Van Zonneveld v Seaton [2004] NSWSC 1223

Reported Decision : (2004) DFC 95-308

New South Wales Supreme Court

CITATION : Van Zonneveld v Seaton [2004] NSWSC 1223 HEARING DATE(S) : 12/10/04 - 15/10/04, 9/12/04 JUDGMENT DATE : 17 December 2004 JURISDICTION: Equity JUDGMENT OF : Campbell J DECISION : Defendant to pay plaintiff $51,000

CATCHWORDS : FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS - claim for adjustment of interests under Property (Relationships) Act 1984 - plaintiff performs work in renovating defendant's house - valuation of contributions - whether significance in attempt by defendant to have plaintiff enter cohabitation agreement - what significance lies in defendant making a Will, after conclusion of the relationship, leaving a legacy to plaintiff LEGISLATION CITED : Property (Relationships) Act 1984 Evans v Marmont (1997) 42 NSWLR 70 CASES CITED : Ferraro v Ferraro (1993) FLC 92-335 Sullman v Sullman [2002] NSWSC 169; (2002) DFC 95-248 PARTIES : John Cornelius Joseph Van Zonneveld - Plaintiff Birthe Kristine Adsbol Seaton - Defendant FILE NUMBER(S) : SC 1672/02 COUNSEL : M Gilbert - Plaintiff R Schonell - Defendant SOLICITORS : Harris Hyde Page - Plaintiff Delaney Lawyers - Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION EQUITY LIST

CAMPBELL J

17 DECEMBER 2004

1672/02 JOHN CORNELIUS JOSEPH VAN ZONNEVELD v BIRTHE KRISTINE ADSBOL SEATON JUDGMENT HIS HONOUR: Nature of the Case 1 This is an application under the Property (Relationships) Act 1984, brought by a man against his former de facto partner, seeking an adjustment of property interests under section 20 of that Act. Uncontentious Facts 2 There are some facts about the relationship between the plaintiff and the defendant which are not disputed. The plaintiff was born on 25 March 1938. He is a stonemason by trade, and has worked predominantly in that field and as a tiler throughout his working life. He was married twice before entering the relationship to which this case relates. He has children, who are all adult and independent. 3 The defendant was born on 4 February 1945. She was also married twice before entering the present relationship. She has no children. 4 The plaintiff and the defendant met in around February 1998, soon after the death on 5 December 1997 of the plaintiff's second wife. The relationship developed quickly. The plaintiff was out of Australia, visiting his family in Holland over the period from mid-March 1998 to 8 April 1998. He had his sixtieth birthday while in Holland on that trip. He moved himself and his furniture and effects into the defendant's house a few days before departing on that trip. Both the plaintiff and the defendant intended that he would live there on his return. From a few days before he left on that trip, he and the defendant lived in a de facto relationship. 5 The defendant has at all times owned a house at 33 Ryries Parade, Cremorne, free of mortgage. It is a three-storey property, containing twenty rooms of which five are bedrooms. It was originally constructed in the 1940s, and has been extended and upgraded since then. For some years before the plaintiff began living there, the defendant had derived income by permitting students to live in her house, and providing them with meals. The last of those students ceased living at the property at the end of December 1998. 6 The plaintiff was absent from the Cremorne house and was overseas for four different periods during the time he lived at Cremorne. There is the period in March-April 1998 already mentioned. In the period 12 August to 16 September 1998 the plaintiff and defendant holidayed in Europe together. During the period 6 December 2000 to 31 January 2001 the plaintiff and the defendant holidayed in Europe together once more. During the period 6 December 2001 to 13 January 2002 the plaintiff went to Europe alone. 7 The relationship came to an end in September 2001, when the plaintiff moved out of the bedroom he and the defendant had shared. Thus, it lasted three and a half years. The plaintiff continued to live at the Cremorne property until his departure for Holland in December 2001. Upon his return from Holland, he lived initially at the Cremorne property, but on 23 January 2002 moved out of that house, and into a flat which he rented. 8 It is common ground that, during the period of the relationship, extensive renovation work was done to the Cremorne house, and that the plaintiff played a part in performance of that work. There is dispute, however, about the precise extent of the work carried out, about the precise extent of the plaintiff's involvement in it, about whether there was any consensus (and if so what), as to the basis upon which he was doing the work, about the value of the work the plaintiff did and about the extent to which that work has improved the value of the house. The Statutory Test 9 The claim the plaintiff makes is under section 20 Property (Relationships) Act 1984. It provides: "(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." 10 There is no dispute in the present case that the plaintiff and the defendant were parties to a de facto relationship, and hence parties to a "domestic relationship" within the meaning of section 20. 11 There is no dispute that the de facto relationship lasted more than two years, and hence that the prerequisite to the making of an order arising under section 17 Property (Relationships) Act 1984 has been complied with. 12 These proceedings were commenced by the filing of a Statement of Claim on 27 February 2002, which was one month and four days after the plaintiff moved out of the defendant's house. The proceedings thus were begun comfortably within the time required by section 18 Property (Relationships) Act 1984. 13 In Sullman v Sullman [2002] NSWSC 169; (2002) DFC ¶95-248 I set out the approach to construction of section 20 as follows: "246 The language of paragraph (a) requires the contributions of both of the de facto partners to be taken into account. This is because the legislature has quite deliberately used the plural "of the de facto partners" . Further, it is the property of both partners, and the financial resources of both partners, which need to be taken into account. However, to qualify under paragraph (a) it is not any contribution which is made by a partner in the context of the de facto relationship which counts. It must be a contribution with a particular purpose or effect, such that it can properly be described as a contribution "to the acquisition, conservation or improvement of…property" . This is consistent with the purpose of the Act when first enacted in 1984, to remedy deficiencies then perceived to exist in the law of constructive trusts as applied to de facto couples who acquired property during the course of the relationship. To apply paragraph (a) one needs to identify each item of property which has been acquired, conserved or improved, and identify what financial and non-financial contributions have been made, directly or indirectly and by whom, to each such item of property. It may be that the evidence in a particular case only enables this to be done in a fairly rough way, but the exercise must still be attempted. 247 Paragraph (a) requires the Court to have regard to the "contributions" made. I gave some consideration to what counts as a "contribution" for these purposes in Nguyen v Schieff [2002] NSWSC 151, at [105] – [109]: "In Roy v Sturgeon (1986) 11 NSWLR 454 Powell J at 466 took the view that the only contributions which the Court could look at in effective this exercise, were ones made during he period of the relationship. However, that view has since been departed from. Bryson J in Foster v Evans (1997) DFC paragraph 95-193 at 77,681 disagreed with it. In Jones v Grech [2001] NSWCA 208; (2001) DFC paragraph 95-234 Davies AJA at [24] and [26] and Ipp AJA at [77] and [82] and held that contributions made prior to the commencement of the de facto relationship could be taken into account. In Green v Robinson [1995] 36 NSWLR 96 Cole JA said, at 115-116: "Further, in assessing whether it will exercise the s.20 power to adjust regard is to be had to contributions made to the date of the application. The underlying presumption of s.20 is that the de facto relationship has ceased, the parties have joint or several property, and it may be just and equitable to adjust those existing property entitlements having regard to past contributions of the type described so that the financial relationship between the parties may be finalised: see s.19." While neither of the other Judges of Appeal in Green v Robinson agreed or disagreed with this proposition, I find it, with respect, persuasive. It is a logical corollary of the Court of Appeal, in Jones v Grech , rejecting the limitation that Powell J had found and permitting pre-relationship contributions to be taken into account. Further, when s 19 of the Act provides: "In proceedings for an order under this Part a court shall, so far as is practicable, make such orders as will finally determine the financial relationships between the de facto partners and avoid further proceedings between them." there is good reason to take any post-relationship contributions into account." … Construction of Paragraph (b) 249 Because of the word "including" in the first line of paragraph (b), it is possible for a contribution to the welfare of the other de facto partner or to the welfare of the relevant family to be made in some capacity other than as homemaker or parent. Further, there is nothing in the language which requires contributions which count for the purposes of paragraph (b) to be non-monetary. It would be very arbitrary if financial contributions were excluded from paragraph (b). One task which paragraph (b) is unarguably designed to perform, is to permit the contribution made by a woman who stays at home to look after house and family to be taken into account in adjustment of property interests. It would be arbitrary in the extreme if a woman who chose to take paid employment, and to use all or part of her income to employ a housekeeper to do some of the tasks she would have done if she had stayed at home, could not have that contribution similarly recognised. 250 In my view, for one de facto partner to pay for housekeeping expenses is a contribution which falls within paragraph (b), even if the payment of those housekeeping expenses does not enable the acquisition, conservation or improvement of any item of property. Of course in that circumstance the question would arise of why the making of such a contribution made it "just and equitable" to adjust property interests. The point, for present purposes, is that such a contribution can fall to be considered under paragraph (b). 251 Consistently with the view that financial contributions can fall within paragraph (b), Brownie J has held that a payment for a holiday can be a payment towards the welfare of the parties, and so within paragraph (b) ( Myers v Myers 21 October 1986; (1987) DFC ¶95-056). See also Evans v Marmont (1997) 42 NSWLR 70 at 96 per Priestley JA (a passage inconsistent in some respects with the decision of the majority in that case in the way it construes the word "having regard to" in section 20(1), but not cut down by the majority view in so far as it stresses the width of paragraph (b)). "Just and Equitable" 252 In Stephenson v State Bank of New South Wales Ltd (1996) 39 NSWLR 101, at 113, Sheller JA was considering section 66M Conveyancing Act 1919 (which provides, that where land is damaged between the time of contract and conveyance, the purchase price shall be reduced "by such amount as is just and equitable in the circumstances"). His Honour said: "The determination of what is just and equitable in the circumstances is not a matter of unfettered individual opinion, nor does it involve a discretion of an arbitrary kind: see Cominos v Cominos (1972) 127 CLR 588 at 599. As Kitto J observed in R v Commonwealth Industrial Court; Ex parte Amalgamated Engineering Union, Australian Section (1960) 103 CLR 368 at 383, the criteria are of a nature with which Courts are familiar. In Talga Ltd v MBC International Ltd (1976) 133 CLR 622 at 634, Stephen J, Mason J and Jacobs J, dealing with the issue raised for the court by the Banking Act 1974 (Cth) of whether it was just and equitable that a transaction should be treated as valid, said: "… The court will have before it an existing transaction replete with all its surrounding facts and circumstances and in their light will determine what is just and equitable. In doing so it will certainly be exercising a wide discretion that this is a commonplace of the curial process; the court will be bound to act judicially, exercising its discretion by reference only to such considerations affecting the transaction as, on an examination of the legislation, may be seen to be material to the decision which it is called on to make. Irrelevant matters, matters such as the plaintiffs instanced in the course of argument, which have no rational connexion with the policy of the regulations but would be expressive only of the personal predilections of the Court, cannot be allowed by it to play any part in its decision." 253 This approach is, it seems to me, applicable to section 20." Value of the Cremorne House 14 The plaintiff called a valuer, Mr Webster. He valued the property as at 25 March 2003, and put a value of $1.95m on it as at that date. He did so on the basis of six comparable sales, over a period from April 2002 to November 2002. He says that the market has risen by around ten percent between April 2002 and March 2003. 15 He assumed that the extent of the improvements effected by the plaintiff was as described in the report of a quantity surveyor, Mr Martin. On that assumption, he concluded that the works had added value to the property, in an amount between $200,000 and $250,000. His preferred view was that the added value would more likely be towards the top of that range, rather than the bottom. He accepts that that increase in value was a product of not only the labour involved, but also the materials, the design, choice of colour, style, and the quality of the PC items. 16 For the defendant, Mr O'Neill, a valuer, also gave evidence. He valued the house as at January 2002, in its renovated state, at $1.8m. Mr O'Neill's valuation was based on six comparable sales over the period April 2001 to April 2002. His value as at January 2002 is broadly consistent with Mr Webster's value as at March 2003, and Mr Webster's view that there had been a ten percent increase in the market over the period April 2002 to March 2003. 17 Mr O'Neill also valued the property as at March 1998. He assumed that the work which the plaintiff did was the work set out in the report of a quantity surveyor, Mr Baum. He took the view that those works would add $200,000 to the value of the property. He valued the property, in its renovated form, as at March 1998, and then subtracted that $200,000 from the value so arrived at, and concluded that the value of the property in its unrenovated form as at March 1998 was $1.1m. Though he did not expressly state it in his report, it necessarily follows from his methodology that, had the house been in its renovated form as at March 1998, it would have been valued at $1.3m. It also follows that $500,000 of the increase in value of the property between March 1998 and January 2002 was attributable to a rising property market and to work done by people other than the plaintiff, rather than to any work done by the plaintiff. 18 I accept this evidence of both valuers, save only that I do not seek, at this stage of the judgment, to decide the precise extent to which the plaintiff's work increased the value of the house. Changes in the Property of the Parties During the Relationship Assets at Start of Cohabitation 19 At the beginning of cohabitation in March 1998 the plaintiff had assets consisting of: