Foster v Adams [2013] NSWSC 1227

Supreme Court New South Wales

Medium Neutral Citation: Foster v Adams [2013] NSWSC 1227 Hearing dates: 21, 22 August 2013 Decision date: 23 August 2013 Jurisdiction: Equity Division Before: Lindsay J Decision: 1. Order that the Statement of Claim be dismissed. 2. Order that the plaintiff pay the defendant's costs of the proceedings. 3. Order that the defendant's costs be assessed on the ordinary basis up to and including 11 March 2013 and thereafter on the indemnity basis. Catchwords: FAMILY LAW- De facto relationship- Adjustment of property interests - Application for property adjustment order out of time-Application for leave to make application for adjustment order refused- Property (Relationships) Act 1984 NSW, ss 18, 20 Legislation Cited: Property (Relationships) Act 1984 NSW, s 18, s 20 Cases Cited: Muschinski v Dodds (1985) 160 CLR 583 Baumgartner v Baumgartner (1987) 164 CLR 137 Texts Cited: - Category: Principal judgment Parties: Russell Andrew Foster (Plaintiff) Sandra Narelle Adams (Defendant) Representation: P Campton (Plaintiff) R Schonell SC (Defendant) Broun Abrahams Burraket (Plaintiff) Rockwell Olivier (Defendant) File Number(s): 2011/00351304

Judgment 1The plaintiff applies to the Court for an order under s 18 of the Property (Relationships) Act 1984 NSW for an extension of time within which to make an application for a property adjustment order under s 20 of the Act. Subject to a grant of leave, he also applies for a s 20 order. Both applications are supported by a claim made in the general equity jurisdiction of the court. 2The defendant, the former partner of the plaintiff, opposes any grant of relief being made to the plaintiff. 3The parties disagree about the duration of their relationship, and intervening periods of separation, but: (a)they agree that they commenced living in a de facto relationship in about June 2002 and that they ceased so living on 22 August 2008; and (b)it is plain that, disregarding periods of separation, they lived in a de facto relationship for no less than about five years, two months, and no more than just under six years. 4The periods of separation were not such as to require, in these proceedings, a finding of more than one de facto relationship. Nothing turns on whether there was one relationship or a succession of them. Nevertheless, significance may attach to the course of the parties' relationship(s) insofar as it bears upon the quality of their personal relationship and the effect of its tenuous character on decisions made by them jointly and severally about property. 5Two children were born of the relationship: A son born in November 2003, now aged nearly ten years; and a daughter, born in August 2006, now aged seven years. 6Parenting orders have been made in the Federal Circuit Court providing for the parties to share care of the children. The parties appear to have reached an accord about parenting responsibility, albeit by a judicial determination of contested proceedings. 7The plaintiff commenced the current proceedings by a statement of claim filed on 3 November 2011; three years, three and a half months after the date on which the parties' relationship ceased. 8Subject to its provisions for a grant of leave for a s 20 application to be made out of time, s 18 provides that an application for a property adjustment order "... can only be made within the period of two years after the date on which [the parties'] relationship ceased...". 9The plaintiff's 20 application was, thus, made (by the filing of a statement of claim) approximately 15 months after expiry of the time in which it was required, by s 18(1), to have been made. 10He obtained legal advice, about the parties' children, shortly after the parties' final separation of August 2008. However, he says, and I accept, that he did not learn of the two-year limitation prescribed by s 18 until he consulted his present solicitor on 16 December 2010. 11His principal explanation for the delay between that date and the date of commencement of these proceedings (about 11 months) is that he continued to live in hope that he and the defendant would be reconciled. 12He points, also, to the fact that his solicitor wrote a letter of demand (dated 8 April 2011) to the defendant, which she chose to ignore. He says, with some justification, that it was incumbent upon him, even after expiry of the s 18 limitation period, to engage the defendant in pursuit of a mediated outcome before instituting proceedings. Nevertheless, his main explanation for his delay is his hope for a reconciliation. 13Before turning to whether he should be granted an order under s 18 permitting him to make an application under s 20 out of time, I turn to consider three other topics: First, the nature and ambit of his claim for relief; secondly, whether he can establish, as he seeks to do, an equity in the property of the defendant (her residence at Drummoyne in the State of New South Wales) which is the focus of his claim to relief under s 20; and, thirdly, the strength or otherwise of the s 20 application. 14The relief ultimately claimed by the plaintiff is an order for the payment to him, by the defendant, of the sum of $150,000, secured by a charge over the Drummoyne property. 15The amount initially claimed, in the statement of claim, was $500,000. At the commencement of the final hearing, counsel for the plaintiff announced that the amount claimed would be limited to $300,000. In closing submissions, it was reduced to $150,000. 16The amount now claimed represents about one half of the capital appreciation in the value of the Drummoyne property since the commencement of the parties' relationship(s). 17If the plaintiff were to be given an award of $150,000, he accepts, the defendant has no property from which the award could be satisfied without her borrowing moneys secured against the Drummoyne property or effecting a sale of the property. 18A consideration of the plaintiff's claims for relief, generally, focuses attention on the following facts: (a)At the commencement of the parties' relationship the defendant was the registered proprietor of her residence at Drummoyne, and she had been the registered proprietor of it (subject to a mortgage) for three years. It was her principal asset. (b)At the commencement of their relationship, the plaintiff had no such comparable asset. At his request, she allowed him to commence living with her on an understanding that he would make a contribution to living expenses which, during the course of the final hearing, she characterised as 'rent' and he sought to characterise as something having a capital flavour. (c)Throughout their relationship(s) the parties, in substance, kept their assets separate. (d)The defendant's acquisition of her residence was effected by her alone in that she alone paid for its purchase; she alone serviced the mortgage debt secured against the property; and she alone paid most, if not all, outgoings referable to it. (e)The defendant was, I find, determined to preserve her ownership of the Drummoyne residence at all stages of the parties' relationship(s), and the plaintiff acquiesced in her determination to preserve it. (f)When, during the course of their relationship(s), the plaintiff purchased land in Queensland it was purchased in his name alone, albeit with assistance given to him by the defendant in the form of a guarantee of his borrowings. (g)Any assistance given by the plaintiff (principally, but perhaps not exclusively, in the form of physical labour and arranging for workers to work on the Drummoyne property) in effecting repairs or renovations to the property was given by the plaintiff in full knowledge of the defendant's ownership of the property, and her determination to preserve her ownership. (h)There is no evidence that any repairs or renovations to the Drummoyne property effected by, or with assistance of, the plaintiff resulted in any increment in the value of the property. 19In these circumstances, I find that there is no factual foundation for a finding that, under the general law, the plaintiff has an "equity" entitling him to equitable compensation and/or a charge over, or other orders affecting, the Drummoyne property. 20Counsel for the plaintiff made passing reference to Muschinski v Dodds (1985) 160 CLR 583 and Baumgartner v Baumgartner (1987) 164 CLR 137 in support of a claim in equity, but that claim was never strongly pressed. 21As counsel for the plaintiff conceded in his opening remarks on behalf of the plaintiff in final addresses, the plaintiff requires the indulgence of the Court (by an order made under s 18 (2)) to succeed. 22The same facts that tell against the existence of any equitable entitlement in the plaintiff undermine the strength of his prospective s 20 application. 23To those facts may be added the following: (a)In his relationship with the defendant, the plaintiff was assisted by her to acquire the Queensland property, which he retains. (b)The plaintiff retains the benefit of capital appreciation in the Queensland property. (c)The relative income levels of the parties favours the plaintiff over the defendant. The parties are agreed that his gross annual income currently approximates $95,000, and that hers approximates $56,400. 24I accept that during the course of the parties' relationship the plaintiff made financial and non-financial contributions. However, the nature and extent of those contributions was not such as to qualify in any substantial way a finding that the parties deliberately kept their financial affairs separate. 25Upon a review of the evidence as a whole, upon an assumption that a grant of leave were to be made under s 18, and having regard to the factors enumerated by s 20 for consideration on the question whether a property adjustment order should be made, I incline against the granting of any s 20 relief to the plaintiff. 26The primary basis upon which the plaintiff seeks a s 20 order is a contention that his contributions to family property and family welfare (as more particularly described in subparagraphs (a) and (b) of s 20(1)) have been such as to require, in justice and equity, that he be given a share of the capital gain in the value of the defendant's residence, the place of their cohabitation. 27In circumstances in which the parties have made a deliberate decision to keep their financial affairs separate, and in which they have substantially adhered to that determination, care needs to be taken upon a consideration of whether the parties' arrangement should, in justice and equity, be departed from. 28The fact that the Court can depart from such an arrangement, in an appropriate case, is not to be doubted. The test to be applied upon an application of s 20 requires an assessment to be made of the evidence, and all the circumstances of the case, at the time s 20 falls for consideration. 29Nevertheless, having considered the plaintiff's contributions to the household, in terms both of property and general welfare, I am not satisfied that there is any reasonable foundation for the making of an order under s 20. 30The plaintiff's financial contributions to the household were largely current in nature, and related to his enjoyment of occupation of the Drummoyne property during periods of cohabitation with the defendant. His non-financial contributions were not so significant as to warrant a property adjustment order, particularly having regard to offsetting benefits he obtained in his acquisition of the Queensland property. 31Although the plaintiff did undertake at least some work, by way of repairs or renovation, on the defendant's residence, and he did arrange for his friends and others to do such work, the work was done, substantially if not wholly, at the cost of the defendant and in the context of a general understanding between the parties that the property was, and was to remain, owned by the defendant alone. 32The plaintiff maintained his own financial independence from the defendant insofar as he applied personal resources to the acquisition, in his own name, of the Queensland property, and insofar as he did not join with the defendant in a general pooling of assets. 33In reaching these conclusions I put to one side the unsatisfactory character of evidence given by the plaintiff in support of his applications. His evidence of financial contributions was, at least in several particulars, demonstrably unreliable. On one view, his evidence also manifested, at least, a loose regard for the truth in dealing with the public revenue. However, deficiencies in his evidence go no further than affecting the extent to which it can be relied upon. 34On the whole, I prefer the evidence of the defendant about the nature, and course, of the parties' dealings in property. Part of the reason for that is that, in my perception: First, she, of the two of them, is the more focussed in dealing with property matters; and, secondly, she appears at all times to have been mindful of the importance to her personal security and well-being, and that of her children, of her maintaining her ownership of, and control over, the residence at Drummoyne. 35If the plaintiff had a substantial claim under s 20, his delay in the commencement of proceedings under the section may not have been an impediment to success in the proceedings. His delay in the commencement of the proceedings is not, of itself, a disentitling factor. 36Nevertheless, the delay was, in the context of the particular s 20 application, such as to warrant a decision that the application made by the plaintiff by reference to s 18(2) be refused. 37The plaintiff's 11 months delay, after the expiry of the statutory limitation period was unreasonable for several reasons. First, it was more than reasonably necessary after his discovery of the limitation period. Secondly, it followed a period of two years in which the defendant had consistently manifested a disinclination to resume her de facto relationship with the plaintiff. Thirdly, the delay continued for a significant period beyond April 2011, when it ought to have been clear to both the plaintiff and his solicitors that the defendant was not prepared to reach an accommodation with him in relation to an adjustment of their property rights. 38I am not satisfied of any of the factors enumerated in s 18(2) as factors to be considered upon an application for leave to make a s 20 application out of time. 39I am not satisfied that the plaintiff is unable to support himself adequately. Nor am I satisfied that any difficulties that he may perceive he has in supporting himself can be attributed to an adverse effect on his earning capacity by the circumstances of the parties' relationship. 40It has not been suggested that a factor to be taken into account in support of the plaintiff's application for a s 18(2) order is that he needs assistance in undertaking a course or programme of training or education. 41I am not satisfied that any hardship caused to the plaintiff by a refusal to grant him leave to make a s 20 application would be greater than hardship caused to the plaintiff if leave were to be granted. On the contrary, I am satisfied that the scale of hardships tips in the opposite direction. The plaintiff has an income substantially greater than that of the defendant. Any exposure of the defendant to the claims for relief made by the plaintiff in these proceedings involves an element of hardship, not determinative in itself, but not wholly to be ignored. 42Quite apart from these particular matters, I am disinclined to grant the plaintiff leave to make a s 20 application out of time because I am affirmatively satisfied that a refusal of leave causes no injustice to the plaintiff. 43I propose, accordingly, to dismiss the statement of claim. 44[The parties made submissions about costs]. 45The defendant applies for an order that the plaintiff pay the costs of the proceedings assessed on an indemnity basis. In making that application she relies, particularly, on the agreed fact that on or about 12 March 2013 the defendant served on the plaintiff an offer that the proceedings be dismissed with each party paying or bearing his or her own costs. 46The parties each suggest that there has been a degree of unreasonableness on the other side in the way the proceedings have been conducted. I refrain from making any particular findings about that beyond noting that a question for any costs assessor will be whether costs were unreasonably incurred as a result of particular conduct. 47The plaintiff contends that any order for costs made against him should not extend to costs arising from the defendant's decision to be represented by senior counsel. I am loathe to act upon the basis that senior counsel ought not to have been retained. He appeared without junior counsel, and I am not satisfied that it was inappropriate for senior counsel to be retained to appear in Supreme Court proceedings, particularly as the nature of the claims for relief made by the plaintiff bore heavily upon the defendant's economic well-being. 48The appropriate orders are first, that the plaintiff pay the defendant's costs of the proceedings. Secondly, that the defendant's costs be assessed on the ordinary basis up to and including 11 March 2013 and thereafter on the indemnity basis.