BROWNLEE (FORMERLY READETT) v STANFORD SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL HANDLEY, CRIPPS JJA and O' KEEFE AJA 6 September 1993, 6 September 1993 [1993] NSWCA 40 Following the breakup of her former marriage, the appellant moved into the home of the respondent under a semi business arrangement whereby she would have free accommodation in exchange for performing household duties and buying food for both parties. After some months a sexual relationship developed and the parties became de facto partners. Thereafter the appellant's children by her former marriage also moved into the house. After some two and a half years the de facto relationship came to an end. The Master accepted the respondent's evidence in preference to that of the appellant and found that she had not made any substantial contribution from her capital, her income, or by her work to the maintenance or improvement of the respondent's house. The partners had not pooled their financial resources. The Master also found that the appellant's contribution as homemaker to herself, her children by the former marriage and the respondent did not entitle her to a property adjustment order. On appeal: Held: The appeal should be dismissed because the appellant had failed to establish that the Master's exercise of his discretion had miscarried. In particular the appellant had failed to demonstrate that she was significantly worse off financially or personally as a result of having entered into the de facto relationship than she would have been had she lived elsewhere and she had also failed to demonstrate that the respondent was financially better off as a result of having entered into the relationship than he would have been if he had continued to live by himself. Handley JA This is an appeal by Susan Patricia Readett from the decision of Master McLaughlin who dismissed her application for a property adjustment order under the De Facto Relationship Acts 1984. The appellant was divorced from her former husband by decree absolute on 6 October 1987. There were two children of that marriage, Leone Patricia, born in August 1977, then aged ten and James Edward, born in October 1980, then aged seven. In the same month the appellant moved into the respondent's home at Evans Road, Toukley on the Central Coast. She was not accompanied by either of her children: her son remained with his father and her daughter with the appellant's mother near Dubbo. The appellant moved into the respondent's home under a semi-business arrangement. They had known each other since school days and the arrangement was that she would have free accommodation in exchange for performing household duties, including buying food for both of them. Some months later the parties commenced a sexual relationship and by early 1988 they had become de facto partners. Progressively the parties were joined by the appellant's children. Although on the Master's findings the relationship was an unstable one, he nevertheless accepted that it was a de facto relationship within the Act and since it lasted for more than two years there was jurisdiction under the Act to make a property adjustment order in favour of either party. The appellant based her claim to such an order upon various contributions which on her case she had made to the relationship and to the property of the parties, particularly the house property of which the respondent was the legal 2 UNREPORTED JUDGMENTS owner. She relied upon capital contributions arising from the division of the property of her former husband and herself through the Family Court. Secondly she relied upon her income contributions from her pension and from her part time employment with Sara Lee Kitchens. She also asserted that she contributed directly to improvements to the house by way of physical work such as tiling, painting and by the purchase of items such as tiles, paint and curtains. Finally she relied upon her contribution as a homemaker both to the respondent as the man in the house and to her children, who were accepted into the household of the de facto partners after the de facto relationship commenced. On the basis of these contributions or some combination of them the appellant sought an order from the Master that she receive an amount of up to $30,000 from the proceeds of the sale of the Toukley house. S20(1) of the De Facto Relationships Act provides: "20. (1) On an application by a de facto partner for an order under this Part to adjust interests with respect to the property of the de facto partners or either of them, a court may make such order adjusting the interests of the partners 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 de facto partners to the acquisition, conservation or improvement of any of the property of the partners or either of them or to the financial resources of the partners or either of them; and (b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the de facto partners to the welfare of the other de facto partner or to the welfare of the family constituted by the partners and one or more of the following, namely: (i) a child of the partners; (ii) a child accepted by the partners or either of them into the household of the partners, whether or not the child is a child of either of the partners." At the end of the relationship the appellant retained a motor vehicle, not the motor vehicle which she had when she commenced the relationship but a newer one which she had bought while the relationship existed, some furniture and her personal possessions. Although there is evidence that she had a fixed deposit and a savings account with the Commonwealth Bank during 1988 and 1989, there was no evidence as to what moneys, if any, she held in the bank when the relationship came to an end. When the appellant first moved into the respondent's house she was in receipt of a social security pension. The de facto relationship terminated the appellant's legal entitlement to the pension, but she continued to receive the pension and spend the money. At some stage the Department discovered the true position, pension payments ceased and she was required to repay approximately $2,500. The evidence discloses the appellant's part time earnings with Sara Lee Kitchens. Her group certificates are in evidence for the years ended June 1989 and June 1990 and for the broken period after July 1990 before the relationship came to an end. The amounts are not insubstantial. The respondent entered the relationship as the owner of the Toukley property although it was subject to two mortgages. He also had a steady job as a sheetmetal worker, working for Stanford Stainless Steel Pty Ltd, a job which he had held for seventeen years. The Master found that the respondent's income was three times greater than that of the appellant. He also found that there was no pooling of financial resources. It is common ground that there was no formal pooling because each party maintained his or her own separate bank account or URJ BROWNLEE (FORMERLY READETT) v STANFORD (Handley JA) 3 accounts. However the appellant's evidence was that there had been an informal pooling of financial resources, that from time to time she gave cash to the respondent, reimbursed him for expenses that he had paid on her behalf and paid money into his bank account. The Master rejected this part of the appellant's evidence. The Master set out at some length his analysis of the evidence of the appellant about the various contributions that she claimed to have made to the property of the parties, particularly the house, and to the relationship as such. A credit issue arose at the trial. Apart from a valuer who gave evidence about the value of the Toukley property the only witnesses were the appellant and the respondent. There was also some documentary evidence. The evidence of the appellant and the respondent conflicted in significant ways but the Master accepted the evidence of the respondent in preference to that of the appellant where they conflicted. Except for one matter the primary findings of fact by the Master have not been challenged in this appeal. This is understandable, bearing in mind the difficulties which confront an appellate court in reversing credibility based findings of primary fact. The only point at which Mr Coombs did challenge the primary findings of the Master related to what he said was the Master's error in assessing the capital contributions made by the appellant. The Master found that the appellant brought into the relationship capital contributions arising out of her divorce settlement which consisted of items of furniture and other domestic chattels, and the proceeds of sale of two dining suites and a microwave oven, totalling about $4000. The evidence demonstrates that in truth the appellant brought into the relationship larger sums of money, representing her share of the proceeds of the sale of the former matrimonial home, her share of the sale of household items and the like. These matters are documented in correspondence from her solicitors and could not be the subject of any dispute. To this extent it does appear that the Master may have overlooked some of the capital assets which the appellant had at the commencement of the relationship. Nevertheless it seems to me for reasons which will emerge more fully later, that the appellant has failed to demonstrate that any of this extra capital was invested in any permanent form in the house at Toukley. The evidence was left in a state where it was not clear just how much of this money was spent during the relationship, and how much was retained by the appellant at the end of the relationship. However it is apparent that the appellant sold the car that she had at the start of the relationship, bought a newer and more expensive one, and met the running costs of these vehicles from her own resources. There is also evidence of a holiday in Queensland, her medical and dental expenses which were not fully covered by Medicare, and trips to her parents near Dubbo. There is also evidence of substantial withdrawals from her bank account over the Christmas/January period 1988 to 1989 and at Easter 1989, although the nature of this expenditure was not explored in the evidence. The Master was not prepared to hold that any payments in reduction of the mortgages on the Toukley property had been made out of the appellant's resources. In fact he was satisfied that all such payments had been made by the respondent. 4 UNREPORTED JUDGMENTS So far as the appellant's income contributions were concerned, the Master found for reasons that he gave that he was not satisfied that her income from all sources was sufficient to do more than merely cover the purchase of food for the household, that being her agreed contribution to the household expenses. The Master was also not satisfied that she had made any direct contribution to the other household expenses. So far as the improvements to the house were concerned, there was significant conflict between the evidence of the appellant and the respondent and, as I have said, the Master accepted the respondent's evidence and concluded that the appellant's direct contribution by way of labour and expenditure for improvements including painting was of a modest nature. He also found that there was no evidence of the extent to which painting by the appellant had increased the value of the property. He was not satisfied that there had been any significant expenditure by the appellant for the other work that was done on the property after the relationship began other than a concrete slab in the garage which cost her some $500. The Master also rejected her evidence that her funds had been used in December 1987 to repay a loan which the respondent had obtained from a bank at Blacktown. So far as her non cash contributions were concerned the Master found that the appellant had, in accordance with the arrangement she had made with the respondent, done the housework but he considered that since this was done under that arrangement it did not give rise to any entitlement to a property adjustment order. Finally there was the question of her contribution as a parent and homemaker. Undoubtedly the respondent developed some relationship with the appellant's children which involved both time and an emotional investment on his part and gifts and other expenditure by him for their benefit. Mr Coombs for the appellant submitted that the contribution that she made to the welfare of her own children while they were living in the respondent's house constituted a significant factor towards establishing her entitlement to an order under the Act. The Master rejected this submission and considered that the appellant's contribution to the welfare of her own children in the context of this relatively short relationship was not such as to attract any entitlement to an order. Ihave already attempted to explain why it seems to me that the submission that there was an error by the Master in overlooking all the capital moneys received by the appellant after she moved into the house at Toukley lacks decisive significance in the context of this appeal. An appellant who seeks to challenge a decision made by a court in the exercising of a judicial discretion faces a formidable hurdle. Such an appellant must demonstrate some error on the part of the trial court. It is not enough merely to establish that the appellate court would have come to a different decision. The decision of the trial court has to be shown to be outside the range of a sound discretionary judgment. The matters which authorise appellate review of the exercise of a judicial discretion are familiar and are set out in the judgment of the High Court in House v The King 55 CLR 499 at 504,505. In my opinion apart from the one factual matter, the appellant has failed to demonstrate any error on the part of the learned Master in the exercise of his discretion. In particular the appellant has failed to demonstrate that she is URJ BROWNLEE (FORMERLY READETT) v STANFORD (O'Keefe AJA) 5 significantly worse off financially or personally as a result of having entered into this de facto relationship than she would have been had she lived elsewhere. The appellant has also failed to establish that the respondent is financially better off as a result of having entered into this relationship than he would have been if he had continued to live by himself. In this respect the case is in my view quite unlike Black v Black (1991) 15 Fam LR 109 (CA) or Dwyer v Kaljo (1992) 27 NSWLR 728 to which reference has been made. For all those reasons I propose that the appeal be dismissed. Cripps JA I agree. O'Keefe AJA I agree. I think that the judgment of the Master discloses no error of a kind that would cause this Court to intervene. Indeed, in my opinion, a careful reading of his judgment indicates that the Master applied his mind carefully to the task in hand and came to his conclusion in accordance with the principles laid down by this Court. Handley JA. The order of the Court therefore is that the appeal be dismissed with costs. Counsel for the Appellant: JA Coombs Instructed by: Kearns and Garside Counsel for the Respondent: RE Quickenden Instructed by: Bruce Jay