Johnston v Hazel [2003] ACTSC 46 (6 June 2003)

Last Updated: 13 June 2003

MICHAEL BRIAN JOHNSTON v LOUISE MORNA HAZEL

[2003] ACTSC 46 (6 JUNE 2003)

DOMESTIC RELATONSHIPS ACT 1994 - adjustment of property interests - ex parte application - contributions prior to and after separation - just and equitable.

Domestic Relationships Act 1994 (ACT), ss 11, 12, 13(1), 13(2), 14

Green v Robinson (1995) 36 NSWR 96

No. SC 85 of 2002

Judge: Higgins CJ

Supreme Court of the ACT

Date: 6 June 2003

IN THE SUPREME COURT OF THE )

) No. SC 85 of 2002

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: MICHAEL BRIAN JOHNSTON

Plaintiff

AND: LOUISE MORNA HAZEL

Defendant

ORDER

Judge: Higgins CJ

Date: 6 June 2003

Place: Canberra

THE COURT ORDERS THAT:

1. The equity of the plaintiff in the property interests divided under the Domestic Relationships Act 1994 (ACT) is declared to be $162,083 and that of the defendant is $107,917.

1. This was an application pursuant to the Domestic Relationships Act 1994 (ACT) (the DR Act) for orders adjusting the property interests of the parties.

2. The claim was heard on 23 April 2003. The defendant did not appear despite being served with due notice of the application. Accordingly, the matter proceeded ex parte.

3. I am satisfied, on the uncontested evidence before me, that the plaintiff and defendant are each over the age of eighteen years. Between December 1996 and February 2000 the parties lived together in the Australian Capital Territory in a bona fide domestic relationship. The application was made on 15 February 2002. On that date, and since, the plaintiff was a bona fide resident of the Australian Capital Territory.

4. Between February 2000 and the date of the commencement of proceedings, the parties had negotiated with a view to settling their affairs. However, from September 2001 it appears that the defendant failed to cooperate, not replying to correspondence or attending conferences, (the most recent such conference having been scheduled for 14 June 2002).

5. I am satisfied that the necessary prerequisites for relief under s 11 of the DR Act (as to residence) and under s 12, (length of relationship) have been met.

6. However, there is no positive evidence that s 13(1) has been satisfied. That provides:

"1. An application for an order under this part by a party to a domestic relationship that has ended shall not be made more than two years after the day on which the relationship ended."

7. The evidence is that the relationship ended in February 2000. If that date was, in fact, before 15 February 2000 then more than two years elapsed before the application was first made.

8. However, if the application was out of time, it was only marginally so. Further, the material contained in the affidavit of the plaintiff and his oral evidence satisfies me that it would cause significant hardship to the plaintiff to strike out this cause.

9. Section 13(2) provides:

"A court may grant leave to a person to apply for an order under this part after the end of the period referred to in subsection (1) if it is satisfied that greater hardship would be caused to the applicant if leave were refused than if it were granted."

10. In my view, to leave the resolution of these parties' property interests to the general law would cause hardship to both parties, not least in terms of cost and delay. I am therefore satisfied that leave should be granted, so far as it may be needed, to make this application.

11. I further note that it promotes the objectives of the DR Act so to do. Section 14 refers thereto in the following terms:

"As far as practicable, a court shall make orders under this part that will end the financial relationship between the parties to the domestic relationship and avoid further proceedings between them."

12. The respective property interests of the parties centre around a dwelling house purchased jointly on 30 November 1998.

13. This was at 32 Russell Street, Hackett being Block 15 Section 44 Division of Hackett (the Hackett property). Each of the parties has been in paid employment throughout the relationship. Neither has, or had at any time, dependant children. The parties also made non-financial contributions during the relationship. The plaintiff estimates the ratio of these contributions (cooking, cleaning, gardening and mutual support) to be 60:40 in his favour.

14. The parties' respective incomes were unequal. The plaintiff is a statistician and is paid approximately $49,000 per annum. The defendant worked as a part-time cleaner but the plaintiff is unaware of her earnings from that or, indeed, any other source. She did on two occasions enrol in a horticultural course. The plaintiff paid the fees, but the defendant on each occasion discontinued the course.

15. It is fair to note that up until the parties separated, each enjoyed the use and occupation of the Hackett property. Since then, at least until relatively recently, the defendant had sole occupation of the Hackett property. At least by 24 February 2003, she had apparently abandoned that occupation, without notice, it seems, to the plaintiff.

16. On that day, 24 February 2003, I granted the plaintiff an interim order permitting him to enter and secure the property, as it seemed to have been abandoned.

17. The defendant contributed $40,059.73 to the purchase of the Hackett property. This comprised:

(a) Deposit $7,950.00

(b) Settlement cheques $27,213.23

(c) Stamp duty $4,097.50

(d) Legal fees $665.00

(e) Water and sewerage bill $134.00

_________

Total $40,059.73

18. The plaintiff, up until 14 November 2002, had contributed $51,407.35 to the purchase and upkeep of the Hackett property being:

(i) Deposit $8,000.00

(ii) Mortgage payments $38,243.10

(iii) Rates $1,307.77

(iv) Water and sewerage $614.00

(v) House insurance $847.29

(vi) Electricity $1,458.00

(vii) Gas $205.89

(viii) Telephone $731.30

_________

Total $51,407.35

19. The original purchase price was $159,500.00. The property is now valued at $338,000, at least, as at 21 March 2003.

20. In addition to those matters, the plaintiff has paid a Visa Card debt incurred by the defendant on his Visa Card account, in the sum of $6,183.20, including interest. As at 14 November 2002 there were also arrears of rates on the Hackett property, totalling $3,948.31 including $1,278.99 relating to water and sewerage. The plaintiff has assumed responsibility for those arrears.

21. He further points to the consideration that, having been excluded from the Hackett property since the parties separated, he had to fund alternative accommodation whilst paying the mortgage and outgoings to preserve the integrity of the property.

22. There are other adjustments claimed by the plaintiff as follows:

(a) $2,200.00 being the value of chattels owned by him but retained by the defendant;

(b) An occupation fee for the period of three years since the separation of the parties; and

(c) Costs of these proceedings.

23. The plaintiff also detailed employer contributions to his superannuation of $10,296.87. However, there is no information as to the defendant's superannuation entitlements, if any. The account to be taken of such a financial resource was referred to in Green v Robinson (1995) 36 NSWR 96. I accept that the defendant's superannuation entitlements were unlikely to have been great.

24. I start with the parties' equity in the Hackett property. Their contributions to the purchase were unequal but it was plainly intended that their beneficial interest would be equal. Their liability under the mortgage plainly was. Whilst I accept that the cash paid towards the purchase and upkeep of the property, including rates and insurance, favours the plaintiff by a ratio of 58.32 to 41.68 currently, it does not follow that it is "just and equitable" to divide the equity in the property between the parties in those proportions.

25. The "up-front" contribution of the defendant to the purchase price represents an ongoing offset to the detriment suffered by the plaintiff in paying the mortgage and other expenses. Further, until February 2000, the plaintiff had the benefit of the use and occupation of the Hackett property equally with the defendant. I accept that, had the property been let for three years, it may have returned $275 per week for much of that time. However, the parties would have shared the net proceeds after deduction of interest payments and outgoings.

26. I consider that to approach the matter globally rather than with mathematical precision is appropriate, given the lack of any precise evidence as to the value of the respective contributions of the parties both financial and non-financial.

27. Approaching the matter in that way I consider, subject to some specific allowances, that generally the value of the equity in the Hackett property at the time of separation should be shared equally, but after that date, in the proportion 60:40 in favour of the plaintiff. I estimate the equity at separation as $165,000 (allowing some increment representing a real diminution in the mortgage debt).

28. The subsequent increment in value is, I would estimate (on the same basis) in round figures, $105,000.

29. I make allowance for adjusting sums not already accounted for above (and it includes payment of mortgage, rates, adjustment to rent forgone) of $6,183.20 (Visa card debt), $249.54 (home maintenance costs), and $150 for one half the cost of valuation report. In addition I allow $10,000 representing costs wasted by reason of the defendant's failure to cooperate with the plaintiff in resolving this matter. Otherwise I propose to make no order for costs.

30. I make no allowance for chattels, regarding the same as offset by the balance in favour of the defendant in respect of the plaintiff's superannuation benefits forgone by the defendant.

31. I will hear the plaintiff's counsel further as to the final form of the relevant orders. The net result however is that the equity of the plaintiff is declared to be $162,083 and that of the defendant $107,917.

I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Chief Justice Higgins.

Associate:

Date: 6 June 2003

Counsel for the Plaintiff: Mr G Blank

Solicitor for the Plaintiff: McGuinness Eley

Counsel for the Defendant: No appearance

Solicitor for the Defendant: No appearance

Date of hearing: 23 April 2003

Date of judgment: 6 June 2003