New South Wales District Court CITATION: Dunstan v Rickwood [2006] NSWDC 119 HEARING DATE(S): 9-11 October 2006 JUDGMENT DATE: 14 December 2006 JURISDICTION: Civil JUDGMENT OF: Goldring DCJ DECISION: 1. The plaintiff's claim is dismissed. ; 2. The cross-claim is allowed to the following extent:; a. the plaintiff must transfer his interest in the Ainslie property to the defendant, and, in consequence, I make the orders sought in paragraphs 2-5 inclusive of the cross-claim; and; b. within 28 days, the plaintiff must pay to the defendant the sum of $70 750 CATCHWORDS: Property relationships - Just and Equitable LEGISLATION CITED: Property (Relationships) Act 1984 Saric v Steward [2006] NSWCA 260 Chanter v Catts [2006] NSWCA 411 CASES CITED: Howlett v Neilson [2005] NSWCA 149 Norbis v Norbis (1968) CLR 513 Kardos v Sarbutt [2006] NSWCA 11 Bilous v Mudaliar [2006] NSWCA 38 PARTIES: Ross Dunstan (Plaintiff/Cross Defendant)) Julie Rickwood (Defendant/Cross Claimant) FILE NUMBER(S): 942 of 2005 COUNSEL: G. Brsztowski SC (Plaintiff) R. Maurice (Defendant) SOLICITORS: Crowley Clifford Simpson (Plaintiff) Lessli Strong & Associates (Defendant) JUDGMENT 1 The plaintiff and the defendant formed a de facto relationship in 1993. This relationship ended in September 2002. 2 The plaintiff seeks an order under the Property (Relationships) Act, 1984 (henceforth "PRA"), s 20. The defendant has made a cross-claim. The issues for determination in these proceedings are: a. The capital contribution made by each party to the relationship; b. The value (as at the date of judgment) of the capital contribution of each party as those contributions stood when the relationship ended in September 2002; c. Whether the contribution of either party contributed significantly to any increase in the value of property; d. Issues arising out of the transfer of a one half share in the property at Duffy Street, Ainslie, which was initially agreed upon in about August 1999, which was the subject of a written agreement between the parties in June 2000, and which was completed by registration of a transfer in August 2002; e. The nature and value of other contributions made by each party to the relationship; and f. What order, if any, should be made pursuant to PRA s 20(1). The Law 3 The PRA, s 20, provides: 20 Application for adjustment (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. (2) A court may make an order under subsection (1) in respect of property whether or not it has declared the title or rights of a party to a domestic relationship in respect of the property. 4 The most recent statement of the law to be applied is in the Court of Appeal, in Saric v Steward [2006] NSWCA 260 and Chanter v Catts [2005] NSWCA 411. In Saric, where she considered the earlier decisions, McColl JA summarised the law as follows: "61 The exercise of jurisdiction under s 20 of the PRA involves three steps: "(1) identification and valuation of the property of the parties; (2) identification and valuation of the respective contributions of the parties, of the types referred to in s 20; and (3) determination of what, if any, order is just and equitable having regard to these contributions." See Howlett v Neilson [2005] NSWCA 149; (2005) 33 Fam LR 402 (at [25] per Hodgson JA, Ipp and McColl JJA agreeing); Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 at 523 per Mason and Deane JJ, (with whom Brennan J generally agreed). 62 In Kardos v Sarbutt [2006] NSWCA 11; (2006) 34 Fam LR 550 at [29] Brereton J (with whom Basten JA and Hunt AJA agreed) said that the second step "typically though not invariably results in an apportionment between the parties on a percentage basis of the overall contributions of the types referred to in s 20 of each of them, made to the date of hearing", while the third "typically results in an order which leaves the applicant with that percentage identified in the second step of the divisible property identified in the first step." However it is also fundamental, as his Honour pointed out (at [51]) that the PRA "… does not dictate the employment of any particular method in the formulation of an appropriate order for the adjustment under s 20 of property interests, and it is not desirable to attempt to formulate principles or guidelines designed to constrain judicial discretion within a predetermined framework". 63 Thus, the Court has "a broad discretion in determining the approach to adopt in considering what order to make under s 20(1): Bilous v Mudaliar [2006] NSWCA 38 at [42] per Ipp JA (Giles and McColl JJA agreeing). Two approaches are usually referred to, global and asset-by-asset: Kardos v Sarbutt (at [51]). In Bilous v Mudaliar Ipp JA observed (at [43]): "43 If a global approach is adopted, regard must still be had to the origin and nature of the different assets. If an asset-by-asset approach is adopted, care must be taken to avoid the risk of undervaluing domestic and non-financial contributions and regard must be had to the overall result: Kardos v Sarbutt at [51] and [54]. Some situations do not lend themselves either to a pure global approach or to a pure asset-by-asset approach. In some cases the judge may decide to have regard to the particular contributions made to individual assets, weigh up the overall respective contributions to the parties and make differing apportionments in relation to the interests of the parties in different assets. 5 I intend to apply here the principles set out in those authorities. Residence of the parties 6 During the relationship the parties lived together at a property in Duffy Street, Ainslie, in the ACT. Before the relationship began in 1993 the defendant had been the registered proprietor of this property, subject to a mortgage. The plaintiff had a property on the South Coast of NSW, but during the relationship he sold this property and bought another property at Mossy Point, also on the South Coast of NSW. He still has this property and, at the outset of the hearing of this matter, I determined that this was his permanent residence at the time these proceedings were commenced. It follows pursuant to PRA, s 15(1)(a), that this Court has jurisdiction to determine the matter. CONSIDERATION OF THE MATTERS REQUIRED BY S 20 - Capital contribution to the property of the parties to the relationship 7 When the relationship began in 1993, the plaintiff owned a property at Lilli Pilli, on the south coast of New South Wales, which he regarded as his principal residence, and another property in O'Connor in the ACT, which was rented to tenants and produced a market rent of about $190 per week for the plaintiff. Each party had a motor vehicle, a small amount of superannuation, and the defendant had a few shares and some Commonwealth bonds. Details of the property owned by each party are set out in table A. 8 During 1999-2000, the plaintiff acquired the property at Mossy Point. In order to do this, he obtained a line of credit from a credit union. During the period of the relationship (9.25 years) but after he had acquired the Mossy Point property, the plaintiff disposed of the O'Connor and Lilli Pilli properties (for $231 000 and $148 000 (net) respectively). The proceeds of the sale of these properties were applied to the reduction of the debt owing under the line of credit. The line of credit was also used by the plaintiff in 1999-2000 to pay off the debt owing by the defendant on the mortgage secured by the property at Duffy Street, Ainslie. This arrangement followed the agreement by the defendant to transfer a one half share of the property to the plaintiff, as evidenced by an oral agreement made about July 1999 and later expressed in a written agreement of 2000. A transfer to the plaintiff of a half interest in the property was registered in August 2002, shortly before the relationship ended. 9 It is not in issue that, during the relationship, the plaintiff made improvements to his properties at Lilli Pilli, O'Connor and Mossy Point. Indeed, during the relationship he spent a considerable time working on renovations and improvements to various properties. He was able to do this because for most of the period he was employed as a computer programmer under contracts to various Commonwealth government agencies, and was able to do this work on no more than 3 days each week. He also lived in accommodation originally provided by the defendant, at a low rental, which I consider below. 10 Table A sets out the property each party brought to the relationship and its value at the commencement of the relationship in 1993, the following assets, and the agreed value of those assets at that time. In all the Tables in this judgment, I have relied on the information contained in the parties' affidavits and submissions. Fortunately, there is no significant difference between the parties on such matters. The valuation of properties as at September 2002 is taken particularly from the affidavit of Mr Pitt and the annexures thereto. Table A Plaintiff Defendant $Value $Value (less mortgage debt) (less mortgage debt) O'Connor 150000 (63670) Ainslie 190000 (104000) Lilli Pilli 115000 Motor Vehicle 4000 Motor Vehicle 8000 Superannuation 234 Superannuation 848 Commonwealth Bonds 10000 ING shares1000 TOTAL 205 564 105 848 11 Table B sets out the property at the time of the termination of the relationship in September 2002. Table B Plaintiff Defendant $Valuation as 2002. $Valuation as 2002. Mossy Point 785 000 (66653) half share Ainslie 220 000 (other property) 4500 shares 2323 Superannuation 184 000 Superannuation 14000 Motor Vehicles (2) say 3000 10000 half share Ainslie 220 000 TOTAL 1 229 850 (approx) 246 300 The nature of the relationship and non-financial contribution of the parties 12 Although the plaintiff has always had a residence on the south coast of New South Wales, this has not always been his principal residence. During the relationship his principal place of residence was at the defendant's property (as it then was) at Ainslie, although he did spend a period of about six months working in Brisbane in 1994, and a period of about three months in 1999, when he moved into the property at O'Connor and carried out renovations there. At all other times while the plaintiff owned it, the O'Connor property produced a market rental. After the relationship ended, the plaintiff bought, and later sold, another residential property in the ACT. He says he did not make a profit on the sale. Whether or not he did is, to some extent, relevant to the issues in these proceedings, because the relationship supported the plaintiff while he worked for 3 days each week, and spent the remainder of his time engaging in his hobby of house renovations, which has proved extremely profitable for him. The transaction demonstrates that the plaintiff had accumulated sufficient assets by 2000 to enable him to purchase real estate additional to Mossy Point and his interest in the Ainslie property. 13 In 1999, there were some difficulties in the relationship and the parties attended a series of counselling sessions together in an attempt to resolve the problems. There were also some relationship problems in 1997 and before or about that time the parties also attended a course of counselling or mediation. However, the relationship continued and full-time cohabitation at Ainslie resumed. I find that any absence by the plaintiff from the Ainslie property was primarily to enable him to carry out work on his other properties, and should not be regarded as a temporary termination of the relationship. I accept the defendant's evidence that the social and sexual relationship continued and the plaintiff spent significant periods with the defendant, even if on some occasions he slept in other properties. Other contributions and benefits Income 14 During the course of the relationship, the incomes of the parties according to what I derive from the figures given in their affidavit evidence, which may be to some extent misleading because of the way in which the information has been presented, are as set out in Table C: These figures are not established precisely, and may not be directly comparable, but are set out here to indicate the relative incomes of the parties in general terms. Table C Plaintiff 1994 - $64,065 1995 - $40,960 1996 - $66,841 1997 - $46,656 + salary sacrifice superannuation contribution $27,000 1998 - $69,824 + salary sacrifice superannuation contribution $27,000 1999 - $75,124 + salary sacrifice superannuation contribution $28,420 2000 - $51,569 + salary sacrifice superannuation contribution $30,356 2001 - $67,120 + salary sacrifice superannuation contribution $31,631 2002 - $80,736 + salary sacrifice superannuation contribution $29,639 Total $736 941. . Defendant 1994 - $21,821 [$13,703 + $5,193(s) + $2,925(fp)] 1995 - $13,047 [$2,135 + $8,203(s) + $2,709(fp)] 1996 - $20,918 [$1,299 + $17,881.58(s) + $1,737(fp)] 1997 - $29,805 [$3,118 +$14,667(s) + $2,730(fp) +$9,290(bm)] 1998 - $25,023 [$21,013 +$1,120(s) +$990(fp) +$1,600(m)] 1999 - $34,415 [$33,075 +$440(fp) + $900(m)] 2000 - $33,450 [$31,950 + $1,500(m)] 2001 - $34,214 [$24,414 + $9,800(bm)] 2002 - $26,002 s: Scholarships; fp: Family Payments; m: Maintenance; bm: Bond Maturity Total $238 695. 15 On these figures, the plaintiff's income, which, I assume, includes income from rent on his O'Connor property, and "voluntary" contributions to a superannuation fund, is more than 3 times that of the defendant over the period of the relationship. The defendant says, and I accept, that she applied all her income for the benefit of herself, her son, and the plaintiff. 16 During the relationship, the plaintiff had a large amount of discretionary income. The nature of his occupation enabled him to work for three days each week (as he continued to do, at least until these proceedings were commenced in 2003) so that he had extra time to work on the various properties. He received income from rents. He paid relatively little for accommodation. I find that he did significant work by way of renovation and extension on the properties at Lilli Pilli, O'Connor, Mossy Point and Ainslie. Superannuation 17 At the beginning of the relationship both parties had a very small amount of superannuation. At the time of separation, the plaintiff's superannuation was valued at $184 000, and he said in evidence that during the relationship he had contributed significantly more than the statutory requirement to his superannuation fund. The defendant was not in full-time employment for about half of the relationship, and her earnings were, in any event, significantly less than those of the plaintiff when she was employed. Her superannuation was of a much lower value than his at the time of separation. The defendant, unlike the plaintiff, had no savings of any significance, during the relationship, except for her superannuation. Her income was spent on buying necessary items for the parties, paying mortgage installments, and later buying items for the renovations and improvement of the Ainslie property. It follows that the increase in the plaintiff's superannuation must be regarded as a benefit that he received from the relationship and should therefore be taken into account. 18 Given the plaintiff's lifestyle and interest in handyman-type work, I find that the time he had available to work on the various properties in which he was interested, was also a benefit he received from the relationship, and also that the increase in the value of all the properties that resulted from his work must be taken into account in determining the just and equitable distribution of the property pursuant to s 20. Non-monetary contributions and benefits 19 It is not in issue that, during the relationship, the parties spent most weekends and holidays at the South Coast property (Lilli Pilli, and later at Mossy Point), so that it is agreed that they spent about 90 days in each year at those properties. The defendant therefore obtained the benefit of a holiday house because of the relationship. However, she contributed as a homemaker, in assisting in the renovation work and in suggesting improvements to the holiday houses as well as at the house in Ainslie. 20 Where improvements were done to the properties, (other than Ainslie, which is considered below) I find that the plaintiff did the majority of the physical work. The defendant contributed ideas on design and decoration. During this work, and, indeed, during the whole of the relationship, she was the principal homemaker. She did the majority of cooking, cleaning, laundry, and shopping, although the plaintiff, from time to time, assisted with shopping. I find that he did virtually no cooking, cleaning or other housework. 21 The defendant has a son, Mitchell, who was six years old when the relationship began. At all material times the spent nine days each fortnight with the plaintiff and the defendant, and the remainder of the time with his father. For a period of about 18 months during the relationship the father paid some regular child support to the defendant, and also paid two lump sums of $600 each, but this was the exception rather than the rule and his contributions were negligible in the overall scheme of things. The father also bought clothes and paid other expenses for the son, as did the defendant. The plaintiff said he acted as a father to Mitchell. He therefore had the benefit of having Mitchell as part of the household. 22 The defendant, who was employed by Amnesty International at the beginning of the relationship, received a "re-entry" scholarship to return to full-time study. This scholarship was tax-free, and the defendant was exempt from HECS contributions in respect of these studies. She completed a Master's degree and a Graduate Diploma over a period of four years' full-time study. Subsequently she obtained a full-time position as a teacher. The defendant continued to do some part-time work and to receive rent from the self-contained flat during the period of study. As part of her study, she did field work for three months in Melbourne. During this time she did not live in the Ainslie property, but the plaintiff did. "Rent" 23 The plaintiff, except as mentioned above, lived in the Ainslie property for substantially the whole of the period of the relationship. There is a dispute as to whether he paid rent. The defendant says that in the early part of the relationship he did pay "board", and in evidence there are a number of cheque-butts relating to the plaintiff's bank account, which are marked "rent". The plaintiff says that he paid rent of $80 per week for the period up until the defendant agreed to transfer an interest in the property to him. I do not accept the plaintiff's evidence on this matter. I find as a fact that he did make some payment for the privilege of living in the property, particularly in the early part of the relationship, but this was not a regular payment, and that in any case it consisted of a series of ad hoc payments made at the same time as the plaintiff and the defendant reconciled other household expenses, as they did from time to time. The average was significantly less than $80 per week. I find that, at irregular intervals, the plaintiff and defendant sat down and listed the payments that each of them had made towards household expenditures, and usually after these sessions, the plaintiff would write a cheque to the defendant for the amount owing. I find that the payments made were significantly less than a "market" or economic rent for the accommodation the plaintiff received. There is no evidence that on any occasion the defendant paid money to the plaintiff. Motor vehicles 24 It is agreed that, when the relationship started, each party had a motor vehicle. In late 1999 or early 2000, these were sold, and there is no evidence of the price received. For this reason, I assume that it was not significant. The plaintiff then purchased two second-hand BMW motor vehicles for about $7000 each. The defendant had the use of one of these vehicles until the annual registration expired in 2003, after the parties separated. The plaintiff then obtained possession of this vehicle and sold it for $1700 early in 2004. I find that, during the relationship, the parties paid individually for the petrol that they each consumed, and that the plaintiff paid for the maintenance, servicing, registration and insurance on both vehicles. The value I place on the provision of a motor car (including registration, insurance and service) for a significant period by the plaintiff for the defendant's use during the relationship is, given the value of the vehicles involved, $7 500. The plaintiff's contribution in this form must be recognized. 25 The financial records in evidence lead to the conclusion that, during the relationship, the amount of money paid by the plaintiff for household expenses and "board" represented a proportion varying between thirty and fifty percent of the weekly household expenditure (other than clothing for the parties and for Mitchell). Although Mitchell lived in the household, the primary responsibility of providing for him lay with his parents. It must be acknowledged that the plaintiff's contribution to household expenses did benefit Mitchell, but not in any way that significantly affects the value of the contributions of the parties. The amount paid by the plaintiff, which I find to be, on average, about thirty-five percent of the total household expenditure over the period of the relationship, not only does not reflect a market or economic rent or a fair contribution to expenses, given his higher income, but it also does not reflect any element of profit or interest for the defendant or return on her capital investment in the property. The extensions to the Ainslie property 26 After a period of difficulties in the relationship, in about June 1999, the parties became reconciled and they agreed that they would change the basis of ownership of the property at Ainslie, and that, at the same time, they would carry out significant extensions to the house. The property consisted of a residential building, including a self-contained one-bedroom flat. The defendant had carried out significant renovations to the house before the relationship began in 1993. I find that she did most of the design for this work and also did the main design work for the additions made after 1999. 27 The plaintiff and the defendant agreed that they would extend the house by constructing a large living area in the space formerly occupied by a garage. They would also construct a carport, and enlarge a bedroom. This also involved constructing an ensuite bathroom. There were also extensive modifications to the kitchen and dining area. The work involved demolishing the western wall of the house and the construction of a new building. I find, on the balance of probabilities, that the defendant contributed many ideas to the design of this building and also acquired a large number of the PC items that were installed as part of the renovations, but, pursuant, as I find, to the agreement, the plaintiff's most significant contribution was his labour for which he received consideration when an interest in the property was transferred to him. It is significant that, at the same time as he was working on the Ainslie property, he was also renovating his property at Mossy Point. It is likely that there were some savings for some items purchased in bulk. It is not clear that all the materials purchased by the plaintiff were applied to Ainslie, rather than Mossy Point. I find that the defendant also made some contribution to the renovation work by assisting the plaintiff at times. Plaintiff's acquisition of a share in the Ainslie property 28 In 1999, the parties approached a real estate agent, K G Putt, and were told by that agency that the estimated value of the property was approximately $300 000. This is consistent with the valuation by Mr Pitt of the property at that time ($275 000). In cross-examination, Mr Pitt conceded that different valuers would produce different figures. I regard a discrepancy in estimated valuations of less than 10%, as in this case, as insignificant, and I accept the value agreed on by the parties at the time. There was a mortgage debt of approximately $85 000 outstanding in mid 1999. Up until that time the defendant had met all the mortgage payments. 29 The plaintiff and the defendant agreed that the defendant would transfer a half share in the property to the plaintiff, and that he would take over responsibility for the mortgage. In fact, the plaintiff paid out the mortgage early in 2000, to the extent of $85 000. He also paid a sum of $9 000 to the defendant later that year to reimburse her for the mortgage payments which she had made from the time of the oral agreement until the payout of the mortgage debt. The parties agreed that, in order to provide consideration for his acquiring a half share in the property, the plaintiff would also purchase the materials for the extension, and do the work necessary to carry out the extension. If any amount remained owing, this was to be the subject of a cash settlement. The defendant maintained that the agreement envisaged that the plaintiff would contribute his labour for nothing. I reject this argument. The agreement provides that the plaintiff was responsible for meeting the cost of the extension, and I interpret this to mean the cost of materials and of his labour. If the cost of the extension was $65 000, approximately, it is clear that materials cost about $35 000. It is not consistent with the plain meaning of the agreement, or with common sense, to conclude that the plaintiff was obliged to pay money as well as to contribute labour as part of his contribution to a notional price of $150 000 for a half share in the property. 30 Later in 1999, the parties approached the building authority in the ACT for an owner-builders license. This was finally issued to the defendant in November of that year, and by that time the plaintiff had carried out significant work on the extension, and the building expert, Mr Atkin, who gave evidence, issued two certificates to comply with statutory requirements. 31 In June 2000, the parties reduced the oral agreement of mid 1999 to writing, and it is set out as follows: I, Julie Ann Rickwood, agree to sell my half share in my house at 284 Duffy Street, Ainslie, ACT, to Ross Dunstan for the sum of $150,000. The bulk of the payment is to be made up of a mortgage settlement (approximately $89,000). The remaining amount is to be paid as materials and cost for housing extensions carried out by Ross, plus cash settlement. Upon completion of the full payment, the leasehold title is to be amended to acknowledge the 50% ownership of the house by Ross Dunstan. 32 I conclude that the plaintiff paid or provided consideration in full for his equal share, as tenant in common, in the Ainslie property, by discharging the mortgage, purchasing materials to the value of $35 000, and carrying out the major part of the work to complete the extension. The work the plaintiff did on the Ainslie property, which clearly had some effect on its increase in value, was work that he did, pursuant to the agreement between himself and the defendant, to construct the extension. It is neither more nor less than this, and should not be given any greater significance. The alleged defects in building work 33 The cross-claim alleges that the work done by the plaintiff on the Ainslie property was defective. I find that the agreement between the parties was that the plaintiff would be paid for his time and labour, and that he would be expected to perform the work, not to the standard to be expected of a professional tradesman, but to the standard to be expected of a reasonable owner-builder, sufficient to satisfy the requirements of ACT legislation. This standard does require completion of the work to a standard that would satisfy the relevant building authorities and the requirements of the legislation (the Building Act, 1970, ACT). I find also that about 4 years has elapsed since the work was completed, and that therefore some of the work has been affected by ordinary wear and tear during that period. 34 Mr Ratcliff, the expert who inspected the property and produced a report for the defendant, was relatively unfamiliar with the requirements and practice of builders in the ACT. Nevertheless I find that his conclusions as to some of the work carried out by the plaintiff on the Ainslie property are significant, and I accept them. 35 Mr Ratcliff agreed that some of the defects were trivial, for example, the paving in the yard and, in my view, the lattice-work and the paving in the carport. Given the passage of time, I would also find that any defects relating to the painting are also to be disregarded, as in any event, the premises would need repainting at or about the present time. There are, however, some aspects of the alleged defects in the work, which appear to be significant. I do not necessarily accept Mr Radcliff's opinion that the Building Code of Australia sets out the minimum standard of work to be expected from owner-builders, who are not qualified tradespeople. I accept that an owner builder is obliged to sub-contract certain work to licensed tradespeople, such as plumbers and electricians, but standards of carpentry, for example, expected of a person who is not a licensed carpenter, are not always as high of those expected of a licensed tradesperson. 36 In general, I find that the plaintiff performed the work to the standard required. There are some deficiencies (e.g. the lack of flashing on windows and doors, the construction of the roof, the construction of the stairs and the failure to finish the skirting boards properly) that are significant and must be remedied, but many of the alleged deficiencies (e.g. the lattice work, paving the carport area) are not major deficiencies or, (as with the paint finishes) are matters which would require rectification in any event given reasonable wear and tear over the time since the work was completed. Nevertheless, the lack of flashing on the doors and windows, the construction of the stairs between the new lounge room and the kitchen and the lack of capping on the roof are significant deficiencies, which, I find, need to be rectified. The state of the skirting boards is also something significant that requires rectification. That state of work falls significantly short of the standard of work to be expected of an owner builder, and I am surprised that the work was ever certified as being completed. These failures are the responsibility of the plaintiff, in respect of which the defendant is entitled to be recompensed. The cost of rectification of those claimed in the amended cross-claim is about $17,000. I accept that. It is reasonable that the plaintiff pay a contribution to the cost of putting the Ainslie property in the condition it should have been in. 37 The plaintiff, as agreed, contributed to the cost of improvements to the Ainslie property by buying materials and contributing his labour. For this, and for his financial contribution to discharging the mortgage, he received a one-half interest in the property. The defendant also paid for some of the materials. I find that the defendant contributed 25% of the cost of these materials. 38 The written agreement of 7 June 2000, which represents an earlier oral agreement, should be given full effect, subject to the need to make adjustments pursuant to s 20. By that agreement, the plaintiff assumed the liability for the defendant's mortgage debt, and agreed to provide the labour and materials for the extensions to the Ainslie property, in return for one half share in the property. Increase in the value of the parties' assets. 39 The value of both the parties' assets increased significantly over the period of the relationship. At the end of the relationship three assets have increased significantly in value. These assets are: 1. The property at Mossy Point. 2. The property at Ainslie. 3. The plaintiff's entitlement to superannuation. 40 Of these assets, the defendant benefited only from the increase in the value of the house at Ainslie, in which she now has a half interest. All other increases in value currently accrue to the benefit of the plaintiff. The plaintiff was enabled to gain these benefits because of the relationship, to which, as I have found, the contribution of the defendant, in nonmaterial terms at least, was significantly greater than his. It follows that it is unjust and inequitable to allow this position to continue without some adjustment under s. 20. 41 The most significant capital appreciation over the period of the relationship is the increase in the value of the plaintiff's property at Mossy Point. When he acquired this property, early in 2000, he paid $380 000. Its present value is $1 007 000 approximately and at the end of the relationship, so far as I can determine, it was between $770 000 and $800 000. For the purposes of these proceedings I accept that it was $785 000. This appreciation is mainly due to the increase in the value of the land component. It is not clear when it occurred, but some of it at least, occurred after the relationship between the parties had finished. There was no evidence before me of the state of the real estate market on the NSW South Coast at relevant times. While the value of the plaintiff's assets is now significantly greater than those of the defendant, this disparity is not directly or completely due to the efforts of either party during the relationship. 42 As Brereton J. pointed out in Kardos' case, the Court must look at the property that a party brings to the relationship, rather than at its value. In this case the property, which the plaintiff brought to the relationship, was the house at Mossy Point. The court cannot disregard the increase in value for the purposes of s 20. 43 The value of the Ainslie property also increased significantly during the relationship. I find that while this was to a limited extent due to the improvements carried out by the plaintiff, which he was able to do at least in part because he was in the relationship and had substantially subsidized accommodation when he was working in Canberra, the main factor leading to the increase in value was, more probably than not, a general increase in land values in the area rather than the work done by the plaintiff. It is clear that, like superannuation, a capital gain of this type must be taken into account for the purposes of s 20. What the Court should do 44 During most of the relationship, the defendant bore the major part of the cost of accommodation and at least half of the household expenses. The major contribution by the plaintiff to the relationship, apart from his contribution pursuant to the agreement relating to ownership of the Ainslie house, and his contribution to household expenses, was the provision of a secondhand BMW car for the defendant's use. He also had a similar vehicle for his own use. He allowed the defendant and her son the use of the property on the South Coast – first Lilli Pilli, then Mossy Point. However, when she was at the South Coast, I find that the defendant continued in her role as homemaker, (cooking, laundry, shopping, cleaning, etc) and that, as at Ainslie, the plaintiff did very little of this work. 45 Given the relative contributions of the parties of both a capital and non-capital type, it seems reasonable that they should leave the relationship with property that reflects at least the proportion of the property that they brought to the relationship. For this reason the plaintiff's claim for reimbursement of a substantial sum cannot succeed. It is not as if his contribution to the relationship so significantly outweighs that of the defendant that he deserves such an entitlement. Rather, I would find that the defendant made the more significant contribution to the relationship, in ways I have explained elsewhere. At the same time, the total value of the plaintiff's separate property increased significantly, because his position in the relationship entitled him to increase substantially his interest in superannuation and to acquire the property at Mossy Point. I have found that the plaintiff's income was so significantly greater than that of the defendant during the relationship, and as a result the relative superannuation entitlements of the parties are now so disparate, that justice and equity require an adjustment. The plaintiff was able to acquire the Mossy Point property as a result of the relationship. The increase in the capital value of that property, which was proportionally far greater than the increase in the value of the property at Ainslie, between the time it was acquired and the end of the relationship, is also such that justice and equity require an adjustment. 46 Having considered their relative contributions by way of property and other contributions during the course of the relationship, I find that it is just and equitable that the parties be placed in a position where their respective assets bear the same relationship to each other as they did when the relationship commenced. At this time the plaintiff had about two thirds of the assets and the defendant had about one third. The defendant is not now in that position and is therefore entitled to a transfer of assets from the plaintiff to her. 47 The defendant has always had her principal place of residence at Ainslie, both before and after the relationship, and it is just and equitable that she should continue to reside there. The just an equitable resolution of the issues is most effectively and equitably achieved by the plaintiff transferring his interest in the Ainslie property to the defendant, which would mean that the defendant would have the benefit of the increase in the value of the whole of that property, including the improvements. The plaintiff would retain the greater part of the benefits he gained from the relationship, including the Mossy Point property at an increased value, and his superannuation. 48 I must approach the position of the parties as it was at the end of the relationship. At that time, even if the plaintiff transferred a half interest in the Ainslie property to the defendant, the parties would not have been in relatively the same position as they were in 1993. A further payment of $50 500 would have been required. 49 A just and equitable resolution of the issues requires that the plaintiff must not only transfer his interest in the Ainslie property to the defendant, but also that he must pay the sum of $70 750 to the defendant. This represents an amount that makes up the difference between the value of a half-share of the Ainslie property at 2002 values, and the amount required to restore the assets of the parties to the 1993 ratio, ($50,500); plus interest on that amount to date (4.25 years at 5% simple) ($10 750); and a sum representing the cost of rectifying the defects in the Ainslie house ($17 000), but allowing for the value of the motor vehicle provided to the defendant ($7 500). 50 I make the following orders: 1. The plaintiff's claim is dismissed. 2. The cross-claim is allowed to the following extent: a. the plaintiff must transfer his interest in the Ainslie property to the defendant, and, in consequence, I make the orders sought in paragraphs 2-5 inclusive of the cross-claim; and b. within 28 days, the plaintiff must pay to the defendant the sum of $70 750. ********** 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.