|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
Supreme Court of the ACT |
Last Updated: 30 September 2008
PHILIP JAMES MORRIS v KATHLEEN BLISS
[2007]
ACTSC 72 (5 September 2007)
FAMILY LAW – domestic relationships – cross-applications for orders adjusting interests in property – exercise of discretion – relevant considerations – comparative financial resources of parties
Domestic Relationships Act 1994, s 3, s 12, s 14, s 15, s 19, s 25, s
38
Legislation Act 2001, s 169
Court Procedures Rules 2006, r 6700,
r 6701
Supreme Court Rules (repealed), O 39 r 1, O 40 r 24
De Facto
Relationships Act 1984, s 15(1)(e)
Family Law Act 1975 (Cth), s
75(2)(o)
Ferris v Winslade [1998] ACTSC 18; (1998) 22 Fam Lr 725
Clauson
v Clauson (1995) FLC 92-595
No. SC 608 of 2004
Judge: Master Harper
Supreme Court of the ACT
Date: 5 September 2007
IN THE SUPREME COURT OF THE )
) No. SC 608 of 2004
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN: PHILIP JAMES MORRIS
Plaintiff
AND: KATHLEEN BLISS
Defendant
ORDER
Judge: Master Harper
Date: 5 September 2007
Place: Canberra
THE COURT ORDERS THAT:
1) Judgment be entered for the defendant in the plaintiff’s
action
2) Judgment be entered for the plaintiff on the counterclaim
1. The plaintiff and the defendant make competing claims against each other
under the Domestic Relationships Act 1994. Although the action did not quite
start in that way, as I shall explain, by the time of the hearing it was common
ground that the
parties had been in a domestic relationship as defined in the
Act for a period of more than two years.
2. A domestic relationship is
defined in s 3 of the Act as follows:
Domestic relationship means a personal
relationship between 2 adults in which one provides personal or financial
commitment and support
of a domestic nature for the material benefit of the
other and includes a domestic partnership but does not include a legal
marriage.
3. A domestic partnership is defined in s 169 of the Legislation
Act 2001 as a relationship between two people living together as a couple on a
genuine domestic basis. It is apparent that the concept of
a domestic
relationship is a wider one than that of a domestic partnership.
4. The Court
has power under s 38 of the Domestic Relationships Act to make a declaration as
to whether a domestic relationship existed during a specified period.
5. The
relief sought by each of the parties is provided for in s 15 of the Act, which
is as follows.
15 Property Orders
(1) On application by a party to a
domestic relationship, a court may make an order adjusting the interests in the
property of either
or both of the parties that seems just and equitable to it
having regard to –
(a) The nature and duration of the relationship;
and
(b) The financial or non-financial contributions made directly or
indirectly by or on behalf of either or both of the parties to the
acquisition,
conservation or improvement of any of the property or financial resources of
either or both of them; and
(c) The contributions, (including any in the
capacity of homemaker or parent) made by either of the parties to the welfare of
the
other or any child of the parties; and
(d) The matters referred to in s
19(2) as far as they are relevant; and
(e) Such other matters (if any) as the
court considers relevant.
(2) A court may make an order under subsection 1
whether or not it has declared the title or rights of a party in respect of the
property.
6. Section 12 of the Act provides that, with limited exceptions, a
court is not to make a property order unless it is satisfied that
a domestic
relationship has existed between the parties for not less than two
years.
7. Section 14 provides that as far as practicable, a court shall make
orders that will end the financial relationship between the
parties and avoid
further proceedings between them. Section 25 provides the court with a wide
range of powers which may be used for
the purpose of effecting the adjustment of
property interests between the parties.
8. The plaintiff and the defendant
met during 1996. They became engaged to be married in about July 1998. The
plaintiff’s case
is that they were to be married on 1 January 2000, but
that the defendant called the wedding off at the last moment. By 2003, or
certainly, at the latest, 2004, their relationship was over, and the plaintiff
commenced the present proceedings on 11 November 2004.
9. The plaintiff is a
self-employed motor mechanic with his own business at Dickson. He is 55 years of
age. He was married in 1969,
and he and his wife Joyce had two children, Karen
born in 1975 and Geoffrey born in 1978. They were divorced in 1984. Initially
the
children lived with their mother, but they moved in with their father to
attend secondary college, Karen in 1991 and Jeffery in 1994.
Karen moved out at
the end of 1996 but Jeffrey lived with his father until 2000. The plaintiff
owned his own house at 44 Newton Street
Hackett, and still owns it.
10. The
plaintiff was one of a number of beneficiaries under the will of an uncle who
died in 1986 owning a rural property in NSW,
a short distance north of Canberra.
The plaintiff came to an agreement with the other beneficiaries to buy part of
the property,
some 60 hectares. He bought the land from the estate for
$125,000.00 in March 1998, borrowing that amount from Westpac Bank.
11. The
defendant is 51. She too was, earlier in her life, married and divorced. She
married in 1973 and had three children, Tanya
born in 1973, Susan born in 1974
and Kylie born in 1975. She separated from her husband in 1990. Their marriage
was formally dissolved
in 1994. Between 1991 and 1994 she lived in Sydney in a
domestic partnership with a man named Mark McLaren. She returned to Canberra
in
1995. She worked for a number of years with Australia Post. During her
relationship with the plaintiff she worked at the Dickson
Post Office.
12. In late 1999, the defendant became the registered crown lessee of a
house in Montagu Street, Evatt. It is the purchase of that
house which has been
the impetus for the present litigation. The house was purchased on the open
market through a firm of estate
agents, Federation Independent (Belconnen). The
purchase price was $126,950.00. Contracts were exchanged on 22 November 1999
and
settlement took place on 15 December 1999. The purchase was principally
financed by a loan from the ANZ Bank of $101,000.00, secured
by registered first
mortgage over the property. The plaintiff’s case is that he provided the
balance of the purchase moneys
from his own funds. The defendant’s case
is that the balance of purchase moneys came from cash which she had given to the
plaintiff, so that it came from her funds. There is a significant difference in
the versions presented by the parties, which I shall
need to resolve.
13. The plaintiff commenced the present action in November 2004, asserting
that the parties had been in a domestic relationship from
about August 1999 to
February 2003, and seeking orders that the Evatt property be sold and that 25 %
of the net proceeds of sale
be paid to the plaintiff, with the balance to the
defendant. It was asserted in the statement of claim that the plaintiff had
provided
the balance of purchase moneys for the property, over and above the
bank loan, that he paid stamp duty, that he paid off the defendant’s
credit card debt of $4,000.00 and car loan balance of $5,137.00 to assist her in
obtaining the bank loan; and that he had made other
financial and non-financial
contributions towards the acquisition, conservation or improvement of the Evatt
property. No mention
was made in the statement of claim of any other asset of
either party, or of the Domestic Relationships Act.
14. In February 2005 the
defendant delivered a defence. She agreed that the parties had lived in a
domestic relationship but asserted
that it had commenced in about November 1997
and continued until March 2004. She denied that the plaintiff made any direct
financial
contribution to the purchase of the Evatt property. She asserted that
she had contributed $27,000.00 to the purchase, being money
she had saved prior
to the commencement of the relationship.
15. Included in the defence was a
counterclaim for adjustment of property interests in favour of the defendant
pursuant to the Domestic Relationships Act. The defendant sought an order that
the plaintiff pay her $100,000.00 and that she be declared the sole owner of the
Evatt property.
She also sought the return of specified furniture and other
items of personal property. She gave particulars of non-financial contributions
she said she had made to the plaintiff’s house at Hackett and to the rural
property.
16. The Court Procedures Rules 2006 provide at r 6700 that evidence
at the trial of a proceeding started by originating claim must be given orally
in open court, whilst
evidence in a proceeding started by an originating
application must be given by affidavit. This is subject to r 6701, which
provides
that the parties to a proceeding started by originating claim may agree
that the evidence at the trial of the proceeding be given
by affidavit. Such
agreement must be made before the proceeding is set down for trial, and the
parties must tell the court about
the agreement before the proceeding is set
down for trial. These provisions came into effect on 1 July 2006, but there had
been
similar provisions in the previous Supreme Court Rules: O 39 r 1 and O 40 r
24. Regrettably, from my perspective, the parties seem to have agreed at a
relatively early stage that evidence
should be on affidavit. The Registrar made
a consent direction in June 2005 that the parties serve all affidavits to be
relied upon
by a specified date. From then on, a substantial number of
affidavits were put on by each of the parties. The action was set down
for
trial at a listing hearing in July 2006 before the then Deputy Registrar, whose
bench sheet includes a reference to affidavit
evidence, from which I must take
it that the parties complied with the requirement to inform the Court of their
agreement. In an
action where the outcome will depend upon findings of fact,
and where the facts, as here, are vigorously disputed, it is in my view
undesirable that the evidence in chief of the witnesses be in affidavit form.
The Court is deprived of the opportunity of evaluating
the witnesses as they
give their evidence orally and without being led. An important opportunity to
assess the demeanour of witnesses
and to form a view as to the quality of their
recollection of events a number of years earlier is lost. I suspect, also, that
proceeding
by way of affidavit adds significantly to legal costs on both
sides.
17. During September 2005, the plaintiff swore a 25-page affidavit
with a further 43 pages of annexures. Another seven affidavits
were put on by
supporters of the plaintiff. I found most of these unhelpful; they appeared to
be directed at establishing that the
relationship between the plaintiff and
defendant was a relatively superficial one, falling short of a domestic
partnership.
18. During the same month, the defendant swore an 18-page
affidavit and both parties filed statements of financial circumstances in
the
form prescribed by the Family Law Rules – not strictly applicable to the
proceedings but a sensible course which has been
followed with approval in
previous applications in this Court under the Domestic Relationships
Act.
19. In February 2006 an amended statement of claim was filed, which
fundamentally changed the nature of the plaintiff’s claim.
It was pleaded
that the plaintiff and defendant were in a social relationship from about
September 1997 to about August 1999, then
in a domestic relationship from about
the time of their engagement in about August 1999 to some time in 2002, and
again in a social
relationship until February 2003. It was asserted that the
plaintiff had introduced property at the start of the domestic relationship,
being his home at Hackett, the rural property, his business, a credit balance of
about $11,000.00 in his bank account with Westpac,
motor vehicles, household
contents and personal belongings. The defendant, it was asserted, had
introduced only two motor vehicles
and personal belongings, offset by debts of
$9,200.00. The plaintiff claimed to have paid the defendant’s debts as a
precursor
to her obtaining a bank loan to buy a house. A joint bank account had
been opened in September 1999, said to be for the purpose
of the house purchase.
Contracts had been exchanged in November 1999 for the purchase of the Evatt
property, the plaintiff contributing
some $28,000.00 to that purchase, the bulk
of this coming from his inheritance of $19,000.00 which he had received two days
before
settlement. It was asserted that the plaintiff had made a contribution
at least equal in value to 35 % of the current market value
of the Evatt
property, and that the Evatt property should be sold and 35 % of the sale price
or $92,750.00, should be paid to the
plaintiff. A second count was pleaded to
the effect that the defendant held the Evatt property on a resulting trust as to
29.07
% for the plaintiff and the balance for herself; and a third count of
constructive trust at 35 % of the value of the property.
20. In April 2006,
the defendant put on affidavits by Julianne Brewer, who described herself as a
licensed mortgage originator, and
Darin Entriken, the real estate salesman who
had effected the sale of the Evatt property to the defendant. There is a
significant
factual dispute as to what took place in a meeting between the
plaintiff, the defendant and Ms Brewer immediately following which
Ms Brewer
faxed a loan application and supporting documents to the ANZ Bank.
21. I
shall deal with the two major areas of factual dispute, setting out and
evaluating the affidavit and oral evidence on each of
those issues.
22. The
allegation that the defendant had savings of $27,000.00 which were the source of
the funds provided by the plaintiff for the
settlement of the Evatt property
arose for the first time in the defence which was delivered in February 2005.
The plaintiff dealt
with this commencing at paragraph 52 of his affidavit of 8
September 2005 as follows:
Date Amount
17/11/1999 $4,000.00
18/11/1999 $100.00
24/11/1999 $400.00
01/12/1999 $1,500.00
13/12/1999 $1,200.00
13/12/1999 $19,000.00
14/12/1999 $500.00
__________
Total $26,700.00
23. The letter, Annexure “D”, referred to in paragraph 64 of the plaintiff’s affidavit, read as follows:
ANZ Bank
To Whom it May Concern
I wish to advise that I, Philip James Morris am depositing $27,000 into Kathleen Bliss’s ANZ account number 536 295 812 on 22-11-99. These funds have come from Kathleen’s share of a joint investment.
This money is not a gift nor a loan but Katy’s entitlement to be used as she wishes.
If you have questions please contact me.
Philip J Morris
44 Newton Street Hackett
Ph: 62486007 W
6248 8192 A/H
018 623 306 Mob
24. The defendant initially swore her affidavit on 2 September 2005 but there
were problems with its form which resulted in a delay
in the court accepting it
for filing. I accepted that the plaintiff had not seen the defendant’s
affidavit when he swore his
first affidavit from which I have quoted. I am
equally satisfied that the defendant swore her affidavit before she had the
benefit
of seeing his.
25. In her affidavit of 2 September 2005, the portions
relevant to the major facts in issue between the parties were:
. . .
. . .
. . .
26. The letter referred to as Annexure A in clause 32 of the defendant’s
affidavit is identical to Annexure D in the plaintiff’s
affidavit, set out
above.
27. The defendant’s daughter Kylie swore an affidavit on 2
September 2005 also. Relevant parts of that affidavit are:
3 I remember the
day on which my mother drained the waterbed at the Kerferd Street, Watson house
in order to collect her money and
count it. The waterbed was actually in my
bedroom at that time and I saw my mother dismantle the base and collect up a
large number
of $50.00 notes from inside that area. I was surprised and said:
“I did not realise that I had been sleeping on top of all
that money. It
feels creepy. I could have been murdered if somebody wanted to steal all that
money”. I said this as a joke
and not as a serious complaint.
4 My
sister Susan also saw our mother collecting her money from under the waterbed.
We thought that it was very funny for our mother
to have done this and we made
jokes and laughed at her.
5 Shortly afterwards, I saw my mother counting the
money into bundles on the kitchen table. At the end of her counting she packed
the bundles of money into a big yellow manilla envelope and said: “There
is more than $30,000.00 in there”.
28. Ms Brewer swore an affidavit
prepared by the defendant’s solicitors on 21 April 2006. She deposed that
she was a licensed
mortgage originator trading under the name Provincial Home
Loans from her home at Queanbeyan. She had worked at St George Bank for
about 11
years before going out on her own in about 1998. She was familiar with the rules
applied by the ANZ Bank in relation to
loan applications and borrowers, having
dealt extensively with the Bank since 1998. She recalled meeting the plaintiff
and defendant
in about November 1999. She did not still have her file and could
not confirm the date of the meeting. Her recollection was that
the plaintiff had
accompanied the defendant to support her at the interview, but that the loan
application and purchase had been
in the defendant’s name alone. She had
read the accounts of the meeting in the affidavits of the plaintiff and the
defendant.
She said that she would not have told the plaintiff that the bank
would not accept him as a borrower because of his existing mortgage,
although
the bank might have asked that he provide collateral security. She said that as
a normal part of the application procedure,
the defendant would have been
required to provide a proof of deposit which included a statement that the
deposit was not a loan.
This was normally done by letter. She denied that she
had, or would have, asked the plaintiff to provide a letter about the funds
knowing it to be untrue.
29. In May 2006 the plaintiff swore a supplementary
affidavit. He denied that the defendant had ever told him that she had money
saved
in a compartment of her waterbed, and denied the defendant’s
assertions about giving him cash to look after.
30. Oral evidence about these
issues was given by the plaintiff and the defendant, and also by the
defendant’s daughter Kylie
and Ms Brewer. All were extensively
cross-examined. All were giving evidence some seven years after the events of
late 1999. The
plaintiff conceded in cross-examination that the note he wrote at
the meeting with Ms Brewer contained a false statement. He said
that the words
had been given to him by Ms Brewer, who prompted him to write the letter. He had
written an earlier letter which was
not acceptable. He now realised that he had
done the wrong thing, but said that professional people gave advice in certain
ways,
and that this had been put as the easiest way to get the loan. He said
that Ms Brewer had been made aware that the money was coming
from his
uncle’s estate. Asked about the meeting with Ms Brewer, the plaintiff
agreed that she had at one point during the
meeting asked Ms Bliss’
consent for him to remain in the interview room because he was not to be a
borrower. He said that this
happened about half an hour into the interview. He
had taken copies of his tax returns, but the tax return for the previous year
(1998-1999) had not yet been prepared and he had no evidence of his income for
that year. He said that Ms Brewer had told him that
there was a better prospect
of the loan being granted in the defendant’s name alone, and she also said
that it would be much
quicker.
31. He had not kept a copy of the first letter
he wrote for Ms Brewer, but he recalled that it did not include the last
sentence in
the second letter, “this money is not a gift nor a loan, but
Kathy’s entitlement to be used as she wishes”. The
plaintiff was
shown his work diary for 1999 in re-examination, and confirmed that there was an
appointment in his handwriting for
7.00 pm on 11 November 1999 noted simply as
‘Provincial’.
32. The defendant was cross-examined extensively.
She gave her evidence somewhat hesitantly, often in incomplete sentences. She
sought
to distance herself from the assertion in her defence that she had
savings of $27,000.00 prior to the commencement of her relationship
with the
plaintiff. She said that when she was living in Holt in 1996 she had had over
$10,000.00. She called the waterbed her money
box, because you could put money
in through what she described as a hole, but you could not reach in and get the
money out without
siphoning the water out of the mattress. The defendant said
that she had saved roughly $3,000.00 to $4,000.00 a year. She had deliberately
refrained from counting the money. She had pretended that it did not exist,
because if she adopted that approach, she would not spend
it and no one could
get it from her.
33. When she returned to Canberra in 1995, she initially
lived with her daughter in the latter’s one-bedroom government flat
in
Belconnen. She stayed there only briefly, then moved to a house at Weston for
about six months, and then to another house at Holt.
At her daughter’s
flat she hid the money in a pot under a potplant. She put the envelope in a
resealable plastic bag. The waterbed
was assembled at the house in Weston, and,
the defendant said, she put her money under the mattress. She agreed that at
this time
she was incurring an increasing credit card debt which was attracting
interest. Soon after moving to Canberra, she incurred a further
financial
obligation. She said “because I had to get to work, the car that I had
could not get me to work. I was so frustrated
I just went out and bought a
car”. She bought a Mazda 121 sedan for $18,700.00, without a trade-in or
deposit. She took out
a loan for the whole price of the car with AGC, committing
herself to pay the loan by monthly instalments of $452.50 over five years.
She
agreed that she did not disclose to AGC any cash savings when listing her assets
and liabilities, notwithstanding that she signed
an acknowledgement that the
information she was providing was true and complete. Her explanation was that
the cash was earmarked
for an eventual purchase of a house, and she wished to
avoid any possibility that she might be required to use the money for some
other
purpose. Her disclosed net income at the time she purchased the car was $379.00
per week.
34. When asked to explain how she had met all her continuing
liabilities, including the car repayments, from her income, she responded
that
she lived on a credit card (“well doesn’t everybody? –
sorry”). She agreed that eventually she incurred
a large debt on the
credit card. Initially she used the credit card because it was cheaper provided
that she paid the balance each
month, but as the debt rose, it was further
increased by the higher interest rate applicable to credit cards in arrears. In
relation
to this she said “I didn’t realise. You don’t think,
I guess. It’s too easy”.
35. Asked about her move to Sydney in
1991, she said that she had over $4,000.00 saved by then, although she did not
count it. When
asked again about this, she said “Yes, that’s how I
went to Sydney”. Probed a little further about the $4,000.00,
she said
that she had it in a little tin. She realised that her husband knew about it. At
one stage she had saved $4,000.00 towards
the purchase of a house and she made
the mistake of telling her husband about it. He effectively went out and spent
an amount equivalent
to all or some (the defendant’s evidence was unclear)
of this amount on tools and materials for his business. I had the impression
that the defendant was required to provide cash from time to time to pay for
purchases by her husband. A little later I asked her
what happened to the
$4,000.00 she had when she moved to Sydney, and she answered, “it was just
spent when I needed it, like
food or whatever”. But she said that she
still had some of the original $4,000.00 in cash when she started to save again.
A
little later she attempted to explain that the $4,000.00 her husband had found
out about and required her to cover the business expenses
with was a different
$4,000.00 from the cash she took to go to Sydney when she left her husband. She
added that her husband had found
her money tin and used to take money out of it
without her knowledge. The defendant then confirmed her evidence in chief that
by
the time she returned to Canberra in 1995 her cash savings amounted to about
$10,000.00, and that this balance had increased to about
$27,000.00 by about
October 1997.
36. She was asked about her move in 1996 from Weston to Holt.
She agreed that she had dismantled the waterbed for the move. She did
not count
the cash but put it into a large manila envelope quickly before anyone could see
her.
37. She was then cross-examined about the ANZ Bank loan documents. She
conceded that she had read and was aware of the fact that it
was a condition of
the loan offer that during the term of the loan she occupy the property
personally. If she ceased to occupy it,
she was required to notify ANZ
immediately, at which time ANZ would discuss with her a new loan at the
appropriate annual percentage
rate. She agreed that she did not move into the
house but that her daughter lived there. At first she sought to justify her
position
by saying that she was not renting the house out as such and was not
making a profit. She then said “but there’s always
fine print, I
guess”, and after a further question “I guess I did the wrong thing
by the ANZ”.
38. Next her attention was drawn to the fact that her
address was given in the bank documentation as 3 Kerferd Street, Watson. This
appeared to rattle her. Her immediate response was “that – I guess
it did draw my attention when I – I know I shouldn’t
have”.
She went on “You get excited about buying a house, you see, if I’d
read every little word in there. I did
know, I just got excited about buying a
house”. Asked how on earth a bank officer could have typed the form with
the Watson
address, she at first said “I can’t answer that”
and then made a half-hearted attempt to blame the plaintiff for
providing the
wrong information. She said that her two daughters and her granddaughter were
living at the Watson address at the relevant
time. Her attention was directed to
another bank form, a consumer credit application form, completed in her
handwriting. She had
completed her residential address as 3 Kerferd Street
Watson, and stated the time at that address as one year six months. When this
was pointed out to her, her response was “gee, I’m silly,
aren’t I?” and to the next question “I say
I – I was
silly, I didn’t think of things” and next “sorry, that’s
a girlie thing to say”. After
a little further questioning, she said
“Yes. No, I’ve put those – see, where my kids are, my heart
is. That’s
my home in a sense. It’s hard to understand. . .
It’s hard to explain. Where my kids are is my home. My home will always
– I don’t care where my kids live, that will always be my home in my
heart and. . . yes, I know that sounds silly”.
She agreed that she had
completed the form during the period when her evidence was that she was living
with the plaintiff.
39. Her attention was next directed to another entry in
her handwriting on the same form, in relation to marital status. There were
a
number of boxes (single, married, defacto, separated, divorced, widowed) with
one to be ticked. The plaintiff had ticked the box
for single. Again she was
rattled when this was drawn to her attention and could not explain it sensibly,
saying “. . . wrong
one. . . I guess because I wasn’t married in
a. . . ”. She was asked why she did not tick the de facto
box. Her reply was “no, that was a silly thing to say. See, I never
– when you. . . yes I know. It’s the same
as ‘Ms, Mrs,
Miss’. I don’t like Ms in a sense – you know? I don’t
know. I wasn’t. . . actually
married. I know I. . . I don’t know.
. . I just didn’t read it right”. And a little later: “I
guess I fill
things out too quick and don’t look”.
40. Elsewhere
in the bank documentation, the defendant had completed in her handwriting
details of assets. These included, under the
heading “Investments”,
an amount of $27,000.00. The defendant, when asked about this, said that she
assumed that it must
have been the cash that the plaintiff was looking after for
her. She was asked where the plaintiff held the money for her. Her answer
was
that she had no idea. She trusted him: he owned a business, and he owned a
house. She had no idea what return there might be
on the investment, if
any.
41. The defendant was next asked about the meeting with Ms Brewer, the
mortgage broker. She was asked about the note I have quoted
previously, in the
plaintiff’s handwriting. She was referred to the words
“Kathleen’s share of a joint investment”.
She was asked what
the joint investment was. She was unable to give any satisfactory reply, and
when pressed said that they were
the plaintiff’s words, although she then
conceded that she gave the note to Ms Brewer as a representation on her behalf.
42. She agreed that the interview with Ms Brewer took place at the
plaintiff’s house at Hackett. She appeared a little reluctant
to agree
that the bank account referred to in the note was the joint account, although
she accepted that she and the plaintiff had
opened a joint account with the ANZ
Bank. She denied that the plaintiff informed Ms Brewer that they wished to buy
the house in Evatt
jointly. She denied that Ms Brewer had suggested or prompted
the wording of the note. She was asked about a note in Ms Brewer’s
handwriting stating that she (the defendant) had been through a difficult
divorce over the previous two years. She denied saying
any such thing, and
sought to attribute the words to the plaintiff while she had been out of the
room.
43. At one point I asked the defendant for a little more detail about
the slot in the structure in the waterbed. I asked whether it
was wide enough
only to slide a bank note through. The defendant replied: “It was like a,
it was like a – because I had,
you know one of those files and it’s
got the pointy thing at the end? Well I scraped it and then it got big enough
and you
put the file in, and it’s serrated on each side”. She
described the slot as being large enough to put her finger in but
not large
enough to put her whole hand and wrist through. She agreed that she had
dismantled the waterbed in Sydney before she moved
to Canberra, then set it up
at Weston. She had dismantled it again when she moved to Holt, and again when
she moved from Holt to
Evatt. She denied counting the money on any of those
occasions.
44. The original amount borrowed by the defendant from the bank
at the time of settlement of the house purchase in November 1999 was
$101,000.00. In March 2001 she negotiated a supplementary loan of $6,000.00, her
credit card having a debit balance at that time
of $5,500.00. Her purpose was to
consolidate her loans and pay off the total debt over the longer term. The loan
offer document was
completed giving the defendant’s address as 32 Montagu
Place, Evatt.
45. In May 2002 the defendant made another application to the
ANZ Bank to increase the principal of her loan, this time by $17,800.00.
Again,
her address was stated on the bank documentation as 32 Montagu Place, Evatt. She
was asked what the debts were which caused
her to apply to borrow a further
$17,800.00. She said that she could not recall. She knew that she had gone into
a lot of debt because
she was “running two houses”. She bought
groceries for the plaintiff’s house at Hackett, and also for her daughters
and grandchildren at Watson.
46. Other documents produced by the ANZ Bank
establish another supplementary loan in September 2002 of $25,167.47; a further
supplementary
loan in February 2003 of $30,000; and a substitute loan in October
2003 in the sum of $128,000.00. The documents for each of these
three
arrangements continued to show the defendant’s address as 32 Montagu
Place, Evatt.
47. On 8 March 2006, the defendant changed banks. She went to
ING Bank, which offered a lower interest rate. The principal amount
by then was
$150,000.00. She paid out the ANZ loans of $140,000.00 approximately in all, and
borrowed another $10,000.00. She had
a recollection that she was overdrawn on
her credit card and used the additional money to pay that off. She thought that
she might
have had a credit card debit balance of the order of $8,000.00 but she
was unsure. A few weeks afterwards she realised that her ANZ
credit card was
still current, as was her ANZ savings account.
48. The defendant’s
daughter, Kylie, gave oral evidence. She agreed that she was living in the
house at Watson on the day her
mother dismantled the waterbed, and that it had
been her bed. She could not recall whether she had slept on the bed that night,
or where she had slept. She said that it was not unusual for her mother to
drain the waterbed (“When my mum cleans, she cleans”).
Kylie
volunteered that the bed “went lumpy after a while”, in an apparent
attempt to corroborate the presence of the
money under the mattress. Asked in
cross-examination about previous occasions when her mother had emptied the
waterbed and at which
locations, Kylie was unsure and added “they’re
the sort of things I didn’t think I’d need to remember when
they
were happening”. Kylie did not count the money herself.
49. The
mortgage broker, Ms Brewer. was cross-examined orally on her affidavit. Her
memory of the meeting with the plaintiff and
defendant on 11 November 1999 was
sketchy in the extreme, which is hardly surprising considering that it had taken
place more than
seven years before she gave evidence, and that Ms Brewer had had
thousands of similar meetings with borrowers over the intervening
period. She
had not retained a file herself in relation to the transaction, but fortunately
the ANZ Bank file was in evidence as
was the file of Mr Ng, the solicitor who
acted for the defendant on the purchase. Ms Brewer’s evidence was that
the meeting
took place at her home office at Queanbeyan, whereas both the
plaintiff and the defendant were clear in their evidence that the meeting
took
place at the plaintiff’s home in Hackett. This is something that the
plaintiff and defendant would be more likely to
remember than Ms Brewer, and I
have no doubt that her evidence about the venue is mistaken. Generally
contemporaneous written records
are a far more reliable source of information in
circumstances like this. I was left with the impression that Ms Brewer had
little
if any independent recollection of the events, and I did not find her
oral evidence of any real assistance in determining whether
the
plaintiff’s or defendant’s evidence about that meeting was more
likely to be accurate.
50. The bank file commences with a fax received from
Ms Brewer of 18 pages on 12 November 1999. This included a number of
standard
form documents which had been completed in handwriting, some by Ms
Brewer and some by the defendant, with signatures of each in a
number of places.
They included a statement of the defendant’s financial position. The
listed assets included an item “Shares/Bonds/Investments/etc”.
The
words other than “Investments” were lined through and the figure
completed for the amount was $27,000.00. The credit
application was completed
to show a deposit already paid of $1,000.00 and a cash contribution of
$28,736.00. The note or letter
completed and signed by the plaintiff, the terms
of which are set out earlier, was also included. There was a typed page headed
“Diary Comments” and dated 12 November 1999, which included the
following:
Key risks and mitigating factors
Customer does not have the usual five percent genuine savings plan as all her money has been put into a joint investment. She has been bought out of the investment and will receive $27,000.00 from her share of the investment (see letter on file from the other person), but as customer has a 20 percent deposit and has met all other conditions of a loan requirement, I feel she is worthy of this loan.
Background and comments
Kathy is a public servant who is employed by Aust Post for the last 7 yrs, her employment is stable and secure, she has been through a difficult divorce over the last 2 yrs, and is now getting back on her feet. Have had to replace all her furniture, car, etc. Customer has reasonable assets in the circumstances. I have assessed this loan based on the PAYE income as shown on the payslip and after all commitments and expenses she has a UMI of $308.65.
The comments are signed by Ms Brewer.
51. On 16 November 1999 the bank approved the loan and notified Ms Brewer
accordingly. Contracts were exchanged on 22 November 1999
and stamped at the
rate applicable to a first home buyer, considerably less than the normal
duty.
52. There was considerable evidence about another event in relation to
which the versions of the plaintiff and defendant were inconsistent.
In his
first affidavit, the plaintiff said that he and the defendant were to be married
on 1 January 2000 but that about an hour
before the time for the service, the
defendant came to his home and told him that she could not get married. He told
her to advise
the celebrant of her decision. The defendant, in her affidavit,
said this:
We initially made plans to be married in January 2000 and Phillip even engaged a marriage celebrant, however we subsequently put the date off and never did get around to marrying.
53. Counsel for the defendant cross-examined the plaintiff extensively about
this, putting to him that there had been no wedding
arranged for 1 January 2000,
or any other date. He was asked whether he had booked a church or registry for
that date. He said
that he had arranged a marriage celebrant named Hubert
Zochling. The wedding was to be a quiet, informal ceremony at home at Hackett
with his brother as a witness.
54. The plaintiff’s brother, Tony
Morris, gave oral evidence in support of the plaintiff’s version of facts
about the
arrangements for the wedding. He said that he and his wife had
refrained from going on Christmas holidays so that he could be at
the wedding.
About two weeks before the proposed wedding date, the plaintiff asked his
brother to stay in Canberra and to act as
a witness at the wedding, which was to
take place at the plaintiff’s house with a backyard barbecue. Tony Morris
said in his
affidavit that he and his wife met with the plaintiff and defendant
on a weekend in the middle of January 2000, when the defendant
said words to the
effect, “I just could not make the commitment. I was not positive I could
marry Phil and leave the girls”.
55. Tony Morris also said in his
affidavit that he recalled the defendant saying to him words to the effect,
“We found a place
in Evatt that I want to buy. I can’t raise the
deposit, so Phil is lending me the money. I’m going to repay him”.
In another conversation, the defendant said words to the effect, “Phil
can’t be on the title because the loan is in
my name”. During yet
another conversation, she said words to the effect, “Phil has helped me
with the debts I had so
I could get the bank loan”. Tony Morris adhered
to this evidence under cross-examination, though, as I have said, the fact
that
his evidence in chief was given on affidavit deprived me of the opportunity to
observe him giving evidence about the conversations
without being led. Tony
Morris was in court for much of the hearing after giving his own evidence and
was clearly very supportive
of his brother and his brother’s case. I
suspect that this may have subconsciously coloured his recollection and his
evidence
to some degree.
56. The defendant’s oral evidence was that
there was definitely not a date set for her wedding on 1 January 2000. In
cross-examination,
she conceded that she had seen the marriage celebrate, Hubert
Zochling, who had come to the plaintiff’s house on one occasion.
She had
known him from the Dickson Post Office. She was asked whether she had signed a
notice of intention to marry. Her answer
was:
I don’t know. I was pretty excited that day because I knew Hughie, Phil knew – that was the first time we realised, hey, we know the same guy and he’s a gorgeous man and – and I was just excited to see him. And I don’t even remember what he asked me. I think we talked a lot about when he came into the post office and just general stuff.
57. She was then asked whether Mr Zochling had explained to her the seriousness
of going through a marriage and the implications
of having been married
previously. She said: “maybe he did. I don’t . . .”. She
could not remember any of the
details of the conversation, and did not remember
signing any document, but she was adamant that there was no marriage date fixed.
The details of the day were vague to her. Pressed further, the defendant said:
“I’m sorry, but honestly I don’t
– I don’t
remember that day. I know I should if I was getting married”.
58. At
one point during the cross-examination, I asked the defendant to clarify whether
she was saying that the events she was being
asked about had not happened at all
or whether she was simply saying that she did not remember. Her reply,
effectively, was that
she did not remember. Counsel for the plaintiff then put
to her that she rang Mr Zochling on 1 January 2000 and told him that the
marriage was not going to take place. Her reply was that she did not
remember.
59. Although Mr Zochling did not give evidence, I admitted into
evidence a marriage register kept by him of marriages he celebrated
between
April 1997 and April 2000. The book consists of bound celebrants’ copies
of certificates of marriage, evidently prepared
in advance of the intended
marriage, and completed and signed at the time. The book includes a partially
completed but unsigned
certificate of marriage between the plaintiff and the
defendant dated 1 January 2000. I also admitted a book of stubs or counterfoils
of registration copies of marriage certificates, which included one for the
marriage of the plaintiff and the defendant dated 1 January
2000. In addition I
admitted a book of calligraphy samples of marriage certificates obviously
prepared to enable Mr Zochling to
give parties to an intended marriage a choice
of style or font of the handwritten portions of their marriage certificate.
Also in
evidence was a copy of a receipt from Mr Zochling for $250.00 for a
marriage fee received from the plaintiff dated 1 December 1999,
and a printed
order of service for a marriage between the plaintiff and defendant to take
place at the plaintiff’s home on
1 January 2000.
60. In relation to the
marriage being arranged to take place on 1 January 2000, I generally accept the
evidence of the plaintiff and
reject that of the defendant. I find that the
plaintiff had put in place arrangements for the marriage to take place, and that
the
defendant was aware of those arrangements. I find it incredible that the
defendant could have no memory of what was potentially
such an important event
in her life. Her initial denial about this was clear and definite. It was only
when it became apparent
to her that there was documentary material in existence
about it that she moved to a position of failure of recollection rather than
outright denial. Whilst the issue about the proposed marriage on 1 January 2000
is in itself strictly immaterial to the issues I
am called upon to decide, it is
of assistance to me in evaluating the credibility of the witnesses.
61. In
relation to the meeting with the mortgage broker, Ms Brewer, I accept as I have
earlier said, the contemporaneous documentation.
To the extent that they
departed from or went beyond the documentation, I did not find Ms Brewer’s
affidavit or oral evidence
of any real assistance. I could not be satisfied
that she had any reliable recollection of the meeting or what was said or what
took place.
62. As to the conflict in evidence between the plaintiff and the
defendant, I prefer the evidence of the plaintiff. I did not find
the defendant
a convincing witness. I think that what probably happened was that Ms Brewer
realised that without the plaintiff’s
1998-1999 tax return, the bank would
be likely to postpone dealing with an application for a joint loan to the
plaintiff and defendant
until that document was available. At the same time she
recognized that an application could be put together which would be acceptable
to the bank on behalf of the defendant alone. This was at a stage in the
relationship where the plaintiff was reasonably of the
state of mind that he and
the defendant were to be married in the relatively near future and would be
together permanently. For
that reason, it seems to me in character that he was
prepared to go along with the change in arrangement, even though, if I accept
his evidence, almost the whole of the funds going towards the purchase (other
than the bank loan) were coming from him and not from
the defendant.
63. This
being so, Ms Brewer had to come up with a way of characterising the money coming
from the plaintiff. She knew that the bank
generally looked for a pattern of
regular saving, of which there was no evidence on the defendant’s part.
It seems to me likely
that it was Ms Brewer who came up with the idea which was
expressed in the document written and signed by the plaintiff. It is unlikely
that the plaintiff would have had a sufficient understanding of bank
requirements to be able to produce a document worded in a way
likely to be
accepted by the bank. It is quite likely that he wrote something out the first
time which Ms Brewer rejected as inadequate,
and that she prompted or suggested
the wording for the second document. I am satisfied that the defendant would
have had no understanding
of the issue and would not have been capable of
playing any part in the drafting of the document.
64. It should be borne in
mind that whilst the bank was misled about the representation that the amount of
$27,000.00 was the proceeds
of a joint investment between the plaintiff and the
defendant, there was no individual associated with the misrepresentation who
was
disadvantaged by it, with the possible exception, as events have transpired, of
the plaintiff. But the plaintiff was a party
to the misrepresentation. The
effect of it was that the defendant got her loan, Ms Brewer earned her
commission and the bank
made a loan which proved profitable. It is as though
all involved had a motive for the loan being approved, and all involved
ultimately
benefited.
65. This brings me to the central issue of where the
$27,000.00 came from. The defendant’s evidence is that its source was cash
savings which she had secreted over the years under her waterbed. She says that
she gave an amount of cash in $50.00 notes to the
plaintiff to manage for her.
She is not precise about the date when this occurred, or about the exact amount
of cash, although she
says that it was about $30,250.00. She says that this was
the source of funds from which the plaintiff paid off her credit card debt
and
later her car loan, and the source of the balance of purchase moneys required on
settlement of the purchase of the house.
66. The plaintiff’s evidence
is that the defendant’s version is a complete fabrication. He says that
she never gave him
any money to look after for her. He made the payments in
respect of her credit card, car loan and house purchase out of his own funds,
which had come from the proceeds of a bequest from his uncle’s
estate.
67. The plaintiff conceded in evidence that he was a man who liked to
deal in cash. He generally kept an amount of cash at home in
a drawer among his
socks and underwear. The amount fluctuated but it was sometimes of the order of
$3,000.00. When he was buying
something significant, such as a tractor, he would
withdraw cash from his bank account and pay cash to the vendor. His experience
was that if one offered cash, one could often negotiate a lower price. That is
not to say that he was a man who dealt in cash to
evade tax. It was suggested to
him in cross-examination that there were some defects in his business records,
but I am satisfied
that he kept proper records of the takings of his business.
Although it is probably common in a business like his for the business
proprietor not to record some cash transactions, it was not put to the plaintiff
that he made a practice of doing so and there is
no evidence from which I could
find that he was guilty of any such behaviour.
68. The plaintiff conducted a
bank account with Westpac at Dickson. The statements for this account from
October 1997 to May 2001
were in evidence. They are consistent with the picture
of the plaintiff as a man who lived within his means. At the beginning of
the
period the account had a credit balance of about $10,000.00. The balance
fluctuated over the period but never went into overdraft.
Significant
transactions which can be seen from the bank statements include a withdrawal on
10 March 1998 of $12,500.00, which was
the deposit on the plaintiff’s
purchase of the farm. On 1 April 1998 there was a credit of $11,172.46, which
the plaintiff
explained was received by him on settlement of the purchase of the
farm, out of the mortgage moneys paid on settlement. His evidence
was that he
borrowed the full purchase price of $125,000.00 from Westpac so that most of
what he had paid by way of deposit came
back to him. Consistently with this,
every month starting from 5 May 1998 there was a transfer to another Westpac
account of $876.00,
increasing by the end of the period of the bank statements
to $961.00. I accept that these payments were the mortgage payments in
relation
to the farm.
69. On 9 April 1998 there is an entry for a deposit of
$8,000.00, which I accept was a distribution from the plaintiff’s
uncle’s
estate. There were few transactions each month, with the plaintiff
apparently depositing a little more than enough each month to
cover the mortgage
payments. Occasionally he would make a withdrawal. He explained that he made
these withdrawals generally in cash
for a particular purchase such as stock for
the farm, or a tractor. By 30 June 1999 the balance was about $15,600.00. On
that date
the plaintiff withdrew $4,000.00 which he says was to pay off the
defendant’s credit card account.
70. By 20 September 1999 the balance
in the plaintiff’s bank account was about $7,500.00. He withdrew
$5,137.11, which he said
he used to pay off the defendant’s AGC car
loan.
71. On 9 May 2000 there was a deposit of $13,400.00 which seems to have
been a further distribution from the plaintiff’s uncle’s
estate. At
the end of the same month the plaintiff withdrew $10,000.00 from the account.
There is no evidence about what became of
that sum. The plaintiff probably used
it to reduce the principal secured by the mortgage over the farm, although it
was not reflected
in any reduction in monthly payments.
72. The bank
statements are consistent with the plaintiff’s evidence that he made the
payments in respect of the defendant’s
credit card and car loan from his
own money. There is no entry consistent with the plaintiff having paid a large
amount, in the vicinity
of $30,000.00, into his account in the latter part of
1998, or at any other time.
73. If the defendant had given the plaintiff
$30,000.00 or thereabouts in cash to look after, I would have expected each of
them to
be concerned to record precisely the total amount involved, in case of
any later disagreement or difference in recollection. On the
defendant’s
case, she handed the cash to the plaintiff nearly a year before the purchase of
the house in Evatt. She was supposedly
giving the cash to the plaintiff because
of his superior skills in money management. It stretches credulity to imagine
that he would
have simply kept the money in cash, whether in his sock drawer or
somewhere else, for that period of time. He had his own bank account,
which
attracted interest: why would he have not paid the money into that account? In
September 1999 the parties opened a joint account
with the ANZ Bank. Why would
the cash not have been paid into that account at that point? If the defendant
had given the plaintiff
the cash late in 1998, why would he have left it until
30 June 1999 to pay off her credit card debt? Why would he have left it until
September 1999 to pay off her car loan? Unfortunately neither party tendered the
bank statements for the joint account. However,
I can readily find from the
evidence that it was opened in September 1999 and that both parties contributed
$100.00 per fortnight
to the account. Significantly, the plaintiff arranged to
obtain a cheque for $19,000.00 from his brother Tony as executor of his
uncle’s estate on 13 December 1999, which was paid into the joint account
so that it could be used to form the major part of
the balance of purchase
moneys payable on settlement two days later. The source of that payment was
confirmed by Tony Morris and
was not challenged by counsel for the defendant.
74. As against this, the defendant’s evidence that she gave the
plaintiff an amount of the order of $30,000.00 to manage for
her seems to me
inherently unlikely. The defendant had been, certainly up to the time covered by
documents in evidence, a poor manager
of money and a person who seems to have
had great difficultly living within her means. She has a history of taking her
credit card
balances well beyond their authorised limit, up to a level where
further credit would be unavailable to her if she attempted to make
a purchase
or a withdrawal of funds. Her evidence was that she had problems with money
during her marriage and again during her relationship
with Mr McLaren. I can
readily accept that someone who had had the experience of being entirely without
money or access to credit
might adopt the expedient of secreting cash away from
time to time in case of a real emergency. I am inclined to accept the evidence
of the defendant that she secreted cash in a tin during her marriage, and later
in a pot plant in her daughter’s flat. I am
also inclined to accept that
she kept some cash under her waterbed, adding to it as she could afford to, but
I cannot accept that
the amount of cash ever reached anything like the figures I
was asked to accept by the defendant. It beggars belief that someone
in her
position would maintain a credit card at its limit or over it, attracting penal
rates of interest, if she had more than enough
cash to keep the credit card
account within its limit, or even to pay it off in full each month.
75. The
figures of which the defendant gives evidence are also far higher than even a
prudent manager of money on the defendant’s
income could have afforded to
set aside. The defendant’s evidence about other matters has proved
unreliable. I prefer the evidence
of the plaintiff that she did not give him any
cash to manage on her behalf.
76. Why then did the plaintiff make the
payments he did? He now says that he lent the defendant the money to pay off her
credit card
and her car loan, and that the money he paid towards the purchase of
the house at Evatt should be seen as a contribution towards
a joint purchase,
the title being in the defendant’s name only for reasons of practicality
at the time of the purchase.
77. I do not accept that either the plaintiff or
the defendant saw the payments in relation to the credit card and the car loan
as
loans at the time. Of course people see things differently after a
relationship has come to an end. But in late 1999 the plaintiff
wanted to marry
the defendant. They were engaged, and he was putting in place arrangements for
the marriage to take place on 1 January
2000. The relationship at that time was
still a positive one. I have no doubt that he saw it as permanent, and genuinely
believed
that he and the defendant would be together for the rest of their
lives. It seems more likely than not to me that in late 1999, at
the time when
he was making these payments, the plaintiff was motivated by a spirit of
generosity towards the defendant. He was much
better off than she was: he owned
his own house, unencumbered but for the farm loan, he owned the farm and he
owned his own business.
The administration of his uncle’s estate was
reaching finalisation after 13 years. His children were no longer dependant on
him. He was, within the context of his relatively modest expectations, in a
strong and secure financial position. The defendant,
on the other hand, had very
little. She had rented all her life and had never owned a house. Although her
children were grown up,
her daughter Susan still depended on her, emotionally if
not financially. She had no assets of any commercial value. She had debts
which
were significant to her though much less significant to a man in the
plaintiff’s position. I think it likely that at
the time he paid her
debts, he did so generously and with no thought that he would ever get the money
back.
78. As to the payments towards the house, I am more inclined to the
view that the plaintiff did see this as some kind of joint investment
although
it was in the defendant’s name only. I doubt whether he thought through
the long-term issues in any detail, and I
would be very surprised if he talked
them through with the defendant at all. Both the plaintiff and the defendant
struck me as relatively
unsophisticated and as relatively poor oral
communicators. In late 1999, before the wedding was called off, it seems to me
unlikely
that the plaintiff even turned his mind to what might be the position
about the Evatt house if his relationship with the defendant
did not continue as
a permanent one.
79. It seems to me that the decision of the defendant not to
proceed with the marriage on 1 January 2000 was the beginning of the
breakdown
of the relationship. The plaintiff began to realize that the defendant was more
committed to her children, particularly
Susan, than he had realised, and
commensurately less committed to him. This must in turn have affected his
commitment to the relationship,
which slowly deteriorated from that point. I
suspect that when it was all over, the plaintiff began to dwell on the fact that
he
had lost money by reason of the payments he made in late 1999, and that the
defendant’s financial position had been greatly
improved. The latter point
would have become more obvious as house and land values in the suburbs of
Canberra rose over the years.
80. The next issue is the manner in which these
factual findings should be reflected in the orders the Court is asked to make.
The
principles to be applied were set out by Cooper J in Ferris v Winslade
[1998] ACTSC 18; (1998) 22 Fam Lr 725. His Honour noted that s 15 of the
Domestic Relationships Act was in substantially different terms to the
equivalent provision of the New South Wales Act, the De Facto Relationships Act
1984,
and specifically that s 15(1)(e) (the section is set out at paragraph 5
above) was to the same effect as s 75(2)(o) of the Family Law Act 1975 (Cth).
That is to say, a Court exercising a discretion under s 15 has a considerably
wider discretion than applies in similar litigation
under the NSW Act. His
Honour considered that in the circumstances, decisions of the Family Court of
Australia as to the exercise
of the discretion were relevant. His Honour quoted
from a judgment of the Full Court of the Family Court, Clauson v Clauson (1995)
FLC 92-595. The making of property adjustment orders was a process involving
three steps:
i. Identification of the property of the
parties;
ii. Evaluation of the “contributions” of the parties;
and
iii. Evaluation of the matters listed at s 19(2) of the Domestic
Relationships Act.
81. That subsection relevantly provides:
... a Court
shall have regard to –
(a) The income, property and financial
resources of each party; and
(b) The physical and mental capacity of each
party for appropriate gainful employment; and
(c) The financial needs and
obligations of each party; and
(d) The responsibilities of either party to
support any other person; . . .
82. Cooper J made the point that s 15(1)(e)
requires the Court to consider any other matter which is relevant to do justice
in the circumstances of any particular case where
regard only to the other
specified factors may not result in a just and equitable outcome for one of the
parties.
83. In the present case, at the time of hearing the property of the
parties was said to have the following values:
Plaintiff
Hackett
property $350,000.00
Farm $450,000.00
Interest in mother’s
estate $120,000.00
Motorcycles $26,000.00
Farm
equipment $9,000.00
Superannuation $8,000.00
Other
assets $6,000.00
Total $969,000.00
Less farm
mortgage $60,000.00
Net assets $909,000.00
Defendant
Evatt
house $265,000.00
Superannuation $60,000.00
Other
assets $3,000.00
Total $328,000.00
Less house
mortgage $150,000.00
Net assets $178,000.00
84. There was of course a
significant issue about whether the defendant made a contribution in cash of the
order of $30,000.00. I
have resolved this conflict in favour of the
plaintiff.
85. Both parties have undertaken complex mathematical
calculations. The plaintiff claims $92,750.00, being 35% of the gross value
of
the Evatt property. He asks that I order the defendant to pay him that amount.
The defendant seeks an order that the plaintiff
pay her $100,000.00, though that
claim must be seen as based on an acceptance of her version of the cash
contribution issue, which
I have rejected.
86. It seems to me that
notwithstanding arguments based on financial contributions, and to a limited
extent on contributions by way
of time and effort, this is a case where the
income, property and financial resources of each party, and the financial needs
of each
party, are highly significant factors. The plaintiff has a house, a farm
and a business. His debts are modest. The defendant has
a house, with a debt of
more than half the value of the house. The hearing of the action took place over
two periods of time, in
November 2006 and April 2007. The plaintiff by the end
of the hearing was continuing to exercise his income-earning capacity as a
motor
mechanic. There was some evidence that he had suffered a stroke at one point but
there was no evidence that this had reduced
his earning capacity.
87. The
defendant when she commenced her evidence in November 2006 was working as a
receptionist with a firm of estate agents, having
left her long-term employment
with Australia Post. By April 2007 she had left the estate agency and said that
she was “between
jobs”. She may by now be back in employment or she
may not. If she is, she might be able to persuade a bank to lend her more
money
on the security of the house but this is speculative. It seems to me more likely
than not that enforcement of an order against
her for payment of money would
lead to the sale of her house.
88. I take judicial notice of the fact that
there has been an increase in house and land values in Canberra in recent times,
and I
think it likely that the agreed values for the Hackett and Evatt
properties, and for the farm, are now quite conservative. Nevertheless,
the
agreed value for the Evatt property places it very much at the lower end of the
real estate market in Canberra. If it were an
expensive house and I thought that
the defendant could sell it and buy a cheaper house, I might take a different
view, but it seems
to me very unlikely that the plaintiff could buy any house in
Canberra for much less than the likely proceeds of sale of the Evatt
house.
89. Accordingly it seems to me that to make an order that the
defendant pay an amount of any substance to the plaintiff would create
hardship
for the defendant. It would be likely to convert her from a house owner to a
tenant. As is clear from the evidence, she
is a poor manager of money, and I
suspect that in those circumstances her financial position would become
gradually worse.
90. If it were not for this factor, the mathematical
approach urged upon me by counsel for the plaintiff would seem to be
appropriate.
However, having regard to the income, property and financial
resources of the defendant, by comparison with the income, property
and
financial resources of the plaintiff, it does not seem to me that justice would
be done by making a property adjustment order.
There is no jointly owned
property, and therefore no necessity for any orders to be made to achieve the
requirement imposed by s
14 of the Act to end the financial relationship between
the parties and avoid further proceedings between them.
91. The effect of
making no order can perhaps be tested by comparing the position of each of the
parties now with the position of
that party at the beginning of the
relationship. The defendant is very much better off; she has considerable equity
in her own home
whereas, as I have found, she had few assets of any commercial
value ten years ago. The plaintiff, however, does not seem to me to
be much
worse off. True it is that he provided funds towards the Evatt purchase which he
could have used for some other purpose.
I suspect that if it had not been for
his relationship with the defendant, he would probably have used the funds to
reduce the farm
mortgage. I doubt whether he would have used the funds to
purchase an investment property. Accordingly, he is a little worse off
than he
might otherwise have been, but not a great deal. And, of course, he is still
vastly better off than the defendant. Looking
at the matter from that
perspective, I am reinforced in my view that justice between the parties is best
served by my making no order
for payment of money or adjustment of
property.
92. I should say that I have considered fleetingly the expedient of
giving the plaintiff a percentage interest as a tenant-in-common
in the Evatt
house. This, it seems to me, would fly in the face of s 14 of the Act; it would
continue a financial relationship between
the parties and it would increase the
likelihood of further proceedings between them in the future. Neither party has
suggested such
an order and I do not propose to pursue it further.
93. There
will be judgment for the defendant in the action, and for the plaintiff on the
counterclaim.
94. I shall hear counsel on the question of costs.
I certify that the preceding ninety-four (94) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Master.
Associate:
Date: 5 September 2007
Counsel for the plaintiff: Mr G P Brzostowski SC
Solicitor for the
plaintiff: Joseph Tallarita
Counsel for the defendant: Ms A
Tonkin
Solicitors for the defendant: JS O’Connor Harris &
Co
Date of hearing: 6, 7, 8 November 2006 and 16, 17 April 2007
Date of
judgment: 5 September 2007
AustLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.austlii.edu.au/au/cases/act/ACTSC/2007/72.html