New South Wales Supreme Court CITATION : Waring v Ellis [2005] NSWSC 467 HEARING DATE(S) : 14/03/05; 15/03/05; 16/03/05 and 17/03/05 JUDGMENT DATE : 18 May 2005 JURISDICTION : Equity Division JUDGMENT OF : Young CJ in Eq DECISION : Order in favour of plaintiff on trust issue. Additionally order for plaintiff on Property (Relationships) Act case for $81,000. CATCHWORDS : EQUITY [97]- Joint bank account- Account held by de facto couple- Plaintiff had legal title to lotto winnings- Placed winnings into joint account- Whether de facto relationship and plaintiff's acquiescence meant that winnings were legal property of each- Whether plaintiff lacked intention to share winnings with defendant which gave rise to resulting trust in his favour. ESTOPPEL [43]- Estoppel by acquiescence- Whether plaintiff's silence as to how defendant spent money from joint account could raise estoppel- Silence can only raise estoppel where there is a duty to speak. FAMILY LAW AND CHILD WELFARE [105]- De facto relationships- Existence of relationship- Parties lived together in same house for 12 years- Conflicting evidence as to whether relationship existed. PERSONAL PROPERTY [5]- Lotto ticket- Plaintiff purchased ticket- Purchaser has legal title - Defendant claimed that preexisting arrangement with plaintiff regarding ticket purchases meant she received a share in winnings- Whether subsequent conduct of purchaser gave rise to creation of other beneficial interests in ticket winnings. LEGISLATION CITED : Property (Relationships) Act 1984, ss 3, 4, 5, 14, 20 Cole v Crain (Young J, 16.8.1989, unreported) Croton v R (1976) 117 CLR 326 Daly v Gilbert [1993] 3 NZLR 731 Jones v Maynard [1951] 1 Ch 572 Pelly v Wathen (1851) De GM & G 16; 42 ER 457 Pickard v Pickard [1981] FLC 91-034; (1981) 7 Fam LR 636 Re Bishop [1965] Ch 450 Re Brease (1997) 22 FAm LR 518 CASES CITED : Re Reid (1998) 85 FCR 452 Re Zyk (1995) 19 Fam LR 797 Russell v Watts (1885) 10 App Cas 590 Smith v McDonnell (Hodgson J, 30.3.1995, unreported) Van Rassel v Kroon (1953) 87 CLR 298 Vitali v Stachnik (2001) DFC 95-235; 28 Fam LR 142 Voulis v Kozary (1975) 180 CLR 177 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Michael Waring (P) PARTIES : Virginia Ellis (also known as Virginia Downes) (D) FILE NUMBER(S) : SC 3591/02 J D Shaw and M Kriss (P) COUNSEL : M T Bridger (D) Fisher Chapman (P) SOLICITORS : Robert Tinsey Pty Ltd (D) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION YOUNG CJ in EQ Wednesday 18 May 2005 3591/02 – WARING v ELLIS JUDGMENT 1 HIS HONOUR: The plaintiff claims that he was the de facto husband of the defendant between 1991 and 2002. The defendant denies this. 2 The plaintiff's primary application is for a declaration that the proceeds of the sale of a property at Little Hartley is held on trust for him. Alternatively and additionally he seeks orders under s 20 of the Property (Relationships) Act 1984. 3 The plaintiff is 57, the defendant 38. Both had been previously married and separated prior to their relationship commencing. The defendant has a child, Jessica, who is now 18 and who at all material times resided with them as did the defendant's mother, Anne Downes. 4 The parties lived at 78 Tablelands Road, Wentworth Falls, a property owned by the defendant up until 25 April 2002, when the plaintiff says the defendant left him. From February 2001 both parties have been working as taxi drivers in the Upper Blue Mountains. 5 It is not easy to state the parties' property in any logical fashion, but I will do the best I can. For ease of reference, and not meaning any disrespect, I will refer to the parties by their first names. 6 In 1988 Virginia, the defendant, purchased vacant land at Tablelands Road, Wentworth Falls for a net cost of about $18,500. She arranged for a house to be built on the property (the cost seems to be admitted to be $62,500) and funded it by a mortgage. In about May 1989, Virginia, Anne and Jessica moved into the Wentworth Falls property. Michael, the plaintiff, was working as an electrician on the house. He became a frequent visitor and formed a relationship with Virginia. He says he moved into the house in April 1990. 7 The defendant does not deny that the plaintiff moved into the Wentworth Falls house, however her principal claim is that he did so as Anne's boyfriend and not as her de facto. I will return to this matter later. 8 Michael at that stage owned a property at 41 Sayers Street, Lawson. He sold this property, purchased a car and had $60,000 surplus. 9 Michael, Virginia, Anne and Jessica then moved to Queensland and Michael and Virginia opened a coffee shop business in Coolangatta. Virginia and Anne operated this while Michael worked as an electrician. There were two businesses in Coolangatta, neither was successful and the parties moved back to Wentworth Falls in April 1991. 10 Michael says he purchased a lotto ticket from Perry's Newsagency opposite Katoomba railway station on 1 March 1993. That same night that ticket won $500,000. 11 Virginia says that (1) she purchased the ticket; or (2) that there was an arrangement between herself and Michael that they would buy tickets turn and turn about and share the proceeds. 12 As to Virginia's first claim, I completely disbelieve it. Evidence was given by the proprietors and staff at Perry's Newsagency that they knew Michael; they did not know Virginia, and indeed Mrs Perry swears that she sold the ticket to Michael. At this stage Michael was working as a taxi driver and the taxi rank at Katoomba railway station is almost opposite Perry's Newsagency. Virginia did not commence working as a taxi driver until February 2001. 13 The fact that Virginia made this claim makes me concerned about her credibility generally. This affects her claim that there was an arrangement whereby she and Michael would buy tickets turn and turn about and share the proceeds. There is no evidence of this other than that which comes from Virginia which I do not credit. 14 Accordingly, in my view the evidence shows that Michael was the owner of the ticket and the person entitled to the $500,000. 15 This is really just a plain question of fact and the evidence is all the one way. However, counsel did refer me to some authorities. In Van Rassel v Kroon (1953) 87 CLR 298, Dixon CJ set out the general rule at 302, that is: "The person in whose name the lottery ticket issues obtains the legal title to what is a chose in action. If he is the applicant he obtains custody of the ticket and is in a position to exercise whatever rights the ticket confers and deal with it as he chooses." The Chief Justice went on to say that claimants that the ticket was bought on their behalf "have nothing but an equitable interest in the ticket and its proceeds if it wins a prize." The ticket holder is not a trustee or fiduciary agent with any duties other than he must do nothing to impair the equitable rights of those for whom he holds the ticket. The High Court also dealt with questions of lottery wins in Voulis v Kozary (1975) 180 CLR 177 and there have been a number of decisions in this court including my decision in Cole v Crain (16 August 1989, unreported) and Hodgson J's decision in Smith v McDonnell (30 March 1995, unreported). However, none of these decisions really has any bearing on the result. 16 Two decisions of the Family Court also consider the matter. In Re Zyk (1995) 19 Fam LR 797, the Full Family Court had to deal with a case where two years into a marriage the husband won $95,000 in Tatts Lotto. The facts were that the monies from which the ticket had been purchased had come from shared joint income of the parties and the Full Court considered that the lotto win should have been treated by the Court as a joint contribution. This was followed by another Full Family Court decision in Re Brease (1997) 22 Fam LR 518. In that case the wife's money had been used to buy the ticket and the Court held that the lottery winnings should be treated as the wife's contribution to the property in which the monies were spent. The case contains some useful discussion as to what happens when a wife deposits her lottery winnings to a joint account. 17 These cases do not take the present matter any further because, as I have held, the monies used for the ticket were Michael's; he bought the ticket and the proceeds were his. 18 I now must pause and look at the next part of the narrative with considerable care. This is because cases like Voulis v Kozary show that the conduct of a person in whose name a lottery ticket is immediately after the win, may show that in fact other people have beneficial interests in the proceeds. 19 The plaintiff, Michael says that he watched the lotto draw and recognised some of his numbers. He went back to Perry's Newsagency the next day without saying anything to Virginia and asked Mr Perry to check the ticket. He says Mr Perry did so and had a surprised look on his face and turned the computer screen around to show Michael that he had won $500,000. He gave Michael a claim form to fill in, which he did. On about 12 March, Michael received a letter from the Lotteries Office confirming his win. That night, in the presence of Anne and Jessica, he said to Virginia, "I have a big surprise for you all" and he told them that he had won half a million dollars. He showed them the letter from the Lotteries Office which had a form attached to it which he was supposed to return to the Lotteries Office with his bank account details. 20 Michael says Virginia said, "We'll go and open up a joint account for our retirement together. We'll go down to Penrith on Saturday morning." A few days later Michael and Virginia went to Penrith and opened an account in both their names with the Advance Bank, A/C No 33395647. The Lotteries Office deposited the amount of the winnings into that account shortly after 18 March 1993. 21 Although in cross-examination counsel for Virginia attacked Michael's version and had some success in that it was difficult to see how a then 27 year old woman would make a remark about investing with a 44 year old man for their retirement, Virginia herself did not put forward any different version. Indeed, in her affidavit she says she cannot even remember the full circumstances of the opening of the account, but she knows that there was a joint account opened at the Advance Bank in Penrith, and that the monies were there deposited. 22 Without Michael's knowledge, Virginia withdrew virtually the whole amount from the joint account in April 1993 and it found its way into an interest bearing deposit account at the same bank in the name of Anne. There are no bank records available until 27 April 1993. However, it would seem that as at August 1993, Anne's IBD account had $406,000 in it and her ordinary account had a further $60,117 in it. 23 On 1 September Anne opened a further account and $400,000 passed from the former IBD account to Anne's new account. It may well be that these were just a rolling over of $400,000. What happened to the $40,000 being the difference between the balance in Anne's accounts and the $500,000 deposit is partially explained because Virginia says that about $40,000 was used to pay the plaintiff's debts (I actually rejected that evidence), and that the $60,000 was set aside for spending on an overseas holiday. 24 It would also seem that a Pajero motor vehicle was purchased in July 1993 for $50,000. Virginia said that she traded in her motor vehicle as part of the price and that the Pajero was principally driven by Anne. Michael says that the Pajero was registered in Virginia's sole name, and although he has or had possession of it, Virginia claims it is her's. 25 During the period after the return from Coolangatta until 2001, Virginia was not often in gainful employment. She had a couple of jobs as a bar maid in local hotels and drove a taxi for a Mr Daley for about six months in 1995. She commenced driving taxis full time in January 2001. Michael says she lived off the capital from the sale of his Lawson property plus various monies she was receiving from the Commonwealth Government by way of pensions or allowances. 26 Michael says that each week he handed his wages, or at least the balance of his wages, to Virginia and she said that she would be using the money towards the mortgage and other bills. She told Michael that the mortgage had been paid off in about July 2001. However, a search as at September 2002 shows that not only was that mortgage not removed from the title, but also that Virginia had taken out a second mortgage after the separation for a further $50,000. Michael says he knows nothing about that mortgage at all. Michael says that during the period he was living with Virginia at Wentworth Falls he did considerable work and purchased materials which are set out in para 28 of his affidavit. 27 In May 1993, Michael, Virginia, Jessica and Anne travelled to the United States, Italy, France and England, a trip which cost about $50,000. Virginia said that she would take the cost out of the joint account and Michael was happy with this, though we now know that the monies had actually been already transferred into an account in Anne's name. In 1995, the four took a cruise to the Pacific Islands. They took another cruise in 2001. 28 Michael says that in 1997 Virginia told him that she, Anne and Jessica were going to take another cruise, but he would have to stay home and look after the dogs and this occurred again in 1999 and 2002. 29 In about March 1994, Virginia suggested that, "Why don't we buy a property down in the Valley? It will be nice to move there later on". In due course, 32 Cranebrook Park Road, Little Hartley was purchased. Michael said he let Virginia do all the paperwork. She said that Dale Turner, the conveyancer at Katoomba would be retained and that Mr Turner would arrange for the property to be in both names and the money would come from the joint account. Michael was happy with this. In fact the money came from Anne's account and the Little Hartley property was put only in the name of Virginia. From 1996 to 2002, Michael purchased equipment and did work on the Little Hartley property. 30 The Little Hartley property has now been sold and the proceeds, approximately $461,000, have been invested in a controlled monies account with the Commonwealth Bank of Australia pending my decision in these proceedings. 31 Jessica gave evidence for Michael, and against her mother. However, her evidence is affected by the fact that came to light that Michael agreed that he would share any proceeds of these proceedings with Jessica in equal proportions. 32 Michael's case then is that he was entitled to the whole of the lotto monies and that he consented to the expenditure on the overseas trips but he is entitled to the whole proceeds of the sale of Little Hartley, and indeed, he is entitled to an account from Virginia as to what happened with the monies that she withdrew from their joint account. He is also entitled to an order under the Property (Relationships) Act. 33 Virginia's answer is that the lotto monies were half her's (a matter which I have already considered), that she was never in a de facto relationship with Michael, that Michael was her mother's boyfriend, that Anne compelled Virginia to do many of the matters that Michael complains about and that Virginia willingly did them thinking that Anne and Michael were an item, and that Virginia has for some time been in a lesbian relationship and is not interested in a relationship with Michael or any other male. 34 It is interesting that in the evidence Michael was suggesting very strongly that he maintained Virginia over the period from 1990 to 2001, that Virginia did little work and that she occupied most of her time in doing a series of courses. Virginia did not put forward any acceptable concrete material to negative this impression. 35 Looking at the parties' property as at the beginning and end of the relationship (assuming there was a relationship), one comes to the following conclusion, though it is, of course, a simplified version. 36 At the commencement of the relationship Michael had a house at Lawson worth about $125,000 subject to a mortgage of $40,000 which he realized during the relationship for about $60,000 net. In addition, he had a car, furniture, tools of trade and cash of about $20,000 in total. 37 Virginia had the house at Wentworth Falls worth about $80,000 subject to a mortgage of $62,000 and a motor vehicle and bits and pieces totalling probably about $10,000. On Michael's account the parties had probably equal wealth. 38 At the time of separation Michael ended up with $1,050 plus his claims to an interest in the house at Wentworth Falls, an interest in the Little Hartley proceeds and an interest in accounts in Virginia's name with the St George Bank totalling $130,000 and his claim to the Pajero. Virginia has a taxi worth $7,000, cash in an unknown bank account of $140,000 from an insurance claim, plus the legal interest in Wentworth Falls, proceeds from Little Hartley and $130,000 in the St George Bank. 39 It is, I believe, first necessary to consider what is the property interest held by the parties at law or in equity before I consider whether I need to apply the Property (Relationships) Act. It is for this reason that I have so far kept completely away from the allegations and counter-allegations as to where Michael slept during the period 1990 to 2002. 40 As I have already said, I am comfortably satisfied that Michael was the lotto winner. Accordingly, the money paid by the Lotteries Office into the joint account at Penrith belonged to Michael. 41 I must first address the question as to whether the act of placing the money into the joint account, perhaps to which one might add his acquiescence in Virginia's statement that she denies that the money was to be for their retirement, meant that there was a gift of half to Virginia. 42 I also should take into account Michael's acquiescence in what he thought was happening to the money in the joint account, namely it being used for overseas trips for the four people and to be used to buy Little Hartley in the two names. The fact that Virginia or Anne had already appropriated the money into their own names is immaterial for this purpose. 43 I have found little guidance in the inferences that might be drawn from the deposit of X's money into a joint account belonging to X and Y. There is guidance in a situation where X and Y are married. I have not yet determined whether the parties were a de facto couple. It may be that if they were, one would have to adjust one's approach, but for present purposes I will put that matter out of consideration. 44 In the CCH Australian De Facto Relationship Law at para 110 on p 1111 the learned author says: "Where a de facto couple open a joint bank account with unequal initial and subsequent deposits, it might be argued that the account, and anything purchased from the account, should be owned in proportion to the initial, and perhaps subsequent, deposits. This may open some accounting nightmares which would encourage the courts to find either: · An objective intention to own the bank account and anything purchased therefrom jointly, eg Jones v Maynard [1951] 1 Ch 572; Pickard v Pickard [1981] FLC 91-034; or · An objective intention that, at least during overt marital harmony, anything withdrawn from the joint account would normally become the property of the withdrawing spouse, eg Re Bishop [1965] Ch 450; Croton v R (1967) 117 CLR 326. Which objective intention prevails over the presumption of resulting trust will depend upon judicial speculation from the facts of each case. This is hardly reassuring to would-be litigants given the elusive nature of past intentions in family transactions." 45 I have, of course, read those four cases. With respect, none of them are of much assistance in resolving the present problem. Jones v Maynard was a case involving husband and wife and Vaisey J held that where husband and wife have a joint account one does not take accounts as to whose is what, but divides the proceeds equally at law or in equity. Pickard (also reported as (1981) 7 Fam LR 636) was a decision of Nygh J again involving a married couple. His Honour followed Jones v Maynard. 46 In Re Bishop, Stamp J made it clear that he disapproved of Jones v Maynard and distinguished it in the case before him. However, again this was a case of husband and wife operating a joint account on the terms that either could draw on it and it was held that if one purchased a chattel for his own benefit or made an investment in her own name, then there was no equity to displace the legal ownership. 47 Croton was a case where a married man and a divorced woman formed an association and had a joint bank account upon which either could operate. The man withdrew the money and put it into his own account and he was charged with larceny. The High Court reversed the conviction, but in the course of doing so made observations as to the situation where parties operate a joint account. Barwick CJ said at 334: "It was a joint account with a right in each to withdraw. Whether or not there was evidence of a legally-binding arrangement as to the ultimate use of the amount standing in it may be doubted: and in default of such an arrangement it may be that either could withdraw the whole or any part without coming under any obligation to account. Whether or not the proceeds of the account were joint property is not answered merely by the fact that, in the circumstances, the account was in the joint names. Further, even supposing such an agreement as to the use of the proceeds of the joint account, it does not follow that it extended to require the amount to be kept in that account: the ability of either to withdraw from the account might be thought to tend against such a construction of these arrangements." Menzies J said at 338: "If moneys from a joint account were to be withdrawn by and paid to an agent of the joint owners whose duty it was to bring it to them, the money which the agent received would be joint property and I see no reason why it should not also be joint property when money withdrawn from such an account is paid to one of the owners of the joint account." At 339 Menzies J distinguished the case of monies held in a joint account by husband and wife with that of a joint account of man and mistress. 48 The question was considered again as between husband and wife in a bankruptcy situation in Re Reid (1998) 85 FCR 452 by Heerey J in the Federal Court. Mr Reid was charged with some white collar crime. Mrs Reid withdrew $50,000 from the joint account which she had with her husband and put it up for bail for her husband. The husband was later made bankrupt and the Trustee in Bankruptcy claimed the $50,000 or alternatively half that amount. Heerey J considered that the wife had full authority to withdraw the $50,000, bail had to be put up by the surety's own money, the $50,000 was considered to be Mrs Reid's own money, and accordingly the Trustee was not entitled to the money. Heerey J approved Re Bishop and Croton. 49 In New Zealand in Daly v Gilbert [1993] 3 NZLR 731, there was a joint account between people living in a de facto relationship. Hammond J followed Re Bishop and held that where parties to a de facto union have a joint account and one party drew on it and purchased something in her sole name, she acquired sole title to it. 50 Virginia does not claim as per Re Bishop that the whole of the Little Hartley property is hers. That is probably wise because I do not consider that cases like Re Bishop lay down any rule that must be applied in every case, they merely deal with situations where there is no particular guidance in the surrounding circumstances. 51 Virginia acknowledges that half the proceeds of Little Hartley are held on trust for Michael. She claims, however, the other half. 52 I am satisfied on the evidence that Michael at all times believed that Little Hartley was paid for out of the monies from the joint account. I am also satisfied that Virginia believed that she was entitled to use the other half for herself. 53 At some stage before Little Hartley was bought, however, Virginia in fact used more than one half of the monies for her own purposes though she said in evidence that that was something that happened unintentionally and she never intended to use more than her half. 54 There is a problem in legal analysis. As I have held, the monies were originally Michael's. His depositing them into a bank account under which the bank became the owner of the monies and Michael exchanged his monies for a promise by the bank that it would repay the monies on demand to either Michael himself or to Virginia, meant that both Michael and Virginia had legal rights against the bank. Does the presumption of resulting trust apply because the monies were wholly Michael's and there are no words of gift to Virginia, or can one reason from cases like Re Bishop that the monies have become in law the property of each of the signatories and there is no equity enabling Michael to demand an account? 55 I have thought long and hard about this matter which is not an easy one. My conclusion is that Michael does not have any equity to pursue the monies. He permitted a situation to arise whereby Virginia had half the legal title and he was content without any accounting for the monies to be used for joint purposes without keeping track on exactly who was entitled to what. 56 During final submissions, Mrs Bridger of counsel for Virginia, put that there was an estoppel operating against Michael from now claiming the money that resulted from the sale of Little Hartley. Mr Shaw for Michael pointed out that that had never been pleaded. Mrs Bridger sought leave to amend; Mr Shaw objected and I reserved my decision on the amendment until final judgment. 57 Mrs Bridger relied on cases such as Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387. She was endeavouring to establish an estoppel by Michael's acquiescence in making no complaint about what Virginia had done. I considered this was a fairly hopeless approach. 58 It will be remembered that Ashburner on Equity 2nd ed at p 450 points out that when silence is relied upon as an estoppel, the silence must amount to a representation that the party keeping silent has no rights. This is different to the situation where silence is relied upon as a promise where the silence must be construed as an intention not to exercise rights. One can only have estoppel by silence if there is a duty to speak or where the party remaining silent might reasonably infer that that silence would be taken by others as sanctioning a particular course of conduct, that is, that it is inequitable to keep silent: Pelly v Wathen (1851) De G M & G 16 at 25; 42 ER 457 at 460; Russell v Watts (1885) 10 App Cas 590 at 613. 59 Accordingly, I decline to give my leave to amend the statement of defence. 60 This, however, is really of no moment. The reason is that, with great respect to Mrs Bridger, the estoppel argument has no legs at all. We are not dealing here with a case where Michael has an equity, but Virginia has an equitable defence. The real attack should have been to the effect that Michael has no equity at all to assert. That I find to be the case. 61 Accordingly, under the general law, Michael and Virginia are entitled to share in the proceeds of Little Hartley equally. 62 So far as Wentworth Falls is concerned, this property was purchased by Virginia before the relationship started. Michael, I accept, has worked on the property and spent his own money in buying accessories for it and also has paid monies to Virginia which he believed were being used to pay off the mortgage. However, none of these matters would give Michael anything more than an equitable charge over the property. 63 Indeed, the evidence does not even go that far. Michael knew the property was Virginia's. He lived in the property rent free for 12 years. He never sought any account from Virginia as to the application of the monies he was paying her. There was never any promise or estoppel operating against Virginia whereby she would have to account or repay any of the monies or that Michael would be entitled to any interest in the property. 64 So far as the $130,000 in Virginia's bank account is concerned, there is virtually no evidence as to where these monies came from. It is true that Virginia does not appear to have been in receipt of income until at least 2001 in any steady form. We know she did raise $50,000 on a second mortgage in 2002 over Wentworth Falls but there is no indication as to where that money went. I do not consider that there is any sufficient material from which I could say that Michael has any interest in that account. 65 Accordingly I have to deal with the question as to whether Michael should get relief under the Property (Relationships) Act and so I now turn to the facts dealing with the personal relationship between Michael and Virginia. 66 In what follows, a reference to "the Act" is a reference to the Property (Relationships) Act 1984 as amended. Section 4 defines a de facto relationship as one between two adult persons, (a) who live together as a couple; and (b) who are not married to one another or related by family. Section 4(2) provides as follows: "In determining whether two persons are in a de facto relationship, all the circumstances of the relationship are to be taken into account, including such of the following matters as may be relevant in a particular case: (a) the duration of the relationship, (b) the nature and extent of the common residence, (c) whether or not a sexual relationship exists, (d) the degree of financial dependence or inter-dependence, and any arrangements for financial support, between the parties, (e) the ownership, use and acquisition of property, (f) the degree of mutual commitment to a shared life, (g) the care and support of children, (h) the performance of household duties, (i) the reputation and public aspects of the relationship." 67 In addition to there being a de facto relationship, a person can be in a domestic relationship. This is defined in s 5(1) as a de facto relationship or: "a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care." However, sub-section (2) provides that such a relationship is taken not to exist between two persons where one of them provides the other with domestic support and personal care for fee or reward or on behalf of another person or an organisation. 68 Under s 14, a party to a domestic relationship may apply to a court, including the Supreme Court, for financial adjustment under Part III of the Act. Section 20 provides that on such an application the Court may make such order adjusting the interests of the parties in the property as it seems just and equitable having regard to various matters set out in the section, principally the financial and non-financial contributions and contributions as a home-maker, of the parties. "Property" is defined by s 3(1) as including all rights relating to property. 69 Both counsel referred me to the judgment of Barrett J in Vitali v Stachnik [2001] NSWSC 408 reported in (2001) DFC 95-235 and 28 Fam LR 142. In that case Barrett J said at [47] that the proper way of approaching loans between de facto partners was that "money which one party has lent to the other or which is otherwise owing between the parties should, as it were, be left to lie where it has fallen, with the resultant benefits and detriments being taken into account as elements in the overall assessment of respective contributions the Act requires." I will adopt this approach with everything except the property at Little Hartley and the proceeds of its realization. 70 The present case is unusual in that the existence of the de facto relationship is denied even though the parties lived together for about 12 years in the one house. There was dispute between the parties as to which rooms they occupied. Virginia said that they slept in completely separate rooms. Michael said they slept together. Jessica said that Michael always shared a room with her mother. Anne says that she never was Michael's companion and the relationship between her and Michael was that of "de facto mother-in-law and son-in law." 71 Jessica's evidence must be discounted for the reason I have already given. Virginia would say that Anne's evidence should be discounted because she is the real villain in the piece. However, I do not accept this. 72 The principal problem with Michael's evidence is that when Mrs Bridger asked him whether he had ever seen Virginia naked, he replied that he had on many occasions. Mrs Bridger then asked Michael to describe whether there were any identifying marks on Virginia's body. Michael found himself unable to do so, save that he did give an answer to the question as to what was the colour of Virginia's pubic hair. This was not a matter that he could necessarily guess right because he said "not blonde" and the evidence showed that so far as the hair on Virginia's head was concerned, it changed from blonde when he first knew her, to spiky brown. 73 In her evidence, Virginia produced photographs of part of her body which showed that she did have a couple of moles and imperfections. Significantly, however, she gave no evidence as to the colour of her pubic hair. 74 When information is in the camp of a witness and the witness does not lead evidence as to that matter, and the opposing witness has given a statement about it, one can assume that the person with the real knowledge is not in a position to contradict, or, to put it another way, that nothing that she would say would weaken the other side's evidence. 75 Of course, it is quite possible that Michael just correctly guessed the colour of Virginia's pubic hair. No evidence was given as to whether pubic hair is or is not the same colour as the hair on someone's head. 76 As to the other marks on Virginia's body, they were minor marks and what I am asked to assume is that a man who had slept with Virginia over 12 years and had seen her naked on many occasions would be able to identify those marks. I find this a questionable proposition. It may be correct. On the other hand, there is something to be said for the proposition that, with over-familiarity, minor blemishes on a sweetheart's body have no significance at all for the man concerned. Accordingly, I do not consider that this is a "killer" point, but I do think it is a relevant matter to take into account when making my determination. 77 The photographs that were tendered, Exhibit DX 123, show a few moles, some white stretch marks and what appears to be a relatively small scar and a lump under the right leg. It is possible that over time these would fade into insignificance to a person used to sighting them. 78 Accordingly, one has the situation where the parties and their associates are saying diametrically opposite things which can be put in perhaps an over-simplified form as follows: The plaintiff: I moved into the Wentworth Falls house in about 1990/1991 and lived in a de facto relationship with the defendant for 12 years. I slept with her. I gave her my earnings of about $600 a week during that time. The defendant: The plaintiff was never my de facto partner. I never slept with him. We always had separate rooms. He was my mother's boyfriend. I was completely under the control of my mother. Mrs Downes: The true situation is that the defendant was always in charge. She was making me do things. I considered the plaintiff as my de facto son-in-law. He was my daughter's de facto. Jessica Downes: The plaintiff was my mother's de facto and I know they slept in the same bed. 79 I need to analyse, accordingly, the credit of the witnesses. None of them are what might be called "squeaky clean". As I will demonstrate, the credit of each was affected. 80 First it should be noted that one reason for moving money around was that, particularly with the defendant and her mother, they were receiving pensions or supporting parent's payments and they did not want any investigation from Social Services, seeing that there was a large sum of money in the account of any of them. This appears to be the reason why the money moved from the joint account into Mrs Downes' account, and then out of it when Mrs Downes found that her account had a large sum of money in it. 81 Whilst Mrs Downes may well have been entitled to a pension, the evidence seems almost uncontradictable that for a period of time the plaintiff was working whilst getting unemployment benefits, but for a very much longer period in time, the defendant was receiving a supporting parent's pension while she was working and, if the plaintiff is correct, while she was his de facto partner. These matters affect credit. People who defraud the Social Services Department cannot pass themselves off as citizens whose credit is unimpaired. 82 When analysing credit, the defendant starts in a sense behind scratch because of the evidence she gave which I have disbelieved that she bought the lotto ticket. Mr and Mrs Perry and Mrs Steher all are quite clear that the plaintiff bought the ticket and not the defendant, or that they did not see the defendant until after the win. The defendant, however, persisted with this story, but then had the rather inconsistent back-up story, which I also disbelieve, that she and the plaintiff bought tickets alternately. It is far more likely that Jessica's evidence is correct that the defendant did not like lotteries. 83 I now turn to the evidence given by the four main players in this drama. 84 Mrs Bridger's cross-examination of the plaintiff was quite effective in many ways. However, it did not wholly succeed in its aims. 85 The first aim was to endeavour to bolster the defendant's story that the plaintiff was the live-in boyfriend of the defendant's mother and that the plaintiff and the mother had got their heads together to concoct the story of there being a de facto relationship. Jessica joined in that story because she was to get half the proceeds of the present proceedings. Furthermore, Jessica was currently in argument against her mother, she having complained to the police about the defendant have sexually molested her from the age of five. This was a recent allegation which it was alleged was malicious and designed as part of the conspiracy against the defendant. 86 Mrs Bridger obtained some material to reinforce this theory. There appears to have been a Miss Cross who was a solicitor's secretary, but also seems to have operated what might be called a solicitor's aide business operating out of her own home. The evidence was quite clear that on some occasions the affidavits were, to use a neutral word, prepared by Miss Cross for the plaintiff and people sympathetic to him, and that on occasions Mrs Downes and the plaintiff and sometimes Jessica as well, were all present with Miss Cross when she took instructions for the affidavits. There was, accordingly, some basis for alleging a conspiracy/collaboration, as no litigation lawyer should allow such things to occur. 87 However, it was not established that this malpractice in fact led to the filing of affidavits which were not true statements of the evidence which each of the witnesses believed to be true. 88 The next attack on the plaintiff was that his affidavit contained details of the work he said he had done on the Wentworth Falls premises. Those details included the dates on which the work was done. It was established in cross-examination that at least some of those dates were completely wrong because he was overseas on the alleged dates. Although the plaintiff endeavoured to minimise the effect of this cross-examination by saying he just got the dates wrong, it looked far more like a case of putting together an affidavit from reconstructed data generally. 89 The next significant attack was on the statement that the money was to be put into the joint bank account for the parties' retirement. I did find the plaintiff's evidence on this unconvincing. An allied point is that if his story were true, why did he allow the money to go into Little Hartley: he obviously did know that and made no objection. However, an answer to this which I accept, is that he was a fairly meek and mild individual and he thought that the property was going to be put in both names. Indeed, I accept the plaintiff's evidence generally that he trusted the defendant and thought that she was looking after his interest as well as hers and made no enquiry for that reason. 90 To conclude, there were obviously unsatisfactory aspects of the plaintiff's evidence. However, I basically accept that he won the lotto money and that he trusted the defendant to use the money for the benefit of both himself and herself. 91 Mrs Downes was attacked on some of the same grounds as the attack was mounted against Mr Waring. She gave some rather peculiar evidence. She distinguished between an affidavit which was sworn, and one which was sworn on the bible. According to her standards of morality, mis-statements in something which was not sworn on the bible was pardonable; something which was sworn on the bible was unpardonable if wrong. In this way she endeavoured to explain away some of the statements that she had made which obviously could not be supported. This did not bolster her credit. Moreover, counsel showed that even some statements in the affidavit which were sworn on the bible must be wrong. 92 However, her general evidence was that the defendant was in command and "made me sign" and "made me" do this and that and although some of the cross-examination affected that evidence to some slight extent, the evidence of Mrs Downes survived to a substantial extent. It was rather hard to accept that A Clarke was a pseudonym for the defendant rather than Mrs Downes, Clarke being Mrs Downes' maiden name. 93 Jessica Downes' evidence was obviously affected by her admission that she did not like her mother at all and she had asked the Department of Community Services to investigate complaints of sexual abuse from her mother since she was five. There was also the problem adverted to earlier that she knew she was to receive part of the proceeds of this action. However, it was put to her directly that: "Q. What I am suggesting to you Jessica is this: that the evidence you have given in these proceedings and in the proceedings in which your grandmother was the plaintiff is evidence that has been totally concocted between you and your grandmother; isn't that right? A. No. Q. And you have done that because of the vendetta that your grandmother and you have against her? A. No. Q. And these allegations of sexual abuse that you have so recently made are a continuation of that vendetta aren't they? A. No they are not." 94 The credibility of Jessica was affected by the factors I have noted, but I thought generally from her demeanour that I should accept it. 95 The defendant, as I have said, suffers from the problems of my disbelief of her principal tale. That was not her only problem. There was the social services problem, to which I have already adverted and that was allied to the problem that she "loaned" her lesbian partner about 95% of the purchase price of the home in which the two women are now living, which is solely in the name of the partner, and appears to have received first home buyers' assistance because the partner had not previously owned a property. This appeared to be a scam either of the Commonwealth, or alternatively, to remove the money out of the operation of any order that might be made in this case. 96 The defendant also had the problem, as Mr Shaw of counsel made capital during his final address, that the evidence was that in the early 1990s at least, the defendant had many sexual encounters with both men and women (see T153), the tradesman (plaintiff) had come into the Wentworth Falls home, he had lived there for 12 years and there was not one sexual encounter. This was rather hard to accept. 97 I also found it hard to accept the defendant's evidence that she had bought Little Hartley in her own name out of what she thought was the one-half of the lotto monies still remaining. Little Hartley cost, it would seem, $236,000. The defendant said that she had "forgotten" that from the original monies there had been paid out monies for the holidays and the car. 98 Although there are difficulties with accepting any of the witnesses fully, the balance of probabilities are that the plaintiff is correct in saying that there is a de facto relationship. There can really only be two explanations on the way the case was put, either that there was a de facto relationship or else there was some "romantic" relationship between the plaintiff and Mrs Downes. The only evidence of the latter is that of the defendant. There is virtually no independent evidence. The evidence of the defendant is generally unreliable. Mrs Downes, Jessica and the plaintiff all deny it. This would lead to the conclusion that the only other real possibility is the correct one. 99 That is a negative way of approaching the question. However, one gets the same result if one approaches it in a positive way. The plaintiff says that he went to the property to have a romantic relationship with the defendant. He gave her control of half a million dollars and indeed in his evidence virtually admitted that he had gone halves with her over the money. One does not do that to one's lover's daughter. Furthermore, he gave her his pay each week. The defendant denies it; Mrs Downes agrees with it and I accept it. The evidence of Jessica Downes and Anne Downes confirms it. Some of the peripheral witnesses such as Mr Derek Johnson gave evidence which is compatible with it. 100 On the balance of probabilities, the parties were in a de facto relationship for the relevant period. 101 There was some discussion before me as to the difference between a de facto relationship under s 4 of the Act and a close personal relationship under s 5(1)(b) of the Act. Because I have found there to be a de facto relationship I do not need to look to see whether, if there was no de facto relationship, Mr Waring was providing Miss Ellis with domestic support and personal care. However, without going into details it would seem to me from what I have already said, the answer to this question would be "Yes". 102 The "jurisdiction" to make an order under ss 14 and 20 has now become clear and the question is what order should be made? 103 I have already said that the proceeds of Little Hartley should be treated as equally held by the parties. 104 So far as Wentworth Falls is concerned, the property belongs solely to the defendant as at the time of the relationship. 105 The plaintiff's claim is that he supported the defendant for many years and that his money was used by her to pay off the mortgage, that is, the initial mortgage. 106 In his affidavit evidence the plaintiff said that he paid the mortgage. However, it became clear during the evidence that what he did was give the money to the defendant regularly out of which money she, he assumes, discharged the mortgage. 107 I have not been favoured with the way in which the mortgage was discharged. All I know is, the amount that was initially borrowed and it was, during the 12 year period, paid off. 108 It would not seem that the defendant was in regular employment for most, if not all, of the period of the co-habitation. According to the plaintiff, and I accept, she was doing a number of "courses" to fill in her time. However, she did occasionally work and has worked more or less full time since 2001. It is, however, clear that the defendant was receiving some social services monies during the whole of this period and she may have been receiving interest from the joint monies invested. 109 On the other side of the ledger, the plaintiff was not paying any rent for his occupation and appears also to have his meals furnished to him and if, as appears most probable, he handed over all his money, his clothing etc were covered as well. 110 I have very little to work on and I, however, can only do the best I can with the evidence that I do have. 111 The plaintiff knew at all material times that he did not have a half share or any share in Wentworth Falls. However, he legitimately assumed that it was the "matrimonial home" and his monies were used to pay off a substantial part of the mortgage and he also did maintenance, repairs and improvements on this basis. 112 He obviously cannot get more than 50% of the home which would put him in a better position than had he been a half owner. However, I believe that it is just and equitable that he should receive a percentage of it, and doing the best I can I would say 20% is as close as I could come to a fair award in view of the fact that he was receiving full board and having his domestic establishment looked after for him. The current value of Wentworth Falls is $350,000 so this adjustment would mean $70,000. 113 Apart from Little Hartley or its proceeds in Wentworth Falls, the defendant has a Pajero motor vehicle worth $7,000, the $140,000 she lent to her partner plus $10,000 in the bank and the plaintiff also says she has "notional amounts to be added back in by reason of having been withdrawn" of $115,000. I believe that the probabilities are that the cash and loans represented the defendant's proceeds of her accident claim, and so far as the notional amounts are concerned, I cannot quite work these out but I believe that if I add another $7,500 to what I have already said, it would well take care of any other adjustments. The defendant has the liability of $50,000 on the new mortgage in Lithgow. I have little information as far as that is concerned, but I cannot see any reason why the defendant should not bear that herself. 114 As far as the Pajero is concerned, it is registered in the defendant's name, but, for at least a time, was in the plaintiff's de facto possession. It is difficult to be more equitable than to divide it equally. Thus the plaintiff may elect to take the Pajero plus $74,000 or give up the car and take $81,000. 115 Accordingly, the defendant must pay the plaintiff one-half of the proceeds of Little Hartley. The figure I have is $478,294.07, so that half would be $239,147.04, plus half the balance remaining in the St George Bank account, a further $2,765.72 and in addition $74,000 or $81,000 depending on who is to take the Pajero as noted in the previous paragraph. The exact figures will have to be adjusted in accordance with what is the amount in those accounts as at the date of judgment. On my calculations this amounts to just under $323,000 (without the car) and it may be that the parties would agree that $323,000 would be a more appropriate order. Because the defendant may have other creditors it may be best to make the order for $81,000 plus trust monies. 116 As the plaintiff has succeeded, then unless there has been some payment into court or Calderbank letter, the plaintiff should have the costs of the proceedings. 117 The Registrar should be directed to send a copy of these reasons to Centrelink who are to be granted permission to view the transcript. 118 I will stand the matter over for formal short minutes to be brought in. I will formally fix Tuesday 31 May at 9.30 am, but provided counsel inform my Associate the week before, that date can be changed to a more convenient time. ********************* DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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