New South Wales District Court CITATION: Henriques v Fernandez [2008] NSWDC 149 HEARING DATE(S): 2 July 2008 JUDGMENT DATE: 2 July 2008 EX TEMPORE JUDGMENT DATE : 2 July 2008 JURISDICTION: District Court Civil jurisdiction JUDGMENT OF: Johnstone DCJ at 1 DECISION: 1. The defendant to pay the plaintiff $175,000.00 2. The defendant to pay the plaintiff's costs on the ordinary basis CATCHWORDS: PROPERTY (RELATIONSHIPS) ACT - adjustment of interests in property after a 10 year de facto relationship - COSTS - plaintiff forced to commence proceedings when the defendant refused to concede her any entitlement to a share of the increase in the equity of their home during co-habitation - costs should, therefore, follow that event LEGISLATION CITED: Property (Relationships) Act 1984 UCPR r 42.1 CASES CITED: Baker v Towle [2008] NSWCCA at [22] to [25] PARTIES: Prazeres Henriques (Plaintiff) Jesus Fernandez (defendant FILE NUMBER(S): 1390/07 COUNSEL: Ms M Gillies (Plaintiff) The Defendant was unrepresented and did not appear SOLICITORS: Foulsham & Geddes (Plaintiff) The Defendant was unrepresented and did not appear JUDGMENT 1. Ms Henriques and Mr Fernandez were de facto partners within the meaning of the Property Relationships Act 1984 (the Act) for about ten years from June 1995 to June 2005. During that period they had one child, Veronica, who was born on 15 October 1996 and is now eleven. Ms Henriques had another daughter, Stephanie, from an earlier relationship, who was born on 14 November 1990 and who will be eighteen in December. 2. Ms Henriques seeks adjustment of the interests in the property the parties accumulated during their relationship, having regard to financial and non-financial contributions made in respect of that property and their financial resources and to contributions made as a parent and homemaker to the welfare of each other and the family, in connection with the relationship: s 20 of the Act. 3. Up until recently the defendant was contesting these proceedings but his solicitors have now ceased to act and his counsel sought leave this morning to withdraw. Inquiries made this morning revealed that the defendant no longer wished to participate actively in these proceedings, and I therefore decided it was appropriate to proceed ex parte to judgment. 4. The dispute between the parties related principally to the proportions in which the assets accumulated by them should now be divided. 5. As will be evident from what follows I did not consider that a global approach to the division of all the assets was appropriate. Although I am satisfied that the parties did, to a large extent, conduct their relationship on the basis of a mutual pooling of their resources and income, and contributed jointly to the outgoings from that mutual pool, they did however maintain an identifiable division of proprietorship in respect of a number of assets to which I will come. 6. The plaintiff owns a unit in Portugal at Campelos as to which she says (at paras 31 to 34 of her affidavit of 16 July 2007): "I purchased that apartment in about 2001, the precise date of which I cannot recall. The apartment was purchased for 100,000 Euros. A deposit of 40,000 Euros was paid to my sister Regina Martinez Henriques Gomez (my sister) who borrowed a sum of 30,000 Euros from the bank and 10,000 Euros from me. A balance of 60,000 Euros was provided by way of a mortgage…. My sister helps me pay the mortgage repayments on that apartment when I am unable to make the repayments. My sister pays all the maintenance, outgoings and other expenses associated with that apartment pursuant to an oral agreement I have with my sister." "There is a mortgage on the title to the apartment of approximately 45,000 Euros, (approximately $75,000 Australian) to a Portuguese bank, and I owe my sister approximately 35,000 Euros (approximately $59,000 Australian). As far as I am aware the apartment in Portugal is vacant. I derive no income or benefit from it." There is no evidence to the contrary. The property is now valued at 115,000 Euros. That valuation has not been challenged by any evidence to the contrary. I can see no basis for including that asset in the pool of assets for division, there being no evidence of any contribution to that asset or its appreciation in capital value on the part of the defendant. 7. Similarly, the plaintiff has an interest in some vacant land in Portugal as to which she says (at paragraph 30 of her affidavit): "I own a one fourteenth share in a block of vacant land in Portugal which was left to me and my thirteen siblings from the estate of our late parents. I receive no financial benefit or income from that land, it does not cost me any money to keep. This vacant block of land is worth 1000 Euros, according to a land valuation which took place on 4 July 2007." That valuation has been recently confirmed at 1000 Euros. Again, there is no evidence to the contrary, nor can I see any basis in respect of this asset requiring it to be included in the pool of assets for division there being no evidence of any contribution on the part of the defendant to it. 8. The next asset for consideration is household effects. The evidence establishes that the parties divided these assets at separation in a way with which they are both content and no adjustment is sought in respect of those assets other than what has already occurred. 9. So far as motor vehicles are concerned the plaintiff has a car that is a fourteen-year-old Mazda that she values at $1000, although this amount is disputed by the defendant. It seems to me that that is probably what it is worth. In any event the defendant also has a motor vehicle and in my view it is appropriate that each party simply keep the car that they have and that no further adjustment in respect of motor vehicles be made. 10. I come next to what is in fact the substantial asset requiring division, and that is the house at Marrickville in which the parties resided during their relationship. I pause here to note that during their ten-year relationship the plaintiff's elder daughter, Stephanie, became a member of the household and the defendant regarded her as a daughter. Since separation the defendant has remained in the house and he has met the outgoings and mortgage payments. Since separation Ms Henriques has been living in rented premises together with the two children, Veronica and Stephanie, and has provided substantial proportion, if not all, of their support, both emotional and financial. 11. Prior to the relationship Mr Fernandez owned the property at Marrickville. His equity in the house at that time was $50,000; the value at that time of that asset being $150,000, with a mortgage of some $100,000. 12. The parties lived in the property until the relationship ended in 2005. Each contributed to the outgoings and the maintenance of the asset, such as the rates, insurance, electricity and telephone, housekeeping expenses, mortgage payments and other expenses. I am satisfied that the parties made a joint and equal contribution to the servicing and maintenance of the property and that costs relating to the outgoings and servicing of the mortgage came from their mutual pool of resources and income. 13. It is not disputed that the current market value of the property is $500,000 and that there is a mortgage debt of $130,000. Current equity is therefore $370,000. Thus the growth in equity has been $320,000. 14. Having regard to the initial contribution by Mr Fernandez and the subsequent equal contributions it seems to me just and equitable that the interests in the property be adjusted by first allowing an amount of $50,000 to Mr Fernandez, being his initial contribution, and that thereafter there should be an equitable division. The starting point, therefore, for considering any adjustment between these parties' assets should be fifty per cent of that net growth in equity, after the deduction of the $50,000, that is, a sum of $135,000. 15. I come then to consider whether the plaintiff should receive any additional amounts in addition to that $135,000, having regard to other assets and contributions. 16. The evidence establishes that Mr Fernandez worked in the construction industry and was in regular employment, apart from a period of three years when he was off work receiving Workers Compensation benefits. I am able to infer that apart from that period of incapacity he must have accumulated substantial occupational superannuation to which he will be entitled upon retirement. The valuation of that asset and the extent to which the plaintiff should be entitled to receive a benefit or an additional adjustment must of necessity be a matter for impression and evaluation, having regard to the paucity of any evidence surrounding the actual dollars involved. In submissions I calculated a broad amount of $10,000 as being the appropriate proportion to which the plaintiff might be entitled, in respect of that fund, having regard to its value today. On reflection, it seems to me that I should also take into account the fact that she will be receiving an immediate asset which would otherwise have been deferred until the defendant's retirement and that there should be some discount accordingly. Tithe figure that I have determined in the final result is the sum of $5000, which should be added to the starting point to which I have already referred. 17. The evidence also establishes that as between the plaintiff and the defendant there were unequal contributions as to parenting during cohabitation. It is also evident on the evidence that the defendant was a gambler and drinker and it might be inferred that some part of his income was dissipated in those activities in preference to the family's welfare and the accumulation of their joint assets. 18. Since separation the plaintiff has borne an unequal burden in respect of the maintenance of the children, both in financial terms and in terms of their care and upbringing. So far as accommodation expenses are concerned, the costs incurred by the plaintiff have not been dissimilar to those of the defendant and I therefore make no allowance for that factor. 19. The unequal contributions to which I have just referred justify an adjustment in respect of the division of the joint assets, namely the house at Marrickville. Ms Gillies submitted that an appropriate percentage to reflect those considerations is 15% of $270,000, namely $35,000. Taking a global approach in that regard, that is, in my view, a just and equitable adjustment. 20. For all these reasons it seems to me just and equitable that the interests with respect to the property of the parties should be adjusted so as to allocate to the plaintiff the total amount of $175,000 ($135,000 plus $5000 plus $35,000) from the equity in the house at Marrickville, but as to all other assets they should be left undisturbed. 21. A payment of $175,000 is therefore required from Mr Fernandez to Ms Henriques. 22. It remains only to make an order for costs. 23. The starting point is r 42.1 of the UCPR, which provides that the Court is to order that costs follow the event unless it appears to the Court that some other order should be made. However, "the event" in cases such as the present is not always easy to determine and might be interpreted in a variety of ways in any one case. This is particularly so in matters under the Property Relationships Act 1984 where orders for adjustment are made and the costs order to be made will rarely, if ever, depend simply upon which party commenced the proceedings. 24. The real question is, what is the appropriate order for costs, and in most cases that will almost invariably depend upon the exercise of a discretion according to the facts and circumstances of the particular case: Baker v Towle [2008] NSWCCA at [22] to [25]. 25. In this case it is evident that this plaintiff was required to commence these proceedings to enforce her entitlement in respect of a division of the assets. It is clear from the evidence before me, and from what I am told from the bar table, which I accept, that at no time did the defendant concede any entitlement on the part of this plaintiff to anything. The evidence to the contrary is overwhelming and for those reasons it is appropriate that this plaintiff be awarded costs. Indeed, had there been an offer of compromise, or a Calderbank letter I would have awarded indemnity costs. However, there is not. 26. I therefore order the defendant to pay the plaintiff's costs on the ordinary basis. 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.