, the direct financial inputs by the defendant are the predominant element. There is no ultimately reliable way of quantifying them but, given the very high quality of life the parties enjoyed and the extent of the material comforts provided by the defendant alone, I am of the opinion that the direct financial elements substantially outweighed the intangible elements of emotional support and application of time and effort in homemaking and the like. I would put the material financial elements at 75% of the total. It is to the remaining 25% that both parties contributed in the way I have described, with the plaintiff's contribution slightly outweighing the defendant's because of the cost factor suffered by her. That division should, I think, be regarded as 55% to the plaintiff and 45% to the defendant. In overall terms, therefore, the s 20(1)(b) contributions should be regarded as provided as to 86.25% (that is, 75% plus 45% of 25%) by the defendant and 13.75% (that is 55% of 25%) by the plaintiff."
36 The primary judge accepted (at [208]) that it was just and equitable that the appellant's "wholly non-financial contributions - being a very modest s 20(1)(a) contribution in relation to the Gemini Hotel business and more significant s 20(1)(b) contributions - be recognised by an order that transfers to her some part of that accretion in value."
37 The primary judge held (at [209]) that he should award the appellant 13.75 per cent of the $13,951,752 by which the respondent's properties had increased in value from the commencement of the relationship to the date of trial - a sum of $1,918,365.90.
38 The primary judge also concluded (at [210]) that the appellant should be awarded two per cent of the increase in the value of the Gemini Hotel business over the period from commencement of the relationship to the time of trial which increased her award by $128,210.
39 Accordingly the primary judge awarded the appellant $2,046,575.90: primary judgment (at [210]).
40 The primary judge considered whether there should be an interest adjustment to the aggregate award of $2,046,575.90 to take account of the fact that the trial began in June 2005 and the agreements as to value (as well as the valuations of the Smithfield land) were as at June 2005, but the trial did not end until 15 December 2005. He concluded he should not because he attributed the delay to the adjournment he gave the appellant at the end of the evidence in July 2005 to adduce evidence of the value of the Filicudi properties: primary judgment (at [211]).
41 At the conclusion of his judgment (at [214]) the primary judge said he would hear the parties as to the precise order that should be made to give effect to his reasons and on the question of costs. On 5 September 2006 he delivered a judgment on costs in which he ordered each party to bear his or her own costs, subject to allowances by the appellant to the respondent of sums it is unnecessary to detail: Paino v Paino - Costs [2006] NSWSC 886. The parties have agreed that the question of costs should be argued and determined after resolution of the substantive appeal.