New South Wales District Court CITATION: OKSANEN v THOMPSON [2007] NSWDC 2 HEARING DATE(S): 24 November 2006, 14-15 December 2006 JUDGMENT DATE: 17 January 2007 JURISDICTION: Civil JUDGMENT OF: Sidis DCJ DECISION: 1. Within 30 days of the date of these orders the plaintiff is to pay to the defendant the amount of $3,000; 2. Within 30 days of the date of these orders the defendant is to sign all documents and do all things necessary to transfer his interest in the property known as and situate at 4 Kangaroo Street Raymond Terrace New South Wales – Lot 1 & 2 DP 137134 – to the plaintiff; 3. The plaintiff is to indemnify the defendant in respect of all outgoings in relation to the Raymond Terrace property including mortgage payments, loan payments, council outgoings, rates and any other outgoings of whatever nature and kind; 4. In the event that the defendant fails, neglects, or refuses to execute any deed, instrument or document to give validity and effect to these orders then upon the plaintiff filing an affidavit setting out such failure, neglect or refusal a Registrar of the Court is hereby appointed to execute any such deed, instrument or document in the name of the party who defaults and to do all things necessary to give validity to the operation of the deed, instrument or document; 5. Each party otherwise be declared the sole and beneficial owner of all other items of property in their respective possession, custody or control; 6. The defendant is to pay the plaintiff's costs of the proceedings; 7. The exhibits are returned. CATCHWORDS: Adjustment of property interests. LEGISLATION CITED: Property (Relationships) Act 1984 PARTIES: Sandra Kay Oksanen Darren John Thompson FILE NUMBER(S): Newcastle 731/05 Plaintiff - J Mundey COUNSEL: Defendant - I Duane Plaintiff - Antonuccio & Assoc SOLICITORS: Defendant - Macedone Christie Willis JUDGMENT HER HONOUR 1 In this matter, Sandra Kay Oksanen and Darren John Thompson, seek by way of statement of claim and cross-claim respectively, adjustment of their property interests pursuant to s 20 of the Property (Relationships) Act 1984. 2 Their claims arise out of the de facto relationship between them, which extended over the period between June 2001 and August 2003. 3 Each party relied on affidavit evidence upon which they were cross-examined. The applications were heard on 24 November and 14-15 December 2006. 4 The issues concern the extent of the direct and indirect contributions of the parties to the assets of the relationship and the manner in which the property interests are to be adjusted. 5 In the course of these reasons for judgment, when I refer to relationship, I am referring to the de facto relationship which existed between June 2001 and August 2003. 6 As far as direct financial contributions are concerned, the evidence was that Ms Oksanen, at the commencement of the relationship and following a property settlement with her former husband, was the registered proprietor of property at Mount Coolum in Queensland, which was subject to a mortgage. Its net value to her at that time was $176,500. She had recently purchased a takeaway café business with stock for the sum of $37,300. She claimed to have a motor vehicle and superannuation to a value of $9,300. Assuming that all of these assets were then realisable at the amounts stated, her asset position at the commencement of the relationship was $213,800. 7 Mr Thompson at the commencement of the relationship owned a motor vehicle which he claimed in his defence and affidavit evidence to have a value of $20,000. In the course of evidence it transpired that the vehicle was insured at a value of $4,550. He also claimed to have savings of $1,500 at that time. He subsequently indicated in his evidence that he in fact had no savings at the time. His liabilities at the time were $3,218 owed in respect of his motor vehicle and a tax liability of about $2,000. On this basis Mr Thompson was in deficit at the commencement of the relationship. 8 As far as income was concerned, Ms Oksanen initially operated the café business, the proceeds of which by September 2001 did not meet the outgoings. The business ceased in April 2002 after a dispute with the landlord of the property in which it operated. In September 2002 Ms Oksanen commenced employment with Centrelink and she remains so employed to date. 9 Mr Thompson claims to have been employed by Ms Oksanen in the café business on a part time basis at $20 per hour. He said he kept a record of the dates and hours during which he worked but that his records have been lost. He claims to have been unpaid for the work that he did. Otherwise he was enrolled in a Bachelor of Science degree at the University of Newcastle throughout the term of the relationship. There was evidence that after graduation he obtained employment very shortly prior to the termination of the relationship. Whilst a student he was in receipt of two student allowances until September 2002. Mr Thompson claimed that he paid these allowances to Ms Oksanen by way of contribution to their day-to-day expenses. Ms Oksanen stated that he paid money to her on occasion only. 10 The café business ceased in circumstances involving the total loss of the monies invested on the purchase. The parties then purchased in their joint names, a property at 4 Kangaroo Street, Raymond Terrace for $140,000. It was financed by borrowings from the National Australia Bank secured against both the Raymond Terrace property and Ms Oksanen's Mount Coolum property. Mount Coolum was subsequently sold and the net proceeds were applied as to about $55,000 to the reduction of the loan on the Raymond Terrace property. 11 It was agreed between the parties that the current value of this property is $210,000. The mortgage remains at about $112,000, so that the net value of the assets of the parties is $98,000. 12 This is the only asset in respect of which adjustment is sought. There was evidence that Ms Oksanen paid all the expenses of the purchase and all of the mortgage repayments on an interest only basis. 13 There was evidence that Ms Oksanen paid all of the outgoings and expenses of renovations for the property since Mr Thompson left the relationship. 14 As far as indirect contributions are concerned, it was conceded by Mr Thompson that Ms Oksanen undertook most of the housework, involving caring for him as well as her two children. He stated that he did assist with some childcare, gardening and maintenance. 15 The main area of disagreement between the parties involves a claim by Mr Thompson for unpaid wages whilst Ms Oksanen operated the café business. He claims that his records indicated that he is owed the sum of $27,000. As I have already noted, his records are not in evidence because they are said to have been lost. Mr Thompson stated that it was agreed that the purchase of the Raymond Terrace property would be put in their joint names in lieu of payment of these wages. This was denied by Ms Oksanen who contended that it was purchased in joint names on the basis that they were to be married. This was denied by Mr Thompson. 16 It will be seen that the fund involved in these proceedings is of very modest proportions. In ordinary circumstances one would have expected the parties to have resolved for themselves the manner in which this fund was to be distributed. In this case there was a considerable degree of antagonism between the parties. Each party was determined to discredit the other, to the point where I was required frequently during the course of their evidence to remind them that I was not dealing with any criminal proceedings or any question of determining which of the parties was the better party, but simply determining the nature of their contributions to their property interests. 17 I consider that neither of the parties was a particularly satisfactory witness and I am not satisfied that either of them was totally honest with the court. I have therefore, as best as possible, looked to the objective evidence to support their contentions. The result is that in respect of the conflicts which are relevant to the issue of contributions, I have determined that I should prefer the evidence of Ms Oksanen to that of Mr Thompson. 18 There were a number of instances in which Mr Thompson's evidence was discredited. Examples were his overstatement of his assets at the commencement of cohabitation in respect of the value of his motor vehicle and the question of his savings. There were a number of other areas in his affidavit evidence which he accepted or which other evidence established were incorrect. 19 Much emphasis was placed by Mr Thompson on credit card debts said to have been accumulated by Ms Oksanen, before and during the relationship and since its termination. I indicated in the course of debate with Mr Thompson's counsel that I considered this material irrelevant. There was evidence that at the commencement of the relationship, the credit card debts had been substantially paid out by the refinancing of the Mount Coolum property and incorporated into the loan secured on that property. There was evidence that during the relationship the credit cards were used to meet the needs of Ms Oksanen and her children as well as Mr Thompson. 20 There was no evidence that the amounts applied to the credit card debts were used otherwise than for the purposes of the family unit. There was no evidence that Ms Oksanen applied these amounts to her sole benefit or for any purpose of a wasting nature. There was evidence that in any event they were repaid from the proceeds of sale of the Mount Coolum property, which was solely owned by Ms Oksanen. There was no evidence that Mr Thompson made any contribution to their repayment, notwithstanding that the debts were incurred partly to meet his needs. I have not been asked by Ms Oksanen to reduce the net value of the Raymond Terrace property by the amount of the credit card debts accumulated since separation and therefore I have not taken them into account. 21 The result is that I find as follows: 1. There is no evidence of an agreement that Ms Oksanen pay Mr Thompson wages for the hours which he claimed that he worked. There is no evidence that he worked for the hours which he claimed. 2. To the extent that Ms Thompson did assist in the business, the evidence indicated that he was more than adequately compensated by: (a) Accommodation provided and expenses paid by Ms Oksanen for food, clothing, his car loan, university fees and other expenses paid on his behalf. I accept that there was some contribution on his part during this period from his student allowances, although not to the extent that he claimed. (b) The total support provided by Ms Oksanen between September 2002 and August 2003 after the student allowances ceased. 3. Ms Oksanen provided all funds necessary to secure the Raymond Terrace property. 4. Ms Oksanen provided the substantially greater proportion of the income of the parties. 5. Ms Oksanen provided the substantially greater proportion of household services. 6. The rent free occupation of the Raymond Terrace property from the time of separation has been offset by Ms Oksanen's meeting all mortgage commitments and outgoings during that period and the expenses of renovations and repairs to the property. 22 The result is that I accept the contention of Ms Oksanen that it is appropriate to adjust the interests of the parties by requiring that she pay the sum of $3,000 to Mr Thompson and that he transfer his interest in the Raymond Terrace property to her. 23 The orders which I make are as follows: 1. Within 30 days of the date of these orders the plaintiff is to pay to the defendant the amount of $3,000. 2. Within 30 days of the date of these orders the defendant is to sign all documents and do all things necessary to transfer his interest in the property known as and situate at 4 Kangaroo Street Raymond Terrace New South Wales – Lot 1 & 2 DP 137134 – to the plaintiff. 3. The plaintiff is to indemnify the defendant in respect of all outgoings in relation to the Raymond Terrace property including mortgage payments, loan payments, council outgoings, rates and any other outgoings of whatever nature and kind. 4. In the event that the defendant fails, neglects, or refuses to execute any deed, instrument or document to give validity and effect to these orders then upon the plaintiff filing an affidavit setting out such failure, neglect or refusal a Registrar of the Court is hereby appointed to execute any such deed, instrument or document in the name of the party who defaults and to do all things necessary to give validity to the operation of the deed, instrument or document. 5. Each party otherwise be declared the sole and beneficial owner of all other items of property in their respective possession, custody or control. 24 On the question of costs, I am aware that it is a practice, although not a rule of this court, that in matters such as this it is generally appropriate that each party pay their own costs. In this case an offer was made without prejudice as to costs on 14 September 2005 to pay the sum of $5,000 inclusive of costs to the defendant, which would put the defendant in a substantially better position than he is placed in by the orders which I have made. The question is whether it was reasonable for the defendant to have continued with the proceedings. 25 The plaintiff, on the basis of this letter, seeks costs and costs on an indemnity basis. 26 There are two issues that I have to take into account in determining the issue of costs. 27 The first is that it was apparent that each party in this case, as I have already noted, was determined to blacken the credit of the other. I am left with the impression, as a result of their behaviour, that the prospects of an agreement between them were indeed very limited. 28 The second issue is that the decision which I have made in this case has been substantially influenced by the fact that I did not accept the evidence of Mr Thompson on relevant aspects of the proceedings as to the contributions of the parties and that it was apparent that he knew at the time of swearing his affidavits and giving his evidence that he was putting before the court an untrue picture of the situation. 29 In the circumstances it appears to me inappropriate to make orders for indemnity costs. However, I do consider it appropriate that the defendant pay the plaintiff's costs of the proceedings. 30 The defendant is to pay the plaintiff's costs of the proceedings. 31 The exhibits are returned. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.