William Neville Lane v Maxine Manuel - [2012] NSWSC 8 - NSWSC 2012 case summary — Zoe

NSWNSWSC

William Neville Lane v Maxine Manuel

[2012] NSWSC 8

Supreme Court of NSW|2012-02-01|Before: Nicholas J

View original source

At a glance

Source facts

Court

Supreme Court of NSW

Decision date

2012-02-01

Before

Nicholas J

Source

Original judgment source is linked above.

Judgment (16 paragraphs)

[1]

Judgment 1These proceedings are for the adjustment of property under s 20 Property (Relationships) Act 1984 (the Act) involving claims by each party against the other. The parties lived together in a de facto relationship for a period of about 15 years until they separated in January 2009. 2The plaintiff was born on 2 August 1947, and the defendant was born on 28 February 1952. The relationship between the parties commenced in about 1995, when the plaintiff was about 48 years of age and the defendant about 43. Both parties had been previously married and had children. There were no children of the relationship between the plaintiff and the defendant. 3The claim of each party for adjustment requires consideration of the contributions made throughout the relationship and hence it is necessary to set out some history. The matters set out below either were not disputed, or were supported by the evidence.

[2]

Background 4At the commencement of the relationship the parties lived at the defendant's property in Bendigo. She had purchased the property in 1983 for $26,500. It was sold in September 1998. Whilst they lived there, the parties carried out renovations and repairs to the property. 5At the commencement of the relationship the plaintiff owned and operated a flying school and aircraft charter business out of Woodvale, Boort, and St Arnaud in Victoria. The defendant was employed at TAFE on a full-time basis on an annual income of about $29,000. 6In 1997 the plaintiff expanded his business to Yarrawonga and Lake Mulwalla, and the defendant assisted him in doing so. 7In 1998 the defendant received $43,000 from the sale of an aerodrome in which she had an interest. Of this amount, she used about $13,000 to pay out the mortgage on her property at Bendigo. 8In about May 1998 the plaintiff moved to Port Macquarie to set up another aeroplane business. 9In about September 1998 the defendant sold the property at Bendigo for which she received about $100,000. She then moved to Port Macquarie to live with the plaintiff. Until early 1999 they lived together in rented accommodation. 10In early 1999 the defendant purchased a property at Sancrox for $143,000. She borrowed about $45,000 and the balance of the purchase price came from the proceeds of the sale of the Bendigo property. She serviced the mortgage by income earned from her employment in Port Macquarie as an accountant. 11In about 2002 the defendant inherited about $90,000, from which she paid the sum of $30,000 to discharge the mortgage over the Sancrox property. 12In 2002 the plaintiff sold his float plane business in Port Macquarie for $230,000, and retained a flying school. The net amount received was about $100,000. 13On 6 March 2002 WN Lane Pty Ltd was incorporated, and became the vehicle through which the plaintiff operated his business under the name "Aerolane". At about this time he purchased a Cessna aircraft for $52,000, and expended about $23,000 in repainting it, and overhauling its engine. The business included charter operations and the conduct of a flying school. In 2003 the aircraft was sold for $115,000. 14In October 2003 the defendant sold the Sancrox property for $330,000. The net amount received was $316,000. 15Following the commencement of the plaintiff's flying business in Port Stephens, the parties purchased in February 2004, as tenants in common, a residential property at Medowie for the price of $480,000. The plaintiff held a one third share for which he borrowed $170,000 under a National Australia Bank flexi-mortgage. The defendant held a two thirds share funded by the monies received from the sale of the Sancrox property, and an inheritance. It is assumed that the parties contributed proportionately to the payment of stamp duty said to amount to $17,090. On this basis, the plaintiff paid $5,697, and the defendant paid $11,393. 16In May 2005 the defendant ceased working, apparently because of ill-health, and remained unemployed until the separation in January 2009. During this time her income was derived from investments in shares and savings. 17In September 2005 the plaintiff's flying business, which included the aeroplane and shares in the company, was sold for $680,000, the net proceeds from which were $562,000. From these monies the plaintiff paid $166,477 to discharge the NAB flexi-mortgage over the Medowie property, and purchased a motor vehicle and caravan, and paid $150,000 to the defendant. The plaintiff was employed by the purchasers of the business until about December 2006. 18In October 2005 the plaintiff purchase a Tabago aircraft for $55,000. 19During 2007 the plaintiff worked as chief pilot for Cloud Nine Seaplanes for which he was paid about $2,200 per month. 20In 2007 the plaintiff purchased a Cessna 182 aircraft for $32,000 which he overhauled for an additional cost of $115,000. These amounts were funded by drawings on the flexi-mortgage account, and from his savings. 21In May 2008 the plaintiff sold the Tabago aircraft for $82,000, and applied the proceeds to reduce his flexi-mortgage account. 22In November 2008 the plaintiff underwent medical and hospital treatment for prostate cancer. In about December 2008 he entered a business relationship with Akuna Seaplanes in Port Macquarie. 23In January 2009 the parties separated. Since then the defendant has continued to live in the Medowie property, and the plaintiff has lived elsewhere. 24In June 2009 the plaintiff purchased the Akuna Seaplanes business for $135,000 with funds under his flexi-mortgage account. He subsequently carried on the business as "Australia by Seaplane". 25Since January 2010, for medical reasons, the plaintiff has not been permitted to fly as a commercial pilot. On 22 August 2011 he sold the business, including a Cessna 182 aircraft, a motor vehicle, and other equipment, for $250,000. The proceeds have been applied in payment of legal fees, agent's commission, and liabilities under the flexi-mortgage account and credit cards. 26The statement of claim was filed on 4 June 2010, and the amended statement of claim was filed on 6 July 2011.

[3]

The principles 27The relevant provisions of the Act are: "20 Application for adjustment (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 (b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely: (i) a child of the parties, (ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties." "Property" is defined in s 3(1) except insofar as the context or subject-matter otherwise indicates or requires, as follows: "'property', in relation to parties to a domestic relationship or either of them, includes real and personal property and any estate or interest (whether a present, future or contingent estate or interest) in real or personal property, and money, and any debt, and any cause of action for damages (including damages for personal injury), and any other chose in action, and any right with respect to property". ... "Financial Resources" is defined in s 3(1), in relation to parties to a domestic relationship or either of them, include: "(a) a prospective claim or entitlement in respect of a scheme, fund or arrangement under which superannuation, retirement or similar benefits are provided, (b) property which, pursuant to the provisions of a discretionary trust, may become vested in or used or applied in or towards the purposes of the parties to the relationship or either of them, (c) property, the alienation or disposition of which is wholly or partly under the control of the parties to the relationship or either of them and which is lawfully capable of being used or applied by or on behalf of the parties to the relationship or either of them in or towards their or his or her own purposes, and (d) any other valuable benefit." 28In Prior v Brown [2011] NSWSC 1006 Hallen AsJ undertook an extensive review of the authorities. I gratefully refer to the following passages: "30 The underlying presumption of s 20 is that the de facto relationship has ended, that the parties have joint, or several, property, and that it may be just and equitable to adjust the existing property entitlements, having regard to past contributions of the type described, so that the financial relationship between the parties may be finalised: Green v Robinson (1995) 36 NSWLR 96, per Cole JA, at [115-116]; referred to in Van Zonneveld v Seaton [2004] NSWSC 1223 at [13], and Sullman v Sullman [2002] NSWSC 169 at [247]. 31 The Act does not define "contribution", which word, therefore, bears its ordinary meaning. Nor is the word otherwise elaborated upon in the Act. It can be seen, however, that s 20(1)(a) is directed to financial and non-financial contributions to the acquisition, conservation, or improvement, of the property of the parties, or either of them, or to her, his or their financial resources. The contributions of both of the parties must be taken into account ("of the parties to the relationship"). 32 Further, it is the property of both parties, and the financial resources of both, which need to be taken into account. However, it is not any contribution that is made by a party in the context of the de facto relationship that counts. It is a contribution with a particular purpose, or effect, such that it can properly be described as a contribution "to the acquisition, conservation or improvement of ... property": Sullman v Sullman at [246]. ... 36 Evaluating the respective "contributions" is a balancing exercise, described by Mahoney JA in Dwyer v Kaljo (1992) 27 NSWLR 728, at 732- 733, in the following terms: "It is, of course, possible to determine what has been done by one party for the welfare of the other and to assess the extent to which the welfare of the other has been forwarded by it. But, in my opinion, the assessment of "the contributions" made by one party is not one sided; it cannot have been the intention of the legislature that what one party has done for the other is to be considered - and rewarded - in isolation. Regard must be had to what that party has received in return. Special cases apart, what is contemplated by the provision is, therefore, that it is the balance of the contributions of the one over those of the other which is to be taken into account in determining what justice and equity require the court do. At least, in deciding what "to it seems just and equitable", the contributions of each side are to be had regard to. I do not mean by this that what is involved is merely the weighing of the quantum of the benefits: it may be that quality also is to be weighed. But, in the end, it is, I think, the balance between the contributions of each which is or, at least, the contributions of each which are to be taken into account. But such a balance is not to be determined by the number of lawns mowed or dishes washed. The process is to an extent normative. And that leads to the examination of the assumptions underlying the section and the process it requires to be undertaken." 37 The Court is empowered to make such order adjusting the interests of the parties in the property "as to it seems just and equitable", having regard to the financial and non-financial contributions described in s 20(1)(a) and in s 20(1)(b). Thus, adjustment of property on an application under the Act is not automatic: Green v Robinson at [115] per Cole, J; Howell v Fiorenza [2008] NSWSC 163 at [33]. 38 It is clear that the reference in the Act to "adjustment" of property interests does not convey an invitation to engage in an unbounded exercise in distributive justice: Evans v Marmont (1997) 42 NSWLR 70 per Gleeson CJ and McLelland, CJ in Eq at 79. The Court does not commence with a presumption that, upon the conclusion of a de facto relationship, s 20(1) is intended to produce the result that each party will emerge with equality of property value. As Clarke JA made clear in Black v Black (1991) 15 Fam LR 109 at [113], a court is not entitled to work on any preconceived notions or adopt any pre-determined formula as a starting point. An evaluative judgment that is inexact, non-scientific, not narrow or purely mathematical, and fact and circumstance specific (an "holistic value judgment"), is required by the Act: Burgess v Moss (2010) 43 Fam LR 260; [2010] DFC 95-423; [2010] NSWCA 139. ... 40 What the statute requires is the ascertainment of the property interests of the parties, the ascertainment of the contributions each made with respect to that property and a just and equitable adjustment: Paino v Paino [2008] NSWCA 276 at [122] - [123] per Young JA. In Evans v Marmont , it was also observed that considerations of fault are not mentioned in the Act and there is no reference to means and needs of the kind referred to in the Family Law Act 1975. ... 49 In this type of application, in order to determine whether and, if so, what, property order is justified in a particular case, the Court is required to: (a) identify and value the property of the parties which determines "the divisible pool of property" - that is, "the property of the parties to the relationship or either of them"; (b) determine whether any, and if so what, contributions of the type contemplated by s 20(1)(a) and s 20(1)(b) of the Act have been made and by which party - that is, the evaluation and balancing of the respective contributions of the parties of the types referred to; (c) determine what order is just and equitable - that is, what order is required sufficiently to recognise and compensate the applicant's contributions. ... 70 In Kozjak v Oswin [2010] NSWCA 260, Hodgson JA (with whom Beazley JA and Handley AJA agreed) said: "[44] I would approach a decision under s 20 of the Act in the following way. I would take the assets of the parties at the commencement of the relationship, and consider to what extent the value of those assets has increased up to the present. (I leave out of account motor vehicles, furniture and personal effects.) I would not take the date of separation as the cut-off point in this case, because it is from existing assets that any adjustment must be made, and any adjustment should be made on the basis of present day values; and also because the difference between the value of assets at the date of separation and the value at the date of hearing is simply due to movements in values of property held at both dates. I would consider whether the value of the assets now held by each, apart from the effect of any s 20 order, is appropriate, having regard to contributions of both parties; and if not, consider what adjustments should be made." ... 82 The Act focuses on the just and equitable division of property and not on an order that is fair having regard to all the surrounding circumstances, and everything that happened during, a relationship: Hogg v Roberts at [11]- [19]. 83 Ultimately, however, "the final s 20 order is an evaluative determination of a discretionary nature, not susceptible of complete exposition" and, "[i]n a process like this different evaluations by different minds are to be expected and are not indications of error": Ducker v Smith at [54]." 29In the present proceedings it was common ground that the court should adopt a global or holistic approach in considering the order to be made under s 20. Such an approach is one whereby the identified assets are treated as a pool, and a global assessment of respective contributions is applied to the whole of the pool, often on the basis of percentages ( Prior, par 57). It requires the court to look to past contributions which the parties have actually made.

[8]

The payment of $150,000 36In September 2005 the plaintiff's flying business was sold for $680,000 from which he received the net amount of $562,000. On 19 September 2005 he paid the amount of $150,000 to the defendant. The circumstances in which the payment was made were the subject of conflicting evidence. 37In essence, the plaintiff's case is that in the course of conversations with the defendant they agreed that he would pay her the sum of $150,000 of which the amount of $80,000 was consideration for a one sixth share in the Medowie property to equalise their interests in the property. The plaintiff said that it was also agreed that the defendant would provide him with a statutory declaration that the money had been paid, and that he was entitled to an equal interest in the property. He said that on numerous occasions prior to separation he requested the defendant to provide the statutory declaration, but she refused to do so. 38The defendant denied the conversations as alleged by the plaintiff. She denied that it was agreed that the money he paid her included $80,000 for a one sixth interest in the property, and that she would provide a statutory declaration to that effect. Her version was that shortly after the sale she said to the plaintiff that he should give her $150,000 as compensation for the support and assistance towards the business she had given over the years. She accepted that on various occasions after she received the money there were conversations in which the plaintiff asked for a statutory declaration that he had paid $80,000 for an equalising share in the property, but said that she replied that it was not what was agreed or what she wanted the money for. She said (affidavit 13 October 2010, par 162) that the monies were paid to her after she had requested the payment in recognition of the contribution she had made to the plaintiff over the period of their relationship. 39Each party was vigorously tested in cross-examination, and challenge was made to their reliability as witnesses. The evidence of the relevant conversations was contained in affidavits sworn five years, and more, after they took place. There were no contemporaneous documents which supported either party's version. The observations of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 referred to the difficulty of satisfying the onus of proof based on unconfirmed conversations. He said (p 318, 319): "Where the conduct is the speaking of words in the course of a conversation, it is necessary that the words spoken be proved with a degree of precision sufficient to enable the court to be reasonably satisfied that they were in fact misleading in the proved circumstances. In many cases (but not all) the question whether spoken words were misleading may depend upon what, if examined at the time, may have been seen to be relatively subtle nuances flowing from the use of one word, phrase or grammatical construction rather than another, or the presence or absence of some qualifying word or phrase, or condition. Furthermore, human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience. Each element of the cause of action must be proved to the reasonable satisfaction of the court, which means that the court "must feel an actual persuasion of its occurrence or existence". Such satisfaction is "not ... attained or established independently of the nature and consequence of the fact or facts to be proved" including the "seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding": Helton v Allen (1940) 63 CLR 691 at 712." His Honour said (p 319) that these considerations were equally applicable to causes of action based on contract. 40Acceptance of the plaintiff's case requires persuasion that the evidence, taken overall, proves that agreement was reached with the defendant that she would transfer a one sixth interest in the property for $80,000 as part of the $150,000 to be paid to her. "Reasonable satisfaction should not be produced by inexact proof, indefinite testimony, or indirect inferences" ( Briginshaw v Briginshaw (1938) 60 CLR 336, per Dixon J p 362). The plaintiff's difficulty in recalling the details and sequence of the conversations was demonstrated by the attempt to reconcile the evidence in his affidavit of 31 August 2010 (pars 16-18) with that in his affidavit of 25 August 2011 (pars 14-19), and by the explanations given in cross-examination for that evidence. Measured against the contradiction of the defendant, I was not satisfied that the evidence was sufficient to prove the agreement which he alleged. 41However, in my opinion, the resolution of this issue is of little consequence in these proceedings. The undisputed evidence is that the plaintiff paid the defendant $150,000 on 19 September 2005, which she applied for her own purposes. In my opinion the payment should be recognised as a contribution by the plaintiff from his business which, at the time, was accepted by the defendant as recompense for her contribution towards the maintenance and development of the business.

[9]

Add backs 42The defendant submitted that in calculating the value of the asset pool at date of trial for adjustment the court should treat as "add backs" the value of the plaintiff's share portfolio and superannuation benefits at date of separation, and also the increase in his liabilities since separation. It was put that it would be unjust if these matters were not taken into account on the ground that at date of separation the defendant had a legitimate interest in the assets because they had been accumulated during the period of cohabitation. Similarly, it was submitted that the amount by which the plaintiff's borrowings had increased since separation should be taken into account. 43Since separation the plaintiff had sold his share portfolio for a total amount of about $53,000, and had realised his superannuation benefits in the amount of about $15,000. The evidence was that the plaintiff had used these monies to pay his legal costs of these proceedings. 44With respect to his liabilities, the plaintiff's debt under the flexi-mortgage at date of separation was an amount of $84,500. Prior to the sale of his business on 22 August 2011 the debt under the flexi-mortgage had increased to about $175,000, and he owed about $7,000 on a credit card. According to the plaintiff's evidence (affidavit 25.08.11 par 4) the proceeds of the sale of $250,000 were disbursed as follows: (1)$25,000 to Moylan Family Lawyers for legal costs; (2)$30,000 to McMahon Broadhurst Glynn, solicitors, in respect of legal costs concerning the sale, and ongoing litigation with the Civil Aviation Safety Authority; (3)$20,000 to Judy Hodge Real Estate as commission on the sale; (4)$175,000 to the NAB flexi-mortgage account; (5)the balance was received by the plaintiff, of which $7,000 was used to pay out a credit card debt. It is agreed that at date of trial the debt under the flexi-mortgage was $164,418. 45The plaintiff opposed the inclusion of these items as "add backs". 46The principles which govern "add backs" to the pool of assets, as stated in cases under the Family Law Act 1975 (Cth), are applicable to cases under the Act. In Marker v Marker [1998] FamCA 42 it was said: "There seems to be no appropriate basis for notionally adding back moneys that existed at separation but which have been subsequently spent on meeting reasonably incurred necessary living expenses. Neither the Family Law Act nor the case law require that parties go into a state of suspended economic animation once their marriage breaks down pending the resolution of their financial arrangements. Parties are entitled to continue to provide for their own support. Whether any expenditure so incurred is reasonable or extravagant is a matter that can be determined by the trial Judge." 47In TJ v SB [2010] QSC 403, par 49 Applegarth J said: "In Challen and Challen Murphy J considered a number of authorities concerning the principles that govern "add backs" to the pool of assets. I again respectfully adopt his Honour's helpful summary of relevant principles. The parties accepted the correctness of this statement of principle. As Murphy J observes, the decision of whether to add back to the pool of assets property disposed of, or money spent, occurs against a legal framework where the general principle is that the court takes the property of the parties or either of them as it finds it at the date of trial. Adding back to the pool is the exception, not the rule. An exception can exist "where one party has embarked upon a course of conduct designed to reduce or minimise the effective value or worth of matrimonial assets; or where one of the parties has acted recklessly, negligently or wantonly with the property of the relationship, the effect of which has reduced or minimised their value or the pool of assets". The exercise of adding back in an appropriate case is but part of the overall exercise of adjusting property interests, which is governed by principles of justice and equity. The fact that a party has expended money realised from the disposition of assets that existed as at the date of separation will not necessarily result in the expenditure being added back. What is crucial is an assessment of the reasonableness or otherwise of the expenditure." 48In my opinion, the defendant has failed to demonstrate an evidentiary basis for the application of the principles which govern "add backs" to the pool of assets. The plaintiff's unchallenged evidence shows no more than that the assets were realised, and the liabilities increased, in the course of arranging his ordinary affairs. There was no evidence indicative of unreasonableness, extravagance, or recklessness in the sense referred to in the authorities, and there was no cross-examination of the plaintiff in an attempt to establish evidence of this kind. There is no justification for treating these items as exceptions to the general principle that the court should take the property of the parties or either of them as it finds it at the date of trial. The defendant's submissions on this issue are rejected.

[10]

Lack of disclosure 49The defendant submitted that the plaintiff had not fully disclosed his financial situation in these proceedings. Indeed, it was put (submissions, 15 September 2011, par 243) "... He deliberately delayed providing information to thwart a proper enquiry of those finances. The Plaintiff can have no complaint if the Court adopts a more generous approach to the Defendant because of that. If it does not there is a real risk that the Plaintiff will benefit from his lack of disclosure". 50The inspiration for the submission appears to have been the plaintiff's disclosure in cross-examination that since separation he had paid legal costs in these proceedings of $135,000 to Fishburn Lawyers, and $15,000 in legal costs in respect of an AVO application. It was put that the plaintiff's 2009 and 2010 tax returns, produced at the hearing, provided no explanation for the source of funds for these payments, and no explanation was otherwise made. It was put that in the circumstances, the defendant was "left in the dark" and unable to cross-examine on the issue. 51In my opinion, the submission is groundless. Doubtless in the exercise of some forensic discretion, the plaintiff was not cross-examined for an explanation as to the source of the funds, and no suggestion was put to him that he was guilty of non-disclosure. No suggestion was made to the court that an opportunity was required to enable exploration of these issues with the plaintiff or anyone else. On this issue, the principles in Browne v Dunn (1893) 6 R 67 appear to have been ignored, and no adverse finding for the plaintiff is warranted. Accordingly, the submission is rejected. 52Furthermore, annexed to the defendant's affidavit of 12 August 2011 is a copy of the correspondence between the parties' solicitors which evidences requests by the defendant's solicitors for information, including documents, concerning the plaintiff's financial situation at relevant times. It is unnecessary to recite the details, but sufficient to note that in reply information was provided, and an explanation was given, where there was an inability to provide it. This evidence undermines the submission that the plaintiff was guilty of non-disclosure, deliberate or otherwise.

[11]

The objection to the plaintiff ' s evidence 53The defendant objected to the admissibility of the evidence in the plaintiff's affidavit of 2 May 2011 (pars 35-43), as to his financial contribution in the period 1 September 2005 to 30 January 2009. The objection was on the ground that the assertions were opinions based upon schedules derived from source documents which had not been provided. It was put that, consistent with the arrangement for dealing with objections made at the commencement of the hearing, it was appropriate for the objection to be maintained in submissions and subsequently ruled upon. It was put that the plaintiff was not cross-examined on this evidence because it was considered to be inadmissible. 54The principal statement objected to is: "36 I have calculated that in the period from 1 September 2005 to 30 January 2009, being around the time of separation, which is a total period of three years and five months, an amount of $1,186,117 of my funds were spent by Maxine and me." The evidence in par 43 is to similar effect. 55Schedule A is a schedule of transactions conducted on the plaintiff's Westpac account which was relied upon to demonstrate an expenditure in the amount of $612,393. Schedule B is a schedule of transactions conducted on the NAB flexi-mortgage account which was relied upon to demonstrate an expenditure of $573,724. The combined amounts total $1,186,117. 56The Westpac account statements had been provided as annexures to the plaintiff's affidavit of 22 November 2010. The defendant deposed in her affidavit of 12 August 2011 (par 36) that the statements for the NAB flexi-mortgage account were provided to her solicitors on 7 January 2011. 57Although the plaintiff was not cross-examined on these matters, the defendant was cross-examined on the relevant paragraphs without objection (T p 108, 109). She was not re-examined on them. She accepted that she had the opportunity to consider this evidence but did not respond to it in her affidavit of 12 August 2011. 58In my opinion the evidence is admissible, and the objection fails. The statement in par 36 is a statement of fact alternatively, if one of an opinion, the supporting documentation had been provided prior to the hearing. The bold forensic decision to leave the evidence untested appears to have been based on the assumption that at some later time the objection would be upheld.

[13]

The property of the parties at trial in September 2011 60Hereunder are listed the assets and liabilities of the parties at the time of trial. The value of Medowie is according to my finding. Item 18 is an amount of $50,000 which, on the evidence, is referable to liabilities incurred by the plaintiff and paid for from the proceeds of the sale. It includes the sum of $20,000 for commission, and of $30,000 paid in respect of legal costs on the sale, and incurred in litigation with the Civil Aviation Safety Authority. I declined to accept the amount of $35,632 proposed by the plaintiff (reply submissions 23.09.11) as I was unable to ascertain the evidentiary support for it. No Held by Asset DOT 1 P:D Medowie: held 1/3:2/3 $500,000 2 D Shares $66,488 3 D Hyundai car $5,000 4 P Hi Lux car $9,500 5 D Contents $5,000 6 P Caravan $20,000 7 P Boat (dinghy) $1,000 8 P Savings $8,225 9 D Superannuation $110,000 10 P Superannuation Nil 11 P Shares Nil 12 P Cessna, plant & equipment, business records: sale price $250,000 Liabilities 13 D NAB visa $1,458 14 D NAB flexi $97,326 15 P NAB visa $160 16 P NAB flexi (paid out) $164,418 17 P Bankwest Mastercard $6,664 18 P Other liabilities (paid out) $50,000 Total assets $975,213 Total liabilities $320,026 Net assets $655,187

[14]

Financial contributions of the parties 61The defendant's initial contribution was her property at Bendigo which she sold in September 1998 for $100,000. In early 1999 she purchased the property at Sancrox for $143,000 with the proceeds of the Bendigo sale and borrowings under mortgage of about $45,000. She serviced the mortgage from her earnings as an accountant in Port Macquarie. In about 2002 she inherited $90,000 from which she paid $30,000 to discharge the mortgage. The Sancrox property was sold in October 2003 for $330,000. 62In February 2004 the parties purchased the property at Medowie for $480,000. The plaintiff purchased a one third share for which he borrowed $170,000, and the defendant purchased a two thirds share funded by the monies received from the sale of the Sancrox property, and an inheritance. It is assumed that the parties contributed proportionately to the payment of stamp duty said to amount to $17,090. 63In September 2005 the plaintiff's flying business was sold for $680,000, the net proceeds from which were $562,000. As earlier referred to (par 17), from these monies the plaintiff paid $166,477 to discharge his mortgage over the Medowie property, and purchased a motor vehicle and a caravan, and paid $150,000 to the defendant. The defendant also received a total amount of about $17,000 in repayment of loans made to the plaintiff. Part of the proceeds were applied by her for the purchase of shares on his behalf. It is appropriate to treat the whole amount received from the sale as a lump sum contribution attributable to the plaintiff. 64In May 2005 the defendant ceased working and remained unemployed until separation in January 2009, during which time she derived income from investments in shares and savings. The evidence is that during this period the parties had access to funds provided by the plaintiff in a total sum of about $1,186,117 which included the sale proceeds of $562,000 already referred to. Although the evidence does not enable identification of precise amounts expended as contributions to the parties' welfare until separation, it supports the finding, which I make, that during this period the plaintiff's financial contribution was probably substantially greater than the defendant's. 65There are some matters which arguably might be considered to be within s 20(1)(a) as financial contributions made indirectly by the parties to fund their resources. In my opinion it is preferable to treat them as contributions to the welfare of each other within s 20(1)(b) and include what are usually referred to as homemaker contributions. I accept the substance of each party's evidence as to non-financial contributions. As is not uncommon in cases under the Act each had a tendency to emphasise or enlarge the nature and extent of his or her activities and to downplay that of the other. I take this factor into account in making an overall assessment of the contributions made during the relationship. I refer to the following matters. 66During the time the parties were living at Bendigo, the plaintiff operated the flying business at weekends and received Centrelink benefits. During the week he carried out maintenance and renovation work on the property which undoubtedly enhanced its value. The defendant was in regular employment. She usually met the day-to-day expenses, and carried out the domestic duties, including cooking and cleaning. 67Similar arrangements were continued after the plaintiff's business moved to Port Macquarie, and they came to live in the Sancrox property in 1999. The defendant gained employment in Port Macquarie, and assisted the plaintiff in his business with accounting, taxation, administration, and marketing. For his part, the plaintiff carried out various work on the property including clearing, the construction of a dam and garages, fencing, and landscaping. Each contributed towards household expenses and outgoings, and shared the domestic duties. Both were working full-time. 68After the establishment of the plaintiff's business in Port Stephens, and the move to Medowie, the parties continued their contributions to home and business. From time to time the defendant provided funds to the plaintiff for his business as the need arose, which he repaid. In addition she provided assistance with accounting and administration. Both parties shared the work required for the maintenance and upkeep of the property, as well as the payment of household expenses and outgoings. 69In evidence, both parties acknowledged (T p 49, 103) that each fairly and equally, to the best of his or her capacity, contributed to their joint welfare and to the household. Unsurprisingly, the evidence, including income tax returns, does not enable any reliable quantification of these contributions in monetary terms. To attempt to do so would be an exercise in speculation. It is reasonable and fair to accept the parties' assessment, namely, that the contributions of this kind for the period of the relationship were equal.

[15]

Determination 70The plaintiff seeks an order that there be an adjustment of the interests of the parties in the property by the division of the assets as to 55 percent to the plaintiff and 45 percent to the defendant. The defendant seeks an order that the assets be divided as to 65 percent to the defendant and 35 percent to the plaintiff. It is common ground that the order should require the transfer of the plaintiff's interest in the property at Medowie to the defendant. Otherwise, both parties seek orders to the effect that each retain the property presently in his or her possession such as shares, cars, and superannuation. 71The application of s 20 of the Act, including examination of the factors specified in s 20(1)(a) and s 20(1)(b), requires consideration of the contributions of the parties throughout the period of their relationship, and the period between separation and trial. The court is required to make an assessment in the exercise of a wide discretion. In circumstances where much of the contributions cannot be quantified in monetary terms the holistic value judgment inevitably will be an imprecise exercise. 72The evidence of the relationship, and of the nature and extent of the contributions made by the parties, have been referred to. The relationship existed for about 15 years, and, overall, I find it to have been one of mutual support, confidence and equality. In deciding whether or not it is just and equitable to make an adjustment it is necessary to take into account matters in addition to those recorded as assets and liabilities as at the dates of separation and trial. 73It is relevant to take into account the probability that part of the defendant's inheritance of $90,000 was applied in meeting common expenses. Relevant also is the plaintiff's payment to the defendant of $150,000 on 19 September 2005 which she accepted as recompense for her contribution towards the plaintiff's business. 74Another relevant factor is the plaintiff's significant financial contribution towards the support of the parties from about May 2005 when the defendant ceased working, until separation in January 2009. The probability is that, although the defendant derived some income from investments and savings, the parties were substantially dependant upon the plaintiff's earnings during this time. Such contributions as each made during this time I have taken to have been for every day living expenses, and not towards any asset. 75The plaintiff gave evidence that he has paid about $150,000 towards his legal costs of these proceedings. I do not overlook the prospect that the defendant's costs, although presently unquantified, may be of a similar amount. 76Significant weight must be given to the fact that for almost three years since separation the plaintiff has lost the accommodation afforded by residence in the Medowie property whilst the defendant has continued to have the benefit of its use and occupation. 77As has often been stated, the court's task is not to undertake an accounting exercise setting off each party's contributions, assets, and liabilities, against the other's. Guided by the principles referred to earlier, in my opinion the plaintiff's claim that it is just and equitable for an order to be made in his favour should be upheld. It follows that the defendant's claim is rejected. 78In a general sense, the nature of the property of each of the parties remains substantially the same as it was at the end of the relationship. It is common ground that if an adjustment is to be made the order should require the transfer of the plaintiff's interest in the Medowie property to the defendant, and that each should retain his or her interest in the other assets presently held by either of them. 79In my opinion, the extent of the adjustment to be made in this case should not be simply the product of a mathematical calculation with regard to the net asset position of the parties at the date of trial. Nevertheless, the position of each of the parties at the date of trial must be considered in the course of evaluating the financial impact or consequence upon them which an adjustment order will have. 80In my assessment, it is just and equitable to adjust the interests of the parties by ordering the defendant to pay to the plaintiff the sum of $250,000 within 28 days, and the plaintiff to transfer to the defendant all of his interest in the Medowie property. In arriving at this figure, in addition to the other factors referred to, I have taken into account the value of the plaintiff's interest in the property in the amount of about $167,000, to which should be added an amount which fairly reflects the extent of the plaintiff's contribution over the period, and the deprivation of his use of the property. 81I also took into account the party's agreement that no order should be made in respect of the interests of each in items of property and financial resources presently in his or her possession or control. Both parties seek an order that each retain these items to the exclusion of the other. 82In the circumstances the parties should be given the opportunity to bring in agreed short minutes in accordance with these reasons. The orders should deal precisely with items such as shares, cars and superannuation and any other personalty for avoidance of doubt, as well as with any other matter which either party considers necessary to be dealt with for the final determination of their financial relationship. 83I have not dealt with the question of costs and, absent agreement, the parties should have the opportunity to address me on this issue. 84Accordingly I direct the parties to prepare short minutes in accordance with these reasons. Arrangements should be made with my associate by 15 February 2012 for the re-listing of the matter.

William Neville Lane v Maxine Manuel

At a glance

Court

Decision date

Before

Source

Judgment (16 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (17)

Cited By (1)