No intermingling finances, no property adjustment order

16. The first question that must be asked is articulated by the High Court in Stanford v Stanford [2012] HCA 52; (2012) 293 ALR 70 at [79] and [80] is whether:

“it is just and equitable to make a property settlement order by identifying, according to ordinary common law and equitable principles, the existing legal and equitable interests of the parties in the property.”

17. If answered in the affirmative, then the matter can proceed to a property division, applying the various principles.
18. Consideration must be given as to whether a global or asset by asset approach is to be adopted.
19. The four step process to be applied in accordance with the Full Court decision of Hickey v Hickey & Attorney-General of the Commonwealth (Intervener) [2003] FamCA 395; (2003) FLC 93-143 at [39] which can be summarised as follows:-
    1. Identify and value, as at the date of the hearing, the parties’ property, liability and financial resources;
    2. Identify and assess the parties’ contributions pursuant to Section 79 of the  Family Law Act 1975 ;
    100. Identify and assess the parties’ ongoing needs taking into account the relevant factors relevant under s.79 and s.75(2); and
    4. Consider the effect of the above and resolve what order is just and equitable in all the circumstances of the case.

Application of the law
The question to be considered as set out in Stanford

The proposals

20. Ms Chancellor submits that this was a long de facto relationship during which time both parties contributed to the large property pool and therefore it is just and equitable for the court to consider a property division.
21. Ms McCoy submits that although the parties were in a long de facto relationship the parties’ finances were kept separate with each party accumulating their own financial pool and therefore it would not be just and equitable for the court to consider a property division.

The decision of Fielding and Nichol

29. Ms McCoy relies heavily on the decision of Fielding and Nichol in support of her position.
30. Ms Chancellor submits that the facts in Fielding make it clearly distinguishable from the facts in this matter and therefore the case has no application to these proceedings.
31. I will now consider the distinguishing features and the commonalities between the facts in this matter and that of Fielding.
32. The distinguishing features are as follows:-
    1. In Fielding, the relationship lasted 12 years whereas in this matter the relationship lasted in excess of 27 years.
    2. In Fielding, the parties were older (74 and 66) whereas in this matter the parties are younger and of similar ages (59 and 55).
    100. In Fielding the credibility of one party was an issue with Thackray J stating at [7] of the de facto husband that “I was less inclined to accept his evidence over that of the wife in relation to those relatively few matters where there was any important difference.”
    4. In Fielding the parties had a joint account for some of the expenses whereas in this the parties did not have a joint account.
    5. In Fielding there was an absence of direct financial contributions made by the de facto husband to the de facto wife’s real property whereas in this matter Ms Chancellor maintains that direct financial contributions were made.
33. The common features are as follows:-
    1. Each couple were involved in a de facto relationship.
    2. Neither couple had children.
    100. When the parties commenced cohabitation the parties lived in a house owned and in the name of one party only.
    4. In both cases the parties owned real property in their names only and were responsible for any expenditure on their own real properties.
    5. In both cases the parties maintained their finances almost entirely separately.
    6. In both cases the parties contributed almost equally to household bills and groceries.
    7. In both cases the parties did not execute wills leaving their estate to the other party.
    8. In both cases the parties made non-financial contributions to the other’s party’s property.
    9. In both cases the parties lived together post separation.
    10. In both cases the parties at separation divided up those few items that had been acquired jointly.
34. Having considered the similarities and differences between Fielding and this matter, I find that the case of Fielding and Nichol is an authority which must be given consideration in the determination of this matter.
35. I will now turn to the question as to whether it is just and equitable to proceed to a determination of altering property interests between the parties.

A separate but very careful deliberation of this matter

46. In conducting a separate but very careful deliberation of this matter, I find that there are several salient factors in this matter which assist in the determination of whether it is just and equitable to make an order altering property interests.
47. I will now set out the factors.
48. Nature of the parties
    1. The parties are mature, educated and intelligent.
    2. The parties are high achievers in their profession.
    100. The parties are both (occupations omitted) and in the absence of evidence to the contrary, appear to have had similar employment conditions and opportunities.
    4. Both parties were employed full time during the relationship, except for a 4 to 6 week period where Ms Chancellor was between jobs.
    5. Whilst presenting as very different in character, there is no suggestion that one party was overbearing of the other or that there was any power imbalance in their relationship.
49. Acquisition of property
    1. During the relationship the parties utilised their own funds and resources to acquire real property in their own name.
    2. Ms McCoy first purchased the Property M property.
    100. After the sale of the Property M property, Ms McCoy purchased and built a house on the Property A property with financial assistance from her parents.
    4. After a number of years Ms Chancellor purchased the Property B property and through her uncle’s inheritance obtained the Property E property.
    5. Smaller purchases such as cars and boats were also acquired individually utilising their own funds.
    6. The evidence supports that the only items purchased jointly and at equal costs were:-
       1. Tinting for the windows in the extension on the Property A property;
       2. Blinds for the extension on the Property A property;
       3. A flat screen TV;
       4. A recreational vehicle (which no longer exists);
       5. A camper trailer (which was retained by Ms Chancellor);
       6. A ride on mower (which was sold during the relationship); and
       7. Some items of furniture (which were shared and distributed at separation).
50. Direct financial contributions to each other’s real property
    1. The evidence supports that Ms Chancellor made the following direct financial contributions to improvements on the Property M property:-
       1. Gift of a lead light window.
    2. The evidence supports that Ms Chancellor made the following direct financial contributions to the house building and improvements on the Property A property:-
       1. The land clearing ($680).
       2. Paint ($499).
       3. Blinds ($1063).
       4. Purchase of wire, chain wire, star pickets and white wire.
       5. Curtains for Ms Chancellor’s room.
    100. The evidence supports that Ms McCoy made no financial contributions to the Property B property.
51. Indirect financial contributions to each other’s real property
    1. The evidence supports that Ms Chancellor made the following indirect financial contributions to the improvements on the Property M property:-
       1. Her father purchased metal and built the balustrading on the deck.
    2. The evidence supports that Ms Chancellor made the following indirect financial contributions to the house building and improvements on the Property A property:-
       1. Family and friends helped with labour.
       2. Ms Chancellor helped with labour.
       3. At times Ms Chancellor did all the domestic chores to enable Ms McCoy to do labour.
    100. The evidence supports that Ms McCoy made the following indirect financial contributions to the maintenance and repair of the Property B property:-
         1. Labour.
52. Sharing of day to day living expenses
    1. During the whole of the relationship Ms Chancellor lived in properties (firstly the Property M property then the Property A property) owned by Ms McCoy.
    2. Ms Chancellor made the following contributions:-
       1. During most of the relationship Ms Chancellor paid $100 to $120 a fortnight Ms McCoy.
       2. Ms Chancellor paid for half of the groceries.
       3. Ms McCoy paid for bills on MasterCard in order to obtain points and Ms Chancellor reimbursed her in cash for her half share of the bills.
       4. Ms Chancellor paid a total of $4,600 towards house insurances and Ms McCoy paid a total of $11,700 towards house insurances for the Property M and Property A properties.
53. Separation of finances and financial independence
    1. The parties did not have a joint bank account.
    2. Ms Chancellor, when unemployed between jobs for 4 to 6 weeks, withdrew monies from her superannuation fund to live off, whilst residing with Ms McCoy at the Property M property.
    100. Ms Chancellor borrowed $4,000 from Ms McCoy’s parents to purchase a boat in her name. The monies were repaid with interest by Ms Chancellor to Ms McCoy’s parents.
    4. Other than the financial contributions made by Ms Chancellor to the Property M property, Ms McCoy paid for all costs associated with all renovation, repair and maintenance of the property.
    5. Other than the financial contributions made by Ms Chancellor to the Property A property, Ms McCoy paid for all costs associated with the building of the house and the renovation, repair and maintenance of the property.
    6. Ms Chancellor was solely responsible for all costs associated with the renovations, repair and maintenance of the Property B property.
    7. Since separation the parties have been solely responsible for all costs associated with their respective properties.
    8. The $25,000 paid by Ms Chancellor to Ms McCoy from the inheritance, I accept, was by way of gift out of the estate of her uncle, who from time to time had been cared for by the parties during the relationship.
    9. Otherwise, Ms Chancellor has had sole use of the inheritance from the uncle apart from paying for a short holiday for the parties in Melbourne.
    10. Since separation the parties have both spent excessive amounts of money in litigation and have eaten into their financial resources to meet those costs with Ms Chancellor increasing her indebtedness on the Property B property and Ms McCoy drawing down on her superannuation and relying on her family.
54. The (omitted) business
    1. The parties for some nine months operated a (omitted) business with Ms Chancellor’s brother.
    2. The parties worked after hours at the business.
    100. Neither party financially contributed to the business.
    4. Neither party received a wage from the business.
55. Lack of future plans or goals
    1. The parties did not during the relationship discuss or execute mutual wills which left property to each other.
    2. The parties did not name each other as beneficiaries on superannuation policies.
    100. There is no evidence of life insurance policies where the other party was named as beneficiary.
    4. Ms Chancellor was not involved in any discussions with Ms McCoy’s parents as to the various cash advances made to Ms McCoy and how that money would, if required, be repaid.
    5. There was lack of evidence as to whether the parties would share their assets or superannuation upon retirement.
    6. There was lack of evidence as to the future plans the parties may have had or goals that might have been shared had the parties not separated.
    7. It was never explained as to how the parties would spend their retirement given that Ms McCoy’s parents lived with the parties and the Property B property was being rented at reduced rent to Ms Chancellor’s sister.
56. Lack of knowledge as to the financial situation of the other party
    1. The evidence supports that Ms Chancellor lacked knowledge as to:-
       1. What money Ms McCoy had at the commencement of the relationship.
       2. The amount of money being contributed to Ms McCoy’s superannuation fund.
       3. How the salary sacrifice worked in respect to Ms McCoy’s superannuation.
       4. When Ms McCoy commenced contributions to her superannuation fund.
       5. When the Property M property was subject to a mortgage and when that money was paid out by Ms McCoy’s parents.
       6. Ms McCoy making out a will in favour of her parents.
       7. How much Ms McCoy paid to purchase the Property A property land.
       8. How much Ms McCoy paid for the house and extension to the house on the Property A property.
       9. The extent of the monies provided by Ms McCoy’s parents.
       10. The purpose of the (omitted) Bank Line of Credit.
       11. How Ms McCoy acquired her share portfolio.
       12. What savings Ms McCoy had.
    2. The evidence supports that Ms McCoy lacked knowledge as to:-
       1. What assets Ms Chancellor had at the commencement of the relationship.
       2. What happened to the sale proceeds of the (omitted) business.
       3. How Ms Chancellor acquired the deposit for the Property B property.
       4. Whether Ms Chancellor was contributing to her superannuation fund.
       5. What savings Ms Chancellor had.
       6. What property Ms Chancellor had as at the date of separation.
57. Lack of evidence
    1. There was lack of evidence from Ms Chancellor as to the alleged contributions made by Ms Chancellor to the Property M and Property A property, with no receipts for work done, no bank statements showing withdrawals and no affidavits by friends or family members as to work performed on these properties.
    2. There was lack of evidence as to whether the financial and non-financial contributions made by Ms Chancellor to the Property M and Property A property increased the value of the properties.
    100. There was lack of evidence as to what the parties spent their respective monies on after the joint expenses were paid and Ms Chancellor paid the fortnightly sum to Ms McCoy.

Conclusion

58. 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.
59. I make this finding based on the following:-
    1. 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.
       3. Each party acquired property in their own name with there being little exchange of the detail of these acquisitions to the other party.
       4. Each party remained responsible for their own debts.
       5. Each party was able to use the remainder of their wages as they chose without explanation or accountability to the other party.
       6. There was a complete lack of joint financial decision making.
       7. There was the absence of sharing of any information with each other as to their financial situation or individual decision making.
       8. 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.
       9. 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.
    2. Whether this separation of finances was initially a conscious decision by one party or both parties is irrelevant; what is relevant is that the parties continued to conduct their relationship without intertwining their finances consistently for some 27 years.
    100. The payment of monies by Ms Chancellor to Ms McCoy of $100 to $120 per fortnight for most of the relationship, whether classified as mortgage repayment (Ms Chancellor’s terminology) or rent or board (Ms McCoy’s terminology), I find, given the small amount of payment in respect to the overall size of the pool accumulated by Ms McCoy, cannot be viewed as financial intermingling, but as financial assistance to the other party as the home owner who provided housing for the parties to live in during the entirety of the relationship.
    4. As there is no evidence that the financial and non-financial contributions made by Ms Chancellor to the Property M property and the Property A property improved the value of these properties, then no equitable interest by Ms Chancellor in the properties has been established.
    5. Each party had the opportunity during the relationship to financially plan for their future given their profession and employment histories.
    6. There was no evidence to support that either party was hindered in their individual financial decision making during the relationship.
    7. For many years Ms Chancellor appeared to be in a more advantageous position as Ms Chancellor did not own real estate or gave evidence of servicing debts; but this is not reflected in the pool of assets each party has retained since separation.
    8. It is unfair for Ms McCoy, who has taken steps to maximise her future wealth, to have to share that wealth with Ms Chancellor who did not invest as wisely; especially in regard to maximising her superannuation benefits.
    9. Ms Chancellor has demonstrated her continuing struggle with financial matters given the spending of the inheritance and the increase in her mortgage over the Property B property since separation, despite the earning of an income.
    10. Although the alteration of property interests has been denied due to it not being just and equitable for such an alteration to take place, Ms Chancellor has still been left with the significant assets accumulated by her during the relationship, consisting of two houses, several motor vehicles and superannuation.
    11. Further, Ms Chancellor has the capacity, unlike Ms McCoy, to accumulate more assets, with her ability to work and her ability to contribute to her superannuation fund.
60. I therefore order that Ms Chancellor’s application for de facto property division be dismissed.

Final comment

61. This has been a long and difficult matter and I have no doubt that Ms Chancellor will find the outcome hard to accept.
62. It is easy to assume that where parties have been together in a recognised legal relationship, whether a marriage or a de facto relationship, and during that relationship the parties have accumulated property, then it automatically flows that a property settlement will occur following separation.
63. In the majority of cases this is true.
64. But as the High Court in Stanford was quick to point out this is not always the case.
65. There are matters due to their particular facts which cannot fall within that assumption and where it is not just and equitable to progress to an alteration of property.
66. Granted, these cases are in the minority.
67. But being in the minority does not mean that it is to be glossed over lightly.
68. There were many indicators in this matter that attracted the principals in Stanford; the lack of financial intertwining, the lack of financial planning for the future, the evident separation of finances and the continued individual ownership of property; just to name a few.
69. Whilst Ms McCoy adopted this position since the commencement of the proceedings some 2½ years ago, I must comment that it was only after all the evidence was presented at the final hearing and after a comprehensive analysis of the material by the court that the outcome has crystallised.
70. Ms McCoy needs to keep this in mind when considering a costs application.