Bertei v Feher

[2000] WASCA 165

BERTEI -v- FEHER [2000] WASCA 165

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2000] WASCA 165
Court:	THE FULL COURT (WA)
Case No:	FUL:85/1999	Heard:	3 FEBRUARY 2000
Coram:	KENNEDY J IPP J WHEELER J	Delivered:	19/06/00
No of pages:	18	Judgment Part:	1 of 1
Result:	Appeal allowed Cross-appeal allowed
PDF Version

Parties:	KATHLEEN BERTEI REINHARD FEHER
Catchwords:	Trusts and trustees Resulting trust Whether rebutted Constructive trust Purchase of a house and a unit in the names of a couple who were then engaged to be married Marriage not taking place Properties mortgaged by parties to secure balance or portion of balance of purchase price Payment of all moneys in connection with acquisition of properties and all moneys payable under mortgages made by man Unquantified contributions to household by woman Whether unconscionable for man to assert sole ownership of properties
Legislation:	Nil
Case References:	Baumgartner v Baumgartner (1987) 164 CLR 137 Calverley v Green (1984) 155 CLR 242 Davies v Messner (1975) 12 SASR 333 Jenkins v Wynen [1992] 1 Qd R 40 Kais v Turvey (1994) 11 WAR 357 Moate v Moate [1948] 2 All ER 486 Muschinski v Dodds (1985) 160 CLR 583 Napier v Public Trustee (WA) (1981) 55 ALJR 1 Ulrich v Ulrich (1968) 1 WLR 180 Wirth v Wirth (1956) 98 CLR 228 Baars v Brendstrup (1986) DFC 95-029 Cohen v Sellar [1926] 1 KB 536 Lockyer v Simpson (1730) Mos 298; 25 ER 404 Louth v Diprose (1992) 175 CLR 621

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : BERTEI -v- FEHER [2000] WASCA 165 CORAM : KENNEDY J

IPP J
WHEELER J

HEARD : 3 FEBRUARY 2000 DELIVERED : 19 JUNE 2000 FILE NO/S : FUL 85 of 1999 BETWEEN : KATHLEEN BERTEI

Appellant

AND

REINHARD FEHER
Respondent

Catchwords:

Trusts and trustees - Resulting trust - Whether rebutted - Constructive trust - Purchase of a house and a unit in the names of a couple who were then engaged to be married - Marriage not taking place - Properties mortgaged by parties to secure balance or portion of balance of purchase price - Payment of all moneys in connection with acquisition of properties and all moneys payable under mortgages made by man - Unquantified contributions to household by woman - Whether unconscionable for man to assert sole ownership of properties

Legislation:

Nil

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Result:

Appeal allowed

Cross-appeal allowed

Representation:

Counsel:

Appellant : Mr J G Hanly
Respondent : Mr P R Eaton

Solicitors:

Appellant : Hotchkin Hanly
Respondent : Marks & Sands

Case(s) referred to in judgment(s):

Baumgartner v Baumgartner (1987) 164 CLR 137
Calverley v Green (1984) 155 CLR 242
Davies v Messner (1975) 12 SASR 333
Jenkins v Wynen [1992] 1 Qd R 40
Kais v Turvey (1994) 11 WAR 357
Moate v Moate [1948] 2 All ER 486
Muschinski v Dodds (1985) 160 CLR 583
Napier v Public Trustee (WA) (1981) 55 ALJR 1
Ulrich v Ulrich (1968) 1 WLR 180
Wirth v Wirth (1956) 98 CLR 228

Case(s) also cited:

Baars v Brendstrup (1986) DFC 95-029
Cohen v Sellar [1926] 1 KB 536
Lockyer v Simpson (1730) Mos 298; 25 ER 404
Louth v Diprose (1992) 175 CLR 621

(Page 3)

1 KENNEDY J: I have had the advantage of reading in draft the reasons to be published by Wheeler J, in which the essential facts are set out. I am generally in agreement with her Honour's reasons and desire only to make some brief observations of my own.

2 The learned trial Judge was presented with considerable difficulties in this case by reason of the manner in which it had been pleaded and the manner in which it was conducted before him. The relevant equitable principles are reasonably well settled. They were considered in the decisions of the High Court in Napier v Public Trustee (WA) (1981) 55 ALJR 1, at 3, Calverley v Green (1984) 155 CLR 242, at 251, 256 - 262, 268 - 270; Muschinski v Dodds (1985) 160 CLR 583, at 590, 598 - 599, 613 - 614, 624; and Baumgartner v Baumgartner (1987) 164 CLR 137, at 145 - 146, 157. And see generally, "Jacobs Law of Trusts in Australia", 6th edn (1997) at 291 - 301.

3 The appellant claimed that the Duncraig property, which is registered in the names of the respondent and the appellant as tenants in common in equal shares, had been acquired by the parties with the common intention of having "an equal legal and beneficial interest in the property as tenants in common". The common intention was said to have been partly expressed and partly implied. In the alternative, the appellant claimed that, at the time of purchasing the property, the respondent had given the appellant an equal legal and beneficial interest in the property. In the further alternative, the appellant claimed that she had acted to her detriment pursuant to her belief, encouraged by the respondent, "or not discouraged by him", that she had a one-half beneficial interest in the property by virtue of her contributions (which were entirely unquantified), or pursuant to a common intention between the parties, and that it was inequitable or unjust for the respondent to assert that the parties were beneficially entitled to the property in unequal proportions. It was also said to be unconscionable for the respondent to deny that the appellant had an equal beneficial interest in the property, notwithstanding their unequal contributions to the purchase price. There was a fourth alternative, also based on a claim of unconscionability, which adds little or nothing to the third alternative. The appellant made no claim in her statement of claim with respect to the unit in Carine.

4 In his defence, the respondent denied the appellant's claim. He pleaded that the parties had agreed that the Duncraig property would be acquired by them as tenants in common in unequal shares, with no agreement having been made as to the extent of their respective shares, notwithstanding that he had executed a transfer which showed the parties

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as transferees as tenants in common in equal shares. He claimed that he had paid all the costs of acquisition of the property. Those costs included the repayment of loans which had been applied towards the purchase price and the interest on those loans. He then claimed that, in relation to the Carine unit, which was also registered in the names of the parties as tenants in common in equal shares, he had made all the financial contributions towards its acquisition, except to the extent to which they had been paid out of the rental produced by the unit. He then pleaded that the appellant was seeking to sell this property and to divide the net proceeds of the sale equally between them, which, he claimed, would be unconscionable as it would unjustly enrich the appellant to the detriment of the respondent. He counterclaimed a declaration that the parties held their respective interests in the properties in trust for the benefit of himself alone.

5 At the end of her defence to counterclaim, the appellant, somewhat curiously, tacked on a claim for a declaration that the parties were the joint (sic) legal and beneficial owners of the Carine unit, on the basis that, in the events which had happened, it would not be unconscionable for her to obtain the orders she sought.

6 There was a pervading vagueness in the evidence of both the appellant and the respondent and, unfortunately, a number of significant ambiguities in their evidence were left unresolved. On their evidence, they did not appear to have made their beliefs and intentions known to one another. "When a common intention is in issue, it is not ordinarily to be found in an uncommunicated state of mind; it is to be inferred from what the parties do or say" - per Mason and Brennan JJ in Calverley v Green (supra), at 261.

7 On the appellant's evidence, the Duncraig house was acquired on the basis that, although she would "join in" the mortgage of the property to secure the bank loan which was applied towards the purchase price, the respondent would make all payments due under it. Obviously enough, she was a necessary party to any mortgage of the property. She explained that she could not afford to make any payments in reduction of the debt because she had no extra money to pay for a second mortgage. She was already paying off the mortgage debt on the unit in which she had been living with her children. She said that the respondent had told her that he was on a large income and that he would "finance" the mortgage, while she could be a lady of leisure and look after the house. The respondent accepted that he had agreed to make all the payments in respect of the acquisition of the house, including paying off the mortgages securing the

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bank loans. Clearly, it was never intended that the appellant should contribute to the cost of purchasing the house, and she did not do so. Nor was she expected to, nor did she, make any payments with respect to the mortgages.

8 At the time of acquisition of the Duncraig house, the respondent was working in Gove, but he was in contact with the appellant by fax and by telephone. The house was located by the appellant, and the respondent agreed to its purchase. Initially, the respondent claimed, he had intended to purchase the house in his own name. However, his evidence was that the appellant had complained about this suggestion, saying that she would have no say in the running of the house unless her name was on the title document. She felt that she had been disadvantaged by her former matrimonial home being registered in the name of her then husband. The respondent agreed that, under these circumstances, her name could appear on the title. He claimed that there was never any discussion as to the shares in which the house would be held.

9 It appears that the estate agent, in preparing the form of offer and acceptance for the purchase of the house, described the appellant and the respondent as joint tenants. Neither wished there to be a joint tenancy. A fax sent by the respondent to the appellant, authorising the purchase of the house by them as tenants in common, contained nothing regarding their respective shares in the property. The respondent indicated that he understood that joint tenants had equal shares in the property concerned and that a tenancy in common could make provision for specific share allocations. Nevertheless, and notwithstanding that he claimed to have misgivings at the time as to the appellant's behaviour, and in particular her making unilateral decisions and insisting on having her own way, when the respondent was given the transfer of the Duncraig house to sign, although it showed the parties as being tenants in common in equal shares, he signed it, apparently without any further discussion with the appellant. He did, however, indicate that he subsequently complained about the conduct of the estate agent concerned. His intention, he said, was never that the respondent should be "a full and equal shareholder". He claimed there was no discussion of "specific share allocation", although he apparently proceeded on the basis that the appellant should have some, albeit unquantified, share in the property. He claimed he had no specific figure in mind.

10 The learned trial Judge found that, when the respondent signed the transfer, he understood and accepted that he was intending to give the appellant title to half of the property. It is not clear to me whether his

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Honour was referring to the respondent's intending to give her such an interest in the legal title or whether he was referring to a beneficial interest in the property. Having regard to his Honour's ultimate decision, however, it would seem that, as Wheeler J has indicated, his Honour must be taken to have been referring to the respondent's intending to give the appellant an interest in the legal title only, and not a beneficial interest in the property.

11 The respondent sought finance for the purchase of the property from the R&I Bank in a letter in which he indicated that he was a joint purchaser of the property, his partner being the appellant. It is noted that the respondent's proposal initially involved borrowing the sum of $70,000 against the appellant's equity in her own unit in Carine. Subsequently, finance was arranged through the Commonwealth Bank of Australia. A loan of $70,000 towards the purchase of the property was agreed to by the bank on the security of a mortgage of the Duncraig house. In addition, the bank approved a bills discount facility in the sum of $137,000 in favour of the respondent alone. The security for this facility was to be a mortgage over the respondent's own house in Victoria Park, which by then had been placed on the market for sale, and a second mortgage over the Duncraig house. This mortgage, it appears, was never registered, although it was executed by the parties.

12 Following the successful sale of the respondent's house in Victoria Park, he used the proceeds of that sale, together with some additional moneys available to him, to pay out both mortgages on the Duncraig house. He gave no indication to the appellant that he had paid off in full the debts incurred in the acquisition of the house. The respondent's evidence was that he had never considered making a gift of the property in any shape or form at any time. On the other hand, at no time did he tell the appellant that she was holding in trust for him any interest which she might have had in the house.

13 Although it was not pleaded, the learned trial Judge gave consideration to there having been a presumption of advancement, on the basis that the transfer of the Duncraig house into the names of both parties was made in contemplation of marriage. Jenkins J in Moate v Moate [1948] 2 All ER 486, at 487, indicated that the presumption was that the prospective husband in such cases intended there to be provision by way of gift to his prospective wife, provided that the marriage was duly solemnised. In Wirth v Wirth (1956) 98 CLR 228, at 237 - 238, Dixon J described the transfer in that case as being made "so to speak in preparation for the marriage and on the footing that the transferee became

(Page 7)

the transferor's wife but in advance of her doing so". In each of those cases, the marriage was in fact solemnised. See also Ulrich v Ulrich (1968) 1 WLR 180, per Lord Denning MR at 45. In the South Australian case of Davies v Messner (1975) 12 SASR 333, Mitchell J treated the transaction as a conditional gift, this being the manner in which the case had been pleaded. The same approach was adopted in Kais v Turvey (1994) 11 WAR 357. See also the judgment of McPherson SPJ in Jenkins v Wynen [1992] 1 Qd R 40, at 40 - 47.

14 In this case, the marriage did not take place, and it is apparent that it will never take place. Accordingly, a presumption of advancement cannot be relied upon and there must have been, on his Honour's findings of gifts in contemplation of marriage, either a resulting trust in favour of the respondent or a failure of the condition on which the gifts had been made. In any event, in my respectful opinion, the evidence before the learned trial Judge was not, in the circumstances, sufficient to sustain a finding of the transfer of the property, or the repayment of "the money which he had borrowed for the balance of the purchase price of the Duncraig property" having been effected by way of gift in contemplation of marriage.

15 The learned trial Judge found that it would be unconscionable for the appellant to retain the full benefit of her legal interest in the Duncraig house. He was of the opinion, however, that she was entitled to equitable relief in the form of a constructive trust in proportion to her contribution to its "acquisition, improvement and conservation". He found that the respondent had made a contribution which was overwhelmingly greater than that made by the appellant, whose sole contribution to its acquisition was said by his Honour to be her joining in executing the mortgages, which secured the loan, and thereby putting herself at risk of being called upon to pay all or part of the moneys advanced to her - see, however, Calverley v Green (supra), per Mason and Brennan JJ at 257 - 258. His Honour found that, apart from the evidence showing that the respondent had paid for the painting of the interior of the house and that the appellant had paid for landscaping the property, there was little information available as to what was done by either party towards its improvement. That was clearly the position. And even the alleged payments by the appellant for landscaping appear to be extremely doubtful. At one stage in her evidence, the appellant said she had begun to landscape the gardens and to to buy lawn turf, and she claimed that she had purchased many shrubs. She also claimed that she had carried out a lot of work herself, but that she had also hired people to come in and work. It then emerged, however, that the respondent had given the appellant the right to operate on a bank account to pay for maintenance and for "household things", and

(Page 8)

that at least part of the expenses in relation to landscaping had come out of that account. It is also to be recalled that, as a consequence of the appellant moving into the Duncraig house, she was able to let her own unit and receive the rental for her own benefit. For some three years, she and her children were in sole occupation of the house, except for the few occasions on which the respondent briefly visited Perth from his work in Gove.

16 The learned trial Judge assessed the value of the appellant's contribution to the "acquisition, improvement and maintenance" of the property as being "about $25,000" and, on this basis, he calculated her share of the property as one-fifteenth of its value and that of the respondent as fourteen-fifteenths.

17 Unfortunately, it appears to me that there will have to be a retrial of the action insofar as it relates to the Duncraig property by reason of the fact that, the finding of a gift in contemplation of marriage not being sustainable, there are no findings as to either the common intention or the individual intentions of the parties when the property was transferred into their names as tenants in common in equal shares. No doubt consideration will also then have to be given to the extent of the appellant's contribution to the household and how it should be taken into account, and how the respondent's payments of the whole of the moneys secured by the registered mortgage, which were applied in payment of the purchase price, should be taken into account.

18 In relation to the Carine unit, which was part of the complex in which the appellant's own unit was situated, her evidence was that she had suggested to the respondent that, since she did not have enough income herself to purchase the property, perhaps they should buy it "together" and then later on, when she was earning adequate income, the title deeds should be transferred to her, and she would take over the payments on the property while the respondent would be paid back "in some way" for the amount of money that he had paid for the property. She said that he had agreed to this suggestion. She claimed that the matter was subsequently discussed by them with Janine Franklyn, a financial adviser, who had told her she was earning enough to repay the respondent the amount that he had already spent on the unit. The appellant said that the respondent took an application for finance away from this meeting, but he did not wish to sign it or to hand over the title deeds to the property, and there the matter was left. The respondent's evidence was that he had never contemplated making a gift of the unit to the appellant and he denied that Ms Franklyn had made the statement the appellant had attributed to her.

(Page 9)


19 His Honour found that the title was intended to be transferred into the appellant's name alone when she could afford to meet the instalments due under the mortgage and that she was to reimburse the respondent for what he had spent on the property. His Honour found that, in the circumstances, no issue of unconscionability on the part of the respondent arose for determination. There has been no appeal against these findings. However, his Honour, in ruling that the appellant and the respondent held the Carine unit in trust for the appellant, subject to a charge in favour of the respondent in the sum of $13,373.08, had regard only to the repayment of principal under the mortgage and not to the interest payments. With respect, that is inconsistent with the finding that the appellant, under the agreement, was to reimburse the respondent for what he had spent on the property, a finding which was not challenged.

20 The respondent claims that he has spent $39,888 by way of monthly instalments under the mortgage of the unit. However, it would appear that this sum includes the full amount of interest paid by him under the mortgage. I agree with Wheeler J that he is entitled only to the net interest paid by him, after the deduction of the taxation benefit he obtained by reason of his "negative gearing". We do not have all the documentary evidence in the trial before us in this appeal to enable us to make the calculation ourselves, but it should be possible for the parties to calculate the amount due to the respondent on the foregoing basis. It will accordingly be necessary to hear counsel on this aspect of the matter.

21 So far as the respondent's cross-appeal in relation to costs is concerned, having regard to the result of this appeal it will also be necessary to hear counsel further thereon.

22 IPP J: I agree with the reasons of Kennedy and Wheeler JJ and have nothing further to add.

23 WHEELER J: This appeal and cross-appeal concern two residences, the first a substantial house at Duncraig and the second a unit in Carine. The female appellant (plaintiff) and the male respondent (defendant) commenced a relationship in 1987, became engaged to be married in 1988 and purchased the Duncraig house as tenants in common in equal shares in mid-1991. The purchase price of the Duncraig house was supplied partly from funds of the respondent, partly by a mortgage of $137,000, for which the respondent asserted he was wholly responsible and for which the appellant asserted she also was responsible, and partly by a mortgage of $70,000 for which the appellant and respondent were responsible. The

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larger mortgage was discharged when the respondent completed the sale of a house which he owned in Victoria Park and applied the proceeds in about October 1991 to that mortgage, and the $70,000 mortgage was discharged by the respondent in about October 1992.

24 The unit at Carine was acquired in about May 1995 by the parties as tenants in common in equal shares. The agreement which his Honour found with respect to the unit, was that it would be a rental property and that the rent would be applied towards the mortgage, with the balance of any mortgage repayments and other outgoings being paid by the respondent. His Honour found that when it was purchased, the parties intended that it would be at some time transferred into the name of the appellant alone, when she could meet the instalments due under the mortgage, and that she would reimburse the respondent for what he had spent on the property.

25 In respect of the Duncraig property, the appellant put her case on a variety of alternative bases in the pleadings. First, she asserted that at the time of purchase it was the common intention of the parties that they would each have an equal legal and beneficial interest in it. The particulars in support of this allegation are many and varied, essentially covering, in broad terms, the history of the relationship between the parties, and all conversations which they had about the purchase of the property. The particulars include an allegation that the parties became engaged to be married in 1988. Alternatively, it was pleaded that the respondent "gifted" an equal legal and beneficial interest in the property to the appellant, the particulars of that allegation overlapping in part with the particulars in relation to the allegation of common intention. Further, in the alternative, it was alleged that a constructive trust arose, primarily because the appellant was alleged to have acted to her detriment pursuant to a belief encouraged by the respondent that she had an equal beneficial interest in the property.

26 As is not, unfortunately, unusual in such cases, there is a lack of clarity in the pleadings as to the bases of the various claims made by the appellant. It is by no means clear, for example, how any common intention in relation to the property could ever be inferred from such matters as "the plaintiff and the defendant attended social events as a couple" (par 3(g) of the statement of claim).

27 The respondent's defence, while denying the claims of the appellant, did not set up any affirmative factual case in respect of the Duncraig property, although it appeared from submissions made at trial that the

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respondent asserted that, he having paid for the acquisition of the property, a resulting trust in his favour arose. The relief sought in his counterclaim was a declaration that he alone was the beneficial owner of the property.

28 In relation to the Duncraig property, his Honour found that the appellant asked that her name be included on the title, and that the respondent agreed, although his Honour found that their reasons both for making and for granting the request may not have coincided, and his Honour was not satisfied that either stated their reasons to the other before the property was purchased. He accepted that the respondent did not give any consideration to the distribution of shares until he saw the transfer contained the wording that they be tenants in common "in equal shares". Despite the respondent's evidence that he did not consider he was making a gift to the appellant, his Honour found that when the respondent signed the transfer he "understood and accepted that he was giving Mrs Bertei title to half of the Duncraig property" (at p 7 of the reasons for decision).

29 It is unfortunately not clear at this point whether his Honour was referring to the legal title, the beneficial interest, or both. At a later point in his reasons, his Honour clearly distinguished between the two, holding that it would be unconscionable for the appellant to retain the full benefit of her "legal interest" in the property (p 9). This tends to suggest that the reference to "title" in the passage at p 7 is a reference to legal title.

30 His Honour referred to the presumption of advancement, which arises when a man pays the purchase price for a property which is transferred into the name of his wife or intended wife. His Honour noted that a gift in contemplation of marriage is to be regarded as a gift upon condition that it shall be returned in the event that the contemplated marriage does not take place, referring to Kais v Turvey(1994) 11 WAR 357. At p 8 of his Honour's reasons, his Honour concluded that in relation to the Duncraig property:

"… the fundamental issue is whether the conduct of Mrs Bertei in asserting her claim to an equal beneficial interest is unconscionable. For the reasons mentioned by Ipp J in Kais v Turvey at 365 resolution of that issue depends largely upon whether the gift by Mr Feher was made in contemplation of marriage".

31 His Honour referred to the evidence that the parties were committed to marry each other some time before the end of 1987, to the "official"

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engagement in 1988 and the appellant's evidence that she intended to marry the respondent and that it was "just a question of time". His Honour found that the engagement to marry endured until well after they had purchased the Duncraig property, and his Honour's reasons contain the assertion that it was common ground that that property "was to be the family home of the parties and that when they married it was to be their matrimonial home".

32 His Honour found that it would be appropriate to declare that the parties held the property in trust for each of them in proportion to their respective contributions to its acquisition, improvement and conservation. His Honour found that the appellant's contribution consisted of her joining in executing mortgages (but that the risk that she would be called upon to repay any moneys pursuant to them was "extremely remote"); her payment for some landscaping; her residence in the property and performance of household chores; and her gardening, maintenance, and so on while the respondent was in the Northern Territory for approximately two years. His Honour calculated the appellant's share as being 1/15 of the value of Duncraig property.

The Duncraig House

33 The appellant's first complaint in relation to the Duncraig property is that his Honour erred in finding that any gift made by the respondent to the appellant of a beneficial interest was made in contemplation of marriage. I think this ground of appeal is well founded.

34 There was no evidence from the respondent that at the time at which he signed the transfer, he did so in contemplation of marriage to the appellant. His evidence was to the contrary. He said at the time of signing the transfer, he had "misgivings" about doing so, based on the appellant's behaviour, aspects of which concerned him. However, his evidence was that he did not say to her at the time that she should only have a nominal share in the property because he saw signing the transfer as a "gesture of good faith on both parties that we were going to go into a long term commitment". However, he said that there were certain aspects of the relationship which disturbed him, and in particular, the appellant's unwillingness to compromise, but that his expectation at the time of acquisition of the property was that the relationship "would improve". He said that he did not have "any specific expectations" in relation to the duration of the relationship (AB 202, 232-3).

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35 While it may well be the case that the existence of misgivings is not inconsistent with contemplation of marriage, it seems to me that, since marriage is a union for life, the absence of any expectation in relation to the duration of the relationship must be inconsistent with an expectation at that time that the parties would marry.

36 The appellant's evidence was that when the respondent first proposed marriage in about late 1987, she did not wish to marry at that time because "there was too much going on" in her life, and that she did intend to marry him in time. Her evidence in response to the question of whether the Duncraig house was intended to be the "matrimonial home" was equivocal, she saying that she "hoped" it would be, and that it was "certainly" going to be "our future home together". However, she also said that the need for the respondent to work in the Northern Territory "curtailed the idea of marriage" (AB 122).

37 There was no evidence that the engagement to marry in June 1988 was formally abandoned by either party, although it is clear that the relationship soured over time, particularly from some time after the purchase of the unit in Carine. Unfortunately, it appears that neither of the parties appreciated that an intention to marry at about the time of the purchase of the Duncraig property could be of particular significance. Neither the presumption of advancement, nor the principle found in Kais v Turvey, are referred to in the pleadings. Questions of engagement and of intention to marry were dealt with, therefore, only very generally as part of a mass of barely relevant "background" information dealing broadly with the progress of the relationship and with the every day domestic details of the parties' households.

38 Without positive evidence from either party pointing to a contemplation of marriage at the time of purchase of the property, and in the light of the respondent's evidence which points to a contrary conclusion, it seems to me that it was not open to his Honour to assume that because of the engagement in 1988, apparently entered into with no very definite idea of when or how a marriage might take place, the events of 1991 occurred "in contemplation of" marriage.

39 The appellant submits that, his Honour having erred in finding the gift to have been made in contemplation of marriage, the result is that there was an unconditional gift of a one half beneficial interest in the property to the appellant. However, the parties' intended marriage appears to have been the matter relied upon by his Honour in finding that there was a gift. It appears that the presumption of advancement when a

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property is transferred to a wife or intended wife, is either the basis of the finding of gift, or forms one limb of that finding, with the respondent's understanding of the transfer document forming the other. His Honour (in my view correctly) did not rely upon any of the other matters pleaded by the appellant or on any other material in arriving at his conclusion of gift.

40 His Honour did not make any finding in relation to the pleaded common intention, or in relation to a constructive trust, although I think it is fair to say that the thrust of his Honour's findings suggests that the appellant would not have succeeded on these bases. It follows that if the finding that there was a "contemplation of marriage" at the relevant time falls away, so too does his Honour's finding that there was a gift of a one half beneficial interest in the property to the appellant.

41 It appears to me, therefore, that the orders made by his Honour in respect of the Duncraig house should be set aside. However, this Court is not in a position to substitute its own view, in the absence of relevant findings of fact. In particular, it appears to me that the common intention issue requires findings, including findings as to credibility. It will, unfortunately, be necessary for the matter to be retried.

42 The view that I have reached disposes, I think, of grounds 1, 2 and 3 inclusive of grounds of appeal. Because it will be necessary for the matter to be reheard it is unnecessary, I think, to deal with the majority of the remaining grounds of appeal. However, it seems to me desirable to comment briefly in relation to grounds 4 and 8, which are concerned with what is alleged to be an error made by his Honour in regarding the mortgage payments and the discharge of the mortgages by the respondent after the acquisition of the property as being a contribution to the acquisition of the property.

43 The appellant refers to Calverley v Green (1984) 155 CLR 242 as authority for the proposition that when the balance of a purchase price is raised by a mortgage under which both parties are jointly and severally liable, this constitutes a contribution by both to the price, and arrangements between them that one party alone will make repayments will not establish that that party alone provided the whole of the purchase price. In my view, although that proposition is undoubtedly correct, it does not dictate a formula which must be mechanically applied.

44 For example, where finance is raised, which is plainly intended to be "bridging finance" it seems to me that it may be undesirably artificial to say that it is the money raised under the mortgage for which, temporarily,

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both parties may be liable, rather than what is intended to be the ultimate source of funding, (for example, money from the sale of one party's home) which constitutes the payment of the purchase price. Similarly, for example, if a relative of one of the parties provides the whole or some of the purchase price as a short term measure until that party is able to obtain funds from, for example, access to a fixed term investment, it would not, I think, be correct to regard that relative as the person making the contribution to the purchase price. It is not necessary finally to determine this question in this case, but it may be that evidence of the purpose of the mortgage and the expectation which the parties may have had about its early discharge from the means of one of them may affect the position which is referred to Calverley v Green.

45 In addition, mortgage repayments by one party may be of relevance as entitling that party to a contribution from the other, and giving rise to an equitable charge to secure the contribution, or perhaps as giving rise to a constructive trust arising after the purchase was complete: Calverley v Green at 263 per Mason and Brennan JJ. It is not, therefore, correct to assert, as the appellant appears to do, that the only relevant issue is that of joint liability under the mortgage.

The Carine Unit

46 His Honour's finding in respect of this unit was that the agreement between the parties was that it was to be an additional future security for the appellant. The agreement was that "the title was to be transferred into her name alone when she could afford to meet the instalments due under the mortgage and she was to reimburse the respondent for what he had spent on the property".

47 His Honour decided that, the parties having intended that the appellant be sole beneficial owner of the unit, he was inclined to make a declaration in those terms and to order that the property stand charged in favour of the respondent for a sum equivalent to the total of what the respondent:

"… has paid in reduction of the principal secured by the mortgage registered over it. That sum, I assume, is only a proportion of the monthly payments which he has made, and the evidence before the court does not enable me to calculate it. That being so, and as counsel should have the opportunity of obtaining instructions as to the suitability of the proposed

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declaration and order, I shall make these reasons available to counsel before delivering them formally".

48 The cross-appeal is in relation to his Honour's order that the property be held by the appellant subject to a charge in favour of the respondent only in the sum of $13,373.08, which is the amount by which he has reduced the principal owing to the mortgagee of that property since its acquisition by the parties.

49 In argument, the respondent departed somewhat from the ground set out in his grounds of cross-appeal. He argued before us that since the parties' agreement, to which his Honour was in practical terms giving effect, was that the appellant was to reimburse him for "what he had spent" on the property, the property should stand charged with a sum which would represent what the respondent had paid under the mortgage, being an average of $850 per month.

50 The first difficulty which the respondent faces in the cross-appeal, is that the orders which were ultimately made were made by consent. It is submitted by the appellant that the proper course for the respondent would have been to have taken advantage of his Honour's invitation to make submissions as to the "suitability" of the order proposed and, he having failed to do so, he cannot now be heard to complain of the order. However, it appears from a reading of the transcript of the first of the hearings before his Honour at which it was attempted to deal with the question of appropriate orders, that the respondent at least was somewhat confused about the order which his Honour proposed. That having been clarified, it seems to me not to have been unreasonable for the respondent to assume that the only submissions which were sought were those going to the calculation of the relevant sum, rather than to the principle which his Honour had decided should apply. The circumstance that the orders were made by consent does not seem to me to be an obstacle to the bringing of an appeal in respect of it in this case.

51 So far as I can discern from the transcript, the reason for his Honour's inclination to make an order in the terms in which he did, rather than in respect of the mortgage payments paid by the respondent, was that there was evidence that the respondent had derived some taxation advantages from what is commonly known as "negative gearing" of the property, so that it would not have been appropriate for him to have received simply a sum equivalent to the mortgage payments which he had made. There were in the trial bundle tendered to his Honour, copies of income tax returns and rental property statements which would appear, by reference

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to the relevant rate of income tax, to permit a quantification of those negative gearing benefits for the years the subject of those documents.

52 Although it seems to me his Honour was correct in forming the view that a simple calculation of the amount paid by the respondent in mortgage repayments would have had the effect of overcompensating the respondent, an order which had regard merely to proportionate repayment of principal would, particularly in the early stages of the mortgage, be likely to result in an order which fell a long way short of the parties' agreement, which his Honour expressed as an agreement that the appellant "was to reimburse Mr Feher for what he had spent" on the property. The more appropriate course, in my view, would have been for his Honour to invite submissions concerning the appropriate calculations, having regard to the documents in the trial bundle.

53 There is no complaint in respect of his Honour's factual findings, which do not seem to have been really in dispute in relation to this property. It seems to me that the appropriate course under the cross-appeal is to set aside the orders which his Honour made and to give the parties the opportunity of making submissions as to what orders ought to be made, having regard to the state of the evidence and to the considerations to which I have referred. This, it seems to me, was his Honour's intention at the time of publishing his reasons in this matter.

Costs

54 The respondent appeals also against the decision of his Honour ordering the respondent to pay the appellant's costs of the action to be taxed, on the ground that it is alleged that this "ignored the fact that, in terms of the relief sought by the respective parties in the action, the respondent was the successful party". So far as the unit at Carine was concerned, the respondent claimed on the counterclaim a declaration that the parties held their interests in it in trust for the benefit of the respondent alone. The respondent was plainly unsuccessful in that claim.

55 The question of who is to be regarded as the "successful" party in relation to the appellant's action is more difficult. The appellant claimed a one half beneficial interest in the property, in which she was unsuccessful, and she was apparently not successful on any of the pleaded bases of her claim. However, the respondent claimed, by his counterclaim, a declaration that the Duncraig property was held in trust for him alone. He was unsuccessful in that claim.

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56 Having regard to the views I have formed in relation to the appellant's appeal, it seems to me that the appropriate course would be to hear further from counsel in the light of the result of the appeal.

Conclusion

57 I would allow the appeal, set aside the orders made by his Honour in respect of the Duncraig property, and remit the matter for a new trial. I allow the cross-appeal, set aside the orders made by his Honour in respect of the Carine unit and in respect of costs, and invite submissions as to appropriate orders in respect of the Carine unit.

58 It is difficult to see how either party could reasonably be regarded as "successful" on the appeal and cross-appeal, and I would be inclined to make no order as to the costs of the appeal or cross-appeal. However, I would be prepared to hear submissions in respect of this issue.