Sharpless v McKibbin

Sharpless v McKibbin - [2007] NSWSC 1498 - NSWSC 2007 case summary — Zoe

[11]

5396/05 Paul Anthony Sharpless v Paul Ellis McKibbin JUDGMENT (Revised 12 February 2008) 1 HIS HONOUR: The plaintiff Mr Paul Sharpless, now a 48-year-old salesperson, and the defendant Mr Paul McKibbin, now a 48-year-old retired naval officer, met in late 1993 and ceased to live under the one roof in April 2005. When their relationship commenced, Mr McKibbin had assets equivalent to about $540,000 in present terms, and held the rank of Lieutenant Commander in the Royal Australian Navy (he was later promoted Commander); between 1 July 1994 and 30 June 2005 he earned income totalling about $440,000 net. Mr Sharpless was then unemployed, and had no assets of significance; between 1 July 1997 and 30 June 2002, he earned income totalling about $31,000 net, almost exclusively in the form of unemployment benefits. The present net assets of the parties amount to about $1.5 million, virtually all of which are in Mr McKibbin's name, and of which the most significant are his townhouse property at Newington (worth $560,000, but subject to a mortgage of $312,000), and his superannuation pension (which has been valued at $1,121,981). Mr Sharpless claims that by reason of his contributions during the relationship - chiefly domestic contributions to the welfare of Mr McKibbin - he is entitled to an adjustive property order; in his final submissions, an adjustment that gave him 25% and left Mr McKibbin 75% of their net divisible property was proposed. Mr McKibbin opposes any adjustive order. 2 The jurisdiction invoked in the present proceedings is that created by (NSW) Property (Relationships) Act 1984, s 20(1), which provides as follows: (1) On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to: (a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and

[31]

27 There are very serious difficulties in placing reliance on the evidence of Mr Sharpless except where it is uncontroversial or independently corroborated. Mr Sharpless wrongly asserted, repeatedly, that he had made an initial contribution of $50,000. He did so in an elaborate manner. It is not possible to pass this assertion off, as he sought to do, as a mere mistake; how he could have been so mistaken was never satisfactorily explained. He was also compelled to concede that a number of previous representations made by him were erroneous, which were likewise not easily explicable as mere mistakes: they included an assertion that Mr McKibbin had been admitted to St John of God Hospital (he never was), that he had seen Mr McKibbin adopt a particular attitude when engaged in planning for the invasion of Timor and for the Gulf War (but the Gulf War had taken place before the parties met), and that the parties had not had sex for twelve months (an assertion that he had made to solicitors then acting for him, but which was inconsistent with the case he mounted in court and which in cross-examination he said was false). 28 His evidence revealed significant elements of fantasy, bordering on paranoia, in respect of Mr McKibbin's employment in the ADF - in particular, he maintained that his real employment was in "military intelligence", which there was absolutely no objective evidence to support, and some in addition to that of Mr McKibbin (including that of another former naval officer, Mr Purdy, called as a witness by Mr Sharpless) to contradict. His assertion that he had been forced by "Military Intelligence" to sell substantial assets was false - he had no such assets. His claim to have been told by "Military Intelligence" not to seek help was grossly overstated and distorted; what he was told was to the effect that he was not eligible for certain assistance. He asserted that it was "Military Intelligence" who prevented legal recourse being taken in respect of an alleged attempt by one Mr Wood to extort funds from Rushmore, and forced the withdrawal of a case against Vodafone; this was mere fantastic supposition, exposed as being without any reasonable basis. Mr Sharpless was given to confabulate, basing wild inferences on the flimsiest foundations. 29 Despite protestations that he was the predominant homemaker at Isaacs and prepared the meals, he conceded that this involved "tea and toast" for breakfast, and that Mr McKibbin did so as well; indeed in cross-examination he acknowledged that Mr McKibbin used to say that cooking was the only thing that relaxed him, and that as Mr McKibbin was more 'in control', "I let him cook as it relaxed him". His evidence that he did the ironing was undermined by the concession that Mr McKibbin had his uniforms laundered elsewhere. He falsely claimed to have been locked out of the Newington property without notice.

[33]

32 Generally, Mr McKibbin was unprepared to make any concession that might assist Mr Sharpless. He was inclined to adopt a position advantageous to his own case and adhere to it, unless indisputable evidence to the contrary was produced; and he was ever ready to search for explanations, even highly speculative ones, which conformed to his case, rather than to make any concession that might assist Mr Sharpless. One illustration of this is his non-admission that a close personal relationship persisted after 1998, when he asserted the relationship came to an end - despite the codicil, despite the power of attorney, and despite numerous other contemporaneous documents which bespeak the continuance of a close relationship, albeit a sometimes stormy one. Mr McKibbin firmly believes that Mr Sharpless has betrayed his trust, and on the few occasions that he was prepared to concede that Mr Sharpless had done anything for him, added an observation that no less should be expected of a friend holding power of attorney, or questioned whether the motive was not to advance his own financial interest. 33 I did not find the evidence of the minor witnesses - such as Mr McKibbin's mother, Mr Sharpless' sister, and Mr Purdy - of much assistance in resolving the conflict. In part this was because each was somewhat partial to the party who called him or her, but it was more because the visibility which each had of the totality of the relationship was very restricted, and not such as to permit a sound conclusion of general application to be drawn from their very limited and occasional observations. 34 Ultimately, the deterioration of the once close relationship between these parties has produced such a level of embitterment and distrust that the evidence of each is affected by an unsurprising lack of objectivity, and consequent polarisation of their perceptions. In my view, Mr Sharpless' evidence greatly exaggerated many aspects of his case, and in particular his contributions to Mr McKibbin's welfare; but Mr McKibbin understated his own difficulties during his illness, and the supportive role of Mr Sharpless. The safer approach is not as a matter of course to prefer the less unsatisfactory evidence of Mr McKibbin (although I will on occasion do so), but to proceed on the basis that the truth lies somewhere between the position of each of them.

[50]

51 Paid legal costs are treated as a notional asset of the parties, because their expenditure may reduce the divisible pool, as it has in the present case, disproportionately as between the parties [Farnell & Farnell (1995) 20 Fam LR 513]. 52 Superannuation entitlements - even those which have not as at the date of hearing matured into rights capable of immediate conversion into money - are property within the definition in Property (Relationships) Act, s 3(1), and amenable to adjustive property orders under the Act, regardless of whether the other party can be said to have contributed to the superannuation entitlement [Green v Robinson (1995) 36 NSWLR 96, 103 (Kirby P); Chanter v Catts [2005] NSWCA 411, [20]-[23] (Hodgson JA), [82]-[103] (Bryson JA)]. However, it is necessary to take into account the nature of the entitlement in exercising the discretion to make orders that are just and equitable. Mr McKibbin has a preserved benefit component said to be worth $30,800, which he is unable to access now, but will be able to access at age 55. However the major component of his superannuation is an invalidity pension, to which he became entitled upon discharge from the Navy on grounds of invalidity. The pension, which is not commutable to a lump sum, was $62,373 for 2007 (after indexation). On the assumption that it will continue for life, and having regard to the life expectancy of a male of Mr McKibbin's age (but not his personal physical and mental health issues, which might be thought to reduce his life expectancy), his pension entitlement has been valued at $1,121,981. However, there is evidence that it may be subject to reduction, or even cancellation, due to his improved health, in which case he would not again become eligible for a superannuation pension until age 55. In short, Mr McKibbin's superannuation pension, while a valuable income stream, cannot be realised into a lump sum and is subject to some contingencies. 53 Mr McKibbin also receives a pension from the department of Veterans Affairs at the special (TPI) rate, about $800 per fortnight, which is also indexed. Eligibility for such a pension, like social security benefits, is not property.

[54]

58 However, the evidence does not permit the ascertainment with any precision of the extent to which Mr Sharpless derived benefits in this way. Ultimately Ms Stubbs, for Mr McKibbin, submitted that the appropriate course was to make some deduction for the reasonable living expenses of the parties, and add back as a notional asset in the hands of Mr Sharpless the remainder of the amounts particularised by Mr McKibbin as having been taken by him. But it is not possible to quantify an amount to be "added back" on this basis as a notional asset of which Mr Sharpless has the benefit. Ultimately, I propose to take this matter into account, not by adjustment to the pool of property, but in evaluating the quantum and quality of the contributions made by Mr Sharpless to, against the benefits derived by him from, the relationship. 59 Accordingly, the net pool of divisible property amounts to $1,512,240, including Mr McKibbin's superannuation, and disregarding Mr Sharpless' personal loan. Evaluation of the contributions 60 The legislation does not dictate the employment of any particular method in the formulation of an appropriate order for the adjustment under s 20 of property interests, and it is not desirable to attempt to formulate principles or guidelines designed to constrain judicial discretion within a predetermined framework, although in the majority of cases, a global approach is likely to be more convenient than an asset-by-asset approach, provided that those who take the global approach heed the warning that the origin and nature of the different assets ought to be considered [cf Norbis v Norbis (1986) 161 CLR 513; (1986) 10 Fam LR 819; (1986) FLC ¶91-712]. Moreover, an asset-by asset approach almost always carries the risk of undervaluing domestic contributions that are not reflected in any particular asset. Some contributions are readily capable of evaluation in monetary terms. Others - such as those made in the capacity of homemaker and parent - are not. Because some assets depreciate in value, and because parties incur living expenses, the pool of property available for division will usually be less than the sum of the financial contributions, and more so when allowance is made for the value of non-financial contributions. An approach which focusses on the valuing of individual contributions item by item not only fails to pay regard to the overall picture, but risks serious injustice by devaluing those contributions which are not readily capable of evaluation in monetary terms. On the other hand, the "fruits of a totality of efforts of wage earning, homemaking and mutual support", referred to by Deane J in Mallet, do not usually encompass property which each party had before the relationship, or which either party introduced, not by way of their mutual efforts at wage earning, homemaking and mutual support, but independently through gift or inheritance from third parties.

[58]

65 Mr McKibbin derived income totalling $647,000 gross (say $430,000 approximately net) during the period 1995 to 2005, principally from the Navy and in the last years from his superannuation pension, whereas Mr Sharpless derived income totalling about $31,000 during the period 1998 to 2002, almost exclusively from unemployment benefits. Ultimately, it does not appear that their income generated any assets; it was expended on their living expenses, but that does not mean that it was not a contribution. In addition, Mr McKibbin continued to make contributions to MSBS, and the value of his superannuation interest grew, very substantially, during the relationship, so that it now represents the most significant asset in the pool, comprising about 75% of the divisible pool. It remains to be resolved how the income and superannuation contributions should be attributed between the parties. 66 With the exception of the period of Mr McKibbin's illness, the domestic contributions were unremarkable. There were, of course, no children to be parented. They occupied relatively low maintenance accommodation, so that there was limited homemaking to be done. Moreover, it was common ground that at Annandale and Newington, they had a paid cleaner, and I prefer the evidence of Mr McKibbin, that there was also a cleaner at Isaacs, to Mr Sharpless' denial. The gardens were not extensive, and they shared those duties. They shared the cooking: I have previously mentioned that Mr Sharpless' claim that it was he who prepared meals (which became "tea and toast" for breakfast) was destroyed in cross-examination when he acknowledged not only that Mr McKibbin did so as well, but also that Mr McKibbin enjoyed cooking, and Mr Sharpless "let him cook, as it relaxed him"; similarly, Mr Sharpless' claim that he did the ironing was undermined by the concession that Mr McKibbin had his uniforms laundered elsewhere. His claim to have contributed by driving Mr McKibbin to work at Russell was diminished by the circumstance that it was in Mr McKibbin's car, which he would otherwise have driven himself, but if Mr Sharpless drove he could have the use of the car during the day. 67 I do not accept that Mr McKibbin was significantly disabled by excessive use of alcohol at that stage. Alcohol-related problems do not appear to have significantly impacted before about 2000: although he had a couple of bouts of pancreatitis, which might well have been associated with excessive alcohol use, he had no convictions for drink driving, nor even for speeding; he had no accidents; as a seaman officer, he was not permitted to and did not drink at sea in any event; and his naval career before 1999 involved no apparent incidents nor other adverse impacts attributable to alcohol abuse. Suggestions that he had been hospitalised on numerous occasions during the Isaacs period did not sustain scrutiny. I reject the proposition that Mr Sharpless was, during this period, engaged on a daily basis in the care of Mr McKibbin, let alone "24/7" as he at one stage put it. 68 Nor do I accept that during the relationship at Isaacs, Mr Sharpless was the predominant homemaker, nor that he bore any special burden as a result of Mr McKibbin being unwell; I regard their domestic contributions during the de facto relationship at Isaacs as approximately equal, and relatively insignificant in magnitude. Moreover, Mr Sharpless derived substantial benefits from the relationship during this period, which at least offset his contributions. He received rent-free accommodation in Mr McKibbin's Isaacs townhouse (as he did subsequently at Annandale, where Mr McKibbin paid the rent). Although he continued to receive rent assistance, he contributed only one payment at Isaacs. He enjoyed the use of Mr McKibbin's car. Mr McKibbin bore virtually all the costs of the relationship: food and household supplies, mortgage payments, utilities and services, motor vehicle expenses, and entertainment. Mr Sharpless could only have made the most minimal contributions to outgoings and living expenses from his very meagre income. 69 It is of course well-established that where there is a division of roles in a marriage-like relationship between the homemaker and parent on one hand and the breadwinner on the other, contributions of a de facto partner as a homemaker and parent are not to be regarded as inferior in any way to the financial contributions made by the other partner [Black v Black (1991) 15 Fam LR 109; (1991) DFC ¶95-113; Evans v Marmont]. The approach endorsed by the High Court to the evaluation of contributions under the (Cth) Family Law Act 1975 in Mallet v Mallet (1984) 156 CLR 605 is applicable to the evaluation of contributions under the Property (Relationships) Act [Jones v Grech, [33]-[35] (Davies AJA)]: In Mallet v Mallet (1984) 156 CLR 605 at 635-636, Wilson J, after referring to a number of judgments of the Family Court of Australia in which that Court had adopted the notion of "equality is equity" as a convenient starting point to s79(4)(b) of the Family Law Act , 1975 (Cth), went on to say:

[59]

In the earliest of these cases, Rolfe [(1977) 5 Fam LR 146 at 148] ..., Evatt CJ referred to s79(4)(b), saying: 'The purpose of s 79(4)(b), in my opinion, is to ensure just and equitable treatment of a wife who has not earned income during the marriage, but who has contributed as a homemaker and parent to the property. A husband and father is free to earn income, purchase property and pay off the mortgage so long as his wife assumes the responsibility for the home and the children. Because of that responsibility she may earn no income or have only small earnings, but provided she makes her contribution to the home and to the family the Act clearly intends that her contribution should be recognized not in a token way but in a substantial way. While the parties reside together, the one earning and the other fulfilling responsibilities in the home, there is no reason to attach greater value to the contribution of one than to that of the other. This is the way they arrange their affairs and the contribution of each should be given equal value.' With all respect, I agree with her Honour's exposition of the purpose of the paragraph subject to one reservation. The Act requires that the contribution of a wife as a homemaker and parent be seen as an indirect contribution to the acquisition, conservation or improvement of the property of the parties regardless of where the legal ownership resides. The contribution must be assessed, not in any merely token way, but in terms of its true worth to the building up of the assets. However, equality will be the measure, other things being equal, only if the quality of the respective contributions of husband and wife, each judged by reference to their own sphere, are equal. The quality of the contribution made by a wife as homemaker or parent may vary enormously, from the inadequate to the adequate to the exceptionally good. … Similarly, the contribution of the breadwinner may vary enormously and deserves to be evaluated in comparison with that of the other party. It follows that it cannot be said of every case where the parties reside together that equal value must be attributed to the contribution of each. That will be appropriate only to the extent that the respective contributions of the parties are each made to an equivalent degree. What the Act requires is that in considering an order that is just and equitable the court shall 'take into account' any contribution made by a party in the capacity of homemaker or parent. It is a wide discretion which requires the court to assess the value of that contribution in terms of what is just and equitable in all the circumstances of a particular case. There can be no fixed rule of general application. The general thrust of his Honour's exposition found support in the observations of other members of the Court: Mason J at p623-p625, Deane J at p639-p641 and Dawson J at p645-p646. One point that their Honours made in relation to matrimonial relationships was that the relationship ordinarily involves "a practical union of both lives and property" and that the acquisition of assets, such as a matrimonial home, can be seen as representing "the fruits of a totality of efforts of wage earning, homemaking and mutual support" (per Deane J at p640-p641). At p625, Mason J pointed out that there may be an equality of contribution if "the efforts of the wife in her role were the equal of the husband in his". However, the facts of the particular case must always be examined. The passage from the reasons of Wilson J set out above shows how this examination may be made. The same general considerations apply to a de facto relationship, for that is a relationship of living together as husband and wife on a bona fide domestic basis. Such a relationship also ordinarily involves a practical union of lives and property. The two factors specified in s 20(1), financial and non-financial contributions and contributions made in the capacity of homemaker or parent, reflect the considerations to which their Honours gave weight in Mallet v Mallet . 70 However, that approach has evolved in the context of marriages and quasi-marriages involving a social and economic partnership between domestic partners or, as it was put in Mallet, "a practical union of lives and property". It is applicable where there is an allocation of roles in the relationship between the homemaker and parent on one hand and the breadwinner on the other, so that one (by assuming the domestic responsibilities) may be said to have freed the other to generate income, so that the income is the product of their joint endeavours in different fields.

[60]

71 The inclusion within the Act of "close personal relationships" has the effect of extending the scope of the Act beyond marriage-like relationships. It does not follow that the approach applicable to a marriage-like relationship should also be applied in the context of a "close personal relationship" not amounting to a de facto relationship. "Close personal relationships" within the definition cover a wide range of relationships, and typically do not involve "a practical union of lives and property". In the case of a close personal relationship from which features of a marriage, such as union of lives and property, are absent, the rationale for the approach authorised by Mallet is much weakened, if not entirely removed. 72 The present is not a case in which it can be said that there was a practical union of the lives of the parties, nor an allocation between them of responsibilities so that one generated income while the other freed him to do so by maintaining the home. Mr McKibbin continued to earn the income which he would have earnt in any event as a Naval officer, unaffected by the relationship; Mr Sharpless remained free to seek work as he pleased, and did not, on account of the relationship, forego opportunities which might otherwise have come his way. That Mr Sharpless continued to receive unemployment benefits and held himself out as available for employment is one of the indicia of this. Indeed, Mr Sharpless ultimately accepted that neither the relationship, nor any need to support Mr McKibbin, occasioned him any reduction of the income that he might otherwise have earnt during the period they resided in Canberra. Similarly, in this case the accumulation of Mr McKibbin's superannuation was not facilitated nor contributed to by Mr Sharpless; Mr McKibbin would have accumulated it regardless of the relationship. By 2001, all Mr McKibbin's property had been accumulated, as a result of his own efforts in his 24-year naval career and his husbanding of his resources. Mr Sharpless made no contribution of significance to this. The fruit was not that of the joint efforts of the parties.

[61]

73 However, the position was different from the time of the grant of the power of attorney in 2001, until about 2004. For substantial periods during these years, Mr McKibbin's functional level was significantly affected by his alcoholism and depression, and he underwent several admissions for detoxification. During this period, Mr Sharpless managed Mr McKibbin's finances and affairs, and provided domestic support and personal care for him. Mr Sharpless did the greater share of the homemaking during this period. He drove Mr McKibbin (albeit in a car purchased with Mr McKibbin's funds) to medical appointments and to Alcoholics Anonymous meetings (though far from invariably - Mr McKibbin more often than not went on his own); he finalised Mr McKibbin's taxation affairs for several years and brought them up to date; he attended to most of the shopping, and the payment of household bills and creditors (albeit from Mr McKibbin's accounts); he provided personal care for Mr McKibbin when necessary, including responding to the occasional disasters - such as organising an ambulance when Mr McKibbin fitted and injured his shoulder in May 2001, and more prosaically putting Mr McKibbin to bed and cleaning up after him when he was unable to do so himself. He provided support to Mr McKibbin during detoxification. In effect, Mr McKibbin relinquished responsibility for dealing with the Department of Defence, ComSuper, the Australian Taxation Office, Rushmore, and the Department of Veterans Affairs to Mr Sharpless, who "filled up his day" with doing things that Mr McKibbin could not or would not then do. Mr Sharpless took a number of steps to facilitate Mr McKibbin obtaining his termination entitlements, his military superannuation pension and his Veterans Affairs pension. In October 2003, he attended and appeared before the Veterans Affairs Review Board on behalf of Mr McKibbin. While Mr McKibbin contends, not without cause, that at least some of what Mr Sharpless did in his dealings with the authorities was less than helpful, and some might have been motivated at least in part by self-interest, this was nonetheless a contribution to Mr McKibbin's welfare, facilitating his recovery, by relieving him of responsibilities to which he would otherwise have had to attend.

[85]

86 In the present case, I consider that the initial contributions are entitled to very substantial weight. The main reasons for this are, first, that the offsetting contributions made during the relationship are relatively slight - Mr Sharpless generated little income, and save for the period of Mr McKibbin's illness between 2001 and 2004, the domestic contributions of both parties were modest, given the absence of children and their occupation of relatively low-maintenance accommodation; secondly, that the current pool of assets comprises in substance assets that reflect those that Mr McKibbin introduced, and his accumulated superannuation, to the accumulation of which Mr Sharpless did not contribute; thirdly, that the capital accretions were not attributable to any contribution by Mr Sharpless, nor was Mr McKibbin's retention of Isaacs or Newington facilitated by any contribution of Mr Sharpless; and fourthly, the pool of assets represents the financial result of Mr McKibbin's career of some 24 years, of which the relationship in any form spanned only about ten, and the de facto relationship only about three. 87 Taking an overview, I do not consider, except in one respect to which I shall come, that the acquisition, conservation or improvement of any of Mr McKibbin's property is attributable to contributions by Mr Sharpless. Mr McKibbin would have had the property and superannuation that he has today - quite probably more - had the relationship never taken place. Similarly, I do not accept that, except in the same respect, Mr Sharpless is any worse off by reason of being in the relationship than would otherwise have been the case: he has not applied significant assets or income, nor foregone opportunities otherwise available to him, on account of the relationship. 88 The exception is Mr Sharpless' efforts during the period 2001 to 2004, which, while they did not result in the accumulation of assets or the generation of income, nonetheless enabled Mr McKibbin to "disentangle himself from day to day life affairs" while he was ill, and facilitated his recovery, and also the day-to-day operation of Sign-o-Rama, and thus the conservation of assets. Mr Sharpless committed four years of his life to this. 89 However, as Wilson J explained in Mallet, in the passage cited above, the quality of a domestic contribution may vary, and in this case the significance of Mr Sharpless' contributions is affected by a number of matters. 90 First, the weight of his contributions during 2001 to 2004 is diminished by his poor stewardship of Mr McKibbin's affairs. Had Mr Sharpless been a prudent manager of Mr McKibbin's affairs, his contributions in that behalf would have called for greater recognition. But he was not a good steward. The circumstance that, despite the substantial superannuation pension that Mr McKibbin received, the mortgage increased by $180,000 between 2002 and 2005, without apparent reason beyond living expenses, is sufficient indication of this.

[89]

94 In my judgment, once the matters to which I have referred are taken into account, the contributions should be evaluated in proportions 96:4 in favour of Mr McKibbin. In a case of this type, mathematical justification of such a result is even more impossible than in an ordinary case under the Act. But the appropriateness of the assessment may be gauged from the range produced by a number of "sole contribution" cases, under the (CTH) Family Law Act 1975 and under the Property (Relationships) Act. In Figgins & Figgins (2002) 173 FLR 273; (2002) 29 Fam LR 544; (2002) FLC 93-122; [2002] FamCA 688 (Nicholson CJ, Ellis and Buckley JJ), with a pool of some $21,000,000 of which $14,000,000 was inherited by the husband early in a relatively short marriage, and the remainder accumulated by the joint efforts of the parties, but for which the inheritance was the seed money, the wife was found to be entitled to about 8% on the contributions; this equates to about 24% of the $7 million increment in value during the relationship. (She received an additional 3% by reference to the s 75(2) factors, which are not relevant for the purposes of the Property (Relationships) Act). In Kennon & Kennon (1997) FLC ¶92-757, of a pool of about $8,700,000 - all of which was held by the husband (who earned $1,000,000 per annum) before the marriage, the wife (in a marriage of about five years with no children) was held entitled to about 4.6% on the contributions (and an additional 3.4% for the s 75(2) factors). And in Dwyer v Kaljo (1992) 27 NSWLR 728, (1992) DFC ¶95-127, Mr Kaljo had assets of at least $11 million to which Ms Dwyer had not contributed; she had enjoyed many benefits during the relationship, but had made contributions as a homemaker during their six year relationship; the Court of Appeal increased the trial judge's award of $50,000 to $400,000 (3.6%). I have taken into account that the pool in the present case is significantly smaller than in those cases, and thus the domestic contributions attract greater weight; I regard Mr Sharpless' net contributions, once regard is had to the benefits, financial and otherwise, conferred on him by or taken by him from Mr McKibbin, as significantly less, in absolute terms, than those of Ms Dwyer and Mrs Kennon, let alone those of Mrs Figgins.

[90]

What order should be made? 95 In determining what order is required sufficiently to recognise and compensate the applicant's contributions - the court is concerned with what is just and equitable having regard to, and only to, the respective contributions of the parties of the type referred to in s 20, and there is no warrant for regard to other factors such as the respective means and needs of the parties (which are made relevant to equivalent applications under the Family Law Act by s 79(4)(e) of that Act, an equivalent of which is conspicuously absent from the Property (Relationships) Act, and the omission of which was deliberate, as appears from the Law Reform Commission's report of June 1983: Report on De Facto Relationships, No 36 of 1983, to which the draft Bill was an appendix, and from which the policy underlying the legislation appears [Wallace v Stanford (1995) 37 NSWLR 1; (1995) 19 Fam LR 430; Evans v Marmont, 81]. 96 Ms Stubbs submitted that Mr Sharpless' false evidence disentitled him from relief that depended on the criteria that it be "just and equitable", as does relief under s 20. She submitted that a plaintiff who gives wilfully untrue evidence is debarred from claiming relief, by analogy with the "clean hands" doctrine. I reject this submission. Insofar as it is supported by the decision of Schmidt J in Gilmore v Allied Express Transport Pty Ltd [2006] NSWIRComm 16, in which her Honour refused to make a monetary order in favour of an otherwise successful applicant under (NSW) Industrial Relations Act 1996, s 106, on the ground that she had given false evidence - while nonetheless granting relief varying the subject contract - I respectfully disagree. The equitable maxim that he (or she) who comes to equity must do so with clean hands is concerned with the transaction the subject of the claim, not with the evidence given in court: "the impropriety must have an immediate and necessary relation to the equity sued for" [Dewhirst v Edwards [1983] 1 NSWLR 34, 51]. Moreover, the defence does not apply to a statutory jurisdiction such as that created by s 20 [Meagher, Gummow & Lehane, Equity Doctrines and Remedies, 4th edn, [3-135], suggesting that although there is no distinct authority for the proposition that unclean hands is no defence to a purely statutory remedy, it is implicit from Lodge v National Union Investment Co Ltd [1907] 1 Ch 300]. 97 Of the divisible pool of $1,512,240, 4% is about $60,000. Mr Sharpless will retain the Mazda motor vehicle, worth $5,000. He will retain the furniture, fittings and effects in his possession, also worth $5,000. He will retain the benefit of his own paid legal costs, of $4,459. If he were also to retain the Trendwest investment, worth $26,000, that would leave a requisite cash adjustment of about $20,000. Conclusion 98 The parties were in a domestic relationship from April 1995 until April 2005, being a de facto relationship from April 1995 until March 1998, and a close personal relationship from December 1998 until April 2005. 99 The net pool of divisible property amounts to $1,512,240, including Mr McKibbin's superannuation, and disregarding Mr Sharpless' personal loan. 100 Mr McKibbin's initial contributions represent about $540,000, which is about 40% of the current pool. His was also the overwhelming income contribution. With the exception of the period of Mr McKibbin's illness, the domestic contributions were unremarkable; during the de facto relationship at Isaacs they were approximately equal and relatively insignificant in magnitude. Moreover, Mr Sharpless derived substantial benefits from the relationship, being financially almost completely supported by Mr McKibbin for most of a decade.

At a glance

Court

Decision date

Before

Source

Judgment (97 paragraphs)

Parties

Cases Cited (29)