Brown v Manuel

[1996] QCA 65

IN THE COURT OF APPEAL	[1996] QCA 065
SUPREME COURT OF QUEENSLAND
Brisbane	Appeal No. 95 of 1995
[Brown v. Manuel]
BETWEEN:

JUNE EDNA BROWN

(Plaintiff) Respondent

AND:

ERIC CYRIL MANUEL

(Defendant) Appellant

Davies J.A.
Mackenzie J

Helman J.

Judgment delivered 22/03/1996

Joint reasons for judgment of Davies J.A. and Mackenzie J.; Helman J. dissenting in part.

APPEAL ALLOWED BY SETTING ASIDE THE DECLARATIONS MADE BELOW AND

SUBSTITUTING THE FOLLOWING DECLARATIONS:

(1)	THAT THE APPELLANT HOLDS THE PROPERTY DESCRIBED AS LOT 377 ON REGISTERED PLAN 88465, COUNTY WARD, PARISH NERANG, CERTIFICATE OF TITLE VOLUME 3165, FOLIO 26 AS TRUSTEE FOR THE RESPONDENT AND HIMSELF AS TENANTS IN COMMON IN THE SHARES OF 6/10 FOR THE APPELLANT AND 4/10 FOR THE RESPONDENT;
(2)	THAT THE APPELLANT HOLDS THE VOLVO 265 MOTOR VEHICLE REGISTERED IN HIS NAME AS TRUSTEE FOR THE RESPONDENT AND HIMSELF IN THE INTERESTS OF 6/7 FOR THE APPELLANT AND 1/7 FOR THE RESPONDENT.

ORDER THAT THE APPELLANT PAY THE RESPONDENT ONE-HALF OF HER TAXED COSTS OF THE APPEAL. RESPONDENT TO RETAIN HER COSTS OF THE PROCEEDINGS BELOW.

CATCHWORDS:	EQUITY - constructive trusts - de facto relationship - apportionment of interests in property
Counsel:	Mr P.T. Morrow for the appellant. Mr R.M. Bourke for the respondent.
Solicitors:	Sabben's Solicitors for the appellant. Primrose Couper Cronin Rudkin for the respondent.
Hearing date:	20 October 1995

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 95 of 1995

Brisbane

Before Davies J.A.
Mackenzie J.
Helman J.

[Manuel v. Brown]

BETWEEN:

ERIC CYRIL MANUEL

(Defendant) Appellant

AND:

JUNE EDNA BROWN

(Plaintiff) Respondent

JOINT REASONS FOR JUDGMENT - DAVIES J.A. AND MACKENZIE J.

Judgment delivered the 22nd day of March 1996

We have had the advantage of reading the reasons of Helman J. We adopt his Honour's
description of the relevant facts as found by the learned trial Judge. As his Honour has pointed out,

the learned trial Judge described the relationship between the parties during the 18 years in which

they lived together as a de facto relationship and said that each of the parties had expectations of the

other of the nature of those normally found or expected in a marital or quasi marital relationship.

Nevertheless it is not surprising, when one has regard to the learned trial Judge's description

of the appellant as mean, bitter, ungenerous and uncharitable, both financially and psychologically,

and to the fact that the parties were involved in bitter litigation against one another, that answers to

questions to them directed to the existence of a commitment to each other were quite unhelpful. The

learned trial Judge, rightly in our view, thought it unrealistic in the circumstances to look for evidence

of manifestations of love or affection between the parties.

The learned trial Judge also found as a fact that, because "to say the very least" the appellant

was not a gregarious person and preferred his own company to that of anyone else, the respondent

sought social company among members of her family and other friends and went on outings and

holidays without him. However, consistently with the relationship which the learned trial Judge found

to exist, the appellant "objected to the time and attention which (the respondent) devoted to

members of her family and her friends, time and attention which he felt should have been devoted to

himself" and "displayed jealousy as would a husband or a de facto partner directed to the

independent activities of" the respondent.

The learned trial Judge concluded, in effect, that there was a relationship of mutual

dependence of the kind normally found in marital relationships and a mutual expectation that that

would continue permanently. His Honour no doubt reached that conclusion not only from what was

said by each of the parties but also from his observation of them whilst they gave evidence, from

which he no doubt gained some impression of their respective personalities and the extent to which

any current bitterness between them may have affected the way in which each, in retrospect,

assessed their former relationship.

Helman J. has construed the relationship as one in which the respondent's position was "in
reality ... not far removed from that of a boarder - and the payments she made were the agreed

rent." His Honour considers that it was "not based on generous impulses or affection. It was

confined, constricted, guarded." He concludes that the "parties lived separate lives but found it

convenient to reside under the same roof." In reaching those conclusions his Honour, in our

respectful view, has placed too little reliance on the advantage which the learned trial Judge had.

Having regard to that advantage we would not be prepared to depart from the learned trial Judge's

conclusion as to the true nature of the relationship.

In that relationship and with that mutual expectation the parties contributed to the acquisition

of their successive homes, the appellant by capital sums, repayment of mortgages, rates and

insurance and renovation work, the respondent by providing food for the household, paying gas and

electricity charges and paying for some of the appellant's clothing as well as her own. The learned

trial Judge found that the respondent made a substantial contribution to the general financial well-

being of the relationship and that this contribution "more than countered" the lump sum contributions

of the appellant.

In those circumstances, in our view, the learned trial Judge was correct in concluding that,

when the relationship finally ended without blame being attributed to either party, it was

unconscionable for the appellant to retain sole beneficial ownership of the home at Eileen Street.

That unconscionability arose from the mutual expectation of the parties, arising out of a commitment

to a de facto relationship over a period of 18 years, that that relationship would continue, and the

financial contribution which each made for their mutual benefit, which included the acquisition of

successive quasi matrimonial homes, in that expectation.

It is true that the appellant did not, by anything he said or did, create any expectation in the

respondent that she would acquire a proprietary interest in any of their quasi matrimonial homes. It

is also true that when the respondent returned to the appellant after a short separation in 1985 she

knew that he would never recognize that she had an interest in the home the subject of this appeal. The appellant argued that a constructive trust may arise only if the conduct of one party has caused

the other to expect that he or she will acquire some proprietary interest. No doubt if there were

such conduct or if a representation having that effect were made and resiled from unconscionability

would, in a case like this, be more readily inferred. But it is not correct that unless there is some

such conduct no constructive trust may be inferred. Nor is it necessary, in order to draw such an

inference, that the parties must have pooled their resources. Again, such pooling may enable the

inference to be more readily drawn. But its absence is not crucial: Hibberson v. Genge (1990) 12

Fam.L.R. 725, 742. The factors referred to earlier, in our view, justified the learned trial Judge in

drawing the inference which he did.

It is not surprising that, in a quasi matrimonial relationship which extended over 18 years

there is insufficient evidence from which to arrive at any precise calculation of the respective

contributions of the parties to their mutual financial benefit. We have already referred to the learned

trial Judge's finding that the respondent's contributions over that period "more than countered" the

appellant's capital payments. However although, as we have said, no precise calculation of the

parties' respective contributions can be made, the appellant's total contributions were, on any view

of the evidence, greater than the respondent's.

The appellant has, since 1990, enjoyed sole occupation of the Eileen Street home. Against

this it must be noted that the appellant provided approximately $3,500 of the capital towards the

Hoya Street property before the relationship commenced and that the respondent removed

approximately $4,000 worth of furniture from the Eileen Street house when she left in 1990.

The appellant argued that, even if the learned trial Judge was right to declare a constructive

trust, he should be given credit for an amount of $10,000 profit made on the sale of a parcel of land

in Cluden Street sold at the same time as the adjacent quasi matrimonial home in that street. It is

true that, though adjacent, the land was not part of the matrimonial home. However the appellant

purchased that land in 1979 about seven years after the parties commenced living together and whatever savings he may have acquired by that time were acquired, at least in part, because the

respondent had been making her contributions, referred to earlier, over that period. We do not

think that there is any sufficient basis for departing from the apportionment which would otherwise

be arrived at to allow the appellant any credit for this sum.

Nor do we think that, as argued by the appellant, the fact that, because the mortgage on the

Eileen Street property was discharged in 1981 the respondent's interest should be less than if her

contributions towards their joint benefit since that date had helped pay for that property. Those

contributions continued to enhance or maintain their joint financial well-being which was reflected in

their capacity to maintain the property free of mortgage. Moreover it was the contributions of the

parties prior to that date, in those same proportions, which had enabled the mortgage to be

discharged.

Nevertheless we think that some adjustment should be made to what would otherwise be

equality of ownership in order to avoid any injustice which would result if account were not taken of

the inequality of the parties' contributions: Baumgartner v. Baumgartner (1987) 164 C.L.R. 137 at

149-150. We would accordingly apportion their respective interests in the Eileen Street property as

6/10 to the appellant and 4/10 to the respondent.

We agree with the reasons of Helman J. as to the apportionment of beneficial interests in the

Volvo 265 motor vehicle.

We would therefore allow the appeal by setting aside the declarations made below and

substituting the following declarations:

(1) that the appellant holds the property described as Lot 377 on registered Plan

88465, County Ward, Parish Nerang, Certificate of Title Volume 3165, Folio 26 as trustee for the

respondent and himself as tenants in common in the shares of 6/10 for the appellant and 4/10 for the

respondent;

(2) that the appellant holds the Volvo 265 motor vehicle registered in his name as

trustee for the respondent and himself in the interests of 6/7 for the appellant and 1/7 for the

respondent.

Although the appellant has succeeded in the sense of obtaining different and more favourable

declarations than those made by the learned trial Judge he has nonetheless failed to obtain the

substantive relief which he sought, that is, that no such declarations should be made. We would

therefore order that the appellant pay the respondent one-half of her taxed costs of this appeal. The

respondent should retain her costs of the proceedings below.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane	Appeal No. 95 of 1995
Before Davies J.A.

Mackenzie J.

Helman J.

[Brown v Manuel]

BETWEEN:

JUNE EDNA BROWN

(Plaintiff) Respondent

AND:

ERIC CYRIL MANUEL

(Defendant) Appellant

REASONS FOR JUDGMENT - HELMAN J.

Delivered 22 March 1996

This is an appeal from a decision of a judge of District Courts at Southport in an action brought by

the respondent Mrs. Brown, who lived in a number of houses with the appellant Mr. Manuel from

1972 to 1990, for a declaration that land at 31 Eileen Street, Southport, of which the appellant is the

sole registered proprietor and on which one of the houses stands, is held by the appellant as trustee

for the respondent and himself as tenants in common in equal shares. She also sought a declaration

that the appellant holds a Volvo 265 motor car registered in his name as trustee for the parties in

equal shares. His Honour found that the respondent was entitled to the declaration concerning the

land and that she was entitled to an interest in the motor car amounting to one-quarter of its value as

agreed between the parties, or, failing agreement, as assessed by a valuer agreed upon by the

parties or appointed by the Court.

The parties are both pensioners. The appellant was born on 15 September 1924 and the
respondent on 27 March 1932. The appellant is a single man who was divorced from his wife in

1969.  The respondent was divorced from her husband in 1975 or 1976.

His Honour found that from about May 1972 until 1990 the parties lived together "under the

one roof in various residences in Brisbane and on the Gold Coast" and that "the parties throughout

the duration of the relationship shared a bedroom and that there was a sexual component to that

relationship". His Honour was satisfied that they lived in a "de facto relationship". His Honour

preferred the respondent's account of the association between the parties to the appellant's. The

respondent gave evidence that they parted for some months in 1985.

His Honour found that from May 1972 until May 1981 the parties lived in a house at Hoya

Street, Holland Park. The appellant had bought the land at Hoya Street with the house on it for

$10,500.00 before the parties began living there. He paid $3,500.00 in cash and borrowed the

remaining $7,000.00 which was secured by a mortgage. When the appellant bought the house it

was in need of extensive repairs. The appellant carried out alterations and renovations, assisted, in a

minor way, by the respondent who provided crockery, cutlery, cooking utensils, and linen and

repaired curtains. The appellant spent $7,000.00 on the renovations.

In May 1981 the Hoya Street property was sold for $35,000.00 and an adjoining vacant

block of land in Cluden Street, which had been bought by the appellant for $10,500.00 and on

which he spent $2,000.00 on clearing and levelling, was sold for $20,000.00. The appellant used

the proceeds of those sales to purchase land with a house on it at Pitcairn Street, Mt. Gravatt for

about $50,000.00. The parties moved into the new house, which was in good condition. Little

renovation was required, but the respondent purchased curtains worth $1,500.00, two bedroom

suites, and a double bunk.

In 1985 the parties left Pitcairn Street which the appellant sold for about $70,000.00 and

went to live in the house at Eileen Street, Southport which stands on land purchased by the appellant

with the proceeds of the Pitcairn Street property.

The appellant provided all of the money required to purchase the parcels of land at Hoya

Street, Cluden Street, Pitcairn Street, and Eileen Street. He repaid all of the borrowed money.

Money was borrowed on only two properties: Hoya Street (I have mentioned the mortgage on that

property), and Cluden Street. The respondent made no direct financial contribution to the purchase

of any of the properties. All were purchased in the appellant's name alone.

Throughout the period during which the parties cohabited the respondent paid for the food

they consumed and the appellant's clothes. In addition she paid the electricity and gas bills until they

moved to Southport. The appellant paid the other household expenses, i.e., he made the payments

required by the mortgages, paid the local authority rates, and paid for the repairs and renovations

etc.

His Honour assessed the respondent's contribution to the parties' expenses in providing food

for the household and clothing for the appellant for eighteen years as being in the range of

$56,000.00 to $93,000.00. The respondent gave evidence that she had spent "anything from $60

to one hundred" a week on groceries depending on what she bought. His Honour clearly accepted

that evidence and based his assessment on it. His Honour's assessment of the appellant's total direct

financial contribution to the parties' expenses was $23,000.00: $3,500.00 and $10,500.00 for the

purchase of the parcels of land at Hoya and Cluden Streets respectively, $7,000.00 for the

renovations to the house at Hoya Street, and $2,000.00 for the clearing and levelling of the land at

Cluden Street. His Honour found that in addition to those direct contributions the appellant made

the payments required by the mortgages, made very occasional contributions to the cost of food,

and made some other random and occasional payments for the benefit of the respondent.

His Honour found that the respondent's financial contribution to the acquisition of motor cars

acquired for the joint use and benefit of the parties was $2,200.00. That figure was based on

$600.00 for a Morris owned by the respondent which was sold in 1973 when an Austin was

purchased, and $1,600.00 she contributed to the purchase of a Volvo (not the one the subject of the action). His Honour found that the appellant's contribution to the acquisition of motor cars,

though "incalculable", was substantially greater than the respondent's: he contributed to the purchase

prices of cars, paid for the cost of repairs, and performed a "significant amount" of mechanical work.

A number of cars were acquired and disposed of by the parties and the appellant renovated and

repaired them and sold them when restored.

The cars the parties acquired when they were together were all registered in the

respondent's name. That was done in the early years because the appellant was entitled to the use

of an employer's car and the parties' cars were registered and insured in the respondent's name so

that she obtained the no-claim bonuses. Later the respondent received a widow's pension and had

the benefit of a reduction in registration fees. After the parties separated the respondent transferred

the car the subject of the action to the appellant.

It is evident that, although his Honour was satisfied that the parties were de facto spouses,

their commitment to each other was far from complete. His Honour observed that questions of the

witnesses - and there were only the two, the parties - directed to the existence of a commitment to

each other were quite unhelpful, although his Honour thought it was apparent that each of the parties

had expectations of the other "of the nature of those normally found or expected in a marital or

quasi-marital situation".

His Honour concluded that from the natures of the parties "it would be unrealistic to look for

evidence of manifestations of love or affection" between them. His Honour's impression of the

appellant was of a mean, bitter, ungenerous, and uncharitable man "both financially and

psychologically". The respondent for her part focussed throughout the relationship on "the financial

aspects, directing her social and recreational attention outside the relationship" chiefly because of the

"reclusive nature" of the appellant, who "prefers his own company to that of any one else". His

Honour said it was clear "each of the parties maintained his and her independence of the other, both

financially and socially".

His Honour was unable to accept the claim made by the respondent that the appellant

agreed she "would eventually get the house if anything happened to him" or that the appellant agreed

to make a will to ensure that result. It would not have been in the appellant's nature, as his Honour

assessed it, to have countenanced for a moment any suggestion that the Eileen Street property be

purchased in joint names. In paragraph 7 of the respondent's statement of claim (the action began in

the Supreme Court) she alleged that it was a term of an agreement reached between the parties at

the beginning of their relationship that all property of the parties would be beneficially owned by

them in equal shares. In paragraph 16 it was alleged that at various times during the course of the

relationship the appellant stated to the respondent that he held the various parcels of land "in his sole

name on behalf of the Plaintiff and the Defendant equally and that the Plaintiff would receive her

share of the property upon the Defendant's death". His Honour found that neither of those

allegations had been established.

There was no pooling of incomes: rather, his Honour found, each of the parties made

financial contributions to their "general welfare" without any attempt at precise accounting to ensure

equality of contribution. The appellant made "lump sum contributions of a capital nature" but those

payments were "more than countered" by the respondent's contributions in paying for food,

electricity, and gas at least until the parties moved to Eileen Street. His Honour concluded that in the

light of the employment history and the "present financial condition" of the appellant it was obvious

that the respondent's contributions enabled the appellant to acquire the properties. His Honour

found that the respondent continued to make contributions in the expectation that she would

eventually share in the property acquired by the appellant in his own name, even though his Honour

was "entirely satisfied that the defendant did not at any time make any promise to that effect or that

there was any express or implied agreement that the plaintiff might acquire some sort of interest in

any of the houses in which the parties resided".

His Honour concluded that since the appellant had been able to acquire the Eileen Street

property only with the assistance of the financial contributions made by the respondent during the

eighteen years they cohabited it would be unconscionable for him to retain the full legal and

beneficial interest in the property. It was then a case for the imposition of a constructive trust of the

sort explained in Baumgartner v Baumgartner (1987) 164 C.L.R. 137. His Honour concluded

that taking into account the nature and extent of the contributions made by the respondent it was

appropriate that she be granted an interest in the property equal to that of the appellant. He

accordingly made the declaration I have mentioned in relation to the land, which is still occupied by

the appellant.

His Honour concluded that taking into account the contributions, so far as they could be

ascertained or valued, the parties made to the acquisition of motor cars it was appropriate that the

respondent have a one-quarter interest in the Volvo motor car which was still in the appellant's

possession.

The principal ground of appeal argued for the appellant was that the learned trial judge erred

in concluding on the facts of the case as he found them to be that it was unconscionable for the

appellant to claim the full beneficial ownership of the land at Eileen Street.

Equity will impose the remedy of the constructive trust regardless of actual or presumed

agreement or intention to preclude the retention or assertion of beneficial ownership of property to

the extent that such retention or assertion would be contrary to equitable principle: Muschinski v

Dodds (1985) 160 C.L.R. 583 at p.614 per Deane J., with whom Mason J. agreed; and

Baumgartner v Baumgartner at p.148 per Mason C.J., Wilson and Deane JJ. In Muschinski v

Dodds Deane J. said:

"The prima facie rules respectively entitling a fixed term partner to a proportionate refund of his or her premium and a contractual joint venturer to a proportionate repayment of his or her capital contribution on the premature dissolution of the partnership or collapse of the joint venture are properly to be seen as instances of a more general principle of equity. That more general principle of equity can also be readily related to the general equitable notions which find expression in the common law count for money had and received (cf. Moses v. Macferlan [(1760) 2 Burr. 1005, at p. 1012, 97 E.R. 676, at pp. 680-681]; J. & S. Holdings Pty. Ltd. v. N.R.M.A. Insurance Ltd. [(1982) 61 F.L.R. 108, at p. 120]) and to the rationale of the particular rule of contract law to which reference has been made: cf. Fibrosa [Spolka Akcyjna v. Fairbairn Lawson Combe Barbour Ltd. [1943] A.C. 32, at p.61ff., esp. at p. 72.] Like most of the traditional doctrines of equity, it operates upon legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct: cf. Story, Commentaries on Equity Jurisprudence, 12th ed. (1877: Perry ed.), vol. 2, par. 1316; Legione v. Hateley [(1983) 152 C.L.R., at p. 444.] The circumstances giving rise to the operation of the principle were broadly identified by Lord Cairns L.C., speaking for the Court of Appeal in Chancery, in Atwood v. Maude [(1868) L.R. 3 Ch. App., at p. 375]: where `the case is one in which, using the words of Lord Cottenham in Hirst v. Tolson [(1850) 2 Mac. & G. 134; 42 E.R. 52], a payment has been made by anticipation of something afterwards to be enjoyed [and] where ... circumstances arise so that future enjoyment is denied'. Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do: cf. Atwood v. Maude [(1868) L.R. 3 Ch. App., at pp. 374-375], and per Jessel M.R., Lyon v. Tweddell [(1881) 17 Ch. D. 529, at p. 531]." (pp.619-620)

In Baumgartner v Baumgartner the parties to a de facto relationship pooled their

incomes for living expenses and fixed commitments. They lived at first in a unit owned by the man

(the appellant), which they sold when they acquired a house in his name. The house was purchased,

with the aid of a mortgage, in the name of the appellant, who also contributed the net proceeds of

the sale of the unit. The parties' aggregate earnings were pooled in the proportions roughly of 55

per cent. by the appellant and 45 per cent. by the respondent. They later separated and the

appellant asserted that the land was his sole property. It was declared that the appellant held the

house on trust for the parties in the proportions in which they had contributed their earnings to its acquisition, subject to certain adjustments in favour of the appellant which were made in the interests

of justice. The appellant was held to be entitled to receive from any sale of the property repayment

of the contributions effectively made by him before and after the period during which the parties

were living together and pooling their resources. So the appellant was held to be entitled to be paid

the net proceeds of the sale of his unit which were devoted to the purchase of the property less the

amount of payments of instalments under the mortgage over the unit which were made from the

pooled earnings during the period of cohabitation. The appellant was also held to be entitled to be

repaid the instalments under the mortgage over the property which he had paid during the period

after the termination of the relationship between the respondent and himself subject to an offsetting

adjustment to reflect any benefit enjoyed by the appellant through use and occupation of the

property during that period (pp.150-151 per Mason C.J., Wilson and Deane JJ.).

Mason C.J., Wilson and Deane JJ. explained the reason for the imposition of the

constructive trust in this way:

"In the present case the parties pooled their earnings with a view to meeting all the expenses and outgoings arising from their living together as a family. The individual contributions of each party were not allocated to a particular category or particular categories of expenses and outgoings. The pool of earnings was used to pay outgoings associated with accommodation - mortgage instalments on the unit at Cabramatta and the property at Leumeah - as well as other living expenses. There was no suggestion that the respondent's contributions were paid and received by way of rent or a charge for use and occupation and for living expenses. Such a suggestion would be inconsistent with the relationship that came into existence between the appellant and the respondent, a family relationship which was for the most part until 1982 a long-term stable relationship in which marriage was under continuous contemplation. The land at Leumeah was acquired and the house on it was built in the context and for the purposes of that relationship. Together they planned the building of the house. Together they inspected it in the course of its construction. Together they moved out into it and made it their home after it was built.

In this situation it is proper to regard the arrangement for the pooling of earnings as one which was designed to ensure that their earnings would be expended for the purposes of their joint relationship and for their mutual security and benefit. To the extent which the pooled funds were the source of payment of mortgage instalments by the appellant, the pooled funds contributed not only to present accommodation expenses but also to the security of the parties' accommodation in the future. In this context it would be unreal and artificial to say that the respondent intended to make a gift to the appellant of so much of her earnings as were applied in payment or mortgage instalments. There is no evidence which would sustain a finding that the respondent intended to make a gift to the appellant in this way.

The case is accordingly one in which the parties have pooled their earnings for the purposes of their joint relationship, one of the purposes of that relationship being to secure accommodation for themselves and their child. Their contributions, financial and otherwise, to the acquisition of the land, the building of the house, the purchase of furniture and the making of their home, were on the basis of, and for the purposes of, that joint relationship. In this situation the appellant's assertion, after the relationship had failed, that the Leumeah property, which was financed in part through the pooled funds, is his sole property, is his property beneficially to the exclusion of any interest at all on the part of the respondent, amounts to unconscionable conduct which attracts the intervention of equity and the imposition of a constructive trust at the suit of the respondent." (pp.148-149)

On behalf of the appellant in this case it was argued by Mr. Morrow that there was nothing

unconscionable in the appellant's asserting that the Eileen Street land was his sole property because:

first, the parties had made an arrangement from the beginning as to how their contributions to

household expenses should be made; secondly, they at all times kept their financial affairs separate;

thirdly, in 1985 the appellant made it clear to the respondent that she would not be acquiring any

proprietary interest in the Eileen Street property and yet she elected to continue her association with

the appellant until 1990; fourthly, the appellant did not by word or deed create an expectation in the

respondent or lead her to believe that she would acquire a proprietary interest in the property; and

fifthly, the appellant had by 1981 with his own funds and by his own work acquired the property by

which as a result of later dealings he acquired the Eileen Street land.

What happened in 1985 is referred to in this evidence of the respondent given under cross-

examination:

"Now, the reason for your departure in 1985 was because you had an argument

with Mr Manuel?-- Yes.

And this argument was about your interest in the new property which was
purchased at Pitcairn Street?-- Part of it.
Part of the argument?-- Yes.

You raised with Mr Manuel the issue as to whether you could become partly the legal owner of that property?-- Yes, yes.

And you wanted a half interest in that property?-- Yes.

And Mr Manuel clearly made known to you that he would not give you any legal interest in that property?-- Yes.

You fully understood that, didn't you, what his view was with respect to that property?-- Yes.

HIS HONOUR: I take it that's why you left, is it?-- Yes.

MR MORROW: Right, and partly for that. 'Okay, that's the way you think, I'm going.'?-- Yes.

And you left?-- Mmm.

Now, you came back after about, what, four to six months, I think we've established?-- Yes.

You knew when you came back that Mr Manuel would never recognise that you had an interest in Pitcairn Street?-- Yes.

Sorry, in Eileen Avenue, sorry; is that right?-- Yes.

So why did you come back?-- Felt sorry for him. He said he'd changed with his attitudes.

Right, but he certainly didn't indicate he would change with respect to his attitude towards any interest that you may have in the property?-- No.

And you accepted that as the basis for the continuation of the relationship that you had?-- Yes.

Is that right?-- Yes." (transcript pp.21-22)

The principle applied in Baumgartner v Baumgartner operates in a case where the

substratum of a joint relationship or endeavour is removed without attributable blame. His Honour

made no finding on the question of blame, but no argument was addressed to us on that subject so I

shall not take it further.

The association between the parties can be most aptly described as a joint relationship

rather than as an endeavour, there being nothing in his Honour's findings suggesting a striving

towards a goal. It was a joint relationship substantially different from that of the parties in

Baumgartner v Baumgartner. It was not a complete and open relationship with a wholehearted

commitment of each party to the other. It was not based on generous impulses or affection. It was

confined, constricted, guarded. The parties lived separate lives but found it convenient to reside

under the same roof. The respondent agreed under cross-examination that there was no discussion

about a long term commitment between the parties and that "essentially" their relationship was "just a

day-to-day relationship where [she was] sharing [the appellant's] house", although she did maintain

that they were living as husband and wife.

In those circumstances it is hard to see that the respondent's expenditure had any larger

significance than appeared on its face: provision of food, electricity, gas, and some clothing.

Although there was a "sexual component" in the relationship the respondent's position in the

household was in reality, it appears to me, not far removed from that of boarder - and the payments

she made were the agreed rent. The fact that the payments continued long after 1981, when the

appellant had accumulated sufficient capital to enable him eventually to purchase the Eileen Street

land, supports the conclusion that they were directed to purposes other than the acquisition of

property.

It is clear from the passage quoted from the judgment of Deane J. in Muschinski v. Dodds

that the circumstance which gives rise to the operation of the general principle of equity relied on by

the respondent is the premature failure of a joint relationship or endeavour so that an expectation

that something will be enjoyed in consequence of a payment is disappointed by an event, for which

the person making the payment is not responsible, occurring subsequent to the payment. The

requirement is for premature failure because if a relationship or endeavour proceeds to maturity it

would follow that the relationship or endeavour had run its contemplated course and hence all that
could reasonably have been expected to follow from the payment must have been enjoyed.

The facts of Baumgartner v Baumgartner illustrate that point: there was a long-term,

stable, family relationship in which marriage was under continuous contemplation. Consistently with

that stability and intended permanence the parties pooled their earnings to meet all their expenses

and outgoings arising from their living together as a family, and did not allocate the individual

contributions of each party to a particular category or particular categories of expenses or outgoings.

The facts of this case are in obvious contrast to those in Baumgartner v Baumgartner.

The relationship in this case was not a family relationship, but one in which the parties lived separate

lives under the same roof. There was no discussion about a long-term commitment. It was

essentially just a day-to-day relationship in which the respondent shared the appellant's house.

Consistently with that lack of commitment to each other, the parties did not pool their resources, and

the contributions of each party were allocated to particular categories of expenses and outgoings.

It follows from the nature of the association between the appellant and the respondent that

this was not a case of the premature failure of a relationship. However long a day-to-day

association may endure it cannot, from its very nature, fail prematurely. Further, there can be no

question of the disappointment of an expectation of future benefit in such an association because,

again from its very nature, no future association is contemplated.

Although, as his Honour found, the respondent made contributions in the expectation that

she would eventually share in the property acquired by the appellant in his own name, that

expectation can, given the clear indication of the appellant's attitude, have proceeded from nothing

more substantial than a forlorn hope of some future softening of that attitude. Such an unreasonable

and groundless expectation cannot, in my view, be a sufficient basis for the imposition of a

constructive trust. The respondent cannot have failed to be aware of the appellant's attitude from

the beginning, but it seems that she found it convenient to continue to associate with him.

It follows, then, in my view that on the facts found by his Honour the case falls short of being
one in which it could properly be said that the appellant's retention of the sole benefit of the Eileen

Street property is unconscionable. The appellant was guilty of no deceit or deception of any kind.

The nature of the relationship from the first made it clear that it was intended that each party should

remain independent of the other, financially and socially. That conclusion is reinforced by the

evidence of the events of 1985 and of the understanding upon which residence together was

resumed and continued to 1990. What the respondent was seeking in 1985 was a change in the

basis upon which the parties associated, and the appellant refused. That evidence therefore shows

not only what happened afterwards but also what had gone before.

I should therefore uphold the appeal in relation to the order made by his Honour concerning

the land.

The respondent's claim to an interest in the motor car was based upon direct contributions

and therefore is in a different category from her case in relation to the real property. The difficulty

about his Honour's conclusion concerning the motor car is however that he found that the appellant's

contribution was incalculable. If that were so it would not be possible to arrive at the proportions

attributable to the parties. The evidence on this subject was not entirely satisfactory, but the analysis

presented to us on behalf of the appellant arrived at the proportion of one to six in favour of the

respondent. That was based on the $2,200.00 contributed by the respondent and at least

$13,200.00 by the appellant according to uncontradicted evidence: $2,400.00 for the Austin,

$800.00 for a Ford, $4,000.00 for a Renault (his Honour found $4,500.00, but Mr. Morrow

contended for only $4,000.00), $3,000.00 for the purchase of the Volvo 265, and $3,000.00 for

repairs to it since the separation. In my view the appellant's argument is on the evidence clearly

correct. I therefore think that his Honour's order in relation to the motor car should be amended by

substituting one-seventh for one-quarter.