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No property division even after long term de facto relationship

Posted by Benchmark Lawyers in Family Law | 0 comments

Chancellor & McCoy [2016] FCCA 53

Keywords: de facto relationship – property division – 27-year relationship – no intermingling of finances

Background and timeline

The couple met in 1982 and began their de facto relationship. The applicant is now 59, still employed and respondent 55, retired and looking after her elderly parents.

Properties

Property M: In 1983 the respondent bought property M in her name using $27,000 as deposit and a mortgage. The couple later moved in together in property M and the applicant began contributing financially to the household. Between 1983 and 1984, they began renovating the home, respondent providing funds and applicant assisting with the labour. In late 1984, the respondent’s parents provided a $35,000 payout for the mortgage on the property.

Property A: In mid-1986 Property M was sold for $61,000 and $51,000 was used to purchase Property A in the respondent’s name. Between 1986 and 1987, the couple lived with the respondent’s parents during the week and spent the weekends in the cottage on property A. The respondent borrowed $45,000 from her parents to build a house on the property. The respondent made a Will in 1987 making her parents the executors and sole beneficiaries of her estate. In the same year, the couple moved to the property and the applicant made financial contributions to the household. In 1997, the applicant’s parents moved to the property. In 2006, the property was further renovated (including installing a pool) which was funded by the respondent and her parents..

Business: In late 1989, the respondent’s brother started a business and the applicant’s uncle provided $100,000 for fit out and finance. The couple worked after hours at the business without pay. In 1990, the business closed down and the equipment was sold for $75,000. $50,000 was gifted to the applicant and the uncle received $25,000.

Shareholdings: Between 1993-1999 the applicant acquired shareholdings from her parents which were later gifted to her.

Vehicles: In 1998 the applicant got money from her parents and bought a Toyota Landcruiser.

Superannuation: In 1999 the applicant entered into a flexible remuneration package where she made additional voluntary super contributions with salary sacrifice.

Property B: In 2002 the applicant bought property B in her name for $187,00 using the money that was gifted to her and a mortgage. It was rented to the applicant’s sister at a reduced rent. Between 2002 and 2003, the couple renovated the property, applicant providing funds and respondent helping with labour.

Bank line credit: The respondent got a bank line credit of $150,000.

Inheritance: the applicant’s uncle passed away in 2010 and the applicant received an inheritance of $560,000, Property E and $165,000 cash.

Others:

The respondent purchased:

  • In 2010- a bobcat for $22,000;
  • In 2011- second hand trailer for $1,000;
  • In 2011- tip truck for $10,000;
  • In 2011- half interest in a boat with her brother

In April 2013 the applicant obtained a home loan overdraft of $50,000 for property B. The respondent drew down $96,000 from her super to pay out the bank, legal fees and living expenses. In September 2013, she drew a further $60,000 to purchase a new car ($37,477), pay for legal costs, living expenses and purchase second hand float for $6,500.

In October 2013 the respondent traded her float and paid $12,000 for a second hand trailer. In November 2013, the respondent increased her overdraft to $90,000.

In February 2014 the respondent drew $20,000 from her super and in April 2014, she sold her half share in the boat with her brother for $60,000.

Relationship

In 2010, the couple separated under one roof. In 2011, the applicant moved out of the property. The respondent re-partnered with Ms S. in 2013, the respondent retired.

In November 2012, the parties attend mediation and an agreement was reached but was not finalised into consent orders.

In March 2013, the applicant commenced court proceedings.

The factors taken into account

Nature of the parties: both are mature, intelligent and educated, high achievers in their professions, have similar employment conditions and opportunities and one party was not overbearing on the other.

Acquisition of properties: both used their own funds to purchase properties and smaller purchases. There were a few items that were bought jointly.

Direct financial contributions: the applicant made some direction financial contributions to property M and A. the respondent did not directly contribute to property B.

Indirect financial contributions: both parties did make indirect contributions to the other’s properties.

Sharing of day to day living expenses: the applicant paid $100-$120 a fortnight to the respondent. They shared groceries, and bills. The applicant paid $4,600 to house insurances and the respondent paid $11,700.

Separation of finances: there was no joint bank account. Each party paid for their own purchases without borrowing from the other. Each party were solely responsible for debts their incurred. The applicant had sole use of the inheritance from her uncle.

Lack of future plans: no mutual Wills were created, neither party named the other as beneficiary in their supers, there was a lack of evidence showing future plans or how they would spend their retirement.

Lack of knowledge of financial situation of the other: the applicant lacked the knowledge of how the respondent contributed to her super fund, how much money she had at the start of the relationship, the making of her will, how much was paid for property A, the amount of money provided by the respondent’s parents, the purpose of the bank credit line and how she acquired her share portfolio. Similarly, the respondent did not know how the applicant acquired the deposit for property B, how much money she had at the start of the relationship, contribution to super fund, amount in savings or the applicant’s assets at the date of separation.

Lack of evidence: there was a lack of evidence showing how the applicant contributed both financially and non-financially to property M and A or whether those contributions increased the values of the properties.

Conclusions

Based on the above information Turner J concluded at [58] and [59]:

I find, having considered the evidence and in particular the factors as discussed above, that it would not be just and equitable to make an order altering the property interests in this matter.

I make this finding based on the following:-

The parties conducted their affairs in such a way that neither party would or could have acquired an interest in the property owned by the other because:-

  1. There was no intermingling of their respective finances.
  2. The parties did not have a joint bank account.
  • Each party acquired property in their own name with there being little exchange of the detail of these acquisitions to the other party.
  1. Each party remained responsible for their own debts.
  2. Each party was able to use the remainder of their wages as they chose without explanation or accountability to the other party.
  3. There was a complete lack of joint financial decision making.
  • There was the absence of sharing of any information with each other as to their financial situation or individual decision making.
  • Neither party made provision for the other party in the event of their death either by way of will, beneficiary to superannuation funds or beneficiary to life insurance policies.
  1. The parties at the time of separation were unaware as to the worth of the assets acquired by each of the parties during the relationship and the decisions that had been made in respect to the acquisition of these assets.

Turner J also commented on the fortnightly payments by the applicant and found that the amount was small relative to the asset size and it did not count as an intermingling of financial affairs.

Application for de facto property division dismissed.

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