Robertson v Austin [2003] VSC 80

6. The plaintiff met the defendant in February 1996 when she was 34 years old and he was 33. She was a policewoman and he was a car salesman who was at that time unemployed and in receipt of health care benefits. The plaintiff had been married to another man from whom she was recently divorced and she had two children from that marriage, aged 9 and 11 years. The defendant was unmarried and he had no children of his own.

9. When they met, the plaintiff owned a house at 23 Vialls Avenue, Parkdale, then valued at $180,000, subject to mortgage in the amount of approximately $85,0000; furniture and effects to the value of $30,000; an old Mitsubishi motor car worth about $1,000; and vested superannuation entitlements of approximately $90,000. Her only significant liability, apart from the mortgage debt, was a credit card debt of $3,500. The defendant did not own anything of significant worth. His possessions were limited to a damaged and dismantled Honda CBR motorbike, an old Falcon XY utility vehicle and personal clothing and effects.

12. In March or April 1996 the defendant obtained employment as a car salesman at a dealership in Ferntree Gully and in June 1996 the plaintiff and the defendant began to live together as man and wife. They continued to do so, with the some significant breaks, until December 2000.

15. Until about November 1997 they lived together at the plaintiff's home at 23 Vialls Avenue, Parkdale. The plaintiff had only just begun to renovate that property before the defendant moved in and it was not until November 1997 that the final aspect of the renovation was completed. But the defendant did not contribute much to the renovations. The major works were carried out by tradesmen for whom the plaintiff paid at a cost of some $25,000. The defendant's contribution was confined to helping the defendant construct a garden bed, polishing some timber floors and assisting in the construction of a pergola.

18. Throughout their time at Vialls Avenue, the defendant made good money as a car salesman. He netted in the order of $1,000.00 per week and he was provided with a company car. But he drank heavily and he lived a profligate lifestyle. In the result, the plaintiff paid all household expenses except for occasional purchases of groceries and payment of the odd utilities bill.

21. In November 1997 the plaintiff was seconded to the Australian Bureau of Criminal Intelligence and the plaintiff and the defendant moved to Canberra together and lived together in subsidised rental accommodation. Again the defendant found employment as a car salesman and again he was paid good money. But he continued to drink to excess, spending he said between $300 and $400 per week on alcohol and it was left to the plaintiff to pay all of the rent and a large majority of the household expenses. Apart from the occasional purchase of groceries and payment of the odd utilities bill the defendant's major financial contribution seems to have been to take the plaintiff and her children on a couple of holidays.

24. The defendant's behaviour towards the plaintiff was on occasions adversely affected by alcohol. On one such occasion on 15 March 1998 the plaintiff obtained from the Magistrates Court in Canberra an interim intervention order against the defendant on the basis that he had treated her with physical violence and made threats of damage to property. He was that day escorted from the house by police.

27. The relationship resumed at the end of March 1998, and it continued then until the end of July 1998, but at that point it broke down again: at first with the parties living apart under the one roof and at the end of August 1998 the defendant left to live elsewhere. The relationship resumed once more at the end of October 1998 and it continued then until 12 December 1998. At that point the plaintiff was posted to Wamboin, New South Wales and the defendant returned to Melbourne to live with his mother.

30. In March 1999 the plaintiff returned to Melbourne with the intention of resigning from the police force and she and the defendant began once more to cohabit. In the same month they entered into a contract to purchase a house at 50 Roberts Street, Parkdale for $190,000, initially with the intention of holding the property as a negatively geared income producing investment (although that intention later changed). They arranged to fund the whole of the purchase price, and stamp duty and legal expenses of some further $10,000, with a loan of $200,000 from Bank of Melbourne. The loan was taken out in both of their names and was secured over the Roberts Street property and also over the plaintiff's house at Vialls Avenue.

33. In March 1999 the defendant attempted to start up a digging business by purchasing a truck and a bobcat with the aid of a loan of $6,000 from the plaintiff and a further loan from the Trust Bank of Tasmania. That loan was also taken out in the names of the plaintiff and the defendant.

36. During May 1999, the defendant was involved in an accident while driving the truck and it was damaged beyond repair. The digging business thus ended almost as it began (although the insurance pay-out was sufficient to discharge the Trust Bank of Tasmania loan, leaving a surplus of $9,080.53 in the defendant's hand).

39. Until completion of the Roberts Street contract on 21 May 1999 the plaintiff and the defendant lived together in police rental accommodation and, as before, the plaintiff paid the rent and the bulk of household expenses. It was at some point during that period that they decided that they would live in Roberts Street rather than holding it as an investment property, and they moved into Roberts Street upon completion of its purchase on 21 September 1999.

42. Things did not go well. Although the defendant had in 1998 admitted himself to a clinic for treatment of his alcoholism, and ceased to drink for the next two years, in October 1999 the plaintiff returned to live in Vialls Avenue, leaving the defendant alone in Roberts Street, and it was not until late in November 1999 that the plaintiff and the defendant resumed cohabitation at Vialls Avenue with the plaintiff's children.

45. On 4 December 1999 the plaintiff resigned from the police force and received upon her retirement a superannuation lump sum payment of $75,713.46 and a retained benefit of approximately $16,000, and on 21 December 1999 she paid out of the lump sum $55,500 off the Roberts Street loan and $5,000 towards the Vialls Avenue mortgage.

48. Following her retirement the plaintiff remained at home at Vialls Avenue until July 2000, but she continued to meet the bulk of the household expenses from her savings and with the use of her credit card.

51. While at home the plaintiff developed an interest in acquiring a business. At first she had in mind that the business would be for herself alone. As the plan developed the plaintiff and the defendant decided that it would be preferable if they were involved in the business together. The defendant's aunt and uncle owned and operated a company called Advantage Trading Pty Ltd which conducted a business of importing and selling Asian furniture. It had had a number of years of successful trading and they were interested in selling. After introductions by the defendant, the plaintiff negotiated with the defendant's uncle to buy the company and its business.

54. On 6 June 2000 the plaintiff entered into a contract to sell the Vialls Avenue property for $262,800, in effect to fund the acquisition of the company and the business.

57. On 26 June 2000 the plaintiff and the defendant entered into a contract to purchase from the defendant's aunt and uncle all of the shares in Advantage Trading Pty Ltd for $35,000 plus stock at valuation. The plaintiff paid the purchase price using the deposit she received on the sale of Vialls Avenue and the remainder of her superannuation lump sum. Upon completion, half of the shares were transferred to the plaintiff and the remainder were transferred to the defendant. The defendant paid nothing for his shares.

60. The contract of sale of Vialls Avenue was completed on 4 September 2000 and after discharge of the securities over Vialls Avenue and a reduction in the amount secured over Roberts Street, the plaintiff was left with net proceeds of sale of $87,281.10. She paid all of that and a further $23,000 into Advantage Trading Pty Ltd as working capital. The only amount which the defendant contributed to working capital was the $9,080.53 insurance proceeds left after discharge of the truck loan.

63. From 1 July 2000 until 12 December 2000 the plaintiff and the defendant worked together in the business, drawing salaries of $162 per week each and paying the remainder of their living expenses out of the company. Throughout that five month period the company ran at a loss. The loss may have been due to once only start up costs and prepayments. The previous performance of the company suggests that the business' essentials were sound, although stock levels were high and cash flow was tight. But as the accountant for the plaintiff, Mr Kinder, said in his evidence, the five month period is too short a time on which to base any conclusions.

66. In October 2000 the personal relationship between the plaintiff and the defendant soured again and they began once more to live separately under the one roof at Roberts Street. I infer that at much the same time the defendant decided that he would leave the company.

69. On 27 November 2000 the defendant drew on the account of Advantage Trading Pty Ltd a cheque payable to himself in the sum of $12,450 and that day he left a note at the company's premises stating that the sum of $12,450 represented repayment of the $9,080.53 which he had contributed to working capital, and payment of wages due to him. The plaintiff did not agree to the payment and against the defendant's wishes she later procured its repayment to Advantage Trading Pty Ltd out of an account of the defendant to which she gained access.

72. Not to be outdone, on 12 December 2000 the defendant took away from the premises of Advantage Trading Pty Ltd stock which he described in a note which he left at the premises as being "to the approximate value of the debt owing to me...".

75. On the same day the plaintiff applied to the Magistrates' Court at Frankston for an intervention order to keep the defendant out of the Roberts Street property. That proceeding was settled on 13 December 2000 upon the defendant giving an undertaking to the court that he would not go within 200 metres of the property.

78. On 15 December 2000 the plaintiff obtained from the Magistrates' Court at Melbourne consent orders and undertakings for the return of the stock. Pursuant to those orders stock was returned. But there is a dispute as to how much was returned.

81. At the time of the defendant's departure from Roberts Street the Roberts Street property had a market value of $220,000 and was subject to mortgage in the amount of $159,000. At that point the payments which had been made by the plaintiff under the mortgage stood at $75,500 and the payments which had been made by the defendant under the mortgage stood at $6,000.

84. Since then, the plaintiff has met all mortgage obligations, so that to date she has paid $105,000 in total. The property now has a market value of $300,000 and is subject to mortgage in the amount of $153,000.

87. For a number of months after the defendant left the company the plaintiff attempted to continue to conduct the company's business on her own. But she found it difficult to do so. With only herself involved, she had to shut the shop in order to make deliveries and the defendant refused to sign company cheques for the payment of company bills. He insisted that stock not be sold otherwise than in the usual course of business. The plaintiff managed to alleviate those difficulties to an extent, by starting a new bank account for the company which she was able to operate alone and by taking a lease in her own name of the premises from which the company operated. But ultimately, after April 2001 the plaintiff set up her own business under the name of Absolutely Luvvit, transferred stock from the company to the new business at cost, and began to use the company's delivery vehicle for the new business and to pay the leasing charges for that vehicle. Thereafter the company did not trade.

90. Recently, the defendant has executed what purports to be a mortgage over the Robert Street property in favour of John Joseph Drummond, to secure the repayment of $5,000 (and interest of $750), lent to the defendant to pay legal fees. Drummond has lodged a caveat on title and refuses to remove it until the debt is paid.

94. The plaintiff contends that the defendant is not deserving of any recognition or allowance in respect of the Roberts Street property, and that he should be ordered to hold his interest in the property on trust for the plaintiff. Her argument is that:

* the plaintiff made all of the monetary contributions to the acquisition of Roberts Street, except for the five payments totalling $6,000 made by the defendant while he lived there;

* the plaintiff paid the overwhelming proportion of living expenses throughout the years in which they lived together which more than compensates for the $6,000 of payments made by the defendant;

* the plaintiff has paid all of the recurrent costs and costs of maintenance and upkeep;

* the plaintiff has borne the brunt of the risk associated with the purchase and it was only because her assets were put at risk and her capital employed in the purchase that the purchase was possible;

* the defendant never contributed anything in the way of labour or otherwise to the improvement of Roberts Street or to any asset which went towards to its acquisition.

102. The plaintiff also contends that the defendant is not deserving of any recognition or allowance in respect of Advantage Trading Pty Ltd, and that he should be ordered to transfer his shares in the company to the plaintiff. She says that:

* The plaintiff paid all costs of the acquisition of the shares in Advantage Trading Pty Ltd and all of the running costs except for the $9,080 paid in by the defendant.

* The $9,080 is substantially represented by the loan of $6,000 which she made to the defendant to fund the acquisition of his digging business, and it was never repaid.

* The defendant walked away from the Advantage Trading Pty Ltd business leaving the plaintiff to struggle alone with a business which really took two people to run.

* The inevitable consequence was that the business was not profitable and because of the losses which it suffered it is now worthless.

* The plaintiff has already suffered very significant losses in terms of the purchase price and working capital thrown away and she should not be burdened with any further losses of the kind which would be imposed by being obligated to pay the defendant compensation in respect of the company.

* The defendant did not return all the stock when he was ordered to do so and as a result he has already had in effect stock to the value of about $12,000.

111. The defendant does not dispute the plaintiff's figures relating to Roberts Street. He says, however, that without his involvement the plaintiff's borrowing capacity would have been limited to $120,000, and that because he became involved they were able to obtain a loan of $200,000. On that basis he contends that the value of the property ought to be apportioned 60/40 after bringing to account the several payments made by him and by the plaintiff in reduction of the mortgage. He argues that there should not be any reduction in his share to allow for the living expenses borne by the plaintiff because, even if he did contribute less to living expenses than she did, the plaintiff has had the benefit of the exclusive occupation of the property since the relationship ended in December 2000.

114. The defendant does not dispute the plaintiff's figures relating to Advantage Trading Pty Ltd either, except for the allegation that he did not return all the stock. He contends, however, that he contributed significantly to the company by bringing to it the benefit of years of experience in marketing, and that at a minimum he should receive an allowance referable to the difference between the nominal pay of $160 per week which he received while he worked there and salary for the same period calculated at the rate of $20,000 per annum (which he says was an agreed minimum annual salary). He also contends that he is entitled to be repaid his loan of $9,080 and to be repaid a further amount of US$3,000 which he paid to discharge the obligations owed by the company to one of its suppliers.

118. Under Part IX of the Property Law Act 1958[1] the court is empowered to make orders in respect of defacto partners, if they have lived together in Victoria in a defacto relationship for at least two years, for the just and equitable adjustment of the interests in the real and personal property of one or both of them. In so doing the court is directed by s. 285 of the Act to have regard to the financial and non-financial contributions made by and on behalf of each partner to the acquisition, conservation or improvement of any of the property, and to the financial resources of each partner, and also to the contributions made by each partner in the capacity of homemaker or parent to the welfare of the other partner or any child of either partner or accepted by either partner into the household.

121. The principles to be applied in making such an adjustment of property interests were essayed by Vincent J in Conn v Martusevicius[2] as follows:

"...the Court is vested with a wide discretion and must attempt to arrive at a result which is just and equitable in the circumstances. Accordingly, it must have regard to the whole of the relevant context within which an application is made. "Any assessment of the significance and value of the assistance and support provided by de facto partners which did not place them within a frame-work provided by all of the circumstances of the relationship, would introduce a measure of unreality into the process and a degree of tension would arise between the adoption of a restrictive approach to the factors to be taken into account, and the duty of the Court to attempt to achieve equity between the partners. "Whilst s. 285 imposes an obligation upon the Court to have regard to a number of particular kinds of contributions which may have been made, the legislature has not attempted to confine narrowly the concept of `contribution' and there is, in my opinion, no good reason for the courts to do so. The fundamental limitations to the scope of the section in this context, are contained in the expression `de facto partner' which makes it clear that any such contribution to be relevant must have been made by a person who fell within that description at the time of its making a possesses a sufficient nexus with the relationship. "...it is, in my opinion, reasonable within its ambit of operation to adopt a similar approach to that followed by the Courts with respect to the New South Wales legislation according to which a judge :

`...should proceed, first, to identify, and value the assets of the parties; second, to determine whether any, and , if so, what contributions of the type contemplated ...[by the legislation]...have been made by each partner; third, to determine whether, in the circumstances, the contributions of the applicant has already been sufficiently recognised and compensated for; and, finally, to determine what order is called for in order that the applicant's contributions be sufficiently recognised and compensated for...'." (Emphasis added.)

126. That decision has been followed in this court and other courts on a number of occasions[3].

129. More recently, in Bennett v Parker[4], O'Bryan J considered that Conn and the cases which had followed it should no longer be followed. In his Honour's opinion they were based on the decision of Handley JA in Dwyer v Kaljo[5] and that had been disapproved of by the New South Wales Court of Appeal in Evans v Marmont[6].

132. But if I may say so with respect, I do not think that there is any inconsistency between Conn and what was said in Evans, unless it is to be found in the observation of Vincent J that "the legislature has not attempted to confine narrowly the concept of `contribution' and there is, in my opinion, no good reason for the courts to do so". The decision in Conn was not based on what Handley JA said in Dwyer - it preceded the Court of Appeal's decision in Dwyer - and in Conn, Vincent J (just like the judge at first instance in Dwyer) expressly adopted the four stage approach to the adjustment of property interests which was laid down by Powell J in D v McA (but subsequently disapproved by Handley JA on appeal in Dwyer). Inasmuch as the Court of Appeal in Evans disapproved of what Handley JA had said[7], and held that Dwyer should not be followed, Evans tends to vindicate the approach adopted in D v McA and thus implicitly to provide support for Conn.

135. At all events, as the law appears to me, the only things to which the court is to have regard are direct and indirect financial interests. But it remains that in quantifying those contributions one should not attempt to confine narrowly the concept of contribution.

138. With those principles in mind, the most practical course is to deal with each asset separately.

142. The value of Roberts Street and the monetary contributions made by each of the partners to its acquisition are clear. As has already been seen, at the time of the defendant's departure from Roberts Street, the Roberts Street property had a market value of $220,000 and was subject to mortgage in the amount of $159,000. At that point the payments which had been made by the plaintiff under the mortgage stood at $75,500 and the payments which had been made by the defendant under the mortgage stood at $6,000. Since then the plaintiff has met all mortgage obligations, so that to date she has paid $105,000 in total, and the property now has a market value of $300,000 and is subject to mortgage in the amount of $153,000.

145. The non-monetary contributions are not as sharply defined. It is not in dispute that the plaintiff bore the large proportion of household expenses and that she was the pre-eminent homemaker and parent. It is also not in dispute that the defendant did not contribute a great deal financially to the costs of living and the expenses of the home. The problem lies in the extent to which the defendant should be given credit for his role as the man of the house[8].

148. On the one hand the evidence persuades me that the defendant regarded the plaintiff highly and with deep affection. My impression is that he esteemed the plaintiff as a partner and for the experience of parenthood which the presence of her children afforded him. Although he was an alcoholic, and consequently sometimes misbehaved (at least up until 1998), I also think that he probably did his best within the confines of his limitations to make the relationship a success and to make the life which they shared a happy one; both for the plaintiff and for the children.

151. On the other hand, the defendant's own evidence was that he worked very long hours (he said as many as 90 hours per week) and that he was given to a profligate lifestyle (he said he spent between $300 and $400 per week on alcohol). Accordingly, even with the best will in the world his contributions as a homemaker and parent were likely to have been limited. He may not have been able to help it, but his behaviour must at times have caused great difficulty and consternation for the plaintiff and for her children.

154. That is not to exclude the weight of non-financial contributions in the adjustment of property interests. They have a significance to which I shall return later in these reasons. But in the circumstances of this case I consider that the focus should be upon the monetary contributions which each party made.

157. Several options are open. If the parties' interests in the property are looked at as at the date that their relationship finally broke down and the equity in the property as at that date (viz. $61,000) is divided between them rateably according to their respective contributions (which, in the case of the plaintiff, then stood at $75,500 and, in the case of the defendant, then stood at $6,000), the plaintiff would be entitled to 75,500/81,500ths of $61,000, which is to say $56,509, and the defendant would be entitled to 6,000/81,500ths of $61,000, which is to say $4,490.

160. If the parties' interests in the property are looked at as the same date but the equity in the property is divided between them in the fashion contended for by the defendant, the result would be no different or, if the contributions made by the plaintiff were paid out first, the defendant would receive nothing.

163. If the parties' interests in the property are looked at as of today, and the equity in the property at the present time ($147,000) is divided between them rateably according to their contributions (which, in the case of the plaintiff, now stand at $105,000 and, in the case of the defendant, remain at $6,000) the plaintiff would be entitled to 105,000/111,000ths of $147,000, which is to say $139,054, and the defendant would be entitled to 6,000/111,000ths of $147,000, which is to say $7,945.

166. If the parties' interests in the property are looked at as of today but the equity in the property is divided between them in the fashion contended for by the defendant, the result would be significantly different. The plaintiff would receive the refund of the amounts which she has paid, namely, $105,000, plus 60% of the net equity after repayment of the amounts which the plaintiff and the defendant have paid (which is to say 60% of $36,000 = $21,600), yielding a total of $126,600. The defendant would receive the refund of the amount which he has paid, namely, $6,000, plus 40% of the net equity after repayment of the amounts paid by the plaintiff and the defendant (which is to say 40% of $36,000 = $14,400), yielding a total of $20,400.

169. It was submitted on behalf of the plaintiff that one should look at the matter as at the date of the breakdown in the relationship, and it was suggested that the decision of the New South Wales Court of Appeal in Theodoropoulos v Theodosiou[9] was authority that, where the value of real property has increased significantly by reason of inflation or market developments since the time of breakdown, the correct or usual approach is to adopt the value as at the date of breakdown. I do not think that is correct.

172. As far as I can see, if Theodoropoulos v Theodosioiu is authority for anything to do with time of valuation, it is that the value should be up to date and have regard to the facts of the case. According to Priestly JA[10]:

"This state of the evidence makes it necessary to ask what property (the section) authorises the court to take into account when making an order adjusting the interests of the parties under the subsection. Should the court limit itself to looking at the state of affairs at the time of the termination of the de facto relationship, or at the time the matter is being considered by the court, or some time in between? In my opinion the answer to this must depend on the facts of the case, but in deciding what property should be the subject of an order, the court must always be able to look at the property facts as they exist at the time when the court is considering the making of an order... In the present case it seems to me to be a relevant fact that at the date of the master's decision the respondent's principal asset was the property... There is nothing in the evidence to suggest that anything had been done by the respondent to add value to the premises... It would therefore seem that any increase in its value from the date of separation in September 1986 must have been due to rising property values." (Emphasis added.)

On that basis his Honour held it appropriate to assess the matter on the basis of the current value.[11]

177. Similarly, where as here a significant increase in the value of a property is due to no more than inflation or market trends, I consider that it is appropriate to adjust the parties' interests in the property by reference to current value. There is no good reason and thus it cannot be just and equitable that one of the parties should have the benefit of the windfall gain to the exclusion of the other party. Equally, however, where as here one party has been largely responsible for meeting the holding costs of the property, they should receive appropriate credit for that contribution. There is no reason why and thus it cannot be just and equitable that one party should share disproportionately in an increase in value made possible by the holding costs incurred by the other party.

180. In this case the plaintiff made the overwhelming bulk of the payments to the bank and hence it is largely her money which has allowed the property to be held long enough to realise the inflationary or market gain which has occurred. Thus unless she is given something by way of interest to compensate her for the time value of her money forgone, or a share in the increase in value commensurate with her larger contribution towards the bank payments, the defendant will benefit to an extent greater than his contribution.

183. If the net equity in the property is divided rateably according to payments made, each party will receive a share of the inflationary or market gain which accords with the extent to which they have financed the property. That would seem to me to be just and equitable because it rewards each party according to the extent to which they have contributed.

186. If, however, each party were first paid out of equity the amount of bank payments they have made, and the remainder were then divided in the proportions suggested by the defendant, the defendant would finish up with a far greater share of the inflationary or market gain than he has financed. That seems to me not to be just and equitable.

189. The defendant contended that he should be allowed something in addition to his rateable share of the current value of the property to compensate for the fact that the plaintiff has had exclusive occupation of the property since the breakdown and the defendant has had no benefit out of it or his investment in it.

192. The plaintiff responded that it is not appropriate to allow for her exclusive occupation of the property, because she had committed no wrong. It was said that the decision of the New South Wales Court of Appeal in Biviano v Natoli[12] stands as authority for the proposition that a co-tenant of property may not claim anything in the nature of an occupation fee from the other co-tenant, unless the other co-tenant has excluded the claimant from the property by a legal wrong. It was submitted that here there was no exclusion by legal wrong, because the plaintiff had by his undertaking to the Magistrates' Court voluntarily absented himself from the property.

195. Biviano v Natoli is indeed authority for the proposition that as between co-owners of land an entitlement to an occupation fee only arises where there is conduct by one co-owner towards the other sufficient for the court to infer a denial of the claimant's title. It is also authority that a court order obtained by one co-owner to prohibit the other going on the land is not a sufficient denial for the purpose. But each of those propositions is a principle of land law which rests upon the nature of the unity of possession which is the essence of co-ownership.[13] As at present advised that appears to me to have very little to do with the adjustment of property interests under Part IX of the Property Law Act according to what is "just and equitable". It may also be observed that even in Biviano it was regarded as sufficient denial of title to attract the right to an occupation fee that the defendant had in a pleading denied the plaintiff's interest in the land. In this case, the plaintiff has asserted from the outset of the proceeding that the defendant holds his interest in the property on trust for her.

198. Nevertheless the real difficulty for the defendant upon this part of the case is that according to the authorities[14] Part IX of the Property Law Act is not about compensation, it is about the adjustment of property interests according only to the parties' direct and indirect contributions to the property or welfare of them both. I do not consider that the defendant's exclusion from the Roberts Street property since the breakdown of the relationship could be classed as a contribution to either.

201. Moreover, even if it were possible to do so, I wonder how one would go about valuing the contribution. The defendant submitted that it might be valued by reference to the rent which one would have to pay for the property, and he said that in his opinion it would bring something in the order of $300 to $350 per week. But there is no direct evidence of the rental value of the property, and the defendant's contention also overlooks that the plaintiff has an interest as a co-tenant and hence that anything more than half the rental would plainly be too much.

204. In all the circumstances I am not persuaded that I should allow anything for the fact that the plaintiff has had exclusive possession of the property since the breakdown of the relationship.

207. I conclude that the plaintiff's and the defendant's interests in the Roberts Street property should be adjusted by ordering that the plaintiff pay to the defendant the sum of $7,045 and that the defendant transfer to the plaintiff all of his right title and interest in the property freed and discharged of the Drummond mortgage.

212. I turn to the adjustment of interests in Advantage Trading Pty Ltd. I accept the plaintiff's contentions that the plaintiff paid all costs of the acquisition of the shares in Advantage Trading Pty Ltd and all of the running costs except for the $9,080 paid in by the defendant. I also accept the contention that the $9,080 is substantially represented by the loan of $6,000 which the plaintiff made to the defendant to fund the acquisition of his digging business, which was never repaid. I agree that it is a fair summary of the facts to say that the defendant walked away from the business, leaving the plaintiff to struggle alone with a business which really took two people to run. But I am not persuaded that the business was rendered worthless or that the plaintiff's investment was lost. I think a more accurate assessment of the position is that the plaintiff's new business is in effect the business previously carried on by Advantage Trading Pty Ltd, but under another name.

215. In making that observation I do not intend to be critical of the plaintiff or to suggest that she is guilty of any wrongdoing. Given what had occurred, I can well understand that she would wish to channel all her efforts into a business which was hers alone, rather than continuing to work for a business in which the defendant held at least a nominal half interest and was making life difficult. I am also sympathetic to the idea that faced with the difficulties which the defendant's departure created, she was left with few other options. But that does not mean that the plaintiff has lost the worth of the funds she put in. Granted that Advantage Trading Pty Ltd may now be worthless, except perhaps as a tax loss company, I think it probable that most of the goodwill of Advantage Trading now resides in the plaintiff's new business.

218. No doubt there are some differences between the two businesses. The name is one. But the new business trades from Advantage Trading Pty Ltd's old premises (the lease was renewed in the plaintiff's name); the new business uses the delivery van which used to be used by Advantage Trading Pty Ltd (the new business pays the lease obligations); the new business has taken over apparently at cost and re-sold presumably at a profit all or at least most of the stock left on hand when the business of Advantage Trading Pty Ltd ceased (the transfers of stock have been treated in the accounts as a reduction in the amount of the plaintiff's loan account); and in the absence of any suggestion of other clientele, I infer that since its inception the new business has serviced and that it continues to service very much the same customers as used be serviced by Advantage Trading Pty Ltd.

221. It remains to determine how the interests of the plaintiff and the defendant in Advantage Trading Pty Ltd are to be adjusted. Clearly enough, the plaintiff should have all of the shares. She paid for them, and she paid virtually all of the working capital, and the defendant walked away and left her with the operation to manage as best she could, and she did. Equally clearly, I think, he should have back his loan of $9,080, less the $6,000 represented by the loan made by the plaintiff to him to finance his digging business, and I think that he should also be repaid the US$3,000 (A$5,099 calculated upon Reserve Bank of Australia exchange rates) which he paid on behalf of the company. That entitles him to $8,179 in total.

224. I mentioned earlier in these reasons that there was a dispute about how much of the stock taken by the defendant on 12 December 2000 was returned pursuant to the subsequent consent orders. The plaintiff gave evidence by reference to stock takings which she conducted that upon her calculations something in the order of $12,000 of stock was not returned. The defendant swore that he returned all of the stock as ordered. It is necessary that I resolve that dispute.

227. I found the plaintiff an impressive and credible witness. I do not doubt her honesty generally or the honesty of her calculations which showed that not all stock was returned. Contrastingly, I found the defendant at times to be a less than satisfactory witness. Of occasion he was prone to exaggerate, and sometimes to prevaricate. Hence, if the matter were one of direct conflict of testimony, I would prefer the evidence of the plaintiff. But this is not a matter of direct conflict of testimony. It is a matter of calculation and opinion on the one side and direct denial on the other.

230. In that state of the evidence, and bearing in mind the serious nature of the allegation which is made against the defendant, I am not satisfied to the requisite standard that any of the stock was withheld.

233. There remains to be considered the defendant's contention that he should be paid something by way of increased salary (in addition to repayment of his loans to the company) in recognition of his contribution to the company. I reject that contention. I am unable on the evidence which was adduced to see that the defendant contributed anything of significance to the value of the company. As has already been observed, it was an established company with an established clientele and the plaintiff paid her money to acquire the existing operation. Little though the defendant's remuneration may have been, there is nothing to show that it was not adequate for the work which he did.

236. The defendant did give evidence that the amount of $162 per week was intended only as an advance on salary and that he and the plaintiff had agreed they would at the end of the financial year cause the company to make up their salaries to $20,000 each, come what may. But even if there were such an arrangement, and I am not satisfied that there was, the defendant left the operation long before the end of the financial year. I do not consider that it is appropriate to award in favour of the defendant anything in respect of Advantage Trading Pty Ltd in addition to the repayment by the plaintiff of the $8,179 lump sum.

240. I come back to the matter of non-monetary contributions to which I referred earlier in these reasons.

243. Whatever the defendant's shortcomings, the plaintiff's actions testify to the fact that she derived sufficient by way of company and support from the defendant to persist with the relationship for more than four years. Given that the nature of her work for much of that time was at least as stressful and demanding as his, I conclude on balance that he was of some real benefit to her and in that way he contributed indirectly to the property and welfare of them both. For the reasons already expressed I regard the significance of that contribution as limited and to some extent balanced by the financial and non-financial contributions which the plaintiff made to the household. But I do not think it to be offset altogether.

246. Even allowing for his excessive drinking and the costs which it must have entailed, he did earn good money and he left the relationship with next to nothing. Furthermore, I doubt that he was much of a burden upon the household. He was out of the home working and entertaining for so much of the time that he is unlikely to have caused a great deal of additional household expenditure. It is more probable that most of the household expenditure went on the plaintiff and her children.

249. In a case of this kind it is impossible to define with precision or even by reference to objective criteria the worth of the defendant's non-monetary contribution to the assets and welfare of the parties. Views will differ widely as to the existence and extent of the contribution. The defendant perhaps perceives it as having been of great importance and value; the plaintiff, something less.

252. In my view, however, having regard to the more than four year term of the relationship and the pool of assets which were amassed within that time, it should be concluded that the defendant contributed indirectly to the extent of at least 5% of the pool. I therefore allow an additional $7,500 to be paid by the plaintiff to the defendant at the same time as the amounts which I have determined to be referable to the Roberts Street property and Advantage Trading Pty Ltd.

256. For the reasons given I consider that it is just and equitable that the plaintiff's and the defendant's interests in the property the subject of their de facto relationship be adjusted as follows:

* Their interests in the Roberts Street property are to be adjusted by the plaintiff paying to the defendant the sum of $7,045 and the defendant transferring to the plaintiff all of his right title and interest in the property, freed and discharged of the Drummond mortgage.

* Their interests in Advantage Trading Pty Ltd are to be adjusted by the plaintiff paying to the defendant the sum of $8,179 and the defendant transferring to the plaintiff all the shares in the capital of the company which are held in his name, free and unencumbered.

* The plaintiff shall pay to the defendant a further sum of $7,500 in respect of the defendant's non-monetary contribution to the assets and welfare of the plaintiff and the defendant.

[1] The provisions applicable are as they were before amendment by Act No.27 of 2001

[2] (1991) V Conv R 54-413 at 64,942-64,943; see also D v Mc A (1986) 11 Fam R 215 at 228; cf Thomas v The Registrar of Titles (1992) V Conv R 54-437

[3] See Hughes v Curwen-Walker (1994) 18 Fam LR 625; Leswiak v Fogginberger BC9503944; Griffiths v Brodigan (1995) 129 FLR 102; Fleeton v Seddon BC9707343; and Burs v Chazab [2000] VSC 328

[4] [2000] VSC 401; (2000) 27 Fam LR 8

[5] (1992) 27 NSWLR 728 at 744

[6] [1997] NSWSC 331; (1997) 42 NSWLR 70

"The power to make a just order must therefore authorise orders to remedy any injustice the applicant would otherwise suffer because of his or her reasonable reliance of the relationship (a reliance interest) or his or her reasonable expectations from the relationship ( an expectation interest)."

In Evans the Court of Appeal rejected the idea that it was permissible to take into account anything other than direct and indirect contributions. Meagher JA with whom all of the other members of the court agreed, said:

"Section 20 [of the New South Wales Act (s.285 of the Property Law Act)] enables a court to `make such order adjusting the interests of the partners in the property as it seems just and equitable having regard to "two specified factors. Those two factors both relate to the contributions, direct and indirect, made by each of the partners to either the property or the welfare of them both. As a matter of English that can only mean that the court may have regard to each of the two factors and not to any other factors. In particular it precludes the court, in a s 20 application, from having any regard to fault, need, maintenance, compensation, expectation damages, reliance damages or quasi-equitable damages."

[9] (1995) 38 NSWLR 424

[11] According to Clarke JA it was appropriate to use the current value on the basis that it would "bring about roughly the same result as the adoption of the 1986 values and the awarding of interest for the period from that time to the date of trial." Powell JA was of the view that while it may once have been appropriate to assess the matter on the basis of value at the time of breakdown and to award interest to the date of trial, the delay which now occurs in bringing proceedings to a conclusion made it not inappropriate to proceed on the basis of current value .

[12] (1998) 43 NSWLR 695

[13] See Bradbrook, MacCallum & Moore, Australian Real Property Law, 2nd Ed at [10.04]