New South Wales District Court CITATION: Drew v Papatriantafillou [2009] NSWDC 353 HEARING DATE(S): 10 August 2009 EX TEMPORE JUDGMENT DATE : 14 August 2009 JURISDICTION: District Court - Civil JUDGMENT OF: Sidis DCJ 1. Verdict and judgement for the plaintiff in the sum of $80,000.00 2. The plaintiff is to file and serve written submissions in relation to costs by no later then 4:00pm on 19 August 2009. 3. The defendant is to file and serve written submissions in reply by no later then 4:00pm on 24 August 2009. DECISION: 4. Stood over to 26 August 2009 at 9:30am to deal with the issue of costs and the return of the exhibits. ___ Costs Hearing Results: The defendant is to pay the plaintiff's costs of the proceedings on an ordinary basis. The exhibits are returned CATCHWORDS: DE FACTO RELATIONSHIPS - Credit - Understatement of assets - Adjustment PARTIES: Nida Gayorgore Drew (Plaintiff) Christo Papatriantafillou (Defendant) FILE NUMBER(S): 43/09 COUNSEL: Bates (For the Plaintiff) I Duane (For the Defendant) SOLICITORS: Attwaters Solicitors (For the Plaintiff) Kekeff & Associates Solicitors (For the Defendant) JUDGMENT 1 Nida Drew and Christos Papatriantafillou were partners in a de facto relationship in which they cohabited between April 2001 and April 2006. There is a dispute between them concerning the nature of the relationship thereafter, the defendant claiming that until January 2007 they resided in his house but not as de facto partners and that thereafter the relationship continued intermittently until January 2009, although they were not living together and not in a de facto relationship. 2 The plaintiff claimed that the relationship continued at the defendant's house until February 2007 and whilst they maintained separate residences until January 2009. 3 The plaintiff claimed an adjustment of property interests in her favour in the sum of $250,000. The defendant claimed that no adjustment was warranted, save that each party should be deemed to have ownership of the personal property currently in their possession. 4 In dealing with matters such as this I am required to take three steps before determining what adjustment, if any, should be made. The first is that I identify the assets of the parties, both at the commencement of the relationship and at the time of hearing. The second is that I identify their contributions, both financial and non-financial to the assets of the relationship. Thirdly, I must determine whether an adjustment should be made and, if so, the amount by which the property interests should be adjusted. 5 The parties in this matter were at issue on virtually every part of their relationship and I was not satisfied that either of them was fully frank with the court. This made it very difficult to determine which of the parties should be accepted on the various disputes that arose between them. 6 In dealing with the term of the relationship, I note that the plaintiff remained in the defendant's house until January 2007 and for want of evidence to the contrary I regard that as the date upon which the relationship as a de facto relationship ceased. The result is that the relationship was for a term of about six years. 7 As far as assets were concerned, the evidence indicated that at the commencement of the relationship the plaintiff owned a considerable amount of furniture and household effects and jewellery, which was not valued but was apparently insured for $18,500. Her motor vehicle was leased, it was not valued but there was a liability of $12,000 under the lease. The plaintiff had superannuation funds of $14,734. She was self-employed as a cleaning contractor and in regular employment. 8 The defendant owned the house in which they resided at Gari Street, Charlestown, and a property at 880 Hunter Street, Newcastle. He was a director and shareholder in the company C & P Newcastle Importers Wholesalers and Retailers Pty Limited which operated a business from the Hunter Street property as "Chris's Discounts". There were funds in the company and business account. There was stock of the business. The defendant owned furniture. He had a modest amount of superannuation and motor vehicles of little value. The total estimate of his assets at the commencement of cohabitation was $885,182. 9 The defendant had liabilities on his credit card account and a loan from the Newcastle Permanent Building Society secured by mortgage on the Charlestown property, so the net estimated value of his assets at the time of cohabitation was $847,600. 10 At the time of the hearing the value of the plaintiff's personal property had increased. There was no evidence as to the value of that personal property and she denied that it was valued at $80,000 as suggested by the defendant. Her superannuation had increased to $52,880. The value of any jewellery, savings or motor vehicle was not known. At the time of the hearing the plaintiff's liabilities were limited to $6,000 which was the amount outstanding of loans that were made to the plaintiff at the time of separation of $20,678. 11 The defendant claimed that there had been a reduction in the value of his real estate, the amount in his bank accounts and the value of his furniture. There was a modest increase in his superannuation. He therefore estimated his gross asset value at $694,663. His liabilities were substantially increased to $233,800, so that the value of his assets at the time of hearing was claimed to be $460,833. 12 As I noted, the parties were at issue on virtually every aspect of their relationship, including the aspect of their contributions to the relationship. The plaintiff claimed and established on the evidence that she had a superior income. She also claimed that she contributed more financially to the day-to-day expenses of the parties. 13 The defendant, acknowledging the greater income of the plaintiff, claimed that he met almost all the financial needs of the parties, whilst the plaintiff expended her income on personal property, particularly jewellery, funds and gifts sent to her family in the Philippines and the purchase of property in the Philippines. He pointed also the plaintiff's increased superannuation fund. 14 The defendant claimed that he met the parties' expenses for accommodation, food and other outgoings and overseas trips and the purchase of gifts of jewellery for the plaintiff. He claimed that he did this by expending more than his income so that his indebtedness increased to the extent already noted. 15 I did not think that either party was entirely honest with the court about their asset position. Much of the evidence proceeded on the basis of assertion without supporting documentary evidence. I commence, therefore, by noting some limited areas that were either agreed or supported by the evidence. 16 The plaintiff was fully employed during the relationship working long hours. Her income was greater than that of the defendant. The property allegedly acquired by the plaintiff in the Philippines during the relationship comprised a mortgage over the property of a family member to secure a loan of 22,000 pesos or $700 Australian. In the course of the relationship the plaintiff did send funds to her family in the Philippines. There was no evidence that the amount sent was more than the $25,170 that she conceded. Some of this came from a settlement paid to her in respect of a compensation claim. The plaintiff said about $12,000 came from this source. 17 In the course of the relationship the plaintiff did send boxes of goods to her family in the Philippines. She claimed that she did so one time only and that she sent boxes of second hand clothing and one box of food. She agreed that some boxes remained at the defendant's home packed and ready to dispatch and she said she will send them when she has the funds to pay for their transport costs. 18 The plaintiff acknowledged that the value of her personal property and superannuation increased during the relationship but she denied that the value of the personal property had increased to the extent claimed by the defendant. Its value was unknown. 19 The parties argued about the amount that they were each contributing to their day-to-day expenses and they made efforts to set up some form of system. The plaintiff initially agreed to pay money to the defendant's mortgage account in respect of the Charlestown property. She denied that she paid this money by way of rent. She said she did so at the defendant's request because he told her he was having difficulty meeting his mortgage payments. 20 The amounts paid varied over the term of the relationship between $50 and $200. They totalled about $23,000, as a contribution to the mortgage that at the commencement of the relationship stood at about $37,000. 21 The plaintiff claimed in addition that she paid substantial amounts towards the parties' living expenses, purchasing food and paying accounts. The parties started a book which was in evidence but it was impossible to tell from that book who paid what in respect of contributions. The plaintiff said this system was terminated after the defendant took out more than he contributed. The defendant said it stopped because the plaintiff did not contribute. He said the plaintiff paid little more than the amounts that she paid into his mortgage account. 22 As to why the money was paid into this account, he said he had no other bank account unrelated to his business and it was thus the only account available for her to make the contribution. I was left to puzzle why, if he was drawing on business funds to meet the parties' expenses, it was considered inappropriate to return some funds to the business accounts. 23 The defendant said that he paid many of the couple's bills through his Mastercard account. The plaintiff agreed that he did so but said that she paid him cash to meet more than her share of those expenses. The defendant tendered in evidence his Mastercard statements from January 2001 to March 2007. While I noted that some day-to-day expenses were charged to this account, they were minor compared to the large sums charged for business related expenses. 24 The defendant explained that he paid these accounts through the Mastercard facility and then paid the Mastercard bill when there were funds in his business to allow it. There was nothing illegitimate in this practice but it made it difficult without a breakdown by the defendant to determine what amounts were paid for the expenses of himself and the plaintiff and what amounts were business related. Further, it did nothing to rebut the plaintiff's contention that she made cash payments to the defendant in addition to amounts paid to the mortgage account. 25 I was very concerned that the defendant understated his income and his assets for the purpose of minimising or avoiding entirely an adjustment of interests. His affidavit referred to his making substantial payments for living expenses of both the plaintiff and at times her children, travel costs of trips to Greece and the Philippines and purchase of jewellery for the plaintiff. This was alleged to have taken place at a time when his business was returning no income or at best a very modest income. There were no company accounts in evidence to inform the court of its actual trading results. 26 The defendant impressed me as a man who was money conscious and careful. I did not see him as the type to pursue a lifestyle that was so obviously beyond his means and damaging to his financial position. There was no evidence to support the contention that the company operated an overdraft account to support this lifestyle. There was no evidence to support the contention that he borrowed $200,000 to pay out liabilities and, if so, how he persuaded a bank to lend him such a large sum when he had such a modest income. I received no explanation of what happened to the balance of about $66,000 remaining after payment of the liabilities claimed to have been met through this advance. 27 There was no evidence to support or explain the claimed loan of $19,000 from Savaklis Investments. In respect of his assets, there was mention by the defendant in his evidence of a loan account with the company. In the absence of the company's financial statements, I did not know what its value might be. His affidavit evidence referred to a unit in Greece in which he had an interest. He said it was sold by his brother to whom he no longer speaks. There was no evidence of the value of his share of the proceeds of sale or to suggest that those proceeds were not recoverable. 28 The current value of the Hunter Street property was estimated at $270,000. There was no evidence to support this figure as the value of a property in the main street of the central business district of Newcastle. However, there was evidence, exhibit G, that indicated that the defendant considered its value to be significantly higher when he informed Newcastle Permanent Building Society that it was worth 1.8 million dollars in August 2008. 29 The defendant said that he did not remember telling anyone this. He agreed, however, that the building society approved a loan for a proposal then under consideration, but not proceeded with, to build additions to the Hunter Street property. 30 This left me with doubt concerning not only the veracity of the defendant's evidence about his financial position but also that he understated the extent of the plaintiff's non-financial contributions. 31 Her claim was that she did virtually all of the work in the home, including cooking, cleaning, washing, ironing and that she undertook some of the gardening. She provided transport for the defendant when he was disqualified from driving and she helped him on an unpaid basis with his business. 32 The defendant denied these claims, stating that he did a substantial part of the couple's domestic work and that he helped the plaintiff with her cleaning work on an unpaid basis. 33 The plaintiff had some support from her son, who might be expected to be biased, and from a neighbour, Verity Maxwell, who did not move from her position in cross-examination that she had observed only the plaintiff attending to washing in the garden of the Charlestown property. 34 The defendant relied upon his daughter, Anita Forbes, whose evidence was to the effect that the plaintiff had a very busy style in the kitchen to the point where she was left to her own devices at Charlestown but that, when she attended at Miss Forbes' home, Miss Forbes attempted to resist the plaintiff's efforts to take over the kitchen. 35 Overall, my confidence in the defendant's credit was such that I preferred the evidence of the plaintiff that she performed the greater share of the homemaking role for the parties to the relationship. 36 The result of this review of the evidence was that, doing the best I could with the limited materials available to me, I adjusted the defendant's asset position by disregarding the claimed liabilities of $233,000 to arrive at a figure of $694,663. I have adopted this approach to take account of the absence of evidence to support the claimed liabilities and my concern about the understatement of the defendant's assets and income. 37 I accepted that the plaintiff made some contribution to the defendant's current asset position, if only to reduce the amount by which the assets would otherwise have been reduced in value. I accepted that the plaintiff made other contributions to the parties' expenses and that her contributions indirectly, through the undertaking of the substantial part of the domestic duties, warranted an adjustment in her favour. 38 I took into account the relatively short term of the relationship and the modest improvement in the plaintiff's financial position during the course of that relationship. I considered that an appropriate adjustment of the interests of the parties would be arrived at if the defendant paid to the plaintiff the sum of $80,000. ORDERS 1. Verdict and judgement for the plaintiff in the sum of $80,000.00 2. The plaintiff is to file and serve written submissions in relation to costs by no later then 4:00pm on 19 August 2009. 3. The defendant is to file and serve written submissions in reply by no later then 4:00pm on 24 August 2009. 4. Stood over to 26 August 2009 at 9:30am to deal with the issue of costs and the return of the exhibits. ********** 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.