White v O'Neill

Conveyancing Act 1919 LEGISLATION CITED : Property (Relationships) Act 1984 Social Security Act 1991 (Cth)

Grech v Walsh [2007] NSWSC 302 Holman v Johnson (1775) 1 Cowp 341, 98 ER 1120 CASES CITED : Nelson v Nelson (1995) 184 CLR 538 Venus Adult Shops Pty Ltd v Fraserside Holdings Ltd [2006] FCAFC 188 Woodland v Rodriguez [2004] NSWSC 1167

PARTIES : Joan White Philip Joseph O'Neill

COUNSEL : Pl: Mr T Hodgson Def: Ms A Rao

SOLICITORS : Pl: Hancock Alldis & Roskov Def: Jennifer Weate & Associates

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

SC 2007/258370 Joan WHITE v Philip Joseph O'NEILL JUDGMENT 1 HIS HONOUR: The plaintiff sues to establish that she is the beneficial owner of a Villa at Gilbert Avenue, Gorokan in Folio Identifier 2/SP36223. The defendant is the registered proprietor. He bought the Villa in his sole name as purchaser for $210,000 on or about 31 July 2003. The plaintiff claims that she contributed the whole purchase price and that the defendant holds the legal estate in trust for her. Alternatively she asks that the Court impose a constructive trust to that effect. 2 As a further alternative she claims an order under the Property (Relationships) Act 1984 s 20(1) adjusting interests in the property of the parties. She commenced the proceedings on 20 December 2007 and needs leave under s 18(2) as the de facto relationship between the parties ended more than two years earlier. The defendant cross-claims for an order under s 20(1). The defendant is also in need of an extension of time under s 18(2). He should be granted an extension, because until 2007 the plaintiff took no positive steps to challenge his occupation of the Villa; until then he may well have thought that he was going to be left undisturbed during his lifetime. The commencement of these proceedings was the signal that he may need an adjusting order. The plaintiff's counsel did not dispute extension of time. 3 I have heard few cases where so much time was given by each counsel to cross-examination attacking the credit of the opponent; each counsel was successful in doing so. I have to approach the evidence of each party with caution, and impressions based on demeanour can have little significance. Cross-examination repeatedly presented each with anomalies and embarrassments. In neither case did the party's demeanour appear to me to be positively impressive or on the other hand unsatisfactory or adverse to acceptance of his or her evidence; but I know for other reasons that they are both quite unreliable. 4 Striking demonstrations of dishonesty of both parties are found in Exhibit C, documents relating to purported residential tenancy agreements. Exhibit C includes several false receipts written out and in some cases signed by the plaintiff purporting to record receipt of rent from the defendant, but using a surname which the plaintiff no longer used. She used the name Cooper and an address which was not hers so that Centrelink would not match up the name of the landlord with herself. There are several forms of residential tenancy agreement, the last of which was used by the defendant in an application to Centrelink for rental assistance. These residential tenancy agreements purport to relate to the plaintiff letting the Villa at Gorokan to the defendant. These documents are shams; not intended to have their purported effect, and were prepared to enable the defendant to impose on Centrelink, which he successfully did for some years, obtaining some thousands of dollars by fraud. When these proceedings began he disclosed his fraud to Centrelink and made a composition under which Centrelink recovered some of the defrauded money. 5 It might be thought to be difficult for his case that he entered into a lease document as tenant whereas he now claims to be the beneficial owner of the property; if the document was effective it would estop him from claiming to be the beneficial owner, but it is a sham so it does not. 6 In the defendant's Amended Defence and Cross-Claim he does not raise a case, which passages in his affidavit and oral evidence suggest he contended for, that he contributed funds of his own to the purchase money of either property. The nearest approach to this allegation is in Amended Defence paragraph 4 where he says "that joint funds were used to purchase the property [at Gilbert Avenue, Gorokan]". The Amended Defence does not spell out the asserted consequence, but the result of purchase with joint funds would be that the property is beneficially owned jointly. A further defence (paragraph 7) is to the effect that sale proceeds of a Villa at Sara Jane Close, Kanwal were contributed towards the purchase of the Villa at Gilbert Avenue, Gorokan and that this was not a contribution by the plaintiff of the purchase price because the plaintiff expressly intended that the Kanwal property, which was purchased in April 2002 in the defendant's name with money provided by the plaintiff, was to be held solely by the defendant so as to avoid incurring capital gains tax (CGT) on its subsequent sale, and that she did not pay any CGT on the sale of the Kanwal property as it was owned by the defendant. 7 Amended Defence paragraph 9 raises a further alternative to the effect that if it is accepted that the plaintiff contributed some or all of the purchase money and intended that the defendant hold the Kanwal property in trust for her, she is not entitled to equitable relief because these transactions were for the purpose of evading CGT or for the purpose of concealing her assets from Centrelink in relation to her application for and receipt of social security benefits. 8 There is very little evidence to the effect that the plaintiff did have a purpose of evading CGT and no evidence at all to the effect that she had the purpose of concealing her assets from Centrelink in relation to social security benefits in making the arrangements for the defendant to be the registered proprietor of either property.

9 The defendant's evidence in his affidavit sworn 25 August, 2008 at paragraph 29 is to the effect that in 2002 a real estate agent, Mr Butcher, told him there was a great property available at Sara Jane Close, Kanwal; he and the plaintiff inspected the property and realised it was a good buy and would appreciate in value quickly, and there was a discussion about whether it was worth buying in which he said "We should buy it in my name so we don't get stung for CGT" and she said "Yep, that's a good idea". The plaintiff denies his evidence about the conversation on not "getting stung" for CGT. 10 Not long afterward another real estate agent, Mr Ron Anderson, told him that the property at Gilbert Avenue, Gorokan was available on the market. At this suggestion, the defendant and the plaintiff inspected the property. The defendant does not give evidence that on this occasion there was any express arrangement about evading CGT. He says (at the second paragraph 32): "I purchased my current home at 13/2 Gilbert Ave, Gorokan as we understood that in the event the property was sold there would be no CGT. I don't recall a specific conversation on this issue. Funds from the sale of Sarah Jane Close, held in the ING account, were used to affect the purchase. " 11 That is to say, his case that the plaintiff had (and shared with him) the purpose of evading CGT when arranging for the property at Gilbert Avenue, Gorokan to be purchased in his name depends on his unspoken understanding, based on the implication that as another property had been bought on that basis, this one would be too. 12 As findings of fact are based on probabilities and regard must be had to the seriousness of the matter alleged, I do not find that the title to the Villa at Gilbert Avenue, Gorokan was arranged as it was with an illegal purpose of evading CGT. There is also no evidence of a purpose of concealing assets from Centrelink in acquiring the Villa at Gilbert Avenue, Gorokan. 13 If there had been such a purpose, it has not been carried out, as the property has never been disposed of and CGT has never been incurred. For this reason the defence of illegality could not be available. The plaintiff has the opportunity when and if she ever disposes of the property to conform with the law relating to CGT and if there was an illegal purpose it has no effect on the availability of equitable remedies against the defendant to her. This was explained clearly in the majority judgments in Nelson v Nelson (1995) 184 CLR 538. See Deane and Gummow JJ at 550 to 568: and particularly at 551 - "…the extent of the illegality and its consequences turn upon construction of the statute"; at 562 where the illegal purpose has not been carried out; at 563 on the critical influence of the operation of the statute; see too McHugh J at 603-604, 612-613. 14 The defendant's evidence does not establish that the funds used to purchase the property at Sara Jane Close, Kanwal in his name were joint funds; he made several assertions that they were, but there is no basis of fact. 15 The parties did not ever share a bank account, building society account or other investment of funds: they had separate accounts throughout. According to the defendant's evidence "Cheques I received from my account work were mainly signed over to her on the back of the cheque and deposited into her Greater Building Society account. This money was used for joint purposes."

The defendant claimed in his affidavit sworn 25 August, 2008 at paragraph 30 when dealing with the purchase of Sara Jane Close, Kanwal: "I contributed to the purchase price in that most of the money that I was paid by my clients for my accounting work was deposited into Joan's account with Greater Building Society. I estimate that I had earned about $7,000 from my accounting work in 2002. With financial assistance from Joan in 2002 I purchased the property at 2A Sarah Jane Close Kanwal."

16 The defendant said in his oral evidence to the effect that some moneys of his, earned by him for accounting work, were paid into a building society account of the plaintiff. This evidence was no more than unsupported and wholly generalised assertions. He was unable to give evidence of any times, amounts or other circumstances in support of this, or to produce any documents, and there is no good reason to find that he did make payments like this which went into the plaintiff's account, or were used to purchase Sara Jane Close, Kanwal. 17 The plaintiff denied, and adhered to her denial when cross-examined, that cheques for the defendant's accounting works were paid into her account in this way, or paid into her account at all except on a small number of occasions when in effect she cashed cheques for him and paid them into her own account. In my finding there were no joint funds. The funds he used to purchase the property at Gilbert Avenue, Gorokan were paid from no other source than the proceeds of the sale of Sara Jane Close, Kanwal. 18 The joint purposes which the plaintiff and the defendant had were current household and other living expenses. It was not practically possible for the defendant to raise $170,000 (the purchase price) to buy Sara Jane Close, Kanwal in April 2002; he could not possibly have had or obtained resources on that scale. So too for the purchase of Gilbert Avenue, Gorokan the following year. Even if his evidence that he paid the proceeds of his accounting work into the plaintiff's building society account had been accepted, his small earnings could not possibly have produced enough money for him to buy Sara Jane Close. He does not say what he refers to as "financial assistance from Joan". The probabilities strongly favour accepting her evidence in which the money available was proceeds of sale of other properties which she owned.

19 I find that no money in which the defendant had an interest or a joint interest was used to purchase either the property at Sara Jane Close, Kanwal or the property at Gilbert Avenue, Gorokan. 20 There are some written expressions of the defendant's intentions or understanding with respect to beneficial ownership; his intentions cannot govern the matter because he did not contribute the purchase money, but they are relevant insofar as they bear on what in fact were the intentions of the plaintiff, who did provide it. 21 The defendant made a statutory declaration on 29 March 2007 which contained statements bearing on beneficial ownership of the property at Gilbert Avenue, Gorokan; he gave the statutory declaration to the plaintiff, plainly with the intention of recording the position which he then held about his rights in relation to the property. The substance of the document is: "The above property was purchased from the sale proceeds of 39 Ourringo Ave Lake Haven 2263, which property was owned by Mrs Joan White. The property above was purchased in my name to conform with Centrelink benefits and to establish separate residences. The property is held by me in trust until my death when it will revert back to Mrs Joan White or her estate." 22 The statement in the statutory declaration that the property was held in trust might be thought to be adverse to the defendant's case that he was its beneficial owner and that the plaintiff was not. In form it is a sufficient compliance with the requirement for writing in s 23C of the Conveyancing Act 1919; but the plaintiff does not adopt it as such and does not accept that there was a trust for the defendant for life. 23 In this statutory declaration the defendant says, strangely, that the purchase of Gilbert Avenue, Gorokan was made from the sale proceeds of 39 Ourringo Avenue, Lake Haven; evidence shows quite clearly that it was bought with the proceeds from the property at Sara Jane Close, Kanwal, although that in its turn had been bought with the proceeds of sale of Ourringo Avenue, Lake Haven and another property, both of which the plaintiff owned. In this indirect way funds for Gilbert Avenue, Gorokan came from the sale of Ourringo Avenue, Lake Haven. 24 The defendant said, in his affidavit evidence and elsewhere, that the funds for the purchase of Gilbert Avenue, Gorokan were drawn from the plaintiff's building society account, but this was plainly not correct and he accepted that the proceeds of the sale of Sara Jane Close were received by a solicitor acting on behalf of the defendant, and most of those funds were transferred within the solicitor's trust account from a ledger entry crediting the defendant with the proceeds to another ledger entry relating to the purchase, and paid out as purchase money. Sara Jane Close was sold for $262,000 in a sale settled on 8 July 2003 and Gilbert Avenue, Gorokan was purchased for $210,000 in a sale settled on 25 July 2003. Notwithstanding that the defendant was the vendor and purchaser and was treated as the client in the solicitor's correspondence and statements, the rest of those funds amounting to $29,204.99 was deposited into the plaintiff's ING account on 18 July 2003. As the defendant agreed in evidence, he must have authorised this. The funds used to purchase Gilbert Avenue, Gorokan are clearly traced to funds which the plaintiff owned at the time of acquisition of Sara Jane Close as the proceeds of the sales of two other properties, including Ourringo Avenue, Lake Haven. The tracing was so clear and obvious to the defendant that in his statutory declaration dated 29 March 2007, the substance of which was extracted at [21] above, he did not refer to the intermediate stage of the Sara Jane Close investment. For the purpose of the law relating to resulting trusts the funds were all contributed by the plaintiff. 25 There was no intention at the times of their acquisitions that either the Sara Jane Close property or the Gilbert Avenue, Gorokan property would in truth be the defendant's separate residence; the Sara Jane Close property was rented out to tenants straight away and the Gilbert Avenue, Gorokan property was tenanted until the defendant moved into it after separation in September 2004. 26 It is altogether clear that the defendant, with his long experience in taxation business, knew that creating the appearance that he had a separate residence could assist in evading CGT; his own evidence in his affidavit is to the effect that he suggested this device to the plaintiff as a means of avoiding "getting stung" with CGT. I am not confident that this evidence is true and that he did explain this to the plaintiff, although it is probable that she understood that there was some inappropriate advantage to be gained. There probably was some purpose discreditable to the parties which led to the title to these two properties successively being put in the name of the defendant although the purchase money was provided by the plaintiff. Where land is bought in the name of someone other than the intended beneficial owner there very often is some discreditable circumstance; but there is some distance between this generalisation and a conclusion that there is some avoiding illegality. 27 Apart from what the defendant said in the statutory declaration itself there is no basis in the evidence, including the defendant's own evidence, for any arrangement or expression of intention that he should have a life interest. There is evidence, including evidence of the plaintiff herself, that on many occasions she assured the defendant to the effect that while they were partners he would always have a roof over his head. Her evidence shows that on one or two occasions early in the relationship she gave him assurances without the qualification about remaining partners, but later when she gave this assurance, as she did from time to time, she made the qualification. In this respect I accept her evidence. None of these assurances were made in the context of acquisition of property or establishing intentions of herself or of both parties with respect to beneficial ownership. There was no support anywhere, except for the defendant's assertion in his statutory declaration itself, for there having been any arrangement for him to have a life estate; his own evidence does not support it. 28 All income from rents was treated as belonging to the plaintiff, went into her bank or building society accounts and was controlled and spent by her. All expenses relating to repair, renovation, maintenance and management were borne by her. When the property at Gilbert Avenue, Gorokan was purchased the certificate of title was held by a solicitor on her behalf; and it still is. The defendant did not bear any of the financial burden and did not receive any of the financial advantages of ownership and rental of the properties at Sara Jane Close, Kanwal and Gilbert Avenue, Gorokan of which he was the registered proprietor. 29 While the evidence of neither party has my confidence, I regard the plaintiff's evidence that in connection with buying Sara Jane Close she stated that the defendant would be holding it in trust for her, and in connection with Gilbert Avenue, Gorokan she stated that the property was hers but she wanted him to hold it for her, as more probably true than the defendant's evidence to different effects and his denials. His evidence does not clearly mean or mean at all that she indicated an intention to make a large donation to him, and I find it objectively improbable that she intended that or said that. A grown woman who was in her wits would be unlikely to give away one of her main assets; although it is possible. It is unlikely that I have been told frankly what all the arrangements are; it is quite possible that they involved something discreditable to do with apparent entitlement to Centrelink benefits and separate residences for taxation. Contrivances like that do not increase the likelihood of intention to confer a benefit; if anything, to the contrary. On the probabilities I find that the plaintiff did not in any way manifest an intention to confer beneficial ownership of the two properties she paid for on the defendant; she probably expressed an intention that he should hold the properties for her; while I do not have high confidence in finding that she made express statements of that intention, she probably did so, and if she did not, a trust results because she paid for the properties. My conclusion is that the plaintiff is as she claims the beneficial owner of the property at Gilbert Avenue, Gorokan. 30 In the defendant's counsel's closing submissions Amended Defence paragraph 9 was not argued in terms of a defence of clean hands, but of illegality. The argument presented was to the effect that the scheme of both parties was one of making a series of investments in properties, turning them to advantage by renting them or selling them and purchasing further properties, with the purpose of evading income tax and CGT by not disclosing what was happening to the Australian Taxation Office (ATO). There was no express reliance on a purpose of concealing assets from Centrelink, but that is alleged in paragraph 9 and was not expressly abandoned. It was contended that the purpose has been carried out to the extent that liability for CGT had been incurred by the purchase and resale of the Villa in Sara Jane Close, no disclosure of a capital gain had been made and no tax had been assessed or paid. 31 The contention that there had been illegality was presented in the most general terms. No statutory provisions of any kind were referred to; in particular, no statutory provisions which, according to their terms, have any effect on the validity or enforceability of agreements, trusts or other arrangements were referred to. In view of the treatment of illegality in the majority judgments in Nelson v Nelson, I do not think that a defence of illegality to a claim that real property is subject to a trust can be addressed in this highly general way. Conformably with observations in Nelson v Nelson at 557-559, the extremely general statement of Lord Mansfield CJ in Holman v Johnson (1775) 1 Cowp 341, 98 ER 1120 purportedly expressing a fundamental principle cannot be treated as a rule of decision; for that purpose it is entirely inadequate, as its treatment in Nelson v Nelson clearly shows. This remains the authoritative position notwithstanding further references to Holman v Johnson, for example in Venus Adult Shops Pty Ltd v Fraserside Holdings Ltd [2006] FCAFC 188 (at [96] per French and Kiefel JJ). 32 The need to have regard to the terms in which legislation deals with the effectiveness of contracts, transfers or trusts is, if anything, clearer where a defence of illegality is based on a revenue statute than it was for the legislation considered in Nelson v Nelson, which contained quite express provisions for lack of effectiveness of non-complying transfers. Revenue legislation is interpreted according to its express terms, with relatively little assistance from supposed implications or generalised conclusions based on the purpose or policy of the legislation. Avoidance or prohibition of transactions cannot be read into legislation which does not provide for them expressly. The argument presented and the pleadings before me did not include any reference to any specific provision. 33 I am unable to base a conclusion that a trust of the Gilbert Avenue, Gorokan property is unenforceable on some general conclusion that it was part of a scheme of doing business with a view to evading taxation. It is necessary rather to concentrate on the facts by which a trust of that particular property was created with a view to discerning whether some statutory provision applies to those facts and prevents the trust from taking effect. 34 Defendant's counsel contended that the investment in Sara Jane Close was illegal and unenforceable because it was made for the purpose of evading CGT; and that, as a consequence, the proceeds of its sale, which were employed for the purchase of Gilbert Avenue, Gorokan within one or two days of completion of the sale of Sara Jane Close, could not be treated as funds provided by the plaintiff for the purchase of Gilbert Avenue, Gorokan. 35 If the trust of the Sara Jane Close, Kanwal property were affected by illegality with respect to the purpose of evading CGT, the trust would not be unenforceable for that reason; it would be enforced by judicial process on terms which required that the CGT be paid. It would be disproportionate to the illegality and altogether unjust that the Court should give effect to a defence of illegality by leaving the Kanwal property or its proceeds in the defendant's hands, particularly as according to his own affidavit evidence he suggested the scheme of evasion himself. However the plaintiff does not need its enforcement by judicial process as the proceeds were disposed of as she wished, without recourse to judicial process and without encountering a defence of illegality or any opposition at all. Still less would enforcement of the trust of the Gilbert Avenue, Gorokan property be refused, because CGT has not been incurred and the illegal purpose has not been carried into effect. This position was recognised in Nelson v Nelson by Deane and Gummow JJ at 550 and by McHugh J at 604-605. The defendant's involvement was even more discreditable than that of the plaintiff. In Nelson v Nelson the High Court showed that the law does not require such an unsatisfactory conclusion. 36 It is clear that the parties lived together in a de facto relationship as defined in the Property (Relationships) Act 1984, s 4 for over 9 years. There are differences in their evidence as to when that relationship began. The plaintiff says that the de facto relationship began about mid-February 1995 when the defendant came to her then home at Hutton Road, The Entrance and said that he needed somewhere to stay, leading to a discussion in which if she agreed that he was to come and live with her, he was to sign a statutory declaration that he would not make a claim on her assets; and cohabitation began then. The defendant gave her a statutory declaration dated 2 March 1995 in which he declared: "I will never attempt to make any claims on the properties currently owned by Mrs Joan White and situated at …Arncliffe and …The Entrance North, NSW, or any subsequent property she may purchase in her name in the future."

The statutory declaration went on to make a similar statement about furniture, motor vehicles, bank deposits and effects unless they could be shown to have been purchased jointly and concluded: "I also state that should the said Mrs Joan White predecease me these same provisions will apply to her estate." 37 The defendant's case that he is entitled to the Villa at Gilbert Avenue, Gorokan does not depart from this early arrangement because the Villa was purchased in his name. The early arrangement cannot displace the Court's power to order an adjustment under s 20. 38 The defendant claims that the de facto relationship commenced in 1994. This claim is not correct. There was a sexual relationship between them from some time in 1993 or 1994, without cohabitation. In my finding the relationship as defined began in February 1995. 39 In the plaintiff's evidence, the relationship ended about 24 September 2004. From about the end of March 2002 the dwelling in which the parties lived together was a Villa in Dan Close, Gorokan owned by the plaintiff. The property at Gilbert Avenue, Gorokan was tenanted and the tenants vacated about 6 September 2004. The plaintiff told the defendant that she could not live with him any more and told him her reasons, and said that he could live in the property at Gilbert Avenue: "… you can live there until we sort things out". The defendant said "…if that's what you want I'll go live at Gilbert Street" and soon afterwards he did. There was little contact for about eight months. The defendant's evidence puts the separation a little later. However it is plain that the de facto relationship ended with the separation, and did not resume: things were never sorted out. This was not an interruption in a continuing relationship: it was the definitive end. 40 About August 2005 the plaintiff heard that the defendant was ill, met him at Gorokan and invited him to have a meal at a bowling club. He collapsed on the front steps of the club and was taken by ambulance to Wyong Hospital; after some weeks in a coma and a triple bypass at Royal North Shore Hospital, he was discharged from hospital about November 2005. He then walked on a frame and required substantial rehabilitation; the plaintiff says "I believed that the defendant had noone else to look after him and felt that I had to care for him". She started to look after him as his carer, at first in the Villa in Dan Close, Gorokan. After the first few weeks they went to live in the Villa at Gilbert Avenue, Gorokan. Some months later she was granted a Carer's Allowance by Centrelink. She looked after him, she says as a carer, until the end of March 2007. During this period they occupied the same dwelling. 41 The plaintiff asked the defendant to sign documentation so he prepared a statutory declaration, and after some weeks delay he gave her the statutory declaration of 29 March 2007. The plaintiff was not satisfied with what it says and asked him to sign over the Gilbert Avenue property to her. He refused, and said: "I don't want it fully in your name, but I'm happy to put the majority in your name." 42 There was further discussion. On 31 March 2007 the plaintiff ceased to be his carer and moved back to live at Dan Close, Gorokan. They have lived separately ever since. 43 In the defendant's case the relationship in the second period had the character of a de facto relationship as defined. He said in evidence that the plaintiff stayed at the hospital during most of the time when he was having rehabilitation at Wyong Hospital and when he was an inpatient at Royal North Shore Hospital, and that she washed his clothes and helped him. He says at paragraph 37 of his affidavit: "Upon my discharge in October 2005 I moved in with Joan at Dan Close and she continued to care for me. We resumed sleeping together. Later we both moved in to Gilbert Street and Joan stayed there until she left in June 2007. When she left she said to me: 'I'm moving back to Dan Close'." 44 In her affidavit sworn 13 October 2008 the plaintiff denies this account in significant detail. She denies that the defendant moved in with her at Dan Close, Gorokan, and denies that they resumed sleeping together. She says that after his discharge from hospital the defendant stayed at Dan Close for one week "as he did not have an electric blanket and did not have any fresh food. After that week, the Defendant moved to the Gilbert Street property where he has lived, to the best of my knowledge ever since. I continue[d] to care for him by preparing his meals, delivering them to him at Gilbert Street and looking after his medication. I also transported him to various appointments for medical and rehabilitation purposes. I did this as the Defendant had nobody else to look after him. The Dan Close property and the Gilbert Street property are separated by a laneway and access is fast and convenient. It is no more than a five minute walk between the two properties." 45 In a statutory declaration dated 22 January 2007 (Exhibit 13) which the plaintiff prepared for her daughter to declare there is a reference to the defendant as the plaintiff's partner. The plaintiff denies that in this period there was a relationship which fell within the class of a de facto relationship as defined. It is very improbable that they resumed sleeping together, in view of his recent heart surgery and adverse state of health, and in that respect I accept her denial. In my finding however the relationship then was a domestic relationship as defined. Apart from the care she gave him there was no significant property dealing or contribution to assets, either way, during this domestic relationship, and it cannot assist his claim for adjustment under s 20(1)(a). There were two relationships, and his claim for an adjustment under s 20 must be based on the earlier. So too must his claim for extension of time under s 18(2). The plaintiff contributed to the defendant's welfare within s 20(1)(b), but the significance of this is diminished because she received a Carer's Allowance for much of the period. 46 In so deciding I have assumed that the receipt by the plaintiff of a Carer's Allowance from Centrelink does not fall within the exclusion in s 5(2) which when defining a domestic relationship and a close personal relationship excludes a relationship "…between two persons where one of them provides the other with domestic support and personal care: (a) for fee or reward, or …". 47 A Carer's Allowance is a statutory entitlement under Part 2.19 of the Social Security Act 1991 (Cth) in the facts and circumstances prescribed by Part 2.19. The facts and circumstances are prescribed in complex terms: see s 954A; but at their centre care and attention must be received from the person entitled to the allowance - s 954A(2), and may be received for wages, but not necessarily so: s 954A(1)(f). Receipt of a Carer's Allowance from the Commonwealth is not in my opinion an instance where a person "…provides …domestic support and personal care …for fee or reward" because there is no direct relation between the Carer's Allowance and the provision of support and care of the kind which the words used connote: they connote a contractual arrangement in which the fee or reward is produced by the provision of support and care. Neither "fee" nor "reward" is apposite for reference to entitlement to a social security payment: the Commonwealth does not contract or arrange to pay a fee, and does not give a reward, but makes the payment if and because the statutory provisions are fulfilled. The separate dealing in s 5(2)(b) with government benefits suggests that they are a different subject to the "fee or reward" in s 5(2)(a). A different view appears to have been acted on by McLaughlin AsJ in Grech v Walsh [2007] NSWSC 302 at [90] and [101] but without supporting reasoning or detailed address to the terms of legislation. His Honour's obiter dicta in Woodland v Rodriguez [2004] NSWSC 1167 at [57] support the conclusion I have reached. 48 In the present case the question can have no real influence on the outcome because the defendant made no contribution to the plaintiff's assets during the second relationship. 49 The plaintiff was born in 1944 and had two marriages, one to Mr Russell from 1963 to about 1972 and one to Mr White from 1974 which ended in separation about 1984 and divorce about 23 September 1987. In a property settlement she became the owner of a house in Kingsgrove and received $22,000 from a shared cash deposit. She received approximately $8,000 from her late father who died in 1984. 50 The plaintiff had employment at most times after leaving school in 1960. At one time she was employed by solicitors as a receptionist/telephonist and, after this employment came to an end, she was employed by Natwest in Sydney. Natwest subsequently reduced its activities and she was retrenched in 1994. Apart from working for about six weeks for a company associated with Natwest after her retrenchment, she has not had employment for wages since then. 51 The plaintiff has bought and in most cases sold many properties since 1987 when she received the house in Kingsgrove in her divorce settlement. These transactions were examined in considerable detail in evidence. The defendant claims to have made contributions to her asset position by work on some of them. In 1988 she bought a property in Port Kembla as a rental investment; she sold it in 1991. In 1992 she sold the house in Kingsgrove and bought a house in Arncliffe. Later in 1992 she bought a house in Hutton Road, The Entrance, partly with borrowed money. In 1994 she received proceeds of her superannuation fund and a retrenchment package and with these funds and savings she reduced her mortgage debt. In December 1994 she moved into a flat at the rear of the house at Hutton Road, The Entrance. The front part of the house was let out. She saw this move as a sea change. She rented out the house at Arncliffe for about 10 months and then sold it in November 1995. In 1995 the plaintiff purchased two cottages, one at Wallarah Road, Gorokan and one at Ourringo Avenue, Lake Haven. The one at Wallarah Road, Gorokan was old, run down and built of unpainted fibro. Mr Brewster, a handyman, worked on the property with the defendant's assistance. The pitch of the veranda was altered, the back veranda was altered to be an office or bedroom, and cracks in the lounge ceiling and wall were repaired. The defendant painted the lounge ceiling, painted two coats of paint on the outside, cleaned the guttering and painted the roof. Both parties worked on these tasks. They worked for about two or three weeks without stopping for weekends. After work had been done on the house in Wallarah Road, Gorokan it was rented out by early February 1996. All work on the houses at Lake Haven and Gorokan had been completed by June 1996. The plaintiff and the defendant moved to live in the house at Lake Haven and the plaintiff rented out the flat at The Entrance. 52 The plaintiff and the defendant lived in the Lake Haven property for almost six years. The plaintiff sold the house at Wallarah Road, Gorokan in June 2001. In January 2002 she purchased the Villa at Dan Close, Gorokan, where she now lives. In February 2002 she purchased a Villa in Sara Jane Close, Kanwal in the name of the defendant. She sold this in July 2003. In March 2002 she sold the house at Lake Haven and the house at The Entrance. 53 In July 2003 the plaintiff purchased the Villa at Gilbert Avenue, Gorokan with the proceeds of sale of the Sara Jane Close property. The plaintiff and the defendant lived in the Villa at Dan Close, Gorokan from about the end of March 2002 until 24 September 2004 when he moved to the Villa at Gilbert Avenue, Gorokan. 54 Early in 2002 the plaintiff bought a property at Carol Close, Lake Munmorah. She sold this property in July 2003, after making enquiries at Centrelink in relation to her Widow's Allowance and being informed that she had too much in assets to qualify for it. The proceeds of this sale were the source of a large deposit to her ING Direct Bank Account, later represented by an account at Newcastle Permanent Building Society, and still later at AON Investments. 55 The plaintiff received a Widow's Allowance for some years, from 1997 until 24 May 2003, when Centrelink stopped paying it. She spoke of this in evidence as making enquiries at Centrelink; the Centrelink officer who gave evidence interpreted the records as showing that she attended for a compulsory review of her entitlement. The officer who made the review and decided to end the Allowance did not give evidence; the officer's notes in Centrelink's records show that he collected information about properties which she then owned that showed that she was no longer entitled to a Widow's Allowance. The defendant's counsel observed that it was adverse to the plaintiff's case that she had the beneficial ownership of the property in Sara Jane Close, Kanwal, that she did not disclose that property to the Centrelink officer who was reviewing her entitlement to a Widow's Allowance. I am, however, not prepared to treat the Centrelink record as the basis for some constructive admission that the plaintiff did not own the Sara Jane Close property at that time. On the same day, 24 May 2003, she applied for a health care card, which she received. I have not been shown any circumstances relating to the health care card which are adverse to her case.

56 Apart from the Widow's Allowance and interest on deposits, not usually large, the source of the plaintiff's income that can be seen is rent on the various properties which, from time to time, she let out; usually at least one, sometimes two properties. Income from these sources was not in the plaintiff's perception sufficient to live on. She said in evidence that she sold the house at Lake Munmorah to get money to live on when it became clear that she was not eligible for any Centrelink payment. As explained by her, her object in buying and selling properties was to get income from rental investments; she did not intend to buy and sell properties as a business, although as things turned out she followed opportunities which occurred. It seems likely that she made significant capital gains or trading profits from dealing in properties, but there are no accounts from which the profits can be ascertained. Such accounts would require considerable detail and simplistic comparison of purchase and sale prices is of little use; there must have been considerable expenses for legal costs, stamp duty, agent's commission, mortgage costs and interest and repair and renovation work. She has never returned any of these capital gains for assessment of taxation. It is likely that a significantly large burden of liability will fall on her at some time as a result of these events, but I do not have the means to assess what will happen or when. 57 The plaintiff claimed to have only a vague idea about CGT but understood that one had to pay CGT on the sale of an investment property and that there was an exemption from CGT for one's main residence. The plaintiff's evidence dealing with her tax returns or their absence was very unsatisfactory and unconvincing. First she maintained to the effect that the defendant prepared her tax returns for the years after 1994/95, and that she followed his advice. The defendant said that there were no tax returns for this period. He did not lodge any himself. It is not fully established that he had sufficient income to incur an obligation to lodge them. The plaintiff's evidence on this subject was not consistent and on my understanding she eventually conceded that she did not lodge returns; although her expressions were not clear. Her evidence on this subject has adverse implications for her credibility generally. 58 During the de facto relationship the defendant was not in employment. It is not possible to make clear findings about the amount of his income during this period because he did not produce any useful records, in particular, he did not produce any income tax returns apart from the year 1994/95. There was extensive cross-examination on the subject of income tax returns. The defendant prepared the plaintiff's tax returns and wrote her returns in his own hand for the years 1993/94 and 1994/95. He did not, I find, prepare her return for the year 1992/93.

59 The defendant had the advantage throughout the relationship of accommodation in each of the plaintiff's various dwellings from time to time without any payment in the nature of rent. He never occupied the dwelling at Sara Jane Close and only moved to the dwelling at Gilbert Avenue, Gorokan when the de facto relationship ended; until then neither property was in any way his separate residence for the purpose of CGT or for any other purpose. The defendant did not make any return of any capital gain on the sale of the property at Sara Jane Close, for which the capital gain was significant. Nor did he pay any CGT. 60 The plaintiff and the defendant carried on market trading at open markets at various places, trading mainly in small household items. The plaintiff sold tea cosies, which she knitted. This trading began with the disposal of surplus items when they set up their shared households. They also purchased goods from charities such as St Vincent de Paul. They dealt in items like glassware, pottery, Venetian glass, bric-a-brac and silver. This involved long hours of work and travel. At its height they were attending markets in different places in the Central Coast on most Sundays. Market trading requires considerable attention but is not very profitable; profits of approximately $100 per week would be a good result. The profits of trading varied widely. The transactions were all in cash. As well as buying stock some cash was used for general entertainment and bills as they occurred. One of the advantages of the activity was social interaction with other traders.

61 The defendant's evidence dealing with funds from market trading is: "We used these funds to assist the payment of the stamp duty and legal fees on the fisherman cottages and later we used funds for the upkeep and improvement of Joan's properties."

He gives no details of the movement of funds or amounts. It is improbable that any significant funds for the purpose of stamp duty or improvements were derived from market trading. The market trading activity should in my finding be seen as a shared activity, not very productive and not leading to any traceable improvement in the capital position of either party.

62 In February 1995, about the time the de facto relationship began, the plaintiff owned assets the values of which she estimates as follows: Holden Commodore motor vehicle $5,000 Arncliffe property $190,000 The Entrance property $160,000 $355,000 Deduct mortgage loan from St George Bank (approx) $37,258 Net assets $317,742

Dan Close property $200,000 ING Bank Account $30,272 Newcastle Permanent Building Society Bank Account $200,000 Toyota Camry motor vehicle $20,000 Total $450,272

She also claims that she owned and still owns the property at Gilbert Avenue, Gorokan which she says was then worth approximately $220,000. Improvement in her asset position over the period of the relationship is attributable to her investments, and to changes in the value of money. The increase in the plaintiff's assets did not come from accumulation of income. Apart from her property at Gilbert Avenue, Gorokan her asset position at September 2004 was not significantly better than her asset position when the relationship commenced in February 1995; not better at all having regard to changes in the value of money. 64 When the plaintiff made her affidavit in chief on 28 May 2008 her estimate of the then value of the property in Dan Close had increased slightly but her other assets had declined in amount or value and she estimated the value of her assets at $343,571. She also claimed to own the Villa at Gilbert Avenue, Gorokan, which she valued at $200,000. 65 The defendant was also born in 1944. He was employed at the ATO early in life and studied accounting at a technical college; he became a registered tax agent. He left the ATO and for some time worked preparing tax returns as a tax agent, sometimes in businesses owned by himself or sharing facilities with another accountant. For some years until 1973 when he had a serious motor accident, he did tax accountant work in a company PJ O'Neill Pty Ltd conducted by himself and his then wife. Later he sold the taxation business to a partnership in Caringbah and was employed by that partnership for about a year. Then for some time he had other employment including as secretary for the Manning Work Cooperative at Taree. He continued to do some accountancy work. He was married from 1967 until 1983, and later had a relationship from 1984 until 1994 when his companion died. He received a Carer's Allowance for some time while caring for his companion, who suffered from muscular atrophy. This continued until she left his home and his care in the last months of her life. In addition to the carer's benefit he did taxation work and he estimates that he earned about $10,000 each year from this work. 66 The defendant met the plaintiff in 1993 at which time he lived at Undercliffe in housing accommodation provided by a cooperative. The defendant gives evidence of having assisted the plaintiff in various ways before the de facto relationship commenced. In 1994 they had a physical relationship although they lived separately. During this period he cleared the backyard of her property at Arncliffe, which was heavily overgrown. He also did some interior painting and restored a hall table for her. Late in 1994 he moved from Undercliffe to rental accommodation at North Entrance, for which there was a six month lease. At this time the plaintiff still lived in Arncliffe. The defendant did work for her and with her on the property which she owned at Hutton Road, The Entrance. They painted the rear of the house and the defendant worked, assisting Mr Brewster, a handyman carpenter, in installing a kitchen, partly with components of a second-hand cedar kitchen; the defendant arranged its purchase which cost $400. The kitchen installed was at a fairly basic level in the rear flat, which the plaintiff came to occupy. The defendant also did some work on gyprocking the hall doorway to make the rear flat self-contained. The defendant assisted Mr Brewster as a general hand or off-sider, and did painting work and other clearing work. The plaintiff and the defendant between them painted the rear flat inside and painted the whole exterior. This work took two or perhaps three weeks. 67 Before the parties commenced cohabitation the defendant lived in rented accommodation at The Entrance and later lived in a friend's home at Long Jetty. From there he moved into the plaintiff's flat at the rear of the house in The Entrance. 68 When the relationship commenced the defendant did not own significant assets and his income and earning capacity were low. He received unemployment benefits at most times or perhaps all times during the relationship. 69 Throughout the relationship and since, the income of both parties has been quite low. Apart from the property transactions and investments, the resources of the parties were quite narrow when the relationship commenced and still are. When the relationship commenced the plaintiff had recently given up work and collected the value of her superannuation and retrenchment payment. She received rental income from various properties and the amount received varied frequently with purchases and sales of rental properties, mortgage interest expense and other outgoings. 70 The main claim on the attention of both parties during the relationship was the properties which the plaintiff bought, let out and sold, management tasks, repair and maintenance after the tenants left. There were periods of relatively intense activity in building work. The defendant took part in this, as a general hand or off-sider. The defendant had contacts with various tradesmen and these were useful in carrying out renovations. After each tenant left, there was about a day's work cleaning out the property and mowing the lawn. The house at Wallarah Road, Gorokan repeatedly needed work on blocked gutters because of heavy leaf fall, and cleaning the roof and gutters was a difficult job which took at least half a day, and was done once or twice a year. 71 The defendant gives evidence that during the relationship he worked on several properties which the plaintiff had acquired. As frequently happens in claims under this legislation, the defendant made a contribution to the plaintiff's asset position with work the value of which cannot be assessed accurately. A great deal of the work was ancillary to the business of letting out housing, producing income from rent which was used for their living expenses, not accumulating assets. However the defendant's work on repairs, renovation and painting must have made some contribution to the plaintiff's capital and her asset position overall. The difficulty with quantification should not lead to withholding recognition. The defendant made a contribution to the plaintiff's resources which it is not possible to measure accurately, but was real. 72 While precision is not available, I regard six months unpaid work as a generous estimate of the contribution made by the defendant to repairs, renovations, maintenance and work generally on the plaintiff's properties, and I allocate half of that to work which contributed to capital and half to work which contributed to current income. 73 In the relationship the defendant attended to cooking and carried a significant part of the burden of household work. He also did a lot of the washing, although the plaintiff also did some of this work. Overall, the household burden does not seem to have been unfairly shared. It cannot be seen as a contribution to the asset position of either party; it is part of the contemporaneous benefits and burdens of their shared life, and does not have any consequences for an adjustment under s 20. The performance of household services did not have the significance that it has in some cases, where it assists a domestic companion to pursue and maximise earning activity, producing an indirect contribution to the asset position. That is not this case, as neither was in employment. 74 Throughout the de facto relationship the defendant gave the plaintiff money at the rate of $100 per week for food and household utilities. This was not a generous rate and it was not increased. The plaintiff said she subsidised him and this is correct. He did not at any time make any payment in the nature of rent for his occupation of the various homes which the plaintiff paid for. The defendant received unemployment benefits at most times, perhaps at all times during the relationship. The defendant maintained a Commonwealth Bank savings account where his unemployment benefits were deposited. The defendant did accountancy work which brought in a small income. He estimates that during the relationship he earned between $5,000 and $7,000 each year from accounting work. These earnings were taken into account in calculating his unemployment benefits. 75 Overall, the improvement in the plaintiff's capital position is a mildly satisfactory but not striking outcome of a decade of activity when neither of the parties had regular employment; their resources were narrow and the living expenses of their shared life used up the plaintiff's income from rent and other sources. Each had personal difficulties relating to alcohol in the defendant's case and gambling in the plaintiff's case, which at times became sufficiently great that each sought outside help. 76 The defendant's contributions to the plaintiff's asset position are entirely outweighed by the advantages he has derived from occupation, again without any payment in the nature of rent, of the property at Gilbert Avenue, Gorokan since September 2004. He occupied this initially with the plaintiff's permission, although commencement of these proceedings brought that permission to an end. Permitted or not, it has been a substantial advantage to him to have the use of the premises for over six years without paying anything in the nature of rent. He has allowed rates to build up to arrears of $3,248.88 and strata levies to $3,751.48. There is no prospect that he will ever have that much money. These advantages altogether outweigh any adjustment of interests which might otherwise be made in his favour. When I have regard to the considerations in s 20, the defendant has already received greater advantages than should justly be allowed to him and I am not prepared to make any order in his favour. 77 My conclusions are that the plaintiff should succeed in her claim to own the Villa at Gilbert Avenue, Gorokan, she has no need of an adjustment under s 20, and the defendant's cross-claim should fail. 78 My orders are:

1. Declare that the Defendant holds the property in Gilbert Avenue, Gorokan the land in Folio Identifier 2/SP36223 upon trust for the plaintiff. 2. Order that the Defendant forthwith create and deliver to the Plaintiff or her solicitors a transfer in registrable form of the land in Folio Identifier 2/SP36223 and take all the steps necessary to bring about its registration. 3. Order that the Defendant pay the Plaintiff's costs of the proceedings on the Plaintiff's claim. 4. Dismiss the cross-claim with costs.

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