Costley v Brial [2004] NSWSC 657 (30 July 2004)

Last Updated: 3 August 2004

NEW SOUTH WALES SUPREME COURT

CITATION: Costley v Brial [2004] NSWSC 657



CURRENT JURISDICTION: Equity

FILE NUMBER(S): 1582/03

HEARING DATE{S): 13 and 14 July 2004

JUDGMENT DATE: 30/07/2004

PARTIES:
Robyn Lynne Costley - plaintiff
John Richard Brial - defendant

JUDGMENT OF: Acting Master Berecry

LOWER COURT JURISDICTION: Not Applicable

LOWER COURT FILE NUMBER(S): Not Applicable

LOWER COURT JUDICIAL OFFICER: Not Applicable

COUNSEL:
CM Simpson for plaintiff
DM Flaherty for defendant

SOLICITORS:
Adrian Twigg & Co for plaintiff
Caldwell Martin Cox for defendant


CATCHWORDS:
FAMILY LAW -- de facto relatioship -- lengthy relationship -- significant assets of defendant -- significant 20 (1)(b) role of plaintiff -- conduct post separation -- s 27 maintenance -- provision for re-training -- lack of sufficient evidence --post separation contributions -- relevance of welfare contribution and child support by defendant -- superannuation -- financial resource -- fund to be considered not just defendant's contribution -- s 20 (1)(a) and (b) relevant to any adjustment

ACTS CITED:
Child Support (Assessment) Act 1989 (Cth)
De Facto Relationships Act 1984
Family Law Act 1975 (Cth)
Property (Relationships) Act 1984

DECISION:
See paragraph 107


JUDGMENT:


IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION



Acting Master Berecry

Friday 30 July 2004


1582/03 Robyn Lynne Costley v John Richard Brial

JUDGMENT

1 MASTER: The plaintiff commenced proceedings by way of Statement of Claim on the 25 February 2003 seeking an adjustment of the parties’ interests in respect of property pursuant to s 20 of the Property (Relationships) Act 1984 (the Act). The plaintiff also seeks an order pursuant to s 27 for payment by the defendant to her in respect of maintenance and retraining.

2 The parties commenced living together as a couple in approximately September or October 1985 until approximately August 2002. Throughout that period they lived in a de facto relationship. At the commencement of the relationship the plaintiff was employed as a word processor operator for a firm of solicitors in Sydney. The defendant was employed as a technical officer with Telcom Australia.

3 The plaintiff’s assets at the commencement of the relationship were as follows:

(i) Clothing and personal effects;

(ii) Various items of furniture; and

(iii) Savings of approximately $3000.

4 The defendant’s assets at the commencement of the relationship were as follows:

(i) Land and residence at 2 Maroubra Crescent, Woodbine;

(ii) Vacant land at Wilton;

(iii) Rental property at Algester in Queensland consisting of a three bedroom home;

(iv) Ford Telstar motor vehicle;

(v) Savings in a bank and credit union account;

(vi) AMP Life Policies; and

(vii) Superannuation entitlements.

5 The plaintiff continued in the workforce until early July 1987. She resigned from her employment as a result of complications she was experiencing during her pregnancy.

6 However in August of 1987 she returned on a part-time basis to her former employers and remained in their employ until 16 October 1987 when she ceased work all together. The first child of the relationship was born on 4 February 1988. Subsequently, there were two other children of the relationship. Megan was born on 24 November 1990 and Erynn was born on 20 November 1993.

7 Sometime after the birth of Adam there was a request by the defendant that the plaintiff return to the workforce. However, although there appears to have been some arguments over the defendant’s requests ultimately it was agreed that it was in the best interests of Adam if the plaintiff remained out of the workforce and provided care and homemaking duties for the family unit.

8 The role that each party played during the course of the relationship was one that was traditionally regarded as the role that both a male and a female would play in either a marriage or a de facto relationship. The defendant was employed throughout the relationship. At the commencement of the relationship he was employed by Telcom as a technical officer on a salary package of approximately $48,000. The plaintiff at the commencement of the relationship earned in the first twelve months a sum of approximately $10,000. She worked for the financial year ended 30 June 1987 and earned approximately $11,800. She did some part-time work for her former employer in the second half of 1987 before resigning in preparation of the birth of Adam.

9 The defendant remained employed by either Telcom or Telstra until 1996. In that year he applied for and was successful in obtaining a position with Nortel Networks (Nortel).

10 By 1996 his salary package had increased to approximately $121,000. At the conclusion of the relationship the defendant’s taxable income was $122,209. He was also entitled to other benefits associated with his employment with Nortel.

11 During the defendant’s employment with Telcom his work required him to be based in a number of centres away from Sydney. With the exception of the period February 1987 to January 1990 when he worked at the Campbelltown Telephone Exchange he was employed at regional centres such as Dubbo, Canberra, Brisbane and Perth. He also spent time working at Townsville.

12 Up until February 1987 the Defendant was based in the Dubbo area. His conditions of employment were based on nine day fortnights. His time was structured so that seven nights in each fortnight he would spend at home. The usual practice was that he would leave for work at approximately 3:30am on a Monday or Tuesday and return no later than about 5pm on the following Friday. A similar pattern existed during the time that he worked in Canberra. Obviously when employed in Brisbane and Perth, because of distances, he resided permanently in those centres. There were, however, times when the plaintiff took the children to those centres to be with the defendant.

13 When the defendant commenced employment with Nortel he was based in Sydney until November 1996. His place of employment was at Chatswood. His evidence was that he would start work any time from 6:30am through to 8:30am. His travel arrangements were that he would leave home sometime prior to 6am each morning. He also gave evidence that in the first year he stayed on a number of occasions with his immediate supervisor who lived in Chatswood. It would seem that he would spend most of the week at his supervisor’s residence and return home on Friday evening.

14 During his time with Nortel he was posted to Canada from November 1996 to July 1997. On two occasions he returned to Australia to be with the family, namely Christmas 1996 and Easter 1997. From November 1999 until March 2002 although he was based primarily at Chatswood he had nine overseas trips to the United States, two trips to China and approximately three to four trips to New Zealand.

15 The plaintiff’s evidence was that with the exception of mowing the lawns and being involved with some of the renovations and extensions carried out on the Woodbine property in approximately 1993 the defendant had no input into family life. This was denied by the defendant although he readily conceded that the primary carer for the family was in fact the plaintiff. However, the defendant’s evidence was that from time to time he assisted the plaintiff in looking after the children when they were young, attended some of Adam’s sporting events and had the children with him when the renovations were being undertaken.

16 I do not accept the plaintiff’s evidence that the defendant played no role whatsoever in the non-financial aspect of the relationship. It is difficult to comprehend that in a relationship which lasted 17 years and produced three children that if there was no input by one party that the other party would stay in the relationship for so long let alone have three children. However, leaving that aside, the plaintiff’s own affidavit evidence was that the defendant attended some sporting events of their son. It may well be that his input was fairly minimal.

17 His evidence concerning his employment at Chatswood indicated that on most occasions he would be absent from the home from approximately 6am to approximately 7pm. He conceded in cross-examination that on occasions when he was leaving for work in Canberra or Dubbo that he would go to bed early on the previous night. The inference being drawn from that is that the defendant in all probability was not involved with the children on the evenings prior to leaving for his regional centre. The inference may also be drawn that because of the long hours he worked when based at Chatswood he had very little involvement with the children on returning home each night and in all probability left for work when to the children were asleep. Therefore, it is highly improbable that he assisted in such activities as bathing and feeding the children or spending time with them of a night time.

18 However, I accept the defendant’s evidence to the extent that he spent some time with the children and attended some functions involving Adam. The defendant’s evidence in relation to his involvement with the children at the time of the renovations was that he had them on site with him when he was working on the property. However, in cross examination he conceded that Adam was approximately four years old at that time and Megan was approximately one. He also conceded therefore that the children, especially Megan, would not have spent much time with him during those renovations. I accept that Adam may have spent some time with him but in all probability it was more in the nature of looking in to see what he was doing or being with him whenever the plaintiff took things to the defendant. I do not accept that Adam or Megan would have been with the defendant throughout the course of the day whilst he was working on the property.

19 During the relationship the plaintiff not only cared for the children at home but became actively involved on their sporting activities and in school life, she worked as a volunteer at their primary school and held the position of vice president of the P and F. She was also the primary source of emotional support for the children. The responsibilities fell on the plaintiff to take the children to and from their sporting events and to become actively involved and interested in their school life. Most of this time the defendant was not based in Sydney and it would not have been possible for him to attend school activities conducted during the week. There was no suggestion by the defendant that he attended on a regular basis the sporting activities of the children on the weekend.

20 Although it was not conceded by the defendant that the plaintiff played any significant role in the renovations of Woodbine in 1993 from a practical point of view the contact with the builders would have been through the plaintiff. At the time the extensions were being carried out the defendant was based in Canberra. It seems only natural that a lot the work in terms of liasing with the builders would have fallen on the plaintiff. In relation to actually performing some of the tasks that were not performed by the builders it seems to me that, having regard to the age of Adam and Megan, in all probability the plaintiff’s role was not significant. Her hands would have been fully occupied with the two children.

21 In 1989 and 1990 the defendant had a second job working for his brother. An arrangement was reached with his brother, although without the consent of the plaintiff, that the income the defendant earned would be declared as income earned by the plaintiff. Of course the purpose of doing that was to minimise the defendant’s tax burden. In my view the only characterisation that can be given to that exercise was a contribution made by the plaintiff to the defendant. Whilst she gained no direct benefit the defendant did and that enabled him to retain a greater proportion of his income than he otherwise would have been entitled.

Assets

22 It is not disputed by the parties that the plaintiff brought very little in the way of assets into the relationship. Further, it is not disputed that she made no financial contributions to the relationship once she ceased employment in 1987.

23 I have already listed the assets that the defendant brought into the relationship. Those assets increased both in value and in number in the following 17 years. The defendant purchased Woodbine property in 1981 for an amount of $48,600. At that time the property was subject to a mortgage. At the commencement of the relationship the property was probably valued at about $80,000. There is evidence that in 1989 an appraisal was conducted by Combined Real Estate Campbelltown and in the opinion of the agent the property would have fetched on the market a figure between $115,000 and $120,000. On that basis I would ascribe a figure of approximately $80,000 being the value of the property at the commencement of the relationship in 1985. At the commencement of the relationship the mortgage on the Woodbine property was approximately $35,500.

24 A property at Wilton was also an asset that the defendant had acquired prior to the relationship. That property was purchased in February 1983 in the sum of $18,500. The property was vacant land and remained so until sold by the defendant in February of 1989. At the commencement of the relationship there was a mortgage on that property in the sum of just over $16,000. The sale price obtained on the property was $48,000. The net proceeds of the sale, some $46,000, was deposited in a joint account in the names of both the plaintiff and the defendant. From those funds the moneys were used to all but discharge the mortgage in respect of the Woodbine property and to use the balance of those funds together with other investments to pay for the extensions carried out on the Woodbine property in 1993.

25 The property at Algester in Queensland was purchased in 1980 in the amount of approximately $30,000. That property was subject to a mortgage. The defendant’s evidence was that the property paid for itself and that there was no need for any contributions to be made by him during the course of the relationship.

26 However, in cross examination the defendant conceded that in the financial years ended 30 June 1986 and 30 June 1987 that the income from that property was less than the expenses. It was also conceded by the defendant that the amount of the deficit did not take into account the repayment in relation to principle; it merely took into account the interest payments on the mortgage. There was little evidence in respect of the Algester property.

27 There is a possibility that the plaintiff made contributions indirectly to the reduction to the payment of the mortgage during 1986 and 1987. Moneys earned by the plaintiff during this period were used for the benefit of both parties. It follows that if there were funds available for their joint benefit then the defendant was able to rely to some extent on the plaintiff’s income to use a part of his income to meet the shortfall on the Algester mortgage.

28 Any contribution made directly or indirectly by the plaintiff during this period would not have been a significant contribution. It must be borne in mind that her total income for that two year period was only approximately $21,000. In cross examination the plaintiff’s evidence was that she contributed non-financially to the conservation and improvement of the Algester property. However, her evidence did not disclose that there was a significant contribution made by her. In cross examination she stated that in the 17 year period she had attended the property on one or two occasions, had cleaned out the gutters and made curtains for the property. Her evidence was that six sets of curtains were made.

29 Surplus funds accumulated in respect of the investment property at Algester were placed in accounts with the Bank of Queensland. It would appear that a point in time was reached where the defendant did not have to rely on funds generated by him to meet any short falls in respect of that property. The property was tenanted throughout the period of the relationship with the exception of short periods in 1993, 1995, 1996 and 2000. In total the combined period of when the property was vacant was approximately 14 months.

30 During the relationship motor vehicles had been purchased by the defendant for his own use and vehicles were provided by Nortel as part of a salary sacrifice package. In 1995 the defendant purchased a Ford Falcon wagon for the plaintiff, this vehicle was used by the plaintiff up until after separation. The plaintiff returned the vehicle because, on her evidence, work needed to be carried out on the car and she required the registration papers so that the vehicle could be transferred to her name. The defendant refused to agree to this request. The plaintiff thereafter returned the motor vehicle to the defendant.

31 During the relationship the defendant had a number of insurance policies and a superannuation plan with AMP Life. The first policy was taken out in February 1976 and matured in February 1998, on maturity the defendant received a sum of approximately $21,000. This sum was placed in an account with AMP Bank and it remains there. A second policy was taken out by the defendant in 1981 and matured in 2003, the amount received on maturity was approximately $27,000. As with the proceeds of the first policy the proceeds of this policy were paid into the account with AMP Bank and it also remains in that account. The only drawings on that bank account have been in respect of the defendant’s legal costs. An amount of $6,782.40 has been withdrawn.

32 In 1985 the defendant took out a superannuation policy plan with AMP. That policy was rolled over in February of 1998 into the current superannuation scheme that he has with Nortel, that scheme is known as Nortel Superannuation Plan. The defendant’s evidence is that the rolled over amount was approximately $18,000. A third life policy was taken out in 1992, it matures on 10 September 2008 and the current surrender value of that policy is $21,658.

33 The defendant has been a contributor to the Nortel Superannuation Plan since he commenced employment with Nortel. The evidence in relation to the Nortel Superannuation Plan is very scant. It seems that the defendant can elect to make contributions above the minimum contribution required as an employee of Nortel. Those contributions can be made by either increasing the amount from his salary by way of payment into the plan or alternatively any benefits he receives from the company’s success scheme can, at the election of the employee, be credited to the superannuation plan. The defendant has been part of the company’s success scheme since 1996. It would appear that there are three sources of funds that are credited to the defendant’s entitlement under the plan. Firstly there is the statutory contribution made by the employer, secondly there is the benefit of any growth in the fund investments during the life of the plan, thirdly there are the payments that the defendant as an employee is required to make or additional payments which remain at his election. Whilst the entitlements are not strictly an asset of the defendant, those benefits are a financial resource within the meaning of s 3 of the Act. Section 20 (1)(a) requires the Court to take into account financial resources of the parties and contributions made directly or indirectly in relation to those financial resources.

34 The definition of financial resources in s 3 makes no distinction about the source of the contributions in respect of any superannuation benefit. Therefore, it would seem that that financial resource is to be included when considering whether or not it is just and equitable to make any adjustment to the interest of the parties.

35 Whilst is could not be said that the plaintiff made any contributions in relation to the employers’ statutory contributions or to any growth through investment of the superannuation fund, the legislation does not restrict financial resources just to the contributions made by either party. Therefore, it would seem that if it is established that the plaintiff has made contributions of the kind described in s 20 (1)(a) then she is entitled to an adjustment to be made in respect of the fund rather than just in respect of the contributions that have been made by the defendant through the minimum contributions he is required to make and any election to make additional contributions.

36 During the course of the relationship the defendant acquired shares in a number of companies. Most of the shares acquired by him were as a result of a demutualisation of AMP and the NRMA. The only shares that he has purchased are additional shares with AMP and shares in Telstra. In relation to the Telstra shares he purchased 600 shares in his own name, 500 shares in the plaintiff’s name and 1500 shares in the plaintiff’s name to be held as trustee for each of the children. The shares that he purchased in the plaintiff’s name are shares in which the plaintiff receives a benefit. Her evidence is that she receives approximately $500 a year by way of a dividend payment from Telstra.

37 As a part of his employment package the defendant is also entitled to participate in the Nortel stock purchase plan. He began participating in this plan in March of 2002. The evidence is that he presently holds some 9,295 shares; of that figure 1,624 were purchased prior to the end of the relationship. He also holds a stock option in respect of 8,299 stock option grants. At this stage the defendant has not taken up the option to purchase any of these shares. The benefit of participating in this scheme is that the defendant is currently entitled to take up shares at a price of approximately $US2 below the prevailing share price. The first of these options became available on 7 February 2004. The defendant’s evidence is that he has not taken up that option. If he were to take up that option the benefit to him would be approximately $2,600.

38 Since separation the children have remained with the plaintiff. She has not obtained any employment. Her evidence is that she has looked in the local newspaper but has been unable to find employment. In cross examination she admitted that she still has good typing skills and is familiar with computers as the children have a computer at home which she uses.

39 Initially after separation the plaintiff resided in the Woodbine property. However, she and the children moved out of that property and the defendant re entered. The plaintiff is currently renting other premises in the area. She has taken some furniture and electrical goods with her to the new premises and has purchased others. She has incurred a debt to her mother and also her children. This debt has been incurred, on her evidence, because of her need to supplement the moneys that she receives.

40 The defendant is currently paying the plaintiff in excess of $2,800 a month under the Child Support Scheme. He has at all times made payments under that scheme; there has not been any default by him. The plaintiff also receives funds from Centrelink in the sum of $270 a fortnight, Family Assistance Allowance of $162.12 a fortnight and a Youth Allowance for Adam of $174.30 a fortnight. She also receives the Telstra dividends in an amount of approximately $500 a year. The plaintiff’s evidence is that her combined income is approximately $1,026 a week. Her outgoings, however, are $1,426 per week. There is therefore a deficiency of income over expenditure.

41 Her affidavit of 8 July 2004 in paragraph five sets out the weekly expenses that she has to meet. Some of those expenses she states she is unable to meet at the present time because she does not have the income which would enable her to meet all her expenses. It was conceded by counsel for the plaintiff that the item of furniture and household replacements set out in that paragraph of the affidavit of $93 a week is one that cannot be sustained. The plaintiff has stated in an application for a loan to the Commonwealth Bank that she has furniture valued at $40,000.

42 Bank statements for the Australian National Credit Union (Exhibit 2) show that the plaintiff makes EFTPOS withdrawals from Woolworths or Coles on a regular basis. Some weeks the amount withdrawn totals an amount in excess of $400, in other weeks it is somewhere between $250 and $300. There are, however, a number items where the combined amounts for any particular week are in excess of $300. There was no evidence before me of the nature of the purchases from Woolworths or Coles, it may well be that she buys fruit, vegetables and meat from other shops. However, it cannot be discounted that she uses both Coles and Woolworths as a one shop stop for all food requirements.

43 It seems to me that the amount that she says she spends for food per week of $380 is a figure which is not all that far removed from the items that are set out in Exhibit 2. All of the other items that are set out in her schedule of expenditure are items which appear to be within the bounds of what a parent would have to spend on herself and three children each week. If the amount for the furniture is deducted from the items then her weekly expenditure is approximately $1,330 per week, of that sum she pays rent in the sum of $230 per week. Thus, excluding rent her expenditure is approximately $1,100 per week.

44 The plaintiff also seeks payment under s 27 (1)(b) namely, provision for maintenance to enable her to undertake a training or education programme. The plaintiff’s evidence was somewhat lacking in this aspect of her claim. At paragraph 57 of her affidavit sworn on 27 September 2003 she deposes to the fact that she has made some enquiries in relation various TAFE courses that she would like to undertake. The majority of that paragraph was objected to. However, I gave the plaintiff leave to adduce evidence; that offer was not taken up. There is nothing before me which would indicate what courses she would like to undertake, the duration of those courses, whether they are evening classes or daytime classes, whether she would be required to attend as a fulltime student or on a part-time basis and what the current cost of each course would be.

45 She has, in her affidavit of 8 July 2004, stated that she has been unable to undergo any training or seek any employment. When asked in cross examination about enquiries she has made concerning employment her answer was that she has browsed the newspapers to see if anything is available within the Campbelltown area. She was asked whether or not she has enrolled with Centrelink for the purposes of being provided with the opportunity to seek out employment. Her response to that question was that she has not approached Centrelink or any employment agency. The plaintiff has also indicated that because of the age of the children she would not be able to undertake employment which would not enable her to be home at a reasonable time when the younger daughter has returned from school. Therefore, she would need employment just within the Campbelltown area.

46 In her opinion it is not open to her to try and obtain employment in the City, the amount of time she would have to spend travelling to and from work each day would mean that the children would be, in effect, ‘latch-key kids’. I have some sympathy with that consideration as she has devoted her life as a parent to being at home for the children and has been heavily involved in the children’s activities. However, it would seem to me that such consideration could only be of short duration as the younger daughter will be 12 at the end of next year and then there is probably no reason why she could not go out and look for work in a broader area than just Campbelltown.

47 The plaintiff does not put any time limit on her requirement to work in a position where she can supervise the children before going off to work and be home within a reasonable time after they return from school. As I have already indicated the reality appears to be that the younger daughter is the only who will still be attending school in the foreseeable future. There is some evidence that Adam is likely to start a TAFE course in 2005 that would indicate that he will then be part of the workforce. The older daughter will be in her early teens and will not require the same degree of supervision and care that one would give to an eight to ten year old. In the absence or any realistic approach to training it seems to me that based the material before me I can make no allowance for provision for the plaintiff under s 27 (1)(b).

Areas of dispute

48 Many of the facts and much of the evidence in these proceedings was not in dispute, both parties readily conceded that each played what could be regarded as the traditional role in a relationship where there were children. The areas of controversy were as follows:

(i) The extent of the contributions of the defendant as a homemaker or parent in relation to the welfare of the family;

(ii) Whether the plaintiff has incurred unnecessary expenses post separation;

(iii) Whether provision ought to be made for an order for maintenance pursuant to s 27 (1)(a); and

(iv) Whether the adjustment should be made for future contributions as a parent/homemaker.

49 I have already dealt with the defendant’s non-financial contributions earlier in this judgment. There is no need for me to go back over this matter other than to say that on this matter, on the evidence, whilst the defendant may have made some contributions in the nature of a homemaker those contributions were insignificant compared with the contributions made by the plaintiff.

50 The plaintiff was attacked in respect to the way in which she incurred living expenses and debts after separation.

51 The plaintiff and the children continued to reside in the property until approximately September of 2002. Thereafter the plaintiff and the children vacated the property and moved into rented accommodation in an adjoining suburb. The defendant moved back into the family home. At the time the plaintiff left the property she took a number of items of furniture and electrical goods. She also has made purchases of electrical goods and furniture since leaving the family home. It was put to her that the defendant did not ask her to leave the family home. She conceded that that was the case. However, conditions became intolerable for her to remain in the property.

52 In my view it could not be regarded as unreasonable that the plaintiff wanted to leave the property. Having regard to the history of this relationship it was quite natural that both she and the children would want to live together. There was no suggestion during the course of the hearing that the defendant would have been in the position to care for the children on a fulltime basis. It would have been totally impractical for there to have been any other arrangement other than the care of the children remaining with the plaintiff. In so far as the criticism of her taking some of the family property with her it seems to me that such criticism is unreasonable as these were joint family chattels.

53 In my view it was just as legitimate for her to take those goods for the purposes of using them in the family unit as it would have been for the defendant to use them in the family home once the plaintiff had vacated. It is just an ordinary incidence of living that people need to replace furniture, whitegoods and electrical products from time to time. The fact that the plaintiff did this, in my view, does not indicate any maliciousness on the part of the plaintiff in terms wishing to denude the joint bank accounts of their funds. It is noted that the defendant seemed to regard these funds as exclusively his. Firstly they were funds held in joint a account and she had an entitlement to draw on those funds, secondly the moneys were spent on matters that were necessary for the family unit.

54 In my view the attack on the plaintiff alleging that she had incurred unnecessary expenses post separation was nothing more than a red herring. The predominant areas of controversy relate to whether or not an order should be made under s 27 of the Act and what adjustment of property interest pursuant to s 20 should be made.

55 Section 20 provides as follows:

“(1) On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to:

(a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and

(b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely:

(i) a child of the parties,

(ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties.”

56 Section 20 (1)(a) makes reference to the ‘financial resources of the parties or either of them’. Section 3 of the Act defines financial resources to include as follows:

“(a) A prospective claim or entitlement in respect of a scheme, fund or arrangement under which superannuation, retirement or similar benefits are provided.”

57 In Powell v Supresencia [2003] NSWCA 195, Sheller JA at [7] said as follows:

“Section 79 of the Family Law Act 1975 (Cth), which enables the Court exercising jurisdiction by virtue of that Act to alter the interests of the parties to a marriage in the parties’ property, contains in subs (4)(a), (b) and (c) a reference to contributions to be taken into account by the Court described in similar terms. In Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 523 Mason and Deane JJ said:

‘Although it is natural to assess financial contributions under s79 (4)(a) by reference to individual assets, it is also natural to assess the contribution of a spouse as homemaker and parent either by reference to the whole of the parties’ property or to some part of that property. For ease of comparison and calculation it will be convenient in assessing the overall contributions of the parties at some stage to place the two types of contribution on the same basis, ie on a global or, alternatively, on an ‘asset-by-asset basis’. Which of the two approaches is the more convenient will depend on the circumstances of the particular case. However, there is much to be said for the view that in most cases the global approach is the more convenient.’”

58 His Honour drew the comparison between s 20 (1)(a) of the Property (Relationships) Act and s 79 (4) (a) and (b) of the Family Law Act 1975 (Cth).

59 In Evans v Marmont [1997] NSWSC 331; (1997) 42 NSWLR 70 the Court of Appeal settled the approach to be taken when determining whether or not there should be an adjustment of interest pursuant to s 20 of the then legislation, the De Facto Relationships Act 1984. The current legislation, the Property (Relationships) Act 1984 is, of course, the same piece of legislation as the De Facto Relationship Act 1984 subject to some amendments, those amendments do not affect this application.

60 In Dwyer v Kaljo (1992) 27 NSWLR 728 at 732-33 Mahoney JA said the following:

“It is, of course, possible to determine what has been done by one party for the welfare of the other and to assess the extent to which the welfare of the other has been forwarded by it. But, in my opinion, the assessment of ‘the contributions’ made by one party is not one sided; it cannot have been the intention of the legislature that what one party has done for the other is to be considered - and rewarded - in isolation. Regard must be had to what that party has received in return. Special cases apart, what is contemplated by the provision is, therefore, that it is the balance of the contributions of the one over those of the other which is to be taken into account in determining what justice and equity require the court do. At least, in deciding what ‘to it seems just and equitable’, the contributions of each side are to be had regard to.

“I do not mean by this that what is involved is merely the weighing of the quantum of the benefits: it may be that quality also is to be weighed. But, in the end, it is, I think, the balance between the contributions of each which is or, at least, the contributions of each which are to be taken into account. But such a balance is not to be determined by the number of lawns mowed or dishes washed. The process is to an extent normative. And that leads to the examination of the assumptions underlying the section and the process it requires to be undertaken.”

61 Hodgson J, at first instance, in Dwyer v Kaljo (1987) 11 Fam LR 785 at 793 drew a distinction between fundamental factors influencing adjustment under s 20 (1) and subsidiary factors. His Honour said:

“In most cases, I think the financial circumstances of the parties will be relevant. Certainly, it is necessary for the parties to ascertain what the property of the parties comprises at the time of the hearing, because it is to this that any adjustments of interest have to be made. Further, I think that in most cases the needs and the means of the parties will have general relevance, as subsidiary factors, to the question of what is just and equitable having regard to the plaintiff’s contributions. However, as indicated earlier, I accept that the needs and means of the parties have no relevance except via its relevance to this question: in particular, the court cannot say that because the defendant has $11 million, and the plaintiff has something less than $50,000.00 for that reason it is just and equitable to make an adjustment.

“Other circumstances which may be relevant include such matters as the length of the relationship, any promises or expectations of marriage, and also I think opportunities lost by the plaintiff by reason of the plaintiff’s contributions. This is by no means intended to be exhaustive. I do not think any limit can be set on what circumstances may be relevant, remembering always that the relevance must be to the question, what is just and equitable having regard to the plaintiff’s contributions?”

62 In Stanford v Wallace (1995) 37 NSWLR 1 Mahoney JA once again revisited the opinions that he expressed in Dwyer v Kaljo, supra. His Honour concluded by saying any order made is constrained by having regard to the contributions of the parties and the balance between them. The term ‘contributions’ extends not merely to financial and non-financial contributions to property, but to the more general contributions referred to in s 20 (1)(b). It is those contributions to the property or the financial resources of the parties and to their welfare to which consideration is limited. It is upon this basis that the Court is to determine what is just and equitable in a particular case.

63 In Powell v Suprasencia, supra, at [25] and [26] Sheller JA said the following:

“The homemaker contribution should be valued whether or not one could trace a connection with particular assets or demonstrate that the homemaker contribution represented an indirect contribution to the assets accrued or preserved in the course of the parties’ cohabitation.

“An assumption of equality in value between financial contribution and welfare contribution is not always appropriate: Mallet v Mallet [1984] HCA 21; (1984) 156 CLR 605. However in that case at 625 Mason J said:
‘Thus, the court must in a given case evaluate the respective contributions of husband and wife [under the relevant paragraphs] difficult though that may be in some cases. In undertaking this task it is open to the court to conclude on the materials before it that the indirect contribution of one party as homemaker or parent is equal to the financial contributions made to the acquisition of the matrimonial home on the footing that that party’s efforts as homemaker and parent have enable [sic] the other to earn an income by means of which the home was acquired and financed during the marriage. To sustain this conclusion the materials before the court will need to show an equality of contribution – that the efforts of the wife in her role were the equal of the husband in his.
No doubt a conclusion in favour of equality of contribution will be more readily reached where the property in issue is the matrimonial home or superannuation benefits or pension entitlements and the marriage is of long standing. It will be otherwise when the property in issue consists of assets acquired by one party whose ability and energy has enabled the establishment or conduct of an extensive business enterprise to which the other party has made no financial contribution and where that other party’s role does not extend beyond that of homemaker and parent.’”

64 In Powell v Supresencia, supra, Einstein J at [83] said:

“The following propositions appear to me to have been clearly established as a result of a number of the decisions referred to by Sheller JA, and significantly, following the clarification by the five-member Court decision in Evans v Marmont [1997] NSWSC 331; (1997) 42 NSWLR 70, of matters which had been somewhat inchoate prior to delivery of that decision:
· paragraph (a) and paragraph (b) of Section 20 (1) prescribe the focal points by reference to which the discretionary judgment as to what seems just and equitable must be made. It is by having regard to those matters that the Court may adjust property interests in a just and equitable manner;
· a judgment as to what is just and equitable having regard to those matters will ordinarily have to be made in a context;
· the critical question is “What is just and equitable having regard to the plaintiff’s contributions?”
· Without being exhaustive [it not being possible to set a limit on what circumstances may be relevant to the critical question], matters germane by reason of the context, to the answering of that question may include:
- the length of the relationship;
- any promise or expectations of marriage;
- opportunities lost by the plaintiff by reason of the plaintiff’s contributions
[cf Dwyer v Kaljo (1987) 11 Fam LR 785 at 793]
· These matters are significant because they identify:
- the part played by the factors referred to in paragraphs (a) and (b); and
- the part played by reason of those factors, in determining what is just and equitable in the circumstances.”

65 Having regard to the evidence I am of the view that the plaintiff has made significant contributions to the relationship. The relationship lasted 17 years. At the commencement of the relationship the plaintiff was in fulltime employment and continued to be so employed for a period of approximately two years shortly before the birth of their first child. Although her income was significantly lower than that of the defendant there is no suggestion that the income that she earned was not spent in the relationship. There is also no controversy in relation to the assets that were brought into the relationship at its commencement. The plaintiff had very little by way of assets. Her evidence was that she had an amount of about $3,000 and some clothes and various items of furniture.

66 The defendant’s contribution was significant. He was the owner of three blocks of land, two of which had dwellings on them, one of which was rented; a motor vehicle, bank and credit union accounts, AMP life policies and superannuation entitlements. He was also earning significantly more than the plaintiff. Two of the three properties were subject to mortgages.

67 Throughout the course of the relationship the plaintiff did not acquire any property, either real or personalty, in her own name. Whilst there may have been items of clothing and the like that were hers, household furniture was not exclusively hers it belonged to both her and the defendant although purchased by the defendant. She had an interest in some bank accounts which were held jointly in the parties’ names, however, the funds provided to those banks accounts came from the defendant.

68 At the end of the relationship the defendant held the following assets. I will divide the assets into three schedules indicating those held prior to the commencement of the relationship, those acquired during the course of the relationship and those acquired after separation.

69 Assets acquired prior to the relationship:

Asset Commencement value Present value

2 Maroubra Cres $100,000 $400,000
Woodbine

33 Dalmeny St $29,995 $225,000
Algister

Trailer unknown $200

AMP funds no value $45,000

70 Assets acquired during the relationship:

Asset Value

Household contents – Woodbine $4,000

Tools $2,000

Ford Fairmont sedan (EF11) $8,000 (recently sold for $6,000)

Commonwealth Bank funds $36,000

Bank of Queenslands funds $22,500

Funds on trust for children with Bank of Queensland $3,000

AMP shares (3,574) $21,000

Telstra shares (600) $3,000

IAG shares (532) $2,700

Nortel shares (1,624) $10,500

71 Assets acquired post separation:

Asset Value

Ford Fairmont sedan (BA) $46,000

Funds on trust for children in Commonwealth Bank $6,600

HHG shares (2,981) $3,600

Nortel shares $54,500

72 Financial resources:

Resource Value

AMP Whole of Life Policy – surrender value $21,658

Superannuation – Mercer Trust $466,815

73 Whilst it is conceded by the defendant that the plaintiff made a significant contribution in terms of s 20 (1)(b) it is not conceded that the contribution of a financial or non-financial nature made by the plaintiff in respect of s 20 (1)(a) had the same significance.

74 It is submitted on behalf of the defendant that neither the Queensland property nor the defendant’s superannuation entitlement should be taken into account. It is submitted that there were no contributions made by the plaintiff of either a financial or non-financial nature in relation to the acquisition or maintenance of the Queensland property.

75 It is submitted on behalf of the defendant that there should be no allowance made for the plaintiff in respect of the funds held in the Mercer Trust. The Mercer Trust is the superannuation scheme set up by the defendant’s employer. That fund holds moneys which were rolled over from the defendant’s Telstra superannuation entitlement together with moneys that have accrued through employer contribution, the defendant’s mandatory contributions, elective contributions by him and any growth in the fund.

76 It was submitted on behalf of the defendant that this benefit is not property within the meaning of the Act. The defendant submits that the plaintiff cannot be regarded as having made a contribution under s 20 (1)(b) because it cannot be said that the contribution as a homemaker/parent in any way contributed to a financial resource, namely, the defendant’s superannuation entitlement. Further, it is submitted that a part of the funds held in the superannuation scheme were funds that were accrued as a result of contributions made by a third party to the scheme. Lastly it is said that making an adjustment under 20 (1)(b) would amount to a double dipping of the plaintiff’s entitlements as she may be given credit for contributions of a non-financial nature that were made under s 20 (1)(a).

77 It is clear from the cases that I have already cited that an approach to contribution in respect of a financial resource is to be approached as a global contribution under either limb of s 20. It is clear from s 20 (1)(a) that financial resources are to be taken into account when looking at contributions made by the parties. Section 3 defines financial resources to include an entitlement in respect of a scheme, fund or arrangement under which superannuation benefits are provided. Clearly the intention of the Act is to include financial resources as a part of the assets of the relationship which are subject to contributions made by either party under s 20. It cannot be said that because there are two limbs of s 20 that any allowance made in respect of an adjustment in favour of the plaintiff would necessarily amount to a double dipping under the two limbs of the section. Any allowance made is made because of contributions made by the plaintiff or either a financial or non-financial nature dealing with assets of that relationship and contributions made as parent or a homemaker or to the welfare of the other party to the relationship. Therefore, the approach is a global approach to determining whether or not contributions have been made and, if they have, the amount by way of adjustment that should be allowed to the plaintiff.

78 The defendant’s submission that homemaker contributions cannot be regarded as a contribution to a financial resource clearly cannot stand when one has regard to s 20 (1)(a) and s 3. In respect of the submission that no allowance can be made because there has been a financial contribution made by a third party also cannot stand. Section 3 refers to a prospective claim or entitlement in respect of a scheme. Section 20 (1)(a) makes reference to the financial resources of the parties. The evidence of the defendant is that currently the financial resource in respect of the superannuation fund is approximately $467,000. Section 3 makes no distinction between contributions made to the scheme it merely refers to an entitlement with respect to the scheme which results in a superannuation or retirement or similar benefit. Therefore, in making an assessment of the value of the scheme as at the date of separation it is the funds that are held in the scheme rather than the source of the contributions to the fund.

79 It is clear because of the length of the relationship and the evidence concerning the plaintiff’s involvement in respect of the family’s welfare and the non-financial contributions that she made to the acquisition or improvement of property that was acquired or improved during the course of the relationship that she has made a significant contribution. In my view it is not necessary for there to be evidence put on by the plaintiff setting out how the Mercer Trust scheme is to operate with all the permutations in relation to the possible retirement of the defendant and possible death scenarios.

80 Reference was made to In the Marriage of West and Green 16 Fam LR 811. It is submitted on behalf of the defendant that in that case the onus was on the wife to put evidence before the Court on those permutations. In my view, that was not a requirement of that case and whilst in that case there was reference to the possible scenarios that would flow from being a member of that fund the Court treated the real current retirement benefit to the husband as amounting to $237,000. It was that figure that his Honour then used as a basis for determining the amount of any adjustment that should be made in favour of the wife. The approach that the Court took is the same approach that I have taken in respect of the assets of this relationship. It would seem to me that in terms of the superannuation fund a similar test should also be applied to those funds. The defendant has put in evidence the current value of the fund.

81 Therefore, it seems to me that the current value should have a multiplier in which the years of the relationship over the length of time that the defendant has contributed to superannuation schemes up until June 2004 divided by 50% is the appropriate calculation to determine the value of the contribution made by the plaintiff during the relationship. I therefore apply that formula to the amount of $467,000 shown as that financial resource.

82 It is clear from the earlier authorities that I have cited that the courts approach to superannuation contributions is that they are to be approached globally and that homemaker contributions are to be a part of a formula in determining whether or not a contribution has been made by a partner to the other partner’s superannuation resources.

83 Therefore, it is submitted on behalf of the defendant that the total asset pool to be considered under s 20 has a current value of about $460,000. It was submitted that the plaintiff would not be entitled to an adjustment which would reflect an interest greater than 50% of the total value of the assets. On that basis it would seem that the defendant’s position is that any adjustment made in favour of the plaintiff would amount to no more than approximately $230,000.

84 In my view taking such an approach flies in the face of the authorities that I have already referred to and to the definition of ‘financial resource’ in the Act and the specific mention in s 20 (1)(a) of financial resources. It seems clear from the authorities that I have cited that superannuation is an asset to be taken into account when determining adjustment between the parties provided it can be linked as either a financial or non-financial contribution made by a party. Of course, the plaintiff has made no direct contribution to either the superannuation scheme or to the shares that the defendant has acquired.

85 It is clear from the evidence, most of which was not challenged, that the role that the plaintiff played as a homemaker was substantial. Throughout the course of the relationship she maintained the home and was the primary carer not only for the children but also for the defendant’s domestic needs. She spent the greater part of the relationship alone whilst the defendant advanced his career by taking positions outside of the Metropolitan area. Much of the burden that would normally be shared by parents fell on her. In my opinion her contributions were equal to the contributions made by the defendant.

86 When the plaintiff commenced employment with Nortel his work patterns changed slightly but there were still significant periods of time when he worked outside of Sydney. During the time when he worked in Sydney, on his own evidence, he would generally leave home before six o’clock in the morning and not return to about seven o’clock each night. Once again, then plaintiff played the significant role of the partnership as carer and homemaker.

87 The approach to be taken in considering the question of adjustment of interest where there has been a long relationship and one where one party has taken an almost exclusive role in respect to the non-financial and homemaking elements of the relationship was discussed in Mallet v Mallet, supra.

88 It is clear from the authorities that for any adjustment to be made there must firstly be a contribution or contributions that are identified in s 20 and secondly it must be just and equitable to make adjustments having regard to those contributions. Of course, it follows that were the contributions have been insignificant no adjustment should be made.

89 It is also clear from the authorities that contributions do not have to be specifically identified with a particular financial resource or asset. It is enough for the Court to make an adjustment based on the evidence that supports the proposition that if the financial and/or non-financial contributions and role as a homemaker have been significant an adjustment is to be made.

90 In my view, having regard to the length of the relationship and the quality of the role that the plaintiff played as homemaker and carer, the adjustment that should be made in favour of the plaintiff is 50% of the value of the assets in which she has made a contribution under either s 20 (1)(a) or (b).

91 With respect to the Woodbine property, the tools and household contents, the Fairmont sedan FE11, the funds with the Commonwealth Bank, the funds with AMP, the shares with AMP and the shares with Nortel to the extent of 1,624 the plaintiff is entitled to an adjustment on those items of 50%. However, in arriving at a figure the property at Woodbine I give a net value of $320,000; that figure is arrived at by deducting from the current value the value of the property at the commencement of the relationship, which was approximately $80,000. In relation to the funds with AMP and the shares with Nortel, I have made adjustments taking into account the defendant’s sole contributions made prior to the commencement of the relationship and post separation. The adjusted figure, as I have already indicated, is an order providing for a 50% adjustment of the value of those assets.

92 In relation to the financial resources, the AMP Whole of Life I note the surrender value and I note that some of the value of that policy has accrued since the separation of the parties and I have, therefore, taken that into account. Similarly, with the superannuation I note that at the commencement of the relationship the defendant had accrued approximately $11,000 in superannuation entitlements and I note, that in the absence of any evidence before me dealing with the accrual rate and investment rate of the policy, that on average since the defendant’s superannuation assets have been managed by the Mercer Trust that they have increased in value at the rate of approximately $58,000 per annum. The last two years are a period after the separation of the parties, therefore, adjusting the value of the fund by taking into account the period after separation and the period prior to the commencement of the relationship, I have allowed the plaintiff 50% of the notional value of those funds.

93 In respect of the Ford Fairmont sedan, the defendant’s evidence is that he sold that motor vehicle after separation and received approximately $6,000, that motor vehicle was acquired during the course of the relationship, therefore the plaintiff’s contribution to that is to the extent of 50%.

94 The funds held with the Commonwealth Bank were funds accumulated during the course of the relationship and the plaintiff has an entitlement to 50% of those funds.

95 The funds with AMP relate to funds acquired not just during the course of the relationship, to the extent that funds were accumulated either prior to the commencement of the relationship or post separation then no allowance is made for contribution by the plaintiff in respect of those portions. However, to the balance 50%.

96 In relation to the AMP shares that were acquired during the relationship is 50% of those shares.

97 In respect of the Nortel shares, the majority of the shares were acquired by the defendant post separation. Therefore, an adjustment has been made in respect of the shares that were acquired prior to the separation of the parties. The value of those shares is approximately $2,500. Therefore, the plaintiff is entitled to an adjustment of 50% of those shares.

98 In relation to the financial resources, in my view, the plaintiff should receive an adjustment in respect of the AMP Whole of Life Policy. That policy was taken out during the course of the relationship by the defendant. Of course, the defendant being the only partner who was earning an income used his income to pay the premiums on that policy. That policy continues to run. Therefore, the plaintiff should be entitled to an adjustment representing 50% of the current surrender value of the policy less an allowance in respect of the period between separation of the parties and June 2004.

99 Therefore, in my view, an adjustment should be made in favour of the plaintiff in the sum of $395,000.

Post separation contributions

100 It is submitted on behalf of the plaintiff that in making an adjustment in favour of the plaintiff regard should be had to the fact that the plaintiff has the day to day care of the children of the relationship and therefore, the continuing contribution that she makes to the family should be recognised in any adjustment made in her favour. Counsel for the plaintiff relies on Foster v Evans, unreported 31 October 1997 Bryson J, BC9705742. His Honour was of the view that the word ‘family’ is a word of very wide meaning that connotes many different connections among persons and many of those connections are irrespective of whether they form a household. In his Honour’s opinion s 20 (1)(b) does not require a contribution to be made during the relationship. In his Honour’s opinion the contribution to the welfare of a family, including to the child of the partners, after the relationship itself has ended can be clearly seen. The view of his Honour was that there may be circumstances in which contributions post separation should be taken into account because of the continuing welfare provided by one party to the family.

101 An example of where such an order may be made by the Court would be where the defendant was asset rich but liquid poor. Thus, the defendant may avoid any liability under the Child Support (Assessment) Act 1989 (Cth) because his income is so low that he was assessed as not liable to make any payments pursuant to the legislation. In such a case it would mean that unless there was an adjustment made in respect of assets post separation the burden of looking after the family could be borne by the party not having any assets which would give a clear benefit to the other party. Therefore, in those circumstances it would be just and equitable for any adjustment made under s 20 to take into account the role played by that person post separation. Another example which could give rise to contributions being taken into account post separation could be where a child of the relationship is over the age of 16 years and because of the handicap that child has the burden falls on the party with custody of that child, but has no entitlement to apply for an order under s 27 because of the age of the child.

102 In my view the plaintiff clearly falls under s 27 (1)(a)(i) as she has the responsibility of caring for the children, one of whom is under 12 years of age. However, having regard to the to the welfare assistance and payments being made in respect of the three children pursuant to the Child Support (Assessment) Act 1989 (Cth) it is not appropriate to make an adjustment in respect to the post separation period.

103 However, in my view it is not unreasonable if provision be made for the defendant to pay to the plaintiff an amount representing provision for maintenance pursuant to s 27 (1)(a)(i).

104 At the present time the youngest child is 10. The plaintiff has indicated that she wishes to be in a position where she is at home to see the children off to school in the morning and to be there when they return from school. It seems to me that having regard to the age and the present circumstances of the older two children that that desire is unreasonable. However, in relation to the 10 year old child and having regard to the way in which the family unit operated it is not an unreasonable desire by the plaintiff. In my view the plaintiff should be entitled to continue the role that she has fulfilled throughout the course of the relationship in respect of the children. Therefore, there should be provision made for her in accordance with s 27.

105 In my view it would be unreasonable, however, to make provision by way of an adjustment under s 20 which would enable to plaintiff to continue to look after the welfare of the children once they are into their teens on the same basis as she did when they were younger. The relationship between the plaintiff and the defendant has come to an end the legislation makes it clear that there should not be ongoing financial obligations by one party to the other. It is incumbent upon the plaintiff to at some stage over the next 18 months to attempt to get back into the workforce, albeit on a part time basis.

106 It is clear the current level of income is not meeting the family needs. It is also clear that a major burden in respect of those funds is the payment of rent. There are debts that plaintiff has also incurred which at some stage will need to be reduced. There is no dispute that those debts have been incurred in relation to the plaintiff looking after the children. They are debts incurred in to context of the legislation for a legitimate purpose. In my view, therefore, an order should be made that the defendant pay to the plaintiff by way of maintenance pursuant to s 20 (1)(a)(i) the sum of $300 per week. The youngest child turns 12 in approximately one year and four months. In my view it is in the interests of both parties to these proceedings for there to be a one off payment rather than a series of payments although, having said that, I note that the defendant has no difficulty in meeting his obligations under the Child Support (Assessment) Act 1989 (Cth). Therefore, the order that I make is that the sum of $300 per week be paid by way of a lump sum payment. That lump sum payment equals approximately $20,400.

Orders

107 Therefore, pursuant to s 20 of the Act there be an adjustment of interests of the parties in the property so that the plaintiff receives a payment out of those assets in the sum of $415,000. The defendant is to pay the plaintiff’s costs of the proceedings.



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LAST UPDATED: 30/07/2004