New South Wales District Court CITATION: Westbrook v Jacobs [2008] NSWDC 246 HEARING DATE(S): 10.10.08 JUDGMENT DATE: 17 October 2008 JURISDICTION: Civil JUDGMENT OF: Sidis DCJ 1 The interest with respect to the property of the parties are adjusted by dispersing the fund of $43,848 as follows: i) In payment of the debt to the lessor of the business premises in the sum of $16,855. ii) In payment of the credit card debt of $5,596. DECISION: iii) In payment to the plaintiff of the sum of $15,000. iv) In payment to the defendant of the balance remaining of the fund. 2 Each party will pay his or her own costs. 3 The exhibits will be returned. CATCHWORDS: PROPERTY (RELATIONSHIPS) ACT - adjustment of contributions to modest fund - conduct and purpose of parties in pursuing action. LEGISLATION CITED: Property (Relationships) Act 1984 Uniform Civil Procedure Rules 2005 PARTIES: Mia Kym Westbrook - Plaintiff Gerard Jacobs - Defendant FILE NUMBER(S): Newcastle 84/08 COUNSEL: B P Kelly - Plaintiff R L Wilkinson - Defendant SOLICITORS: Fowler Predny Solicitors - Plaintiff Roderic W J Hale - Defendant JUDGMENT 1 This matter involves an application under The Property( Relationships) Act 1984 for an adjustment of the property interests of Mia Kym Westbrook, the plaintiff, and Gerard Mark Jacobs, the defendant. The property concerning which there is a dispute is the cash sum of $43,848 currently held in a controlled money account by the plaintiff's solicitor. After deduction of joint liabilities of the parties, the sum available for adjustment on the plaintiff's case is $21,397 and on the defendant's case, less than $1,000. 2 An attempt at mediation of the dispute between the parties failed. The attempts of the legal representatives of the parties failed to resolve their disputes and my advice to the parties before commencing the hearing that they resolve their differences concerning the modest sum at issue also failed. 3 I was left with the impression that the property itself was a secondary matter and that the true intent of each party in insisting on a full hearing was the denigration of the other. In my view, this was a highly unsatisfactory use of the processes of this Court by parties with sufficient maturity to know better. The tragedy of the situation is enhanced because there are two children of the relationship, who must necessarily suffer as a result of the ongoing conflict between their parents. The parties appeared to be determined to ignore the rights and interests of their children. 4 I pointed out in the course of the proceedings that it is not my function under s 20 of Act to apportion, as between the parties, the blame for the breakdown in the relationship. My function is to determine the fate of the modest cash sum. The authorities direct that I do so through a three stage process, which requires that I: 1 Identify and value the property of the parties to the relationship. 2 Identify and value the contributions of the parties, financial and non financial. 3 Determine the adjustment, if any, to be made to the parties' interests in the property to reflect their contributions in a just and reasonable manner. 5 In this case the relationship commenced in early 2002 and the parties separated in late 2006. As pointed out by defendant's counsel therefore it was a relatively short term relationship. There were however two children of the relationship, daughters born in 2003 and 2005 who are now aged five and three respectively. They live with the plaintiff with one night weekend access per week to the defendant. 6 On the plaintiff's case her assets at the time of the commencement of the relationship amounted to a net value of about $9,000. The defendant stated that the plaintiff at the commencement of the relationship was in debt in the sum of $7,500. The defendant had assets, the major of which was the property at 26 Wangi Point Road Wangi Wangi. He also owned a boat and a four wheel drive motor vehicle. After deducting his liabilities including a mortgage on the property, he claimed that the net value of his assets was $215,000. The plaintiff suggested that the defendant's liabilities were greater than he claimed and put the value of $95,000 to $98,000 on the assets that he brought into the relationship. 7 At the time of commencement of the relationship, the plaintiff was employed as a senior consultant in the recruitment industry with a salary package of $75,600 per annum. She resigned from this position in August 2002 when the parties moved to live in the defendant's Wangi property. She secured employment locally at $48,000 per annum, with commissions, and stated that her net monthly base wage was $4,000 per month. After the birth of their first child the plaintiff reduced her working hours, earning net approximately $714 a week. There was a period when the plaintiff ceased employment during which she received Centrelink payments. The defendant stated that the plaintiff worked from home at Wangi, earning about $410 a week and resigned from her employment in December 2002, after which she took unemployment benefits. 8 As far as the defendant's income was concerned the plaintiff stated that at the commencement of the relationship he was working for his father without receiving a salary, but receiving a weekly allowance of $50. She said that, after moving to Wangi, until April 2004 he worked intermittently as a panel beater, changing jobs at intervals of three to six months, with frequent periods of unemployment. 9 The defendant stated that at the commencement of the relationship he was working as a panel beater, earning about $500 per week and that thereafter he worked continuously until April 2004 with a salary varying between $500 and $1,500 net per week. 10 In April 2004 the parties purchased a video hire business at Wangi Wangi, for $165,000 for goodwill and stock. The purchase was funded through a bank loan, secured against the Wangi property and cash contributions from the plaintiff and the defendant. The business loan was increased and reduced over a period to the date of separation. 11 Financial accounts in evidence showed that the business operated at a loss. The plaintiff maintained however, that proceeds from the business were sufficient to meet the parties' obligations to the bank in respect of their housing and business loans and to provide for the needs of the family of two adults and two children. She was challenged on this evidence in cross-examination, notwithstanding that the defendant's affidavit evidence in paragraph 32 confirmed that the proceeds at least met their commitments to the bank. The defendant said he also obtained part time panel beating work to provide for the family. 12 As far as non financial contributions were concerned, the plaintiff claimed that she was the primary carer for the children and that she undertook all household duties. After the acquisition of the business she said one party worked in the shop while the other remained at home with the children. It appeared from the evidence of both parties that they worked approximately equal times in the business. The plaintiff claimed that much of the time the children were with her at the shop. At other times when she was at the shop they remained in the care of the defendant but she continued to undertake all of the housework and to prepare meals for the defendant and the children when she was not there. This was denied by the defendant. 13 It will be apparent from this summary that there was much conflict in the evidence of the parties. In deciding which of the evidence is to be preferred, I noted that whilst each party was committed to communicating their views of the character of the other. The plaintiff gave evidence in a straightforward fashion and made concessions concerning values of the defendant's assets and contributions where appropriate. Her evidence concerning her income, except while in the video shop business, was supported by tax records. To the extent that the defendant has produced documentation relating to the plaintiff's bank accounts, those documents supported her evidence. 14 The defendant, on the other hand, was evasive and unhelpful in the answers he gave to questions in cross-examination. Notwithstanding subpoenaed requests, it became clear that he did not produce all of his banking records. He denied, notwithstanding clear evidence to the contrary, that he maintained a credit account. He produced no taxation documentation to support his claims concerning his income. The result is that where there was a conflict in the evidence I have elected to prefer that of the plaintiff to that of the defendant. 15 Having regard to the value of the assets that the defendant brought into the relationship, his claim that whatever balance remains of the sum held in the controlled money account should be paid to him, might well appear to be justified. However, I consider that the plaintiff's position, namely that she receive $15,000, more appropriate for the following reasons. 1 The plaintiff contributed from time to time to the relationship further cash sums through an inheritance, a victim's compensation fund payment, bonuses on the birth of the children and gifts from her mother. 2 The evidence indicated that the plaintiff contributed income to a greater degree through her employment and Centrelink benefits until the purchase of the video store business. In this period I accept that the defendant's income was intermittent. 3 The plaintiff throughout the relationship was the primary carer for the children. 4 The plaintiff throughout the relationship was the primary contributor to household duties and household management. 5 The parties' contributions to the business were roughly equal. 6 At separation the business was returning sufficient income to meet the parties' loan obligations and to maintain a household of two adults and two children. 7 There was no evidence that any of the loans claimed to have been made by Denzel Jacobs were applied to meet shortfalls in income while the parties were operating the video hire business. Only one of the loans was made during that period and it was applied to the purchase of a motor vehicle that was retained by the defendant after the parties separated. 8 There was no evidence to support the defendant's contention that the plaintiff was aware of any other of the loans said to have been made by Mr Denzel Jacobs or that they were applied to the plaintiff's benefit or to that of the household. 9 After separation, the defendant retained the business and continued to operate it. He claimed that it operated at a loss. There was no evidence to support this claim or to explain why a business capable of meeting the family's expenses and commitments to the bank, became a losing proposition. There were two possibilities. Either the defendant was not frank with the Court or he did not operate the business to its income earning capacity. In the light of the evidence of the defendant's statement to the child support agency that he drew $500 a week from the business and his evidence that he maintained payments to the bank, the first of those possibilities, is in my view the most likely. 10 The stock of the business was sold by the defendant on his evidence, for the sum of $1,000. This amount has not been accounted for. 11 After separation, the defendant retained two cars and a houseboat. There was dispute concerning the value of the Holden Gemini. One of the cars and the boat were sold for a total of $41,000. This sum was said to have been expended in paying off business debts. The defendant was unable to identify the debts paid off. In the light of my finding as to the income generated by the business, I reject the evidence that it was used for business debts. 12 After separation, the plaintiff and the children continued to live at Wangi until May 2007. After which the defendant exclusively occupied the property until it was sold in July 2008. 13 After separation to the date of trial the plaintiff remained solely responsible for the day to day care of the children. She remained substantially responsible for their financial maintenance with only intermittent and minimal child support payments from the defendant. 14 The suggestion that as a single parent of two very young children, she should have returned to a high paying executive position while the defendant avoided his financial responsibilities to his children, was offensive and unrealistic. 16 The result is that, while I consider it clear that the defendant brought substantial assets into the relationship, the plaintiff in the course of the relationship and to the date of the hearing, made major financial and non financial contributions. Further, the defendant's conduct since separation has required the plaintiff to take virtually sole responsibility for the care and financial support of their children. At the same time the defendant has been responsible for the loss of any value in the business and for the accumulation of a debt of more than $16,000 to the lessor of the business premises. 17 I therefore accept the plaintiff's position. 18 The plaintiff seeks an order for the costs of the proceedings. This order is resisted by the defendant on the basis of rule 42.30 of the Uniform Civil Procedure Rules 2005, which obliges the Court to resist the request for the order for costs where the amount at issue does not exceed the jurisdictional limit of the Local Court. That was clearly so in this case. The application is pressed on the basis that at the time of commencement of the proceedings the plaintiff valued the property at Wangi at a greater amount than subsequently realised on its sale. The contention is that the house was sold in circumstances where the real estate market was in decline. However, I am also reminded that the rule allows the Court to take into account the conduct of the parties. I have already made known what I think of the conduct of the parties in this case. I do not think that that conduct can be sheeted home to the defendant alone. In my view this is a case where regardless of rule 42.30 I would not have been inclined to award costs in favour of either party. ORDERS 1 The interest with respect to the property of the parties are adjusted by dispersing the fund of $43,848 as follows: i) In payment of the debt to the lessor of the business premises in the sum of $16,855. ii) In payment of the credit card debt of $5,596. iii) In payment to the plaintiff of the sum of $15,000. iv) In payment to the defendant of the balance remaining of the fund. 2 Each party will pay his or her own costs. 3 The exhibits will be 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.