Hayes v Marquis [2008] NSWCA 10 (22 February 2008)

Last Updated: 17 April 2008

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Hayes v Marquis [2008] NSWCA 10
This decision has been amended. Please see the end of the judgment for a list of the amendments.

FILE NUMBER(S):
40212 of 2006

HEARING DATE(S):
16 May 2007

JUDGMENT DATE:
22 February 2008

PARTIES:
Craig Darren Hayes - Appellant
Deborah Mary Marquis - Respondent

JUDGMENT OF:
Beazley JA McColl JA Einstein J

LOWER COURT JURISDICTION:
District Court

LOWER COURT FILE NUMBER(S):
DC 8 of 2004

LOWER COURT JUDICIAL OFFICER:
McLoughlin DCJ

LOWER COURT DATE OF DECISION:
22 March 2006


COUNSEL:
Ms M Bridger - Appellant
Mr J Wilson SC with R Winfield - Respondent


SOLICITORS:
Kells The Lawyers - Appellant
Morton Harris - Respondent

CATCHWORDS:
FAMILY LAW AND CHILD WELFARE – Property (Relationships) Act 1984 – s 5(1)(b) – whether parties in a "close personal relationship" where not living continuously in the same house – whether "personal care" in s 5(1)(b) includes emotional support – relevance to determination of relationship of non-disclosure of cohabitation to government authorities – adjustment of property interests – failure to take into account part of appellant’s assets – obligation of parties to property relationship proceedings to make full and frank disclosure of relevant financial circumstances.

LEGISLATION CITED:
Civil Procedure Act 2005
De Facto Relationships Act 1984
Family Provision Act 1982
Property (Relationships) Act 1984
Property (Relationships) Legislation Amendment Act 1999
Uniform Civil Procedure Rules 2005

CATEGORY:
Principal judgment

CASES CITED:
Armory v Delamirie (1722) 1 Stra 505; (1722) 93 ER 664
Bar-Mordecai v Hillston [2004] NSWCA 65
Barnes v De Jesus [2001] NSWSC 19
Bilous v Mudaliar [2006] NSWCA 38
Black v Black (1991) 15 Fam LR 109
Burden v Cottee (Supreme Court of New South Wales, Bryson J, 31 July 1998, unreported)
Chanter v Catts [2005] NSWCA 411; (2005) 64 NSWLR 360
Davey v Lee (1990) 13 Fam LR 688
Dridi v Fillmore [2001] NSWSC 319
Dunstan v Rickwood (No 2) [2007] NSWCA 266
Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373
Fung v Ye [2007] NSWCA 115
Government Insurance Office of New South Wales v Rozniak (1992) 27 NSWLR 665
Greenwood v Merkel [2004] NSWSC 43
House v R [1936] HCA 40; (1936) 55 CLR 499
Howlett v Neilson [2005] NSWCA 149
Hughes v Egger [2005] NSWSC 18
James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296
John Fairfax & Sons Ltd v Carson (1991) 24 NSWLR 259
Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298
Jones v Grech [2001] NSWCA 208; (2001) 27 Fam LR 711
Kardos v Sarbutt [2006] NSWCA 11
Kardos v Sarbutt (No 2) [2006] NSWCA 206
Mcdonald v Stelzer [2000] NSWCA 302; (2001) 27 Fam LR 304
Manns v Kennedy [2007] NSWCA 217
Metropolitan Water Sewerage & Drainage Board v Histon [1982] 2 NSWLR 720
O’Brien v Tanning Research Laboratories Inc (1988) 14 NSWLR 601
Paino v Paino [2006] NSWSC 218
Petersen v Gregory [2007] NSWSC 8
PY v CY [2005] QCA 247
Re Fagan Deceased [1980] 5 Fam LR 813
Roy v Sturgeon (1986) 11 NSWLR 454
Saric v Steward [2006] NSWCA 260
Simonis v Perpetual Trustee Co Ltd (1987) 21 NSWLR 677
Skulander v Willoughby City Council [2007] NSWCA 116
Southgate v Waterford (1990) 21 NSWLR 427
Sullman v Sullman [2002] NSWSC 169
Tasmania v Victoria [1935] HCA 4; (1935) 52 CLR 157
Trustees of the Property of John Daniel Cummins v Cummins [2006] HCA 6; (2006) 80 ALJR 589
Weston v Public Trustee (1986) 4 NSWLR 407
White v White [2004] NSWSC 208
Wilson v Vine [2003] NSWSC 341
Ye v Fung [2006] NSWSC 243

TEXTS CITED:


DECISION:
1 Appeal allowed. 2. Set aside the verdict in favour of the respondent in the sum of $120,000. 3. Order that there be judgment for the respondent in the sum of $100,000. 4. Order that each party pay his and her own costs of the appeal.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40212/06

DC 8 of 2004

BEAZLEY JA

McCOLL JA

EINSTEIN J

Friday 22 February 2008

Craig Darren Hayes v Deborah Mary Marquis

The appellant commenced a relationship with the respondent in 1993. In the first three years of the relationship he stayed at her house on average three times per week. From October 1996 he stayed with her up to four nights a week until 1999. In 1999, the appellant moved in with the respondent and lived with her fulltime for most of the next three years. The parties separated in May 2003. The respondent sought an adjustment of interest pursuant to s 20 of the Property (Relationships) Act 1984 (the “Act").

The primary judge accepted that during the period 1993 to 1999 the parties were in a “domestic relationship” for the purpose of s 5(1)(b) of the Act and in a de facto relationship from 1999 to 2003 within s 5(1)(a). He found that throughout the relationship, the respondent paid the rent on the accommodation in which they lived, maintained the various properties, provided furniture and most food for the household and performed some administrative tasks for the appellant’s construction business, which he ran partly from her premises. The appellant paid some household bills, for which he claimed taxation relief, some utility expenses and performed minimal household chores. During the course of the relationship, when making applications to government authorities, the respondent did not disclose that the appellant was living in her house.

The primary judge found that the respondent’s contributions were substantial and enabled the appellant to devote himself to his business, accumulate assets and spend his money as he saw fit. Neither party adduced evidence of their assets as at 1993. The primary judge found the respondent’s assets in 1994 were probably around $10,000 and remained at that rate throughout the relationship. He found the appellant’s assets in 1994 were about $40,000. In considering the appellant’s assets, his Honour did not refer to an amount of $140,000 to which the appellant first referred in re-examination. Documentary evidence established that sum was first invested in the appellant’s name in December 1994 and withdrawn a year later. At about that time the appellant’s loan account in his construction company increased by an amount it could be inferred included the $140,000. The appellant said he had accumulated that amount over his working life. At the end of the relationship he had assets of approximately $520,000. The primary judge determined the parties’ respective contributions as seventy five percent by the appellant and twenty five percent by the respondent. He ordered the appellant to pay the respondent $120,000.

The appellant appealed. Relevantly, he challenged the conclusion that he and the respondent were in any relationship which attracted the court’s jurisdiction under the Act. He also complained the primary judge erred in valuing his assets in, inter alia, failing to refer to the $140,000.

Held, allowing the appeal:

As to whether a “close personal relationship” existed

(per McColl JA, Beazley JA substantially agreeing)

1 The primary judge’s conclusion that the parties were in a “close personal relationship” during the period 1993 – 1999 was open to him on the respondent’s evidence, which was corroborated by the evidence of public relationship witnesses, and on his findings as to the appellant’s credibility: ([92], [100]).

2 The question whether one of the statutory relationships which attracts jurisdiction under the Act exists, is fact dependent and requires a practical approach. The concept of “living together” in s 5(1)(b) of the Act does not require the parties to live together fulltime: ([70], [78], [79]).

Fung v Ye [2007] NSWCA 115 applied

Weston v Public Trustee (1984) 4 NSWLR 407 approved

PY v CY [2005] QCA 247; Petersen v Gregory [2007] NSWSC 8; Ye v Fung [2006] NSWSC 243 referred to

3 The question of whether a couple is “living together” turns on an evaluation of the nature and extent to which they share a household and is ultimately a value judgment, which has regard to the three indicia under s 5(1)(b) to determine whether there is a relationship which fulfils the definition as a whole: ([76], [79]).

Sullman v Sullman [2002] NSWSC 169; Roy v Sturgeon (1986) 11 NSWLR 454; Simonis v Perpetual Trustee Co Ltd (1987) 21 NSWLR 677; Bar-Mordecai v Hillston [2004] NSWCA 65; Barnes v De Jesus [2001] NSWSC 19; Burden v Cottee (Supreme Court of New South Wales, Bryson J, 31 July 1998, unreported) referred to

4 The requirement in s 5(1)(b) that one or each of the parties provides the other with “personal care” may be satisfied through the provision of either physical or emotional support: ([87]).

Dridi v Fillmore [2001] NSWSC 319 disapproved

5 Statements to a government authority apparently inconsistent with a party’s case are taken into account as a part of all the circumstances, and are not determinative of whether a relationship exists for the purposes of the Act: ([99]).

Bar-Mordecai v Hillston [2004] NSWCA 65 applied

(per Einstein J)

6 The expression “living together” in the context of the Act is to be understood as referring to sharing a home, that is to say, cohabiting or dwelling together. The test is an objective one. It involves assessing the nature and extent of the claimed common residence. The concept of “living together” in s 5(1)(b) requires two adult persons be seen as regarding the place or places in which they live as “their home”. The dominant parameter will be whether or not the individuals concerned may be discerned to regard the premises in question as their home and in so doing to be acting reasonably: ([166]).

As to whether a “de facto relationship” existed

(per McColl JA, Beazley JA substantially agreeing)

7 The primary judge’s conclusion that the parties were living in a de facto relationship during the period 1999-2002 was open to him on the evidence that the parties were living as a couple: ([101]).

As to the valuation of the appellant’s property when the relationship commenced

(per McColl JA)

8 The primary judge did not err in failing to value the appellant’s property at the commencement of the relationship in 1993 because there was no evidence of the value of his assets at that time: ([109]).

(per Einstein J)

9 The primary judge erred in failing to value the appellant’s property at the commencement of the relationship: ([173]).

As to the exercise of the s 20 discretion

(per Beazley JA and Einstein J)

10 The primary judge erred in failing to take into account the amount of $140,000 because there was evidence as to the accumulation of the moneys prior to the commencement of the relationship: ([5], [8], [173]).

(per McColl JA, dissenting)

11 The appellant did not discharge the burden of proving that he had accumulated the $140,000 prior to the relationship commencing so that it could be treated as part of his assets at the commencement of the relationship: ([125]).

(per McColl JA, Beazley JA substantially agreeing)

12 Parties to proceedings under the Act are obliged to make full and frank disclosure of all relevant financial circumstances: ([129]).

White v White [2004] NSWSC 208; Wilson v Vine [2003] NSWSC 341; Paino v Paino [2006] NSWSC 218 referred to

13 It is open to the Court to give full weight to the parties’ pre-relationship contributions, in considering the terms of any s 20 order, if they fall within s 20(1)(a) and (b): ([104]).

Hughes v Egger [2005] NSWSC 18 approved

Mcdonald v Stelzer [2000] NSWCA 302; Jones v Grech [2001] NSWCA 208 referred to

Orders

(1) Appeal allowed;

(2) Set aside the verdict in favour of the respondent in the sum of $120,000;

(3) Order that there be judgment for the respondent in the sum of $100,000;

(4) Order that each party pay his or her own costs of the appeal.

***************

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40212/06

DC 8 of 2004

BEAZLEY JA

McCOLL JA

EINSTEIN J

Friday 22 February 2008

CRAIG DARREN HAYES v DEBORAH MARY MARQUIS

Judgment

1 BEAZLEY JA: I have had the benefit of reading in draft the reasons of McColl JA and Einstein J. I agree substantially with the reasons of McColl JA, but wish to separately consider the relevance of an amount of $140,000 which was deposited in a fixed deposit account in the appellant’s name in December 2004, to the determination of the adjustment to be made in the respondent’s favour pursuant to s 20 of the Property (Relationships) Act 1984. The result of my consideration of that matter will determine whether or not I agree with the orders proposed by her Honour.

2 McColl JA has examined the evidence in relation to the fixed deposit and its subsequent transfer in 1996 to the company through which the appellant conducted his building business and has dealt with the manner in which its existence was revealed in the evidence. I do not intend to repeat that material. Rather, I propose to commence with the position, established on the evidence, that in December 1994 the appellant opened a fixed deposit account in his name with a deposit in the sum of $140,000 and that this amount was transferred to the appellant’s loan account in the company in 1996. The appellant’s evidence in respect of the deposit was that it was money he had accumulated prior to the relationship. There was no supporting evidence for that proposition. Further, as McColl JA explains, the evidence as to the fixed term deposit only emerged late in the trial.

3 The trial judge, McLoughlin DCJ, did not refer to this amount at all. The appellant’s essential contention on the appeal is that his Honour overlooked the matter and further, that it was a contribution made by the appellant to the relationship which should have been taken into account in his favour, in the exercise of the discretion conferred by s 20 of the Property (Relationships) Act.

4 Subject to what I say below, senior counsel for the respondent in his oral submissions on the appeal, conceded that the sum in question was money that the appellant had at the commencement of the relationship. Senior counsel advanced reasons why the trial judge did not need to deal with these moneys in his judgment. He also made submissions in respect of the question whether the moneys should have been taken into account in the appellant’s favour. As the respondent’s position on this equivocated somewhat, I propose to set out in some detail the submissions made on these questions.

5 Senior counsel for the respondent’s initial submission acknowledged that the moneys were transferred from the term deposit account to the credit of the appellant’s loan account in the company so as to significantly increase his loan account from $14,009 as at 30 June 1995, to $184,852 as at 30 June 1996. (There was no evidence to explain the further increase of approximately $30,000 in that year.) However, senior counsel did not concede that the appellant had accumulated those moneys as at 1993. No concession was made because, it was said, there was “just no evidence” that the moneys had been accumulated prior to the commencement of the relationship. Later, senior counsel for the respondent stated that he was not seeking to establish that the money was not the appellant’s. Senior counsel then conceded, unequivocally, that at the commencement of the relationship the appellant had accumulated moneys in the order of $140,000. This concession came in the following exchange:

“BEAZLEY JA: ... when I said I need to be satisfied that [the appellant] was obliged to reveal it I thought you were seeking to make some sort of credit point against him or seeking to establish that this money could not have been his.

WILSON: No.

BEAZLEY JA: It may have better had it been disclosed earlier, but if you’re not making the point that the money wasn’t his, then we go back to the point when that, at the commencement of the relationship, not in the statutory relationship, but in their personal relationship it appears that the appellant had a significant sum of money which was in the order of $140,000.

WILSON: Yes.

BEAZLEY JA: And certainly by 1994 it was $140,000.

WILSON: Yes.”

6 It is convenient at this point to return to the appellant’s cross-examination, such as it was, in relation to the sum of $140,000. Again, it is convenient to set this out in full (this was further evidence given when the appellant was further examined in chief in respect of the sum of $140,000):

“[DALLY]: Q: Do you recall being asked some questions about the position of the company between its inception in 1994 and up to the present?

A: Yes.

Q: You were asked about the state of your loan account with your company, do you remember that?

A: Yes.

Q: Are you able to tell the Court where the money came from that was lent to the company to set up that loan account?

A: I am.

Q: Where?

A: It was made up of assets of me, personally [the appellant], and it was transferred across to the company and also a term deposit that I had and when I purchased a property at Currwinda (?) Place that was used to purchase that property and loaned to the company.

...

Q: What I ask you is, could you recall when it was that the security was realised, in what year?

A: I think it was about ’95.

Q: Of your own knowledge do you know what happened, what was then done with that money?

A: The money out of the term deposit?

Q: Yes?

A: It was used to purchase – loaned to the company to purchase a vacant block of land at Kiama, Currwinda Place.

Q: Did the company do something with that land?

A: Yes, developed it further.

Q: In what way?

A: Put four units on it.

Q: Then was that sold?

A: Correct.

Q: When was that?

A: It would’ve been probably around the ‘95/’96 year, it took me about 9 months to construct them, thereabouts.

Q: Are you able to say what the source, where did you get the money from to put into this security in the first place?

A: The 140 in the term deposit?

Q: Yes?

A: That was from previous sales of other properties, other houses that I build [in the appellant’s own name] and just money through my working life.”

7 In further cross-examination, the appellant gave the following evidence:

“[WINFIELD] Q: On the last occasion you told the Court that you didn’t know how much the loan account was when the company was incorporated in 1994, didn’t you?

A: Yes, if that’s what I said, yeah.

Q: So if this is the case what you’re doing now is you’re thinking back over what happened and trying to recall what happened?

A: The question was asked of me in court and I couldn’t answer it at the time but yeah, I’ve thought about it more and I can remember I had a term deposit of 140,000.

Q: You haven’t got any documents to support that, have you?

A: I haven’t got any, no.

HIS HONOUR: Q: Have you seen any documents that suggest that that’s where this money came from?

A: It’s a fair while ago but I haven’t got any now but I’ve – I knew – I remember having a term deposit of 140,000 because I had no other project to carry on with, so I just put it into a term deposit until another block of land came up.

Q: But you couldn’t think of that when you are asked questions in Nowra?

A: No I couldn’t.

...

[WINFIELD]: Q: I suggest to you ... that you are now attempting to reconstruct what happened in 1994 and 1995?

A: No that’s not correct.

Q: You didn’t remember it when you swore your affidavit in December 2004, did you?

A: No I didn’t.

Q: You didn’t remember it when you were asked questions --

A: I didn’t understand it more to the point, as I explained down in Nowra I don’t understand the financial figures too well, how it’s all put together in the financial figures.

HIS HONOUR: Q: But I take it you understand that you know what this case is all about, as to who’s made contributions and where the source of that contribution may be?

A: Yes.

Q: The $140,000 would be a fairly important contribution, wouldn’t it, 1996, if one looks at the financial transactions of both you and the plaintiff over both 10 or 11 years?

A: It’s quite hard to remember back also nearly odd what 9 or 10 years.

Q: Was there any other sum like $140,000 anywhere that just materialised in the 10 year period?

A: I was doing developments or buying blocks of land and building houses on over that time.”

8 In my opinion, there was evidence as to the accumulation of the moneys prior to the commencement of the relationship. Accordingly, it was incumbent on the trial judge to deal with the matter. His Honour was not, of course, obliged to accept the appellant’s evidence as to the accumulation of the money. However, as the respondent’s concession to which I have referred acknowledged, it is apparent from the financial position of the parties that the sum of $140,000 would not have been accumulated in the period after the commencement of the relationship in 1993. It is feasible that some of it was. In the absence of any other evidence than that to which I have referred, the proper inference to be drawn is that the sum of $140,000 was a contribution made by the appellant at the commencement of the relationship, to which the respondent made no, or only an insignificant, financial contribution. This was the effect of the concession made by senior counsel for the respondent.

9 Once that evidentiary position is reached, the final submission of the respondent on this question comes into focus. Having accepted that as at 1993 the appellant had a sum in the order of $140,000, senior counsel for the respondent described what he said might be the “nub” of the issue, namely, that it was apparent from the trial judge’s reasons, that there was a basis for not giving credit for the sum. In short, it was said that the trial judge analysed the financial position of the company on incorporation in 1994, finding that there was a small shareholder equity of just under $50,000 in 1996. His Honour also noted that the company had suffered losses from 1996 to 2000 and that it had returned to profit at that time, having as at 2000, net assets in the order of $150,000. His Honour also noted that the appellant’s loan account of approximately $166,000 was paid back to him in 2003 and it was those moneys that he used to purchase real estate, being the Fletcher Lane property, which, together with the appellant’s loan account with the company, constituted the substantial portion of his assets as at the date of trial.

10 Senior counsel for the respondent submitted that it was apparent from his Honour’s analysis of the financial position of the company that it was not necessary to take into account the value of the fixed deposit of $140,000. He submitted that in the years after the injection of that money into the company, the company ran into financial difficulties and the value of the appellant’s loan account had consequently significantly diminished. Senior counsel for the respondent further submitted that it was apparent that his Honour took the sum of $140,000 into account because he referred to the appellant’s loan account with the company in 1996 of $184,852, which the evidence established, included the contribution of $140,000.

11 The difficulty with this submission is that in determining the adjustment to be made under s 20, his Honour found that the appellant’s contribution at the commencement of the relationship was about $40,000. That contribution was constituted by the moneys to the appellant’s credit in the loan account, which was known to be in the order of $14,000 and the “tractors, items, tools and the like”: judgment (18). His Honour estimated the respondent’s assets at the same time at about $10,000. It was from that starting point that his Honour proceeded to make an adjustment in the respondent’s favour. It is apparent, therefore, that his Honour failed to have regard to the $140,000 which the appellant contributed, or contributed a substantial portion of, at the commencement of the relationship. In my opinion, it is not sufficient to deal with this sum by saying that it was wholly dissipated, having regard to the fortunes of the company in the period 1996-2000, as submitted by the respondent. In any event, I am not satisfied that is how his Honour dealt with the matter. If that contribution had not been made to the company at that time, the company’s financial position would have been worse and its financial recovery, if it recovered at all, would also have been in a lesser amount.

12 Accordingly, I am of the opinion that the appellant has established error in his Honour’s reasons. The question becomes whether this Court ought to make some different order. McColl JA at [125] is not satisfied that there was error in his Honour’s reasons, because she has concluded that the appellant did not discharge the burden of proving that he had accumulated the $140,000 prior to the commencement of the relationship in 1993.

13 Einstein J has identified the same error which I have discussed above. His Honour considered, that as a result of that error, there was a basis for interfering with the trial judge’s determination. His Honour approached the matter by maintaining, in the respondent’s favour, the proportion of assets awarded by the trial judge, after having taken into account, in the appellant’s favour, the sum of $140,000. For my part, I would approach the matter slightly differently. No basis was advanced as to why the trial judge’s determination of the proportion of assets that should be adjusted in the respondent’s favour was erroneous. However, I would not simply take into account the full sum of $140,000 in the appellant’s favour in any readjustment of the amount to be paid to the respondent. In the first place, as I have sought to explain, whilst it is likely that the whole, or almost the whole, of the sum of $140,000 had been accumulated as at the commencement of the relationship, there may have been some accumulation of that sum during the two years before it found its way into the fixed deposit. Further, it cannot be assumed that the $140,000 retained its ‘full value’ during the course of the fluctuating fortunes of the company. In all of the circumstances, I would set aside the trial judge’s order and make an order in the respondent’s favour in the sum of $100,000.

14 It follows, in my opinion, that the appeal has succeeded. In the normal course, costs follow the event: Civil Procedure Act 2005, s 98; Uniform Civil Procedure Rules 2005, r 42.1. However, whilst the appellant has established error, the approach that I have taken has resulted in an adjustment in the order of $20,000. That is a small amount and, had the matter being one that required leave to appeal, may not have been sufficient to persuade the Court to grant leave. However, the appellant has established error and was entitled to a readjustment of the discretionary order made by the trial judge as a result.

15 There is another factor that is relevant to whether the appellant should have the benefit of a costs order. The appellant also challenged the trial judge’s determination that the parties were in a domestic relationship so as to found jurisdiction under the Property (Relationships) Act. McColl JA has dealt with that aspect of the appeal in detail. In my opinion, that challenge had little prospect of success but nevertheless, substantial argument was directed to the issue.

16 It does not necessarily follow that because an appellant does not succeed on a particular ground of appeal, that the appellant should thereby be deprived of portion of the costs. In other words, it does not necessarily follow that in such a case, the ordinary rule as to costs, prescribed by Uniform Civil Procedure Rules, r 42.1, should not apply. However, in this case, the appellant not only totally failed on one ground of appeal, there was the other factor to which I have referred, namely, that the readjustment to be made to the trial judge’s order in the amount of $20,000, is a small amount relative to the likely costs of the appeal. Given the existence of both factors, I am of the opinion that “some other order [as to costs] should be made”.

17 In considering the appropriate order as to costs, two possibilities present themselves. The first is that, having regard to the factors to which I have referred, the appellant should pay the respondent’s costs. The second is that each party should bear his and her own costs. I consider that, on balance, the appropriate order is the second, namely that each party should bear his and her own costs. I have arrived at this conclusion because the error made by the trial judge was a significant error which, on the approach taken by myself and Einstein J, called for appellate intervention. However, as the judgments of myself and Einstein J reveal, differing views are open as to the extent of that interference. The ‘criticism’, insofar as costs are concerned, that I have made of the appellant’s case resulting in the readjustment of $20,000, is not valid on the approach taken by Einstein J, which would have resulted in a readjustment of $45,000. The result arrived at by Einstein J was within an available range of the re-exercise of the discretion, but it is not one with which I agree. In accordance with the convention of the Court, as more fully explained by Einstein J in his judgment, it is the order which I have proposed which will be the order of the Court.

18 Accordingly, the orders I propose are as follows:

1. Appeal allowed;

2. Set aside the verdict in favour of the respondent in the sum of $120,000;

3. Order that there be judgment for the respondent in the sum of $100,000;

4. Order that each party pay his and her own costs of the appeal.

19 McCOLL JA: The appellant, Craig Hayes, appeals against orders made by McLoughlin DCJ that he pay Deborah Marquis, the respondent, $120,000 by way of an adjustment of interest pursuant to s 20 of the Property (Relationships) Act 1984.

20 There are multiple grounds of appeal but essentially the appellant contended that no order ought to have been made in the respondent’s favour for the following reasons.

21 He submitted that the primary judge erred in finding that the parties were at any time in a “domestic relationship” within the meaning of s 5 of the Act. Alternatively he contended the primary judge’s exercise of his adjustment power miscarried because he failed to take into account property the appellant owned prior to the commencement of the relationship in determining whether the respondent’s contributions had been adequately compensated. Finally he complained that the primary judge erred in any event awarding the respondent $120,000 and failed to disclose the reasoning process by which he reached that conclusion.

Background

22 The parties commenced a relationship in 1993. It appears to have been common ground that the relationship came to an end in about May 2003 when the parties separated.
23 The respondent successfully contended before the primary judge that that relationship was a “domestic relationship” for the purposes of s 5 of the Act. She advanced that contention in two ways. In her Amended Statement of Claim she alleged that during the period 1993 to 1999 the parties were in a “close personal relationship” within the meaning of s 5 because they were living together and because she did his laundry and prepared meals for him. As to the period 1999 to 2002, she alleged the parties were in a “de facto relationship” within the meaning of s 4 of the Act. Finally she alleged that after a period of separation between July 2002 and February 2003, the parties resumed their “close personal relationship” which continued until May 2003.
24 In his defence to the Amended Statement of Claim the appellant admitted that in or about 1993 he and the respondent commenced a “close personal relationship”. He also admitted that after 1993 he spent the night at the respondent’s house at times. He denied he spent 3 or 4 nights a week there, as the respondent alleged. He also put in issue the frequency with which the respondent provided him with meals on occasions he stayed at her house and denied she had done his laundry. Ms M Bridger, who appeared for the appellant on appeal but not below, said that despite his apparent admission to a close personal relationship in terms of s 5(1)(b) of the Act, the appellant had put in issue at trial whether the relationship satisfied the requirements of that subsection.

25 The appellant also denied that he and the respondent lived together on a fulltime basis from March 1999 until July 2002. This put in issue the respondent’s assertion that during this period the parties were living in a de facto relationship. Despite this denial, the respondent was not cross-examined to contradict her affidavit evidence that the appellant moved into a house she rented in March 1999 and lived there until July 2002. The respondent also read affidavits from several witnesses to which I will refer, each of whom described their observations of the relationship. Each deposed that the appellant was living fulltime in the respondent’s house during 1999 – 2002. None of these witnesses was required for cross-examination.

26 Throughout their relationship the respondent provided the premises in which the parties consorted. In the period 1993 – 1996 she leased premises in Lumsden Drive, North Nowra. In 1996 she moved to Yurunga Drive, North Nowra where she remained until 2003.

Statement of the Case

27 The primary judge’s findings of fact must be viewed against the assessment he made of the parties’ credibility. His Honour was satisfied that the respondent was a witness of truth. In contrast, he concluded that the appellant attempted to give answers he thought were best suited to his case and purposes, would give answers to protect any financial asset he might have and generally was not doing his best to be truthful. (Red 19). His Honour also found that the manner of the appellant giving evidence was “selfish, guarded” and reflected a determination “to protect his own financial interests, to the extent of not being fully frank in the evidence that he gives”. (Red 28). He concluded that:

“... much of the defendant’s evidence ... appeared evasive and self-serving such as the plaintiff’s contribution on domestic matters, his own contribution to the domestic matters, the plaintiff’s doing of work, answering of phones and doing of messages for his business, and his failure to make concessions in relation to much of the plaintiff’s claim.” (Red 19-20).

28 Where there was a conflict between the parties’ evidence, the primary judge preferred the respondent’s evidence.

29 The facts can be extracted from the primary judgment:

“The plaintiff was born on 8 July 1959 and the defendant on 20 January 1966. The parties met in 1993 and commenced a sexual relationship shortly thereafter. I accept that in the first three years of the relationship that the defendant would, on average, stay three times per week at the premises which the plaintiff supplied and paid for. I also accept that during that period of time the plaintiff did perform some laundry, maintained the house and provided, prepared and purchased food and paid all rent, all of which was to the advantage of the defendant.

At that time the plaintiff lived in Lumsden Drive, North Nowra and as I have said, she paid all outgoings in relation to the premises, maintained the premises, purchased the food and provided the domestic chores, to which she has referred in her affidavit.

During the 1993 to 1996 period I accept that there was a relationship, except for a period of several months, as described by the plaintiff. In October 1996 the plaintiff moved to Yurunga Drive, North Nowra and I accept the defendant stayed, often up to four nights per week, at those premises between then and 1999. I accept the plaintiff continued to provide meals, laundry and maintain a house which she has described, and contributed to the relationship between the two by the provision of the domestic services set out in her affidavit.

I also accept that the defendant made a minimal contribution to domestic services and I accept that in 1997 the defendant commenced to store tools and equipment at the premises that the plaintiff had leased and used the land adjacent to such land to store his truck, bobcat and scaffolding and I accept this relationship then went on for a number of years.

I accept that between 1993 and 1999 the plaintiff used the whole of her income on household expenses and her motor vehicle. I accept that in 1997 there was a motor vehicle purchased to which both parties made contribution. I accept that in 1999 the defendant moved into the Yurunga Drive premises and thereafter lived full time for most of the next three years with the plaintiff. And the plaintiff then continued to make more payments of rent, household expenses, maintained the house and provided the domestic services to which she has referred.

....

I find that there was a long mutual loving relationship from 1993 until the middle of 2002 and again in early 2003, with the short breaks between 1993 and 1996 and late 2002 into early 2003. Those breaks I find are breaks that could well occur in any relationship in that often parties, whether married or otherwise, will have breaks in the relationship in order for both parties to work out their respective positions to see as to whether they wish to pursue. On both occasions after these breaks the parties attempted to cohabit again and continue the lives that they had built together.

During the whole of the time the plaintiff maintained three different premises with the defendant living with her full time between March 1999 and July 2002, and on a significant part time basis for the periods preceding that, and on a full time basis for two months in early 2003.

From about 1997 the defendant commenced to pay some of the utility expenses. Such payments were made either by himself or on behalf of his company and it would appear that because of the area from which the receipts came, namely his income tax documents, that a claim for tax relief may well have been made on such payments. I accept the defendant used those premises in part to run his business. I accept that the plaintiff frequently answered the telephone and a number of business calls were made to those premises.

I find, as submitted, that there was a sexual relationship between the parties for the whole of the period between 1993 to 2003, except for the periods when the parties separated, to which I have referred.

There was no agreed financial arrangement entered into between the parties, however, inferentially it was agreed by the defendant that the plaintiff would pay all rent, most of the food expenses, although some were met by the defendant, some household expenses, in addition to the provision of the domestic chores, while the defendant paid some of the bills for which he claimed taxation relief and purchased some of the furniture used by the couple.

The parties purchased, as I have indicated, in 1997 a Toyota Seca Sedan which was sold in 2001. The expenses, fuel and maintenance were paid for through the defendant’s company. The parties shared an HCF policy and holidayed together on a number of occasions. The plaintiff assisted in cleaning units and houses being built by the defendant, whether in his name or the company’s name. The plaintiff cared for the defendant when he broke his collar bone in 2003 and the defendant made little contribution to Kyle’s support, Kyle being the plaintiff’s son from a prior marriage. The plaintiff has fully maintained Kyle for the whole of the period of the relationship between the plaintiff and defendant.

I accept that the plaintiff performed household duties throughout the history of the relationship for the defendant. They were housecleaning, bed making, cooking, food purchases and preparation, and I accept the matters set forth in her affidavit as to her contribution by way of domestic assistance.

I accept the difficulty in accurately itemising the amounts spent and the chores in fact actually performed, and when one puts one’s mind in retrospect, as to that which has occurred, it is difficult to be accurate in assessment, but I accept the hours particularised by the plaintiff as being reasonably accurate. I accept she has done her best to be able to particularise the contribution she has made.

As a result, I have no hesitation in accepting that the plaintiff performed the twenty-five to thirty-three hours per week at various times that she described, and I accept that the defendant performed some household chores, but these were minimal and I accept that the contributions to which I have found made by the plaintiff are contributions under s 20 of the legislation.”

30 Turning to the jurisdictional issues, his Honour concluded:

“The evidence clearly demonstrates a reputation and public and family acceptance of the relationship between the parties as being a mutual, loving relationship where the parties lived together and adopted mutual responsibilities as male and female partners in a household. I find that the parties were in a domestic relationship from 1993 until 2003 and it is arguable that, even during the period of separation, that domestic relationship continued for the reasons that I have expressed. However, little is dependent upon whether those two short periods fall within or without the period of domestic relationship.

I find that the parties between 1993 and 1999 were in a close personal relationship as defined in s 5(1)(b) of the Property Relationship Act 1984. I find that as a fact on the evidence that I have found, and I find the admission contained within the pleadings as supportive of the factual finding to which I have made.

I find that the parties were in a de facto relationship between 1999 and 2003, except for the period of separation as defined in s 4 of the Act. Accordingly, I am satisfied that the parties were in a domestic relationship, living together for a period greater than two years as required by s 17(1) of the legislation.

31 The primary judge then turned to consider the exercise of jurisdiction under s 20 of the Act.
32 His Honour recognised that identifying the parties’ contributions was not an easy task because of the manner and type of their respective contributions. The respondent had taken into the relationship furniture, white goods, linen, kitchenware, laundry items and a 1985 sedan. In 1993, the appellant had been self-employed as a builder. In 1994 he had incorporated a company, Craig Hayes Builders Pty Limited, through which he thereafter ran his building business. Prior to incorporating the company he had a truck, a utility, personal belongings and, the primary judge inferred, tools and the like. On incorporation the appellant had transferred ownership of the truck and other equipment to his company and a loan account had been established in the appellant’s name.

33 His Honour’s findings about the parties’ contributions can conveniently be summarised as follows:

(a) From the commencement of the relationship in 1993 the respondent paid for the rent, maintained the property, provided furniture and food for the household and performed domestic services; initially this was “part-time”, but became fulltime from 1999 – 2002, and resumed in early 2003; (Red 27)

(b) The appellant appeared to have made little financial contribution to the relationship until about 1997 when he commenced to pay some of the utility expenses of the respondent’s rented property (Red 24E). The appellant used the respondent’s premises in part to run his business (Red 24J); the respondent did some work in the appellant’s business by cleaning, answering phones, running messages and doing some banking;

(c) The appellant paid some of the bills of the household for which he claimed taxation relief and he purchased some of the furniture used by the parties (Red 24U); he also met some of the food expenses; (Red 24S)

(d) The parties jointly contributed to the purchase of a Toyota Seca sedan in 1997; the appellant’s company paid for fuel and maintenance; (Red 24W)

(e) The parties shared an HCF policy (Red 24Z) and holidayed together on a number of occasions; (Red 24Z)

(f) The respondent assisted in the cleaning of units and houses built by the appellant whether in his name or in the name of his company; (Red 25C)

(g) The respondent cared for the appellant when he broke his collarbone in 2003; (Red 25F)

(h) The respondent performed household duties throughout the relationship namely house cleaning, bed making, cooking, food purchases and food preparation; (Red 25J)

(i) The respondent performed 25 to 35 hours per week in domestic duties whilst the appellant performed some household chores but these were minimal; (Red 25U)

(j) The whole of the respondent’s income was spent on living expenses and her contribution to the payment of household expenses within the relationship was greater than the appellant’s; (Red 27O) and

(k) The appellant’s contribution to domestic tasks equalled the respondent’s contribution to the appellant’s business.
34 The primary judge concluded that the respondent’s s 20 contributions were substantial and enabled the appellant to devote himself to his business, accumulate assets (Red 28H) and spend his money as he saw fit (Red 33J).

35 The primary judge concluded that there was no real evidence of the value of the respondent’s assets at the start of the relationship in 1993, but found her assets in 1994 were probably worth around $10,000 and remained at a similar value throughout the relationship.
36 Turning to the appellant’s assets, it is relevant to recall that the primary judge concluded the appellant was determined to protect his financial interests and was not fully frank in his evidence, generally and, I infer, in relation to his financial assets. His concerns in this respect were apparent when he sought to deal with the appellant’s assets.

37 His Honour found there was no evidence of the value of the appellant’s business when the relationship commenced, at the time of incorporation or at the date of judgment. His Honour also observed that no documents identifying the amount of the appellant’s loan account with the company in 1994, the date of incorporation, had been produced. Doing “the best he could”, he estimated that the appellant’s contribution to assets in 1994 was about $40,000. This took into account the appellant’s loan account with his company which stood at $14,009 as at 1995 and the equipment the appellant had contributed to the company.
38 The primary judge then traced the appellant’s financial position as reflected in his company’s fortunes. The appellant’s loan account with the company as at 1996 was $184,852. In the same year the company had assets of $465,783 and liabilities of $665,369. The company suffered losses in 1996 - 2000 due to the construction of some units at Kiama, but large profits were recorded in 2002 and 2003. The appellant’s loan account was $170,968 in 1998 and $165,956 in 2002. This amount was repaid to him in 2003 and used by him to purchase a property in Fletcher Lane, Meroo Meadow, the net value of which at the time of trial was $340, 000. In 2003 the company had assets of $429, 907 and liabilities of $280, 024.

39 His Honour concluded that the Meroo Meadow asset had been “built up” by the use of the loan moneys which had accumulated in the appellant’s company’s account and were transferred to him in late 2002. In addition, he took into account the value of the appellant’s furniture of $19,960, money in a bank account of $10,733, a motor bike valued at $6,500 and the value of the company’s assets of $149,883, to value the appellant’s assets at approximately $520,000 when the relationship ended.

40 There was little dispute between the parties that, at the date of trial, the respondent’s assets were of little value while the appellant’s were the net value of the Meroo Meadow property.

41 The primary judge concluded that the appellant’s assets had appreciated during the period of the relationship by $480,000 ($520,000 - $40,000). He found that the evidence disclosed the respondent had earned more from her pension and wages, then later wages alone, than the appellant had drawn as income from his company. (Red 30) Further, the respondent had applied all her income either to herself, her son or the relationship which allowed the appellant “to spend his money as he saw fit and to not impose on the company a need for drawings in other circumstances [that] may well have been required.” His Honour regarded one of the respondent’s contributions, therefore, as “allowing the defendant to arrange his financial affairs in the company as he saw fit”.

42 The primary judge held that the respondent had also contributed to the increase in the appellant’s assets through her income being used to maintain and provide a home that was first used part-time, then full-time, by the appellant. She had also made a contribution as homemaker by carrying out domestic tasks. His Honour recognised that the increase in the appellant’s assets had been brought about by his “obvious hard work and skills as a builder in developing the value of the asset” and, too, the fact that his work as a builder provided the base of the capital growth of the company.

43 His Honour found the pool which was to be the subject of the adjustive property order to be $480,000. He determined that the parties’ respective contributions as referred to in s 20 of the Act were seventy five per cent by the appellant and twenty five per cent by the respondent. He concluded that an order that the appellant pay the respondent $120,000 was sufficient to recognise and compensate her for her contribution.

Submissions

44 Ms Bridger submitted that the the primary judge erred in finding that the parties were in a domestic relationship between 1993 and 1999, were in a de facto relationship between 1999 and 2003 and, further, in finding that they were in a domestic relationship living together for a period greater than two years or at all. (Grounds 1, 2 and 3.)

45 If those jurisdictional grounds were unsuccessful, Ms Bridger next contended that the primary judge erred in failing to identify and determine the value of the appellant’s property in 1993, the time at which he found a domestic relationship between the parties to have commenced, at the termination of the relationship and at the time of trial. She also argued that his Honour erred in failing to properly to identify the appellant’s initial contributions, in his assessment of the appellant’s assets and in the analysis he undertook of the appellant’s company’s assets. (Grounds 4, 5, 6, 7, 8, 9, 10, 11 and 12).

46 Finally Ms Bridger challenged the primary judge’s exercise of his s 20 discretion (Grounds 13 – 15)

47 In relation to the first period of the relationship, between 1993 and 1996, Ms Bridger submitted that the trial judge’s finding that the parties were in a close personal relationship and thus in a domestic relationship for the purposes of the Act was not supported by the evidence. She argued that the concept of “living together” was synonymous with sharing the same accommodation, although she accepted that the definition did not require the parties to live together all the time. (AT 12) She argued that the evidence did not support the conclusion that the parties were sharing accommodation.

48 Ms Bridger contended the evidence supported a finding that between 1993 and 1996 he “stayed over” at the respondent’s home on average two to three nights a week, left early in the morning, kept minimal clothing at the respondent’s house, sometimes “went home” to his parents’ home, showered before he came to see the respondent at her home, sometimes called in after work to see her at her home and had no key to her home.

49 Ms Bridger appeared to accept that the relationship differed qualitatively in the period from 1996 through to 1999, although the factual distinctions were difficult to detect in her submissions. She argued, however, that the primary judge had ignored evidence that the respondent had “certified’ to Centrelink over a period (vaguely described in cross-examination as “those years”, but apparently meaning 1993 – 1999) that she was not living with a person of the opposite sex. She submitted his Honour had also ignored evidence that “went to the crux of the inquiry”, that on 11 November 1998 the respondent advised Centrelink that there was no person of the opposite sex, other than her son, who regularly stayed at her address.

50 Ms Bridger accepted that there was some evidence of domestic support provided by the respondent prior to 1999, but argued there was no evidence either party had provided personal care to the other: cf s 5(1)(b).
51 Turning to the period 1999 – 2002, Ms Bridger challenged the primary judge’s finding that there was a de facto relationship during this period on a narrow basis. She accepted that it not been squarely put to the respondent in cross-examination that the appellant was not living with her between 1999 and 2002. However she argued that the respondent’s evidence of the relationship during that period was affected by her acknowledgement in cross-examination that after March 1999, when she was claiming a family tax benefit based on her income and the fact she had a child, she did not tell Centrelink that the appellant was her partner, her de facto spouse or that he was living with her. Ms Bridger complained that the primary judge had not referred to this evidence, and that it should have affected his assessment of the respondent’s credit.

52 In a submission apparently intended to deal with the entirety of the relationship, Ms Bridger argued the parties had not demonstrated a mutual commitment because the respondent paid all the household expenses (although the appellant paid for the utilities) and selected the house at Yurunga Drive of which she was the lessee. As was pointed out during argument, this submission appeared to ignore all advances made in gender equality.

53 Mr J Wilson of Senior Counsel, who appeared with Ms R Winfield on appeal but not at trial, submitted the primary judge’s conclusion that the parties were “living together” before 1999 was correct. He argued that it was not necessary for the purposes s 5(1)(b) that the parties live together on a fulltime basis: Greenwood v Merkel [2004] NSWSC 43. He drew the Court’s attention to letters from the appellant, as well as independent statements made by the appellant and others, indicating that he was living with the respondent. He submitted there was a permanency about the parties’ relationship from its commencement. The respondent always provided financial support for the appellant as well as domestic services. He contended that the commencement of fulltime cohabitation in 1999 did not preclude a finding that the parties had “lived together” for the purposes of s 5(1)(b) before they lived together as a couple: s 4(1).

54 Mr Wilson also submitted that even if the court found that there was no close personal relationship before 1999, the approach to the division of assets would not change, as the primary judge was entitled to take into account contributions made before the commencement of the de facto relationship. He submitted it was clear that there was an intense personal relationship between the parties with financial and non-financial contributions from both sides and that there was no reason to give the pre-de facto relationship contributions any less weight than those made during the period of the de facto relationship.

55 As to the requirement for domestic support and personal care, Mr Wilson submitted that the two concepts could overlap, and that, as the Act is remedial legislation, the Court should be reluctant to limit the types of personal care required by s 5(1)(b).

56 The second area of contention concerned the primary judge’s treatment of the assets the appellant brought to the relationship. Ms Bridger argued that the primary judge did not identify and determine the value of the appellant’s assets in 1993 or 1999 and that he did not give sufficient weight to his initial financial contributions. She contended the appellant’s initial contributions far outweighed the respondent’s.

57 Ms Bridger submitted that the primary judge had ignored evidence that in 1996 the appellant had lent $140,000 to his company, monies drawn from a term deposit (ex 8) in his name. She argued that the primary judge’s finding that the appellant had approximately $40,000 in 1994 (Red 32R) did not take into account the $140,000 or $29,998, the latter being the nominal value of the shares that the appellant held in the company. Ms Bridger submitted that while his Honour was “technically ... correct” in stating that there were no documents recording the amount in the appellant’s loan account in 1994, nevertheless there was evidence demonstrating that the appellant had contributed $140,000 to his company from his own funds, an amount the primary judge had failed to take into account in determining the appellant’s initial contributions.

58 Ms Bridger submitted that the primary judge’s failure to take the $140,000 into account as an asset as at 1994 tainted the s 20 order and meant his Honour considerably undervalued the appellant’s initial contributions. She contended that this lead to a significant mathematical error in his Honour’s calculation of the extent to which the appellant’s assets had appreciated during the period of the parties’ relationship. Further, she argued that the primary judge’s failure to take the $140,000 into account when calculating the assets the appellant brought to the relationship had a flow on effect in causing the judge to find (erroneously) that the monies the appellant had in the loan account in 2002 had accumulated between 1996 and late 2002. The consequence, according to Ms Bridger, was that the primary judge wrongly concluded that the appellant had accumulated earnings because he used his funds for himself, while the respondent devoted hers to herself, her son and the appellant.

59 Ms Bridger also submitted that on a proper analysis of the loan account, the primary judge should have concluded that the appellant had been repaid money for personal expenses, with the result, she argued, that the primary judge had erred in concluding the respondent’s contributions to household expenses were greater than the appellant’s. (Orange B 111)

60 Mr Wilson submitted that given the appellant failed to set out his financial position at the start of the relationship in his principal affidavit, and that he was uncooperative in this respect throughout the trial, the trial judge did all he could with the material available to him in making findings as to the appellant’s financial situation. Insofar as the loan of $140,000 to the company was concerned, Mr Wilson submitted the appellant was not in a position to complain about the primary judge’s finding that the loan account substantially accumulated between 1996 and 2002 as he chose not to adduce evidence on the position before 1996. He submitted there was no evidence as to when the $140,000 had been accumulated.

61 The appellant accepted that contributions made by the parties before the de facto relationship could be taken into account (AT 50) but argued that, even taking the respondent’s pre-relationship contributions into account, the primary judge’s finding of a 25% entitlement was not justified on the evidence before him.

62 Ms Bridger argued that the primary judge did not take the appellant’s initial and subsequent contributions relative to the respondent into account. She contended that the appellant had had assets at the beginning of the relationship while the respondent had none of any value, and that the appellant made the total financial contribution to the purchase of the property at Fletcher Lane. She also submitted that it was not possible to discern the basis of the decision from the primary judge’s reasons.
63 Mr Wilson submitted that the primary judge followed the principles for the exercise of the s 20 discretion set out by Brereton J in Kardos v Sarbutt [2006] NSWCA 11 and that the primary judge’s reasons for his decision were adequate.

Legislative framework

64 Section 20(1) of the Property (Relationships) Act enables a court on an application by a party to a domestic relationship to make such order adjusting the interests of the parties in the property of the parties to the relationship or either of them as seems just and equitable having regard to, in substance, the parties’ respective financial and non-financial contributions 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 what I will call the parties’ non-financial contributions, being those made in the capacity of homemaker or parent.

65 Domestic relationships are defined in s 5 which relevantly provides:

5 Domestic relationships

(1) For the purposes of this Act, a domestic relationship is:

(a) a de facto relationship, or

(b) a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care.

(2) For the purposes of subsection (1) (b), a close personal relationship is taken not to exist between two persons where one of them provides the other with domestic support and personal care:

(a) for fee or reward, or

(b) on behalf of another person or an organisation (including a government or government agency, a body corporate or a charitable or benevolent organisation).

...

(4) Except as provided by section 6, a reference in this Act to a party to a domestic relationship includes a reference to a person who, whether before or after the commencement of this subsection, was a party to such a relationship.”

66 De facto relationships are defined in s 4 as follows:

“4 De facto relationships

(1) For the purposes of this Act, a de facto relationship is a relationship between two adult persons:

(a) who live together as a couple, and

(b) who are not married to one another or related by family.

(2) In determining whether two persons are in a de facto relationship, all the circumstances of the relationship are to be taken into account, including such of the following matters as may be relevant in a particular case:

(a) the duration of the relationship,

(b) the nature and extent of common residence,

(c) whether or not a sexual relationship exists,

(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties,

(e) the ownership, use and acquisition of property,

(f) the degree of mutual commitment to a shared life,

(g) the care and support of children,

(h) the performance of household duties,

(i) the reputation and public aspects of the relationship.

(3) No finding in respect of any of the matters mentioned in subsection (2) (a)-(i), or in respect of any combination of them, is to be regarded as necessary for the existence of a de facto relationship, and a court determining whether such a relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.

(4) Except as provided by section 6, a reference in this Act to a party to a de facto relationship includes a reference to a person who, whether before or after the commencement of this subsection, was a party to such a relationship.

67 Sections 4 and 5 were inserted into the Act by the Property (Relationships) Legislation Amendment Act 1999 (the “1999 Act”). In the Second Reading Speech to the Bill which became the Act, the Attorney General, the Honourable J W Shaw MLC, said (New South Wales Legislative Council, Parliamentary Debates, (Hansard) 13 May 1999 at 228):

“The Property (Relationships) Legislation Amendment Bill recognises that contemporary society has developed to a point where laws that regulate the division of property on the failure of a

broad range of intimate relationships are necessary and desirable. Presently, persons living in intimate partnerships but who are not married or covered by the existing De Facto Relationships Act have limited rights to a share of the property of the partnership in the event that it fails or one partner dies.

...

In establishing whether a relationship comes within the definition of a close personal relationship for the purposes of this bill, regard should be had to the requirements that the parties provide, one or both for the other, domestic support and personal care. Such support and care will commonly be of a frequent and ongoing nature. For example, domestic support services will consist of attending to the household shopping, cleaning, laundry and like activities. Personal care services may commonly consist of assistance with mobility, personal hygiene and generally ensuring the physical and emotional comfort of one or both parties for the other.

In view of factors such as those I have just outlined, it is clear that there is no intention to create rights and obligations between persons who are merely sharing accommodation as a matter of convenience, in the way that flatmates might.” (emphasis added)

68 The definitions inserted by the 1999 Act commenced on 28 June 1999. Subsections 4(4) and 5(4) make it plain that the 1999 definitions were intended to apply to relationships in existence prior to their commencement, as long as they had not ceased before s 6(2) of the Act commenced. That subsection also commenced on 28 June 1999. Accordingly the parties in this case were parties to a domestic relationship for the purposes of s 20 if their relationship fell within the definition of “close personal relationship” in s 5(1)(b), even though it had commenced in 1993. Neither party gainsaid this proposition and it is, in any event, supported by Campbell J’s analysis in Sullman v Sullman [2002] NSWSC 169 (at [47]); see also Hughes v Egger [2005] NSWSC 18 (at [4]) per White J.

69 The 1999 Act also re-named the De Facto Relationships Act 1984, the Property (Relationships) Act 1984.

De facto and close personal relationships

70 The question whether one of the statutory relationships which attracts jurisdiction under the Act exists, is fact dependent and requires a practical approach: Fung v Ye [2007] NSWCA 115 (at [30]) per Young CJ in Eq (Tobias JA and Bell J agreeing).
71 In Trustees of the Property of John Daniel Cummins v Cummins [2006] HCA 6; (2006) 80 ALJR 589 (at [70]) per Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ observed that “[The] term [‘domestic relationship’] is broadly defined in s 5 as extending beyond the already broad definition of ‘de facto relationship’ in s 4.” This observation should be borne in mind when seeking to determine whether the parties’ relationship fell within either or both definitions.
72 It is convenient to deal first with the definition of “de facto relationship”. The definition inserted by the 1999 Act was substantially modelled on the analysis undertaken by Powell J (as his Honour then was) in D v McA (1986) 11 Fam LR 214 of the factors required to demonstrate a de facto partnership for the purposes of the De Facto Relationships Act 1984; see Sullman v Sullman (at [44] – [46]). Powell J repeated that list of factors in Roy v Sturgeon (1986) 11 NSWLR 454 (at 458 – 459) where he made other observations which are of use in considering the approach both to the interpretation of “de facto relationship” and “close personal relationship” notwithstanding that he was considering the definition of “de facto relationship” before the 1999 amendments.

73 In his Honour’s view determining whether the statutory definition applied required the Court to make a value judgment having regard to a variety of factors relating to the particular relationship. Although his Honour enumerated many such factors, he made it plain that they were not exhaustive, an approach reflected in s 4(3) of the Act. Kearney J adopted Powell J’s approach in Simonis v Perpetual Trustee Co Ltd (1987) 21 NSWLR 677 (at 685), holding that the definition of “living with ... on a bona fide domestic basis” in s 6 of the Family Provision Act 1982 was a “single composite expression of a comprehensive notion or concept, and therefore has to be approached by considering the expression as a whole and not in several parts”. These cases establish that definitions of relationships are not to be dissected into discrete elements, an approach endorsed by Mason P, Tobias JA and Davies AJA in Bar-Mordecai v Hillston [2004] NSWCA 65 (at [86], [125]). What this means practically, is that it is necessary to consider the evidence as a whole, not under isolated headings: Barnes v De Jesus [2001] NSWSC 19 at ([26]) per Windeyer J.

74 This approach was highlighted by Bryson J in Burden v Cottee (Supreme Court of New South Wales, Bryson J, 31 July 1998, unreported), speaking of the factors Powell J had enumerated in Roy v Sturgeon:

“The Court is to make a value judgment having regard to a variety of factors affecting the particular relationship, including those which are relevant of the ten factors listed at 459. Many of the factors listed by Powell J are difficult to appraise and none is conclusive; the presence or absence and the intensity of a sexual relationship are not conclusive ... I too regard it as necessary to review the facts of each case and then make a finding of fact, referred to by Powell J as a value judgment, on whether the definition as a whole is fulfilled. Such an exercise when applied to a domestic relationship cannot really be reduced to an orderly or syllogistic demonstration.”

75 Counsel did not identify any authorities in which detailed consideration had been given to the interpretation of a “close personal relationship” in s 5(1)(b). The immediate requirements of the relationship are that it is between two adults, whether or not they are related by family, who are “living together” and one or other of whom provides the other with “domestic support and personal care”. It cannot be a de facto relationship, or a marriage (s 5(1)(b)), nor one in which the domestic support and personal care is provided in the circumstances set out in s 5(2). Thus the concept of “living together” will always be something different from living together as a couple, one of the critical requirements for a de facto relationship.
76 The context in which s 5(1)(b) appears is also significant. A “close personal relationship” is one of two domestic relationships (the other being a de facto relationship) whose existence may be established to attract jurisdiction under the Act. The word “domestic” carries connotations of matters relating to a household. The definition contemplates, in my view, that the facts permit of the conclusion that the two adults are living as a household.

77 Finally, some guidance as to the purpose of s 5(1)(b) can be gleaned from the Second Reading Speech in which the Minister made it clear the amendments to the Act were to cover persons living in intimate relationships not hitherto covered.
78 Central to the primary judge’s characterisation of the pre-1999 relationship was the proposition that the concept of “living together” in s 5(1)(b) did not require the parties to live together fulltime. In my view his Honour was correct in approaching the case on that basis. The definition of “close personal relationship” does not require the two adults to live together fulltime. The language of s 5(1)(b) does not require such co-habitation. Further a s 5 “close personal relationship” may be contrasted with a s 4 de facto relationship. A de facto relationship is one which might ordinarily be expected to emphasise common residence. However, while the definition of a de facto relationship requires a relationship between two adult persons who live together as a couple, s 4(2) makes it plain that sharing a “common residence” full-time is not essential to a conclusion that a de facto relationship exists: see also PY v CY [2005] QCA 247 (at [7]) per De Jersey CJ. Rather the significance of a common residence, in determining whether a de facto relationship exists, turns on its nature and extent.

79 Similarly, in my view, the question whether a couple are “living together” for the purposes of s 5(1)(b) will turn on an evaluation of the nature and extent to which they share a household. Having regard to the fact, however, that they do not have to live together as a couple to satisfy s 5(1)(b), it might be thought the requirement of a common residence might be somewhat more attenuated than in s 4.
80 Further, the concept of “living together” is only one of the three indicia of the relationship in s 5(1)(b). The decision as to whether the statutory definition is satisfied will, like the decision about whether a de facto relationship exists, ultimately be a value judgment which has regard to the three indicia to determine whether there is a relationship which fulfils the definition as a whole.
81 Young J (as his Honour then was) so held in Weston v Public Trustee (1986) 4 NSWLR 407, a case which concerned the phrase “living ... as his wife...on a bona fide domestic basis” in s 6 of the Family Provision Act 1982. The applicant had been in a relationship with the deceased for thirty years during which time he had stayed at her flat in Homebush several days every week but had kept a separate residence in Bondi. They had holidayed together, shared a car for which the applicant paid and garaged, but whose operating expenses were paid for by the deceased. She had done almost all his laundry.

82 Young J held (at 408 – 409), by analogy with cases which turned on whether people had lived separately and apart for the purposes of grounds for divorce under the former divorce legislation, that the court “was not looking to see whether the parties were physically cohabitating but whether there was a relationship between them which was one which showed that the marriage relationship was still alive”. The court was concerned to see whether the two parties had a bond akin to marriage. His Honour concluded that the word “living” in s 6 had the same connotation. Accordingly, it was not fatal to the applicant’s case that she and the deceased had not physically lived in the same place seven days a week, fifty-two weeks a year.

83 In reaching that conclusion, his Honour adopted counsel’s approach of splitting the statutory definition into three elements, an approach criticised by Powell J in Roy v Sturgeon (at 458 – 459). I do not understand Powell J’s criticism to have deprived Young J’s remarks of their analogical force in respect of the overarching concepts of “living together” addressed by s 4 and s 5 of the Act. Indeed, without referring to Weston, in Petersen v Gregory [2007] NSWSC 8 (at [11]), Barrett J described the central concept of the definition of “de facto relationship” and, in particular, of the concept of living “together as a couple” (s 4(1)(a)) as being a “personal commitment that is mutually acknowledged and of an emotional kind transcending the mere fact of the shared residential setting”; see also Ye v Fung [2006] NSWSC 243 (at [64] – [65]) per Gzell J.

84 The question of whether or not one adult provides the other with domestic support and personal care sufficient to satisfy s 5(1)(b) will also turn on the nature and extent of that assistance. Thus if two adults lived together fulltime and one provided domestic support and personal care to the other only once or twice a year, it would be difficult to say that a close personal relationship had been established.

85 While Ms Bridger conceded the respondent provided domestic support, she challenged the proposition that the evidence disclosed that either the appellant or the respondent provided the other with “personal care” within the meaning of s 5(1)(b). She drew attention to Dridi v Fillmore [2001] NSWSC 319 (at [105] – [106]) where Master Macready said that personal care connoted care taken with respect to such matters as pertained to, concerned or affected the individual person or self or pertained to one’s person, body or figure. She did not explain why the sort of care the respondent provided did not fall within that description.

86 Master Macready commented (at [108]) that he would not have thought that matters such as “emotional support” would “by themselves” fall within the expression “domestic support and personal care”. Clearly each case will turn on its own facts. The Second Reading Speech contemplated that personal care services may encompass ensuring the physical and emotional support of one or both parties for the other.

87 For my part I have difficulty with an argument that parties accepted to be in a loving sexual relationship, as the primary judge found here, are not providing each other with personal care. And there may be cases where emotional support of itself will suffice. Society recognises the importance emotional support can play in an individual’s well being. Psyche is just as much a personal attribute requiring sustenance as one’s physical self. The notion of “personal care” should not be confined to matters relating to physicality.

Consideration: whether the jurisdictional facts were established

88 The primary judge’s conclusion that the relationship between the parties satisfied the statutory criteria was an issue of fact which turned to a great extent on issues of credibility. As I have already noted his Honour made strong findings of credit favourable to the respondent and adverse to the appellant. Importantly, his Honour was of the view that the appellant was determined to protect his own financial interests, to the extent of not being fully frank in the evidence that he gave. This assumes significance when considering the appellant’s arguments concerning his Honour’s assessment of the appellant’s assets, particularly his contributions at the commencement of the relationship.
89 The challenge to the conclusion that the parties commenced a close personal relationship in or about 1993 faces considerable forensic hurdles in that he had, as the primary judge pointed out, admitted in his defence that such a relationship commenced in or about 1993, and continued in October 1996 when the respondent lived at the Yurunga Drive premises. The appellant denied, in his defence, the allegation in the amended statement of claim that the parties had started to live together on a full time basis from March 1999 until July 2002, but, as I read the defence, admitted that a close personal relationship persisted until approximately May 2003.

90 These admissions of a close personal relationship were sufficient to constitute an admission that the parties had been in a “domestic relationship” for the purposes of s 5 of the Act so as to attract the Court’s jurisdiction under s 20. No application was made to withdraw the admissions and the primary judge was entitled to rely upon them in concluding that he had jurisdiction to entertain the respondent’s claim as well as to conclude that that relationship persisted for the necessary period of two years referred to in s 17 of the Act.

91 There was, in any event, ample evidence from the respondent that the appellant was living with her and, further, that she was providing him with domestic support and personal care during the period up to 1999.
92 I have set out the primary judge’s factual findings on this issue. In addition to the matters to which his Honour referred, the respondent called three witnesses, Ms Goodsell, Mr Carney and Ms Hodge each of whom gave unchallenged evidence concerning their observation of the parties’ relationship. This was evidence of the public aspects of the parties’ relationship of the sort contemplated by s 4(2)(i) of the Act, but was also clearly relevant to the question whether a close personal relationship existed for the purposes of s 5(1)(b).

93 Their evidence established that the appellant spent substantial periods of time at the respondent’s home and, too that the respondent was providing him with domestic support and personal care.

94 Thus, Ms Goodsell deposed that she had observed the parties’ relationship since approximately 1994. She said that once the respondent moved to Yurunga Drive in 1996 she observed, on her many visits to those premises, that the appellant was present and that she had shared meals with the appellant and the respondent. She observed the respondent doing all the housework, cooking and cleaning up after the meals as well as ironing and washing. She also observed that it was common for the appellant to go to bed just after dinner in the respondent’s bedroom. She said that she observed their relationship to have progressed from one of “boyfriend and girlfriend, to almost living together on a full time basis at the time [the respondent] moved into Yurunga Drive and to [the parties] living together in the late 1990s on a full time basis.” (Blue 207)

95 Mr Carney, who also lived in Yurunga Drive where he and his wife appear to have been the respondent’s neighbours, initially observed the appellant to stay over most of the week at the respondent’s premises. In about 1999, he observed the appellant to be living at the respondent’s premises all the time. Ms Hodge gave similar evidence. She observed the parties to have formed a “close relationship” when the respondent lived at Lumsden Drive and said once the respondent moved to Yurunga Drive, the appellant was almost always at her premises. To her observation, in the first couple of years at Yurunga Drive (i.e. 1996-1998):

“... if Craig was not there on a full time basis, he was there on a basis that seemed very close to it.”

She also deposed that from approximately 1999 to 2000 onwards:

“. Craig was definitely living at Yurunga Drive on a full time basis.”

96 She also observed the respondent performing housework such as cooking, cleaning, washing and ironing on the occasions she visited Yurunga Drive.

97 The appellant appeared to accept that the relationship differed between the period 1996 and 1999 in that while he again “stayed over” at the respondent’s house on some nights (there being a dispute between them as to whether it was 2 or 4 nights a week) he had some clothing at her home, had “some laundry” done at his parents’ home (which he claimed he called “home”) and, again, sometimes called over to the respondent’s home after work. The appellant acknowledged he had a key to that house although he was vague about the period he held it.

98 The respondent properly draws attention to the primary judge’s findings of fact which clearly rejected the appellant’s account of the relationship in the period 1993-1999. On his Honour’s findings, once the relationship commenced in 1993, the appellant stayed at the respondent’s home on average 3 nights a week during which time she did laundry for him, maintained the house, provided and prepared food and paid the rent to the appellant’s advantage. Once the respondent moved to Yurunga Drive in 1996 and up until 1999, the primary judge found the appellant stayed at the respondent’s house up to four nights a week and the respondent provided meals, did his laundry and provided domestic services. His Honour also found that from 1997, the appellant stored tools and equipment at the respondent’s premises, as well as using the land adjacent to her home to store considerable equipment associated with his business. In 1997 the parties purchased a vehicle together. They were also joint parties to a private health insurance fund.

99 The appellant says the primary judge ignored the evidence of the respondent’s statement to Centrelink in November 1998 that there was no person of the opposite sex other than her son who regularly stayed at her home. This was said to go to the crux of the inquiry. I cannot agree. It was clear the respondent was concerned not to compromise whatever benefit she was receiving from Centrelink as at the date of her statement. That was understandable, not least because she was bearing all the expenses of the appellant residing at her house. He was making no financial contribution. Although his Honour did not refer to this aspect of the evidence, it is clear, in my view, that he did not because, in the circumstances, it would not have altered his view as to the characterisation of the relationship. He was entitled to reach that conclusion. Statements to a government authority apparently inconsistent with a party’s case may complicate the resolution of the issue of the nature of the relationship, but they are not determinative. They are taken into account as part of all the circumstances: Bar-Mordecai v Hillston (at [118]).

100 In my view the primary judge’s conclusion that that the parties lived in a close personal relationship during the period 1993 – 1999 was open to him. It was supported by the respondent’s evidence which was corroborated, to the extent that it could be, by the evidence of the public relationship witnesses. It was also based, in part, on his Honour’s rejection of the appellant as a witness of truth. The appellant faced a considerable hurdle in overturning the primary judge’s conclusion in such circumstances. There were no incontrovertible facts, nor compelling circumstances pointing to error on his Honour’s part.

101 I can also discern no error in the primary judge’s conclusion that the parties were living in a de facto relationship during the period 1999 – 2002. There was abundant evidence that the parties were living as a couple during this period, sharing the same house fulltime, continuing their sexual relationship, that the appellant was dependent on the respondent’s financial support and that the appellant in turn made some contribution to the cost of utilities as well as fully substantially furnishing the property the respondent leased. Further they were clearly recognised as a couple. Thus almost all of the s 4(2) factors were established. Once again the appellant relies on the respondent’s failure to disclose the appellant’s occupancy of her home to Centrelink, but, again this was but one matter to be evaluated in all the circumstances. The reputation evidence strongly supported the respondent’s case as to this period.

102 In my view the primary judge was also entitled to accept that the short period between late 2002 and early 2003 when the parties separated was the sort of break which can occur in any relationship without determining it, a fact supported by the resumption of the relationship for a short period in 2003. Thus his Honour was entitled to conclude the de facto relationship subsisted from 1999 – 2003. Accordingly the parties were in a domestic relationship from 1993-2003, for the first period (1993 – 1999) in a “close personal relationship”, and for the second (1999 – 2003) in a “de facto relationship”. His Honour had jurisdiction to make a s 20 order.

103 I would also note that it was common ground that even if his Honour had erred in reaching his conclusion as to the 1993 – 1999 relationship, but been correct as to the de facto relationship, it was nevertheless open to him to take the parties’ pre-relationship contributions into account in considering the terms of any s 20 order: see Mcdonald v Stelzer [2000] NSWCA 302, (2001) 27 Fam LR 304 (at [32]) per Sheller JA; (at 34] – [39]) per Priestley JA; Jones v Grech [2001] NSWCA 208; (2001) 27 Fam LR 711 (at [77] – [82]) per Ipp AJA (as his Honour then was); Davies AJA agreeing (at [24] – [26]); Chanter v Catts [2005] NSWCA 411; (2005) 64 NSWLR 360 (at [74]) per Bryson JA; Kardos v Sarbutt (at [35]) per Brereton J (Basten JA and Hunt AJA agreeing).

104 There is no clear authority on the manner in which pre-relationship contributions are taken into account. In Mcdonald v Stelzer, Priestley JA said such contributions could be taken into account if they were “very closely connected in subject matter, time and relevance to financial and non-financial contributions during the period of the full de facto relationship” and that they could be given “some but not fundamental weight”. In Jones v Grech, Ipp AJA (at [82]) said there was no difference in principle between contributions made before the de facto relationship commenced and those made thereafter and that the court may have regard to both. While Davies AJA agreed with Ipp AJA’s view that pre-relationship contributions could be taken into account, he expressly agreed (at [25]) with Priestley JA’s formulation in Mcdonald v Stelzer of the manner in which this could be done. In Hughes v Egger (at [5]), White J expressed the view, with which I agree, that if pre-relationship contributions fell within s 20(1) (a) and (b) there was no reason why they should be relegated to a subsidiary role, merely because they preceded the commencement of the relationship.

105 There is some tension between the views of Priestley JA and Ipp AJA, which it is unnecessary to resolve in the circumstances. The appellant did not suggest that if the primary judge erred in his characterisation of the pre-1999 relationship anything less than full weight should be given to his pre-1999 contributions. This stance is hardly surprising considering the appellant’s second principal argument that the primary judge erred in failing to take into account adequately his contributions, the ground to which I now turn.

Evaluating the parties’ contributions
106 It is essential, in considering the appellant’s complaint about the s 20 order, to consider the ambit of an appeal to the Court from a s 20 adjustive order. This was explained by Campbell JA (with whom Santow and Bryson JJA agreed) in Manns v Kennedy [2007] NSWCA 217 at [68] ff. As his Honour observed, there are two issues: first whether the primary judge has made correct findings of fact, secondly whether the primary judge erred in carrying out the evaluative task performed in deciding what, in all the circumstances, seemed just and equitable having regard to the factors listed in s 20. The first task proceeds on the same principles as any appeal concerning findings of fact. In considering the s 20 task, however, the Court must recognise the discretionary nature of the exercise and must approach consideration of a s 20 order in the manner laid down in House v R [1936] HCA 40; (1936) 55 CLR 499 (at 504-505) per Dixon, Evatt and McTiernan JJ. As Campbell JA explained:

“70 Another type of task concerns the evaluative task that the primary judge has performed, of deciding what, in all the circumstances, having regard to the factors listed in section 20, seems just and equitable. Part of that task involves weighing the various matters that need to be taken into account. Part of that task can involve deciding what is the most appropriate methodology to use, in the circumstances, to carry out the evaluative task. Insofar as the appeal involves the question of as at what date the valuation should be taken, that is a question of the appropriate methodology to carry out the statutory task. Each of those aspects of the evaluative task involves the exercise of a judicial discretion. Its discretionary nature is underlined by the expression “to it seems” when section 20 talks of the adjustment that “to it seems just and equitable”. (emphasis in original)

107 Exercising the discretion under s 20 required the primary judge to identify and (so far as possible) value the contributions that are being taken into account and identify and (so far as possible) value the property concerning which it is open to the court to make an adjustment. The final step in the process of arriving at an order is to make a "holistic value judgment", that is to say, to decide what adjustment of property seems just and equitable having regard to the contributions identified in s 20(1)(a) and (b): Manns v Kennedy (at [64]).

108 While the Court has “a broad discretion” in determining the approach to adopt in considering what order to make under s 20, two approaches are usually referred to, global and asset-by-asset: Saric v Steward [2006] NSWCA 260 (at [63]) per McColl JA (Handley and Santow JJA agreeing); Kardos v Sarbutt (at [51]); Bilous v Mudaliar [2006] NSWCA 38 at [42] per Ipp JA (Giles and McColl JJA agreeing). Care must be taken when either is adopted to conduct that might be described as a cross-checking process as described by Ipp JA in Bilous (at [43]):

“43 If a global approach is adopted, regard must still be had to the origin and nature of the different assets. If an asset-by-asset approach is adopted, care must be taken to avoid the risk of undervaluing domestic and non-financial contributions and regard must be had to the overall result: Kardos v Sarbutt at [51] and [54]. Some situations do not lend themselves either to a pure global approach or to a pure asset-by-asset approach. In some cases the judge may decide to have regard to the particular contributions made to individual assets, weigh up the overall respective contributions to the parties and make differing apportionments in relation to the interests of the parties in different assets.”

109 The primary judge undertook the tasks s 20 required him to consider. The appellant’s complaint that his Honour failed to value his assets as at 1993 ignores his Honour’s finding that there was no evidence of the value of the assets in 1993, so that the best he could do was assess them in 1994. Even then his Honour had to deploy hindsight because he had to value the appellant’s assets by reference to the company’s accounts, the first of which dealt with the company’s financial position as at 1995.

110 The only substantial question in this area of the appeal, in my view, is whether his Honour failed properly to value the appellant’s initial contributions. This turns on whether his Honour ought to have assessed the appellant’s initial contribution to have included the sum of $140,000 which he lent to the company in 1996. In considering this issue his Honour’s assessment of the appellant’s approach to disclosing his assets should be borne in mind.

111 In my view, the primary judge’s conclusions concerning the unsatisfactory manner in which the appellant gave evidence about his assets were well open to him. The appellant’s evidence about his financial position can be said, at best, to have dribbled out in the course of the hearing. This is particularly relevant to the appellant’s complaint that his Honour failed to take into account his initial contributions. In considering this complaint, it must be borne in mind that the appellant carried at least an evidential burden of proving his initial contributions. Close scrutiny should be given to the manner in which he approached this task at trial.
112 In his affidavit in the proceedings, sworn 21 December 2004, the appellant referred to the incorporation of his business, and stated baldly that upon incorporation he “transferred the cash and equipment [he] had accrued as a sole trader to the company which was shown as a loan by myself to the company.” (Blue 3/306). He did not annex, or exhibit, to his affidavit any documents corroborative of that statement.

113 In the course of his re-examination on the third day of the trial, on 19 August 2005, he was asked the source of the moneys in his loan account. He explained that it included a term deposit he had of $140,000 which he had built up through his working life. (Black 107, 111), (Black 106). When this evidence was led, counsel for the respondent objected, saying it was new evidence. His Honour allowed the evidence, but on the basis that he gave the respondent leave to issue subpoenas and directed the appellant to take all steps to obtain bank records to support his evidence. At this stage no documents relating to the affairs of the company had been tendered.
114 Counsel for the respondent cross-examined the appellant to suggest that he was attempting to reconstruct the events of 1994 and 1995, a proposition he denied. However, he accepted that he had not recalled the source of the money in his loan account when he swore his affidavit. (Black 109). In response to a question from the primary judge to the effect that the $140,000 would be a fairly important contribution looking back at the parties’ transactions over 10 to 11 years, the appellant responded that it was “quite hard to remember back”, in effect, over that period. (Black 109).

115 This evidence first emerged at a stage when it was apparently anticipated that the only matter outstanding was the re-examination of the appellant to be followed by submissions.

116 The matter was then adjourned, it appears both as a result of the evidence concerning the term deposit, and, also because a joint valuer’s conference had not taken place. Prior to the adjournment the primary judge commented that it seemed extraordinary that a person could “suddenly remember after being cross-examined that there is a $140,000 that has just materialised” and suggested that both sides should try to obtain documents to determine the source of those moneys. (Black 118). His Honour’s incredulity is understandable.

117 When the matter resumed on 24 October 2005, counsel for the respondent tendered a bundle of company documents which were admitted without objection and became Exhibit U. (Blue 516). Exhibit U included the company’s accounts from 30 June 1995 to 30 June 2003. They showed the balance in the shareholders’ loan account as at 1995 at $14,009, an amount which was not allocated to any particular shareholder. The 1996 accounts showed shareholders’ loans of $257,080, $184,852 of which was allocated to the appellant. Although it does not appear that documents identifying the shareholders in the company were ever tendered, it appears to be common ground that the shareholders were the appellant and his parents.

118 Thereafter the balance in the appellant’s loan account fluctuated slightly, but never dropped below $165, 956, the balance as at 2002.
119 The appellant was also recalled and gave further evidence concerning the term deposit. He was shown documents from the National Australia Bank dealing with the term deposit from 14 December 1994 to 9 November 1995. (Exhibit 8, Blue 502). In cross-examination the appellant said that he had found these statements in “some paperwork back in my office”. (Black 129G). These documents recorded a term deposit of $140,000 in the appellant’s name which commenced in December 1994 and remained on fixed terms of 30 days rolled over by the bank until November 1995.

120 The company’s fortunes fluctuated throughout the period of the parties’ relationship. In 1995 it recorded a profit of $17,994, but thereafter it showed losses for the years 1996 - 2000. In 1996 net losses were $199,586, a position which gradually improved over the years until a net profit of $11,395 was declared in 2000.

121 The appellant was cross-examined by counsel for the respondent, to suggest that he had made a substantial loss on a development of units at Kiama in or about 1996, and that if he had not invested his term deposit in the company, it would have been in serious trouble, a proposition with which he “supposed” he agreed. (Black 132-133). It was then put to him that by 2000 he had bought the company back into credit and, by 2003, had built it up to a sufficient level that he was able to withdraw the funds he had put in, in 1996. He agreed that he had drawn out the $140,000. (Black 133-134).

122 Counsel’s addresses were not recorded. Both parties’ counsel had prepared written submissions all of which pre-dated the final hearing day. The written submissions of the appellant’s counsel at trial, did not address the issue of the appellant’s contributions to the relationship. Significantly they did not address the appellant’s assertion that he had contributed $140,000 to the company, and that that amount should be taken into account as an initial contribution should the primary judge be considering a s 20 adjustive order.

123 When the evidence about the appellant’s loan account is analysed it amounts to this. When he incorporated the company he contributed, inter alia, cash he had accumulated as a sole trader. This may be all or part of the $14,009 shown in the 1995 loan account. At some stage, apparently as a result of the financial difficulties the company found itself in due to an unsuccessful building venture, he said he advanced a further $140,000, monies which had been invested in a term deposit with NAB during the period December 1994 to November 1995. Assuming the $14,009 shareholder’s loan as at 1995 was all attributable to the appellant, and that his evidence is accepted that he advanced $140,000 to the company in 1996, there is no evidence as to the source of the balance of $30,843 making up the total of $184, 852 attributed to his loan account in the 1996 accounts. The appellant does not claim that amount should be taken into account as an initial contribution.

124 Moreover there is no clear evidence as to when the $140,000 was amassed. The appellant gave vague evidence that that sum had accumulated over his working life. That evidence is capable of supporting the proposition that the $140,000 was accumulated in all, or at least in part, during the period of the parties’ relationship. If it was accumulated prior to the appellant incorporating his company, then his affidavit evidence that, upon incorporation he transferred “the cash” he had accrued as a sole trader to the company by way of loan, was demonstrably false. Leaving that aside, the evidence is nevertheless left in the unsatisfactory state that the $140,000 appeared to emerge from the blue in late 1994 when it was placed on term deposit. There is no evidence that the appellant had amassed the entirety of that sum prior to his relationship with the respondent commencing in 1993.

125 In my view the respondent’s submission that the appellant did not discharge the burden of proving that he had accumulated the $140,000 prior to the relationship commencing in 1993 so that it could be treated as part of his assets at the commencement of the relationship should be accepted.

126 Since writing the above, I have read Beazley JA’s reasons in draft. I cannot, with respect, agree that, Mr Wilson “conceded, unequivocally, that at the commencement of the relationship the appellant had accumulated moneys in the order of $140,000” (Beazley JA (at [6])). That proposition is controverted by the passage of transcript quoted. The second question in the passage extracted contains at least four propositions: that it may have been better if the $140,000 had been disclosed earlier, that Mr Wilson was not making the point that the $140,000 was not the appellant’s, that it appeared that at the commencement of the relationship the appellant had a significant sum of money which was “in the order” of $140,000. Mr Wilson’s affirmative response could have been to any of these propositions. It certainly was not an affirmative response to the proposition that the appellant “had accumulated $140,000” as at 1993, when the relationship commenced. That was not put to Mr Wilson in that passage extracted in her Honour’s reasons.
127 Mr Wilson’s argument, as I have sought to explain, was that there was no evidence which the primary judge could have relied upon as to when the $140,000 was accumulated such that it could be taken into account in the s 20 exercise. In my view he did not resile from that proposition. It was in his written submissions, and was repeated in his oral submissions (CA Tr 77.30). The passages from the appellant’s cross-examination Beazley JA has extracted do not advance the matter, rather, in my view, they underline the imprecision of the appellant’s evidence.

128 I would adhere, accordingly, to my view that the appellant did not establish when he accumulated the $140,000 in a manner which would allow the court to draw any meaningful inference about it for the purposes of s 20.

129 I would add that the appellant’s approach to disclosing his assets appears to have been inconsistent with the obligation of parties concerned in claims for financial provision and property adjustment to make full and frank disclosure of all relevant financial circumstances: White v White [2004] NSWSC 208; Wilson v Vine [2003] NSWSC 341 (at [36] – [37]) per Macready M (as he then was). The appellant was clearly asked to turn his mind to his assets at the commencement of the relationship when he swore his affidavit. He disclosed only the limited assets to which I have referred and even then only as at the date the company was incorporated. People can reasonably be expected to know what they own (Paino v Paino [2006] NSWSC 218 (at [176]) per Barrett J). The $140,000 should have been disclosed at the outset of the proceedings, not in their dying stages.

130 In White v White (at [42]), Macready M (as he then was) suggested that in cases where a party had failed to comply with the duty of disclosure, it could be appropriate to apply Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 to draw inferences against the party which has failed to call evidence, or in a case where the court had to make findings as to the value of an item that a party had not adequately established, to apply Jones v Dunkel to find the value was as high a value as possible consistent with the description of the asset: Armory v Delamirie (1722) 1 Stra 505; (1722) 93 ER 664. It is unnecessary to consider these propositions as it was not put to the appellant that he had failed in his duty of disclosure. Parties to proceedings of this nature should be alert to the obligation of disclosure and the consequences which may flow from its breach.

131 The primary judge clearly relied upon the appellant’s affidavit evidence that he had invested all his then assets in the company when it was incorporated in 1994 in valuing his initial contribution at $40,000, an amount which included the balance in the loan account at 1995. In my view his Honour was entitled to do so. In the light of his assessment of the appellant’s credibility, his Honour clearly regarded it as necessary that there be corroboration of his assertions concerning his assets at the outset of the relationship. There was, as his Honour observed, no documentary evidence relating to the state of the appellant’s loan account at incorporation. In such circumstances he was entitled to look at the documents closest in time to attempt to value the appellant’s contributions at the earliest possible date in the relationship. Those documents showed a shareholder’s loan of $14,009. In my view his Honour was entitled to regard that amount as representing the cash the appellant had amassed as at the date of incorporation in 1994.

132 His Honour then appears to have regarded the appellant’s loan account with the company as demonstrating an accretion of his fortunes, without considering that its balance represented monies the appellant had advanced to the company. In that respect his Honour was in error. However, having regard to my conclusion that the appellant has not demonstrated that the primary judge should have concluded he had accumulated $140,000 prior to the relationship commencing, it is not clear that his Honour’s error is material.

133 His Honour’s failure to refer to the source of the loan account funds being the term deposit, was, in my view, an immaterial oversight. The critical point was that he was entitled to treat the monies in the loan account, with the exception of the $14,009, as accumulated after the relationship commenced. This he did.

134 The appellant also complains that the primary judge failed to attribute the company’s paid-up capital to him as an asset. This submission was not advanced at trial as far as I can discern. But, in any event, in my view the value of the company, if that is an appropriate measure, should not be dissected in the manner the appellant’s counsel suggested which only took into account the positive side of the ledger. Rather if the value of the company was to be considered it should be the net value. The summary of the company’s accounts demonstrate that the net value of the company was ($199,586) in 1996 (the 1995 summary did not record a net value), first reached positive figures in 2000, and by 2003 (after the appellant had been repaid his loan) stood at $149, 883. Counsel for the respondent did not suggest that a net value approach should be taken, being content with the primary judge’s approach. However the appreciation of the company’s position over the period coinciding with the relationship between the parties, taking into account his Honour’s findings that the respondent’s contributions assisted the appellant to augment his financial position, confirms the conclusion his Honour reached by reference to the loan account.

135 The appellant’s second complaint should be rejected.

The orders made

136 The appellant’s final complaint was that that the primary judge erred in awarding the respondent $120,000 and failed to disclose the reasoning process by which he reached that conclusion. Little attention was paid to this complaint in oral submissions. To the extent it was addressed in the written submissions, the appellant complained that the overall result did not reflect his initial and subsequent contributions. This argument assumed success in his argument that his initial contributions included the sum of $140,000, a submission I have rejected.

137 Otherwise the appellant argued that the respondent had had no assets of any significant value and that he had entirely financed the purchase of the Meroo Meadow property.

138 This argument was advanced with blithe disregard to the primary judge’s findings about the significant support the respondent had provided to the appellant by way, not least, of providing accommodation throughout the relationship as well as substantially financing the couple’s living expenses. Further it was she who, on the primary judge’s findings, undertook substantially all the domestic tasks.

139 The primary judge was entitled to conclude that the respondent’s assumption of virtually all the responsibility for maintaining the home freed the appellant to earn income, and, accordingly, independently of her financial contributions, her indirect contribution was “substantial and significant”: Black v Black (1991) 15 Fam LR 109 at 118 per Clarke JA (with whom Kirby P and Handley JA agreed); Kardos (at [33])

140 In order to demonstrate error in the s 20 order, the appellant was, as I earlier pointed out, required to demonstrate a House v R error. In my view the appellant has not demonstrated any error in this respect.

141 The appellant’s argument about absence of reasons was faintly put. In my view the primary judge properly considered the issues posed by s 20. He assessed the parties’ respective contributions and, having done so, undertook the holistic value judgment as the final step. But as in assessing general damages “a point is reached where further reasoning is impossible ... [and] it is necessary to make a determination which is insusceptible to entirely logical expedition ... [the] determination rests upon the judge’s finding [sic] and his or her reaction to those findings, drawing upon the judge’s general experience ...”: Southgate v Waterford (1990) 21 NSWLR 427 at 442.

142 In my view the primary judge gave adequate reasons.

143 The third complaint should be rejected.

Costs at trial

144 The appellant also appealed against the costs orders made by the primary judge. The written submissions on this issue were confusing. On the one hand they seemed to accept that a challenge to the costs order the primary judge made was only open if the appeal succeeded. On the other hand they appeared to challenge that order in any event on the basis of the decision in Kardos v Sarbutt (No 2) [2006] NSWCA 206 in which Brereton J (with whom Basten JA and Hunt AJA agreed) developed a number of propositions concerning the question of costs in property relationship matters, including (at [35]) that “the starting position should be that each party should bear its own costs”.

145 It is sufficient to dispose of this argument, if it is indeed advanced by noting that in Dunstan v Rickwood (No 2) [2007] NSWCA 266, the Court held that it was not appropriate to confine the discretion conferred by s 98 of the Civil Procedure Act 2005 and UCPR 42.1 by adopting the “starting position” approach. Costs were to be decided in accordance with the discretion conferred by the Civil Procedure Act and the Rules.

146 Apart from the Kardos v Sarbutt submissions, the appellant did not advance any reason why the costs order below should be set aside were his appeal otherwise to fail.

147 This ground of appeal should be rejected.

Orders

148 The effect of the majority’s proposed reasons is that the primary judge ought to have taken into account the amount of $140,000 although they differ in their approach as to how this should be done. Einstein J has deferred to Beazley JA’s order. Accordingly, the respondent has lost $20,000 of the $140,000 she was awarded by the trial judge. However the appellant failed on his principal argument as to jurisdiction.

149 In my view the jurisdictional argument occupied a substantial proportion of the appeal. The respondent should not have to bear the costs of that issue. It was a separate issue in which the appellant has been totally unsuccessful. His lack of success attracts the operation of an exception to the general rule that costs follow the event: UCPR 42.1; James v Surf Road Nominees Pty Ltd (No 2) [2005] NSWCA 296 (at [31] ff); Elite Protective Personnel Pty Ltd v Salmon (No 2) [2007] NSWCA 373 (at [7] – [9]).

150 Bearing in mind that where there is a mixed outcome in proceedings the question of apportioning the costs as between the successful and unsuccessful parties depends upon matters of impression and evaluation (Elite at [11]), my view is that the appellant should bear 75% of the costs of the appeal and that each party should bear their own costs as to the remaining 25%. Accordingly I propose the following orders:

(a) appeal dismissed;

(b) appellant to pay 75% of the costs of appeal;

(c) each party to bear their own costs of the remaining 25% of the costs of the appeal;

151 EINSTEIN J: The first to third grounds of appeal raise questions going to the proper construction of the definition of a domestic relationship for the purposes of s 5 of the Property (Relationships) Act 1984 ["the Act"]. Dealing as they do with the threshold requirements for an entitlement to relief by way of making just and equitable property adjustment orders under section 20 of the Act, the questions raised are of signal significance. The particular focus of attention thrown up by these proceedings involves the principled approach to questions concerning:

i. when persons may be said to have been “living together” within the meaning of that expression to be found in s 5(1)(b) of the Act.

ii. the proper construction of the words "one or each of whom provides the other with domestic support and personal care" also to be found in s 5(1)(b) of the Act.

The findings under challenge

152 The appellant has challenged findings by the trial judge:

i. that the appellant and the respondent were over a particular period of time, in a close personal relationship as defined by s 5(1)(b) of the Act;

ii. that the appellant and the respondent were over another period of time, in a de facto relationship as defined by section 4 of the Act;

iii. that the appellant and the respondent were in a domestic relationship living together for a period of more than two years;

iv. concerning the identification and determination of the appellant's property during the period in which the trial judge found a section 5 domestic relationship existing as between the appellant and the respondent.

Overview

153 The respondent was born in July 1959. The appellant was born in 1966. They met in 1993 and commenced a sexual relationship shortly thereafter.

154 Their relationship the subject of the proceedings below, spanned the following four periods of time:

i. the three year period between 1993 and 1996 when the appellant would for approximately 3 nights a week, sleep at the respondent's premises in Lumsden Drive, North Nowra: on other nights he would sleep at his parents’ home;

ii. the period between October 1996 and 1999 when the appellant would for approximately 4 nights a week, sleep at the respondent's then rented premises in Yurunga Drive, North Nowra: on other nights he would sleep at his parents’ home;

iii. the period between 1999 and mid-2002 when the appellant had moved into the respondent’s home and lived there full-time;

iv. the relationship having broken down in late 2002, it resumed for a short period of time in 2003.

The legislative background

155 Prior to the amendments introduced by the Property (Relationships) Legislation Amendment Act 1999, relief was only available under the then De Facto Relationships Act 1984 in respect of relationships between a man and a woman. Under the amendments introduced, which took effect on 28 June 1999, the Act extended to apply to relationships which ceased after that date.

The Property (Relationships) Act 1984

156 This Act provides inter alia as follows:

s 4 De facto relationships

(1) For the purposes of this Act, a de facto relationship is a relationship between two adult persons:

(a) who live together as a couple, and

(b) who are not married to one another or related by family.

(2) In determining whether two persons are in a de facto relationship, all the circumstances of the relationship are to be taken into account, including such of the following matters as may be relevant in a particular case:

(a) the duration of the relationship,

(b) the nature and extent of common residence,

(c) whether or not a sexual relationship exists,

(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties,

(e) the ownership, use and acquisition of property,

(f) the degree of mutual commitment to a shared life,

(g) the care and support of children,

(h) the performance of household duties,

(i) the reputation and public aspects of the relationship.

(3) No finding in respect of any of the matters mentioned in subsection (2) (a)–(i), or in respect of any combination of them, is to be regarded as necessary for the existence of a de facto relationship, and a court determining whether such a relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.

s 5 Domestic relationships

(1) For the purposes of this Act, a domestic relationship is:

(a) a de facto relationship, or

(b) a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care.

(2) For the purposes of subsection (1)(b), a close personal relationship is taken not to exist between two persons where one of them provides the other with domestic support and personal care:

(a) for fee or reward, or

(b) on behalf of another person or an organisation (including a government or government agency, a body corporate or a charitable or benevolent organisation)...

Returning to the trial judge's findings

157 The trial judge's findings in relation to the initial three-year period of the relationship spanning from approximately 1993 to 1996 was that the respondent performed laundry duties, maintained and paid all outgoings in relation to the rented house premises at Lumsden Drive, provided, prepared and purchased food and paid all rent [Red 20P-T]. The finding was that save for short breaks, there clearly was a close personal relationship between the parties for this period.

158 The trial judge's findings with respect to the period between October 1996 and 1999 was that the respondent continued to provide meals, laundry services and maintain the house and contributed the provision of domestic services to the relationship. The finding was that the appellant had made a minimal contribution to domestic services. Further that in 1997, the appellant commenced to store tools and equipment at the premises leased by the respondent using the land adjacent to those premises to store his truck, bobcat and scaffolding.

159 The further finding was that upon the appellant moving full-time into the premises leased by the respondent in March 1999, the respondent continued to make payments of rent and of household expenses, maintained the house and provided similar domestic services as previously.

160 The finding was that there was a long mutual loving relationship between the parties from 1993 until the middle of 2002 and again in early 2003, with short breaks between 1993 and 1996 and between late 2002 into early 2003. The trial judge found that those breaks were of the type which could well occur in any relationship and that on each occasion after the breaks, the parties attempted to cohabit again and to continue the lives which they had built together. The finding was that there was a sexual relationship between the parties for the whole of the period between 1993 and 2003, except for the periods where the parties had separated.

161 The trial judge found that the evidence clearly demonstrated a reputation and public and family acceptance of the relationship between the parties, as being a mutual, loving relationship where they lived together and adopted mutual responsibilities as male and female partners in a household. He found that the parties were in a domestic relationship for the period between 1993 and 2003 and that during the period between 1993 and 1999, the parties were in a close personal relationship within the meaning of section 5(1)(b) of the Act. The finding was clearly supported by the admissions in the grounds of defence that

(1) the parties had commenced a close personal relationship in about 1993;

(2) that the close personal relationship had continued during the period that the respondent lived at the Yurunga Drive premises [but did not admit the dates alleged, being October 1996 to February 1999, as set out in the plaintiff’s statement of claim];

(3) that the relationship had terminated in approximately May 2003.

162 The finding was that the parties were in a de facto relationship between 1999 and 2003 when they lived together on a full-time basis, except for the period of separation as defined in section 4 of the Act.

163 Accordingly the trial judge was satisfied that the parties were in a domestic relationship, living together for a period of not less than two years as required by section 17(1) of the Act.

164 It is next appropriate to examine these findings in light of the Act.

The definition of "close personal relationship" in section 5(1)(b)

165 Plainly the Act does not provide a definition of the phrase "a close personal relationship". In that regard the following may be said:

i. the language of s 5(1)(b) is explicit in identifying the material concept as involving a relationship other than marriage or a de facto relationship. Hence it is not necessary that there be a sexual relationship.

ii. The relationship must be between two adult persons and they can be of the same family.

iii. It is important in focusing upon the s 5(1)(b) concept of a 'close personal relationship' between adult persons who are ‘living together’, to keep in mind the signal difference between "de facto relationship" concepts relating to a "couple" which are not relevant (cf Dridi v Fillmore [2001] NSWSC 319 at [102]).

iv. One or each of the parties must provide the other with domestic support and personal care. The language of the subsection is explicit in that the requirements for provision of domestic support and personal care are cumulative. Neither one nor the other suffices. Both must be provided.

166 Upon its proper construction the expression "living together" in the context of the instant legislation is to be understood as referring to the sharing of a home: that is to say to cohabit/to dwell together. The test is an objective one. It involves assessing the nature and extent of the claimed common residence. To live together requires that the two adult persons be seen as regarding the place or places in which they live as ‘their home’. Both of them may not always be found in that home because from time to time family or business requirements or similar may require one or both to spend some time elsewhere cf: Re Fagan Deceased [1980] 5 Fam LR 813 where Jacobs J observed [at 822] that “there may be states of cohabitation where (the partners) see as much of each other as they can”, to which I would add – “in the circumstances”. But the dominant parameter will be whether or not the individuals concerned may be discerned to regard the premises in question as their home and in so doing to be acting reasonably.

The requirement in section 5(1)(b) that each of the persons provide the other with domestic support and personal care

167 An important pointer in the legislation is seen in the further requirements that one or each of the adult persons is to provide the other with domestic support and personal care. These requirements clearly support the above construction of the term "living together". The key to the correct construction inheres in the notion of two adults living together at the same time as one or each of whom provides and/or receives domestic support and personal care to the other. Whilst it must be acknowledged that there will always be borderline situations requiring close attention to be given to the material circumstances, the expression requiring the provision of "domestic support" would not seem to occasion any particular questions of ambiguity.

168 The other expression requiring the provision of "personal care" may well result in differences of opinion. The expression is not defined. The ordinary meaning to be attributed to this expression is simply the commonsense experience of one person caring in a personal way for the needs of another. In Dridi v Fillmore, Master [now Associate Justice] Macready expressed the view with which I agree, that the expression ‘personal care’ seemed to be directed at matters such as assistance with mobility, personal hygiene, physical comfort and emotional support. Nor would I regard this list as necessarily exhaustive. It is unnecessary to presently determine whether in the absence of the giving of assistance of the type outlined above, the giving of emotional support would qualify on its own as ‘personal care’, although this may well be the case.

169 Hence it is that in cases such as the present, the exercise involves a close examination of all of the evidence in the search for the indicators of whether or not a close personal relationship between two adult persons living together has been shown to exist.

170 Nothing in the trial judge's findings in relation to what were essentially questions of fact are seen to have been infected by appellable error.

171 In particular the perhaps unusual situation which obtained during the 1993 to 1999 periods where the appellant would only sleep in the same premises as the respondent for three or four nights a week, returning to his parents’ home on the other nights, did not mean that the parties were not 'living together' within the meaning of the Act. This indicia of the sharing of a home changed over time, the evidence ranging across matters such as the appellant’s wardrobe allocations, a statement by the appellant to police identifying the Yurunga Drive address as that at which he had lived since 1997 and other close questions of personal habits. It was open to the trial judge to find as he did, that the appellant and the respondent shared a home. It was open to the trial judge [applying the objective test] to reach the conclusion that the appellant and the respondent, acting reasonably, clearly regarded each of the premises rented by the respondent across these periods as ‘their home’: and this notwithstanding that the appellant would return to his parents home on a few days each week.

172 In any event the ultimate de facto relationship permitted contributions made during the earlier period of the relationship to be taken into account: cf Jones v Grech [2001] NSWCA 208 per Ipp JA at [80]-[81] and Davies AJA at [24]-[26].

Valuation of the appellant’s property at the commencement of the relationship in 1993

173 The trial judge erred in failing to identify and determine the value of the property of the appellant in 1993, this being the time at which he found a domestic relationship between the appellant and the respondent to have commenced. The short point is that in endeavouring to value the property of the appellant as at the beginning of the relationship, the trial judge failed to give recognition to the appellant’s accumulated moneys from his earlier working life: evidenced by a term deposit in the sum of $140,000 at December 1994. Although the evidence only showed the $140,000 on term deposit in December 1994, the trial judge should have accepted that this would have been an asset held at least at the start of the relationship in 1993, it being unlikely to have been accumulated only over the first two years of the relationship (1993 to end of December 1994).

174 The making of this error in the trial judge's reasoning was not challenged by the respondent [Transcript 77.11; 79.10].

175 It is not entirely clear why the appellant’s assets were not valued in 1993 [when the relationship commenced] but this may have been attributable to the lack of evidence before the trial judge as to the value of the business in that year [Red 30K]. Counsel for the appellant contended that the trial judge was in error when he estimated the appellant's assets in 1994 at $40,000 [Red 32R] because (aside from the term deposit) the appellant had owned 29,998 shares in the company with a nominal value of $1 per share at the time. Even assuming that the appellant was somewhat correct in this submission, it was inappropriate to include the nominal value of the company’s shares held by the appellant (being $29,998 as set out in the various financial statements in evidence). The nominal value of $1 ascribed to each share was not indicative of the true value of the appellant’s interest in the company. Given that the appellant held 29,998 out of the 30,000 shares in the company [with the 2 remaining shares being held by his mother being effectively of de minimis value: cf the appellant’s concession at T 59:1-5], the total net value of the company should have been used and ascribed to the appellant. However as stated above, the trial judge did not have the relevant financial information nor any other evidence as to the value of the business at the start of the relationship or in 1994 [the first set of accounts for the company in evidence being for the year ended 30 June 2005]. I accept that doing the best he could, aside from the omission of the $140,000 term deposit moneys, the trial judge valued the appellant’s assets in 1994 at $40,000 which included the money in the $14,009 loan account moneys referred to in the 30 June 1995 financial accounts, the International truck, Falcon utility, personal belongings, tools and the like (Red 29H and 32R). The value of $40,000 therefore seemed to be a sufficiently approximate value of the appellant’s business and personal belongings in 1994 [again leaving aside the $140,000 term deposit], in light of the available evidence and the fact that the defendant was a self-employed builder in 1993 [ultimately incorporating that business in 1994].

176 Counsel for the appellant submitted that the trial judge had erred in failing to take into account the “plant and machinery” which the appellant owned at the beginning of the relationship which was ultimately transferred into the company upon incorporation in 1994. It was contended that the plant and machinery figure of $55,283 taken from the financial accounts for the year ended 30 June 1995 was the appropriate value to be ascribed to the plant and machinery said to be owned by the appellant at the commencement of the relationship, prior to the company’s incorporation.

177 In the absence of tangible evidence which would satisfy this Court that the trial judge had erred in failing to include a specific item of particular value, it is inappropriate for the Court to deduce what specific property is encompassed under the “plant and machinery” heading on the 30 June 1995 balance sheet, or that the 1995 figure is the appropriate value to be used in assessing the appellant’s pool of property at the beginning of the relationship. No material assistance was provided by the respective counsel on appeal. In any case, a close reading of the judgment shows that the trial judge did take into account the value of the vehicles, ‘tools and the like’ [Red 29H] at the beginning of the relationship, which was included in the figure of $40,000 referred to above. Some or all of these items may have fallen within the “plant and machinery” account classification on the 30 June 1995 balance sheet when they were ultimately transferred into the company upon incorporation in 1994.

178 In short, as explained in the reasons above, the value of the appellant’s property in 1994 – accepted for these purposes to be the appropriate time at which to value the appellant’s property given the available evidence – totalled $180,000.

Whether the trial judge erred in finding the loan moneys had accumulated between 1996 and late 2002

179 Upon incorporation of the appellant’s business in 1994, the ownership of the truck and other equipment was transferred to the company and a loan account [referred to earlier] in the appellant’s name was established. In the year ended 30 June 1996, the appellant’s loan account is seen to have dramatically increased to $184,851 (Blue 521) and this appears to have been due to the transfer of the appellant’s accumulated moneys from his working life into the company. From the financial year ended 30 June 1996 to the financial year ended 30 June 2002, the appellant’s loan account with the company went from $184,852 to $165,956, a relatively small decrease of approximately $19,000 across the various years. [The appellant contended that this movement in the balance of the loan account was due to the appellant being repaid for his personal expenses (Orange 110T). In any event, the trial judge did acknowledge that some food and utility expenses were met by the appellant: however the respondent paid all of the rent, most of the food expenses and some household expenses in addition to the provision of domestic services.]

180 The trial judge’s reasoning at Red 31U was that:

”[The Fletchers Lane] asset was built up by the use of the loan moneys, which had been accumulated in the defendant’s company’s account, transferred to the defendant in late 2002.”

Counsel for the appellant contended that the trial judge’s reasons with respect to the ‘accumulated’ loan account moneys were misconceived. The submission was that this was a finding that the loan account moneys had been accumulated over the course of the relationship as if they were a product of the company’s enterprises rather than the appellant’s pre-existing savings prior to the commencement of the relationship.

181 The answer to this contention is that, as I observed earlier with respect to the appellant's loan account with the company, the dramatic increase in the loan account in 1996 appears to have been due to the transfer of the appellant’s accumulated moneys from his working life prior to the commencement of the relationship. This is not to be confused with the separate issue of what occurred with this money over the life of the relationship. The trial judge was also entitled to find that the value of the loan account moneys were ‘accumulated’ (or perhaps more specifically, retained to a large extent) during the relationship for the reasons that follow.

182 The trial judge found that throughout the period of the parties’ relationship, the respondent put all of her income into living expenses for either herself, her son from a prior marriage, or the relationship with the appellant, which enabled the respondent ‘to devote himself to his business and accumulate assets’ (Red 27M). In the circumstances this meant that the appellant did not need to utilise much of his own resources: so much is reflected in the relatively small decrease in the appellant’s loan account (it being apparent that personal expenses were often paid for using the company name in which a tax deduction was claimed). This approach to assessing contributions was plainly consistent with the observations of McLelland J in Davey v Lee (1990) 13 Fam LR 688 at 689, in turn referred to with approval by Ipp JA in Bilous v Mudaliar [2006] NSWCA 38 at 41.

183 The trial judge was entitled to find that the loan moneys the appellant built up in the loan account in the company had accumulated between 1996 and late 2002. While the amount seems to have decreased over the years from 1996 to 2002 by approximately $19,000, the appellant was able to retain a significant bulk of it due to the significant contributions of the respondent by way of living expenses.

184 I do not accept counsel for the appellant’s submission that the appellant did not receive an advantage because the $140,000 that was transferred into the company loan account was accumulated by him prior to the relationship and remained substantially the same asset that the appellant had in 2002 when it was withdrawn from the company’s loan account [T 37.25]. This argument fails to take into account the fact that the appellant was able to accumulate/retain this asset because the respondent covered the vast majority of household expenses within the relationship. It allowed the appellant to retain his loan account moneys and later apply those funds to his purchase of the Fletcher Lane property: cf Bilous v Mudaliar supra at [22] where the need to demonstrate a connection between the appellant’s acquisition of property post-termination of the relationship and the respondent’s contributions received recognition.

185 In this way, the respondent made indirect financial contributions to the Fletcher Lane property which was ultimately purchased soon after the relationship ended. This property was funded partly from the loan account moneys (that were withdrawn from the company) and bank borrowings which were ultimately repaid by the appellant. Hence I reject the appellant’s contention [T 56.15] that the respondent made no contributions (financial or non-financial) to the value of the Fletcher Lane property.

Valuation of the appellant’s property at trial

186 The trial judge found that in 2003, when the de facto relationship terminated, the company’s assets were $429,907 and the liabilities were $280,024: hence having a net value of $149,883 (Red 31P, Orange 83D).

a In light of the appellant’s ownership of the vast proportion of the shares in the company, and also his position as sole director as evidenced in the 30 June 2002 annual return, it is not shown to have been inappropriate for the trial judge to have treated the company as the appellant’s alter ego. It was reasonable for the trial judge to ascribe the company’s net asset value of $149,883 (at Red 32F; figure reflected in the 2003 balance sheet summarised at Orange 83) to the appellant personally. No appellable error is demonstrated in this approach.

b The appellant contended that the analysis undertaken by the trial judge of the company's financial position at various times was confused and inherently flawed. The proposition was that at times the trial judge dealt with the gross asset position and, at other times, referred to the net asset position of the company. The proposition was that there is shown to have been a lack of consistency in how the trial judge dealt with the company's financial position. This proposition is rejected. A careful reading of the judgment [in particular at Red 29 et seq] does not demonstrate that the trial judge materially erred in the figures he analysed, and in any event it was reasonable for the trial judge to ultimately take the 2003 net asset figure of $149,883 to value the company.

187 In addition, the appellant held the net value of the appellant’s Fletcher Lane property, which was purchased in early March 2003. The net value in this property was $340,000, being the property’s agreed value at trial of $500,000 less the $160,000 owing by way of mortgage.

188 The Fletcher Lane property was partly funded by the use of the loan moneys which had been accumulated/retained in the company’s loan account and found to be transferred to the appellant in late 2002 (Red 31U).

189 In sum, the trial judge added the following in determining the value of the appellant’s property at trial:

· the company's net value of $149,883 [accepted as the appropriate value at trial, given that there was no evidence of the value of the business at trial: Red 32I];
· the appellant’s net interest of $340,000 in the Fletcher Lane property;
· the furniture that he contributed to the relationship;
· money held in an NAB account; and
· a motor bike.

190 The appellant’s assets totalled approximately $520,000 (Red 32G). I am unable to discern any error in the trial judge’s assessment of the appellant’s assets as at trial.

191 The trial judge found that the respondent’s assets in or around the same time as the start of the relationship were valued at about $10,000 and at trial the same value was put on her existing assets [Red 32U].

192 The exercise of the identification and valuation of the property of the parties can be undertaken as at the date of trial or at the date of termination of the relationship. The starting point is that ordinarily property is valued as at the date of trial for the primary reason that the jurisdiction under s 20 of the Act speaks from the date at which the jurisdiction is exercised: Kardos v Sarbutt [2006] NSWCA 11 at [30] per Brereton J (Basten JA and Hunt AJA agreeing). In the circumstances of this case, it has not been shown to be inappropriate for the trial judge to have valued the pool of assets as at the date of trial.

193 Nor has it been shown that the trial judge failed to take into account the contributions made by the appellant since the date on which the relationship ended. The relevant asset was the appellant’s purchase of the Fletcher Lane property in early 2003 for $255,000. The purchase was funded by the loan account moneys withdrawn by the appellant [shown to be totalling $165,956 in the year ended 30 June 2002: Orange 83] and funds borrowed by the appellant from a bank which were secured over the property. Further funds were borrowed for the renovations subsequently carried out by the appellant to the property. Despite the respondent not being party to the borrowing of funds and their repayment, on a principled global approach taking into account the respective parties’ assets and contributions, it was appropriate for the total $340,000 net value [as at the date of trial] of the Fletcher Lane property to be counted among the pool of assets to be the subject of the property adjustment order by the Court.

Conclusion

194 In the result the trial judge omitted to take into account the $140,000 term deposit which the appellant held at the beginning of the relationship in 1993. Apart from this error, the trial judge is not shown to have erred in his broad evaluation of the respective contributions of the parties, having clearly used his best endeavours, given the difficulties he faced in terms of the available evidence before the Court.

195 It is well established that the Court’s task in an application under s 20 of the Act is to identify and (so far as is possible) value the contributions of the parties to the relationship, and to use its best endeavours to value the property: the Court being empowered, where appropriate, to adjust the parties’ interests in the property in a just and equitable manner: Howlett v Neilson [2005] NSWCA 149; Saric v Steward [2006] NSWCA 260; Chanter v Catts [2005] NSWCA 411; (2005) 64 NSWLR 360.

196 The task that s 20 requires, involves the Court making “a holistic value judgment in the exercise of a discretionary power of a very general kind” (per McClelland J in Davey v Lee, supra, at 689; cited in Manns v Kennedy [2007] NSWCA 217at [62] per Campbell JA; Santow JA and Bryson AJA agreeing). See also Kardos v Sarbutt [2006] NSWCA 11 at [36].

197 In Howlett v Neilson [27]-[28], Hodgson JA observed that the task of identifying and evaluating the respective contributions of the parties for the purpose of s 20 was not a narrow or purely mathematical process.

198 In the circumstances of this case, I am satisfied that the trial judge formed a holistic view of the parties’ contributions throughout the relationship and made an informed value judgment in the process of deciding what adjustment of property was just and equitable having regard to the contributions identified in s 20(a) and (b) of the Act, before arriving at the order of 25% of the pool of adjusted property to the respondent in order to sufficiently recognise and compensate the respondent for her contributions. The trial judge’s oversight of the appellant’s $140,000 accumulated moneys existing at the beginning of the relationship did not detract from the validity of his determination of the respective contributions of the parties over the course of the relationship.

199 There is no discernible error in the trial judge awarding the respondent 25% by way of property adjustment or in the contention that he failed to disclose the reasoning process to such judgment.

Appeal against the costs order made by the trial judge

200 The trial judge ordered that the appellant was to pay the respondent’s costs but reserved to both parties the right to apply within 28 days to vary such an order. Only the respondent exercised this right (her application for indemnity costs being unsuccessful), and the appellant let the order lie. Since it was not challenged, it is inappropriate for this Court to entertain any appeal.

Orders

201 Consistently with the above reasons the proper analysis is that the appellant at the beginning of the relationship had assets valued at a total of $180,000 [$40,000 as originally valued by the trial judge plus the $140,000 term deposit]. At the end of the relationship as found by the trial judge the appellant had assets of approximately $520,000. This reflected an increase of $340,000 in the appellant's assets over the period of the relationship and accepting, as I do, the trial judge's apportionment of 25% of this amount to the respondent, this gives the respondent an entitlement to $85,000.

202 But for that which follows, the orders I would have proposed would have been:

1 Order setting aside the verdict for the respondent entered below.

2 Verdict for the respondent in the sum of $85,000.

3 Order that each party pay his or her own costs of the appeal.

203 However, consistent with principle and being the junior judge I do not press my preferred orders and agree with the orders proposed by Beazley JA: cf McHugh JA in O’Brien v Tanning Research Laboratories Inc (1988) 14 NSWLR 601 at 641; Tasmania v Victoria [1935] HCA 4; (1935) 52 CLR 157 at 183; Metropolitan Water Sewerage & Drainage Board v Histon [1982] 2 NSWLR 720 at 730; John Fairfax & Sons Ltd v Carson (1991) 24 NSWLR 259 at 303-4; Government Insurance Office of New South Wales v Rozniak (1992) 27 NSWLR 665 at 700; Skulander v Willoughby City Council [2007] NSWCA 116 at [59].

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AMENDMENTS:


26/02/2008 - to conform with reasons published on 22 February 2008 - Paragraph(s) multiple

16/04/2008 - Front Cover Sheet - Paragraph(s) Category: Principal judgment


LAST UPDATED:
16 April 2008