Smith v Pearson
[2011] NSWSC 600
At a glance
Source factsCourt
Supreme Court of NSW
Decision date
2011-05-16
Before
Macready J
Source
Original judgment source is linked above.
Judgment (17 paragraphs)
Judgment 1His Honour : This is the hearing of the plaintiff's application for adjustment of the parties' property interests pursuant to section 20 of the Property (Relationships) Act 1984 ('the Act'). A notice of motion filed 9 February 2010, was stood over to hearing in which the plaintiff sought certain relief against the defendant in connection with the parties' possible capital gains tax liability. 2The plaintiff and defendant commenced a de facto relationship in January 1997 and the relationship ended in April 2006. There was one child of the relationship, Madison, who was born in January 2001. The plaintiff had three children from a previous marriage and two of these children, Luke and Tiffany, came to live with the parties in 2004. At that stage they were aged 13 and 12 respectively.
Background 3The plaintiff was born in 1965 and the defendant in 1968. The defendant had not been married. The plaintiff had married in 1988 and separated in 1996. 4During the marriage, both parties worked, except during a period after the birth of their child, Madison. From January 1997 until January 2001, the plaintiff was employed, as an administrative officer at Midstate Security Services, an administrative clerk at Newham's Security of Liverpool and as a Customer Service Consultant with St George Bank. 5Shortly before the plaintiff gave birth to Madison, the plaintiff resigned her employment and engaged in Madison's full-time care until December 2003. From December 2003 until April 2006, the plaintiff was in part-time employment. The plaintiff continued to care for Madison. 6From January 1989, the NSW Police Service employed the defendant. According to the plaintiff, that employment ceased in 1999. According to the defendant, that employment ceased in 2000. I will accept the defendant's evidence on this aspect. From 2000 until August 2006, the defendant was employed as an RSPCA Inspector. 7Initially the parties lived in rental accommodation at a number of places. They decided to move to the South Coast because of the relocation of the defendant's employment and in September 2000, the defendant purchased a property at Wirreanda Place, Long Beach near Bateman's Bay for $167,000. The defendant had shortly before received a retirement payout from the police force of $46,547.17. He used to $22,471 from this payout to contribute to the purchase and the balance was borrowed from the St George Bank in the sum of $148,000. 8At the end of 2001, the defendant incorporated a company Seiei Pty Ltd. At that stage the defendant was the only shareholder. The defendant refinanced the existing mortgage on their property by taking a new mortgage in the name of the company. 9In 2003, the company purchased an investment property at Narooma for $267,000. After some minimal refurbishments, the property was rented at $250 per week. On a 23 July 2004, the plaintiff was appointed an additional director of the company and issued with 50 fully paid ordinary shares in the company. The defendant held 100 fully paid ordinary shares in the company. 10As I have mentioned the parties separated in April 2006 and on 14 June 2006, the plaintiff left the Wirreanda property. Thereafter there were disputes concerning the residence arrangements for their child Madison. The upshot is that she resided with the defendant and thereafter the plaintiff made child support payments to the defendant for her care. 11In December 2006, the company sold the Narooma investment property for $290,000. After paying out the mortgage and also the finance on the car, which the plaintiff took on separation, there was a balance of $47,000 which was initially held in a St George Bank account in the name of the company. 12On 13 July 2008, the company Seiei Pty Ltd was deregistered. On 28 November 2008, the defendant withdrew $47,483.78 from the company's account. The defendant transferred these funds into a Police Credit Union account in the defendant's sole name. He has subsequently used those funds for his living expenses. Seiei Pty Ltd has a liability for unpaid CGT in respect of this sale. That liability is at present unknown. 13These proceedings were commenced out of time on 18 December 2008.