D v W - [2011] SADC 151

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
D v W
[2011] SADC 151
Judgment of His Honour Judge Costello
23 September 2011
EQUITY - TRUSTS AND TRUSTEES
FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS - ADJUSTMENT OF PROPERTY INTERESTS
LIMITATION OF ACTIONS - POSTPONEMENT OF THE BAR - EXTENSION OF PERIOD - OTHER CAUSES OF ACTION
Plaintiff and defendant in de facto relationship which ended in 1997 - after separation defendant continued to reside in jointly owned farm property - plaintiff sought sale of farm property and distribution of proceeds together with occupation rent and equity of exoneration in relation to monies drawn by the defendant on their joint account - defendant counterclaimed in 2010 seeking an extension of time to make a claim for a division of property under the De Facto Relationships Act 1996 or alternatively declarations that he had a beneficial interest greater than 50% in the farm and a beneficial interest in assets acquired by the plaintiff in her own name.
Held: Defendant's application for extension of time to bring claim under the Act refused - no serious injustice to the defendant - declarations as to defendant's beneficial interest in assets in plaintiff's name declined - declaration made that defendant has a beneficial interest greater than 50% in the farm - plaintiff's claims for occupation rent and equity of exoneration allowed - order for sale of farm property and distribution of proceeds to reflect above orders
Law of Property Act 1936; De Facto Relationships Act 1996, referred to.
Matthew v Hobbs [2006] SADC 34; Karpathious v Clemente [2008] SASC 316; D v McA Unreported; Cooper v Lees [2009] SASC 386; Perre v Ogulev [2009] SADC 85; Pearson v Pearson [1961] VR 693; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, 365; Trustees of the Property of Cummins v Cummins (2006) 227 CLR 278; Calverley v Green (1984) 155 CLR 242, 257-258; Currie v Hamilton (1984) 1 NSWLR 687; Ryan v Dries (2002) NSWCA 3; Mc Kay & Anor v Mc Kay [2008] NSWSC 177; Tracy v Bifield (1998) 23 Family L R 260; Scapinello v Scapinello [1968] SASR 316; Callow v Rupchev [2009] NSWCA 148; Biviano v Natoli (1998) 43 NSWLR 695, 704; Farrugia v Official Receiver in Bankruptcy (1982) 43 ALR 700, 702, discussed.

D v W
[2011] SADC 151
Introduction

The plaintiff seeks orders pursuant to the Law of Property Act 1936 for the sale of a farm property (“the farm”) jointly owned by the plaintiff and defendant. She also seeks an occupation rent from the defendant, equal to one half of the rent attributable to that property from October 1997, together with an equity of exoneration in relation to monies drawn by the defendant on a bank account in their joint names.
By way of counterclaim, the defendant seeks an extension of time in order to make a claim for a division of property pursuant to the De Facto Relationships Act 1996 (“the Act”), (now known as the Domestic Partners Property Act 1996) or alternatively, declarations that he has a beneficial interest greater than 50% in the farm and a beneficial interest in assets (comprising real estate and business) acquired by the plaintiff, during the period of cohabitation alleged by the defendant.
For the reasons which follow, I decline to make an order extending the time under the Act as I am not satisfied that it is necessary to avoid serious injustice to the defendant.
I also decline to make a declaration that the defendant has a beneficial interest in the plaintiff’s assets other than the farm. I am however prepared to make a declaration that the defendant has a beneficial interest, greater than 50%, in the farm.
In relation to the plaintiff’s claim I am satisfied that she is entitled to an occupation rent from the defendant and to monies based upon the right of exoneration. I am also disposed to order a sale of the farm and a distribution of the proceeds of such a sale which reflects these orders.
Background
1985-1992
It is agreed by the parties that, for a period of time, they were in a de facto relationship for the purposes of the Act. However, it is the duration of that relationship which lies at the heart of part of their dispute.
The parties first met in December 1985 at a Christmas lunch function. At this time W had separated from his wife. In 1986, D separated from her husband and moved into rental accommodation in Glenelg. By then, W had moved out of his former matrimonial home and into a flat in Walkerville.
During 1986, D and W began to see each other more frequently and commenced a relationship, described by D, as that of boyfriend and girlfriend. They travelled to Melbourne to attend the VFL grand final with W’s children in September of that year. Later in 1986 D’s lease at Glenelg came to an end. W offered her accommodation at Ashton, his former matrimonial home, to which he had recently returned. W says that D moved into his home and that the parties commenced, from that time, to live in a de facto relationship, within the meaning of the Act. D agrees that she stayed there from “time to time” but that it was sporadic and temporary[1].
[1] Transcript p 75
In March or April 1987, D moved into rental accommodation in Keswick where she set up house as well as operating her business. At that time, one of D’s sons, GD also commenced residing with D.
In August of 1987, W was transferred by his employer to Port Lincoln where he continued to work for the next two years. During this period, D remained living and working at her Keswick home. However, she and W continued to see each other regularly. She flew to Port Lincoln (on W’s estimation) perhaps 50 times over a two year period, with 40 of these trips being on W’s employer’s plane, on which, in order to be eligible to travel, she needed to be “recognised” as W’s “partner”[2]. Nevertheless, there remained significant periods (of between two and four weeks at a time) when they did not see each other[3].
[2] Transcript p 354
[3] Transcript p 356
In addition to the occasions when D travelled to Port Lincoln, there were times when W returned to Adelaide. On such occasions he and D stayed at his holiday home (at Goolwa), her house at Keswick or in motels when, according to D, she did not wish her son, GD to see them sharing a bed together[4].
[4] Transcript pp 85 and 189
Prior to moving to Port Lincoln in 1987, W had purchased the property in Goolwa which he placed in the names of himself and his two children, as he wished “to leave something” to his children[5]. In June of 1989, D purchased a house at South Plympton, in her own name, using a mixture of personal and borrowed funds. This is the real estate over which the defendant claims a beneficial entitlement.
[5] Transcript p 350
Despite asserting, in evidence-in-chief, that the property was purchased at auction, the defendant accepted in cross-examination that he may have been wrong and that it could well have been purchased by private treaty[6]. W’s involvement with this property consisted of assisting with the painting of perhaps a couple of the rooms. Apart from this, W did not participate in negotiations with respect to its purchase, nor did he make any of the contributions towards the mortgage or other outgoings which were borne solely by D. In evidence-in-chief W said[7]:
Q – Were there any discussions about whose name the property would go into?
A – No. It was for her and her business and it was, as I say, also to act as her home in
Adelaide.
[6] Transcript pp 470-471
[7] Transcript p 358
In 1989, W was transferred in his employment to Port Augusta. For her part, D obtained employment in Port Pirie. As a result, she regularly travelled (albeit only on weekends) over the next three years to see and stay with W at his house in Port Augusta.
Purchase and Occupation of the Farm
In August of 1992, W was transferred back to Adelaide by his employer. On his return, he moved in with D, on a permanent basis, at her South Plympton home. Whilst residing there, the parties commenced to talk about the prospects of purchasing a farming property. In late 1992 they settled on the purchase of the farm for a sale price of $340,000.
In addition to the sale price, the stamp duty and adjustments cost $14,780.52[8]. D paid $10,000 towards the purchase price, plus the stamp duty and adjustments while W paid $30,000. The balance of $300,000 was secured by way of a mortgage over the farm in the joint names of D and W. The farm was initially owned by the parties as joint tenants but this situation changed in 2008, when the joint tenancy was severed, following which the parties owned the farm as tenants in common in equal shares[9].
[8] Exhibit P 1 Vol 1 p 105
[9] Exhibit P1 Vol 1 pp 100 and 126
As a result of their concerns about the size of the mortgage and their concerns about their ability to meet the mortgage repayments, it was agreed by the parties that W should sell the Goolwa property which (after discussions with his children) he did. The proceeds of the sale of Goolwa, after payment of expenses were approximately $41,000. Out of these proceeds, W reimbursed D for the stamp duty and expenses which she had paid on the farm purchase. He also paid another $10,000 towards the mortgage[10]. There is no conclusive, documentary evidence as to what became of the balance (of over $16,000), although I am satisfied that it is likely to have been paid into a joint account set up by the parties and used for the purchase of items to equip the farm. There is, however, no evidence that this money went on capital improvements to the farm or that it enhanced the value of the farm[11].
[10] Transcript p 385
[11] Transcript p 477
In his evidence-in-chief, W said that, in terms of the mortgage, the parties decided that they would not have agreed to purchase the farm unless they knew the mortgage was able to be covered and that they only went on with the purchase because of a belief that his salary could cover the mortgage. In effect, he asserted that throughout the course of their relationship it was him (via his salary) who had paid the mortgage. In cross-examination he accepted (and appeared to appreciate for the first time[12]) that the banking/mortgage arrangements were somewhat different.
[12] Transcript pp 413-416; 434-435
In fact, W’s salary (which varied between $1100 and $1300 per fortnight) together with a contribution of $2000 per month from D[13] were paid into a joint account, from which account, payments were made in reduction of two mortgage loans (in their joint names), one a fixed loan and the other a variable loan.
[13] Exhibit P1 Volume 3 pp 615-661
Payments were made by the parties in this fashion throughout their period of cohabitation and thereafter. Although D missed paying her contributions of $2000 on a couple occasions, her evidence (which was corroborated by the bank statements[14]) was that these were made up in the following month.
[14] Exhibit P1 Vol 3 Bank Statements pp 616-619
In addition to paying his salary into the joint account each fortnight, W also paid in his tax refunds for at least some (and perhaps all) of the years during which the de facto relationship existed. Whether the full amount of the tax refunds was paid into the joint account is uncertain due to the absence of some of the banking records. Amounts of approximately $7,300 and $10,500 were paid into the joint account in November 1995 and September 1996 respectively[15]. However none of the amounts representing W’s tax refunds were paid into either of the loan accounts in reduction of the mortgage.
[15] Exhibit D8 - Book of W Documents - pp 144 and 147
In summary, with respect to the farm it is clear that, after reimbursing D, W’s contribution to the initial purchase totalled approximately $55,000[16] and D’s $10,000. The purchase was made jointly. The loan applications to the bank took into account their combined incomes[17]. The mortgage and the loan agreements were in joint names. The property was registered in joint names. The parties contributed amounts (D $2,000 per month and W $1,100-$1,300 per fortnight) into a bank account in joint names from which payments were made to meet and reduce the two loans.
[16] This sum is made up of $30,000 at settlement, $14,780 in reimbursement of expenses and a further $10,000 shortly after settlement from the sale of the Goolwa property
[17] Exhibit P1 Vol 1 pp 106-108
Finally, I note that after moving to the farm and vacating her property at South Plympton, D’s sons continued living there. In D’s absence, they made the mortgage payments for this house[18].
[18] Transcript p 91
The Parties Separate
The parties remained living together at the farm until October 1997, when they separated, with D moving back to her home in South Plympton. According to D, the relationship had begun to deteriorate in 1996. Despite some speculation as to a possible reconciliation up until 1999, the parties remained living apart from the time of their separation until the trial.
After D left the farm, the parties continued with the same mortgage repayment arrangement until early in 1998, when they agreed that, thereafter, D would contribute $1,200 per month and W $600 per fortnight in addition to paying the rates and taxes. At about this time, W also redrew some $17,500 from the mortgage to repay a loan on a Mitsubishi Triton vehicle which was used on the farm. W has since retained that vehicle[19]. It is in relation to this amount that D claims an equity of exoneration. From then until the end of the 2000 financial year, both parties claimed tax losses from the operation of the farm with it rarely, if ever, being profitable. After 2000 the ability to claim tax losses was legislated away.
[19] Exhibit P1 Vol 1 p 113; Transcript p 119
In 1999 and 2001, D purchased two properties in Mount Osmond and Plympton respectively, again, using a combination of her own money and borrowed funds. W did not contribute in any way (either with money or his labour) to the purchase or maintenance of these properties. In 2007 and 2008, D sold both properties, in each case realising a significant capital gain. Despite vague suggestions, during cross-examination by W’s counsel, that D had deliberately dissipated the proceeds of these sales to, in some way, thwart W’s counterclaim, there was no evidence to support such a concept and it was subsequently abandoned in final address.
W first sought and obtained legal advice with respect to his rights as to the ownership of the farm as early as 1997[20]. In 1998, D says she approached W asking that he buy her out or take over the mortgage repayments but W refused[21].
[20] Transcript p 452
[21] Transcript p 119
From then until some time around 2005 the parties continued paying the mortgage in the proportions mentioned. From time to time, D returned to the farm to look after the house and some of the animals during absences (for work) by W.
In March of 2005 W retired. As part of his retirement package he is in receipt of a fortnightly pension of around $3000. C, an actuary, called by D, estimated that the lump sum W would require, in order to receive a pension of this order, would be in excess of $1 million[22]. A couple of months prior to his retirement, W approached D seeking a figure from her as to what she would need to relinquish her interest in the farm. Her response invited him to put a figure to her, although the tenor of her response suggests she was seeking half the value of the farm after expenses[23].
[22] Exhibit P13
[23] Exhibit P1 Vol 1 p 4
Further discussions were put on hold, due to an approach from a third

party, LN, seeking to purchase the farm. The parties granted LN a 12 month option to purchase the property for $1.2 million during which time LN contributed monies towards the payment of the mortgage. After the option lapsed, negotiations continued into 2007 with LN still prepared to purchase for that amount. The parties were unable to agree between themselves to accept such an offer and subsequently, in 2007, LN ended negotiations with respect to its purchase[24].
[24] Exhibit P1 Vol 1 p 211
At the end of 2007 D ceased operating her business and retired. The business depended largely, if not entirely, on her personal involvement. Although she made attempts to sell it, her efforts proved to be unsuccessful[25]. Despite the fact that the business provided D with an income which, during some years, was quite substantial, I am not satisfied that, at the time of her retirement, it had any meaningful value.
[25] Transcript p 154
W has now been in a relationship, for some time, with a Ms C, who subsequently commenced living with W at the farm in 2005. Ms C continues to reside with W at the farm although she also maintains her own home nearby[26].
[26] Transcript p 437
After the breakdown in negotiations to purchase the farm with LN, in 2008 D’s son, G, wrote to W offering to sell him D’s share in the farm. The offer was $600,000.
In October of that year, the parties conducted a conference with a solicitor, JW with whom W had consulted in 1997. After the conference, JW wrote to D and offered to sell W’s share in the farm to D for $600,000 on the basis that he could not afford to buy her out.
D replied, suggesting that a better solution would be to auction the property. In response, JW advised that, prior to sale, the joint tenancy should be severed[27]. This was done. In January 2009 W’s new solicitor, Mr CL, wrote to D seeking to continue negotiations with a view to selling the farm. However, Mr CL also sought information from D as to when (according to her) their relationship had commenced stating that, in the event of negotiations being unsuccessful, a resolution might only be achieved by taking into consideration the value of all assets acquired during their relationship[28].
[27] Exhibit P1 Vol 1 p 18
[28] Exhibit P1 Vol 1 pp 20-22
D’s solicitors responded, in July 2009, seeking a settlement by way of a sale of the farm and an equal division of the proceeds. Her solution also raised the prospect of a claim for occupation rent in the event of there being no such resolution[29]. On behalf of W, Mr CL responded (in August 2009) by saying that, apart from anything else, it was W’s wish to stay and die on the farm[30]. In October 2009 both parties ceased paying the mortgage. At the same time, D instituted proceedings seeking a sale of the farm. In his counterclaim (not filed until April 2010), W sought the equitable relief previously referred to and alternatively, orders for an adjustment of property pursuant to the Act.
[29] Exhibit P1 Vol 1 pp 24-26
[30] Exhibit P1 Vol 1 p 27
The Legal Issues
Against this factual background, the following issues arise for consideration:
·    The claim under the Act and the corresponding application for an extension of time;
·    Ownership of the farm and a sale under the Law of Property Act;
·    Resulting Trust;
·    Constructive Trust;
·    Occupation Rent; and
·    Equity of Exoneration.
The Claim Under the Act
An application for a division of property under the Act must be made within one year after the end of a de facto relationship unless the Court, after considering the interests of both de facto partners, is satisfied that an extension of time is necessary to avoid serious injustice to the applicant[31].
[31] De Facto Relationships Act 1996 - Section 9(3)
The question of whether the limitation period should be extended to avoid serious injustice to the applicant (in this case, W) requires an examination of the merits of the application[32].
[32] Matthew v Hobbs [2006] SADC 34 at para 4

The Act defines “de facto relationship” in the following way:
De facto relationship means the relationship between a man and a woman, who although not legally married to each other, live together on a genuine domestic basis as husband and wife[33] (my underlining).
[33] De Facto Relationships Act 1996 s 3
This much is common ground: the parties commenced living together on a genuine domestic basis in 1992 when W returned from Port Augusta[34] and their de facto relationship lasted until 1997 when D left the farm and returned to South Plympton.
[34] Transcript p 88
D asserts that, until W returned in 1992, their relationship could not be characterised as anything more than a “boyfriend/girlfriend relationship”[35]. On the other hand, W asserts that the de facto relationship commenced towards the end of 1986 when D resided with him at his former matrimonial home at Ashton[36].
[35] Transcript pp 71, 74
[36] Transcript p 346
The question, as to the circumstances in which a de facto relationship exists, was discussed by the Full Court in Karpathiou v Clemente[37] where Gray J said:
The starting point for determining whether a de facto relationship exists are the terms of the 1996 legislation … Picking up from the definition, an important inquiry is whether there was a relationship between a man and a woman in which they lived together on a genuine domestic basis as husband and wife. It is also important to recognise that before an application can be made for a property adjustment order, that genuine domestic relationship, as husband and wife, must have existed for at least three years.
[37] [2008] SASC 316 at para 12
His Honour referred, with approval, to a decision of Powell J, in D v McA[38], who said:
[38] Supreme Court of New South Wales (Equity Division) 27 June 1986 (unreported)
… it seems to me that each case would involve the court making a value judgment having regard to a variety of factors relating to the particular relationship, those factors including, but not being limited to, the following:-
1.     the duration of the relationship;
2.     the nature and extent of common residence;
3.     whether or not a sexual relationship existed;
4.the degree of financial inter-dependence, and any arrangements for support, between or by the parties;
5.     the ownership, use and acquisition of property;
6.     the procreation of children;
7.     the care and support of children;
8.     the performance of household duties;
9.     the degree of mutual commitment and mutual support;
10.     reputation and “public” aspects of the relationship.
I accept that whilst these factors provide guidance on this question they are not intended to be exhaustive[39].
[39] Karpathiou v Clemente at para 14
Applying what was said in these decisions, I am not satisfied that the parties’ de facto relationship commenced in 1986 for the following reasons:
1.W’s evidence that Ashton was only a temporary place of residence, at best, and that they did not discuss finding a place where both of them could live because of his son’s, then schooling arrangements[40];
2. W moved to Port Lincoln in August 1987[41];
3. D was not divorced until 1988[42];
4.D purchased her own home at South Plympton in 1989 without financial assistance and limited practical involvement from W[43];
5.W’s acknowledgement that this home was “for her and her business” and to “act as her home in Adelaide”[44];
6.W lived in Port Lincoln and Port Augusta between 1987 and 1992 during which time they saw each other mainly during weekends[45];
7.Each party maintained separate and individual financial arrangements until 1992.
[40] Transcript p 459
[41] Transcript p 460
[42] Exhibit P1 - Book of Documents Vol 1 p 1
[43] Transcript p 80
[44] Transcript p 358
[45] Transcript pp 73 and 225
I am satisfied that, although the relationship was both loving and committed, (particularly after W moved to Port Lincoln) it nevertheless fell short, of the requirements in Section 3 of the Act, until 1992 when W returned to Adelaide. In particular, the relationship lacked some of the important indicia referred to above including financial interdependence and common residence.
As a result, I find that the de facto relationship lasted only during the period 1992-1997. Nevertheless, the requirements of Section 9(2)(c) of the Act have been satisfied. However, despite the existence of a relationship for the purposes of the Act, W’s application for a division of property was not made until 2010, nearly 13 years after the parties separated.
Extension of Time
As I have said, on this issue, I am required to consider the interests of both de facto partners and I need to be satisfied that pursuant to Section 9(3) of the Act, the extension is necessary to avoid serious injustice to the applicant.
Having regard to the terms of Section 9(3) the Court is authorised and required
to have regard to the likelihood of a claim succeeding, and the impact of a successful claim on the unsuccessful party. But ultimately the Court must be satisfied that an extension of the limitation period is necessary to avoid serious injustice to the applicant. Injustice can include the circumstances of and reason for delay in instituting proceedings. But more significant factors … will be the prospects of the claim succeeding, the nature and amount of the claim, and the impact on an applicant of the refusal of an extension of time[46].
[46] Cooper v Lees [2009] SASC 386 at para 30
I am not persuaded that this is a proper case to extend the limitation period. W asserted in paragraph 54 of his Defence and Counterclaim that he did not apply for Orders under the Act because he acted in reliance on an agreement in March of 1998 that he would remain on the farm pending a “final property settlement”. I am not satisfied that in March 1998 (or at any other time) the parties reached an agreement with respect to a division of their property, be it jointly owned or owned solely by D.
After D left the property in 1997, there were discussions about a sale of the farm[47] but it was not until late in 2009 that the question of an overall settlement was raised.
[47] Exhibit P1 Vol 1 pp 4-27
Indeed it would appear, from some of W’s answers in cross-examination, that the concept of an overall settlement of the type contemplated by the Act was never intended by him:
Q    And she certainly hasn’t done anything to encourage you to be under a belief that    she would do a division of her properties that she owned in her personal name.
A    I’ve never discussed her properties, that’s all become part of this process between the lawyers, not me.
…
Q    Do you see that there is an inconsistency between C always maintaining her position of 50% and you having an expectation that there will be a division of the other assets that are in her name.
A    I never had that expectation, I never had that until these proceedings have begun[48]; and
A    … C had made it clear that her legal advice was on Nairne at 50% ... At the end of the day these matters about South Plympton and assets have only come into fruition because of this – this Act which really you’ve only got as I understand it 12 months to take action in. So I don’t understand why we’re here for that[49].
[48] Transcript p 443
[49] Transcript p 458
D’s position, with respect to the nature of any settlement, was always that the only property involved was the farm and that it was to be divided equally[50].
[50] Transcript pp 161, 164, 439, 442
I am satisfied that the reason, why W gave these answers, is because there was no belief or expectation, on his part, as to a division of property other than the farm.
Furthermore, as I have said, W made no financial contribution to D’s South Plympton home (be it by way of purchase money or mortgage repayment) and D’s other homes were purchased post separation. As to the latter, it is difficult to imagine that Parliament intended the Court to take into account, in an adjustment of property order, property acquired after separation, particularly property acquired after the time limit, in Section 9(3), for taking proceedings, had expired[51].
[51] see Perre v Ogulev [2009] SADC 85
The only other asset sought to be brought to account by W was D’s business. This was a business peculiarly personal to her and one which I am satisfied held no value upon her retirement.
Finally, W had legal advice with respect to the farm from as early as 1997[52] but made no claim for property division until 2010. Although I accept that, in the initial years which ensued post-separation, various factors (e.g. possible reconciliation, shared tax losses and the offer from LN to purchase) would have distracted W from taking proceedings, there is no explanation as to why from 2007, at the very latest, proceedings were not instituted.
[52] Transcript p 452
In summary, I am not persuaded that there are reasonable prospects of him succeeding in a claim for a division of property other than the farm. Furthermore, given that he has an alternative claim in equity to a significant proportion of the proceeds of any sale of the farm, I am not persuaded that impact of a refusal of his claim under the Act will work a serious injustice to him[53].
[53] Cooper v Lees at para 35
In any event, the delay in bringing these proceedings is lengthy to say the least and the explanation for that delay particularly from 2007 onwards, is unsatisfactory.
Law of Property Act Sale
I now turn to consider D’s claim for a sale of the farm property and an equal division of the proceeds after payment of expenses.
In Currie v Hamilton[54] McLelland J said:
One starts with the proposition, prima facie, that the beneficial ownership of real property is commensurate with the legal title.
[54] (1984) 1 NSWLR 687, 690
Accordingly, as tenants in common, in equal shares, D is (without more) entitled to an order that the farm be sold and the proceeds divided 50/50.
However, McLelland J went on to acknowledge that:
… where two persons contribute in unequal proportions to the cost of acquisition of real property which is conveyed to them in equal shares, there is a rebuttable presumption of law that they take beneficial interests in proportion to their respective contributions (my underlining)[55].
[55] (1984) 1 NSWLR 687, 690
Leaving aside for the moment the question of whether the cost of acquisition includes only the initial acquisition costs and not the subsequent lump sum mortgage payment and reimbursement of expenses by W to D, it is clear that W made a greater contribution to the acquisition than did D.
The presumption, referred to above, may be rebutted if and to the extent that it appears that the person who made the greater contribution intended that the other should take a beneficial interest commensurate with the legal title[56].
[56] Pearson v Pearson [1961] VR 693, 698
Counsel for D submitted that the evidence of W disclosed an intention on his part that, despite his higher contributions, he always intended that D was to have an equal share.
I note, at the outset, that the High Court has recognised that this presumption is not easily displaced and
should not … give way to slight circumstances[57].
[57] Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, 365
Counsel for D pointed to the evidence surrounding the joint borrowing/purchase to which I referred earlier. He also referred to that part of W’s evidence where W agreed that the suggestion of him getting a larger share (because he was putting in more money) was “never discussed”.
In his evidence W spoke of being happy to put all his money into the farm because “it was for us” and “that what was mine was hers and what was hers was mine”.
Although W spoke in this fashion he also used similar expressions when talking about property which D bought[58]. At other times he spoke of a belief that any settlement should reflect his greater contributions[59].
[58] Transcript pp 457, 473
[59] Transcript 458; also Exhibit P1 Vol 1 p 5
After considering all the evidence, I am not satisfied that there is evidence, of a clear intention on W’s part, such as to rebut the presumption. As such they hold their respective interests in the farm in proportion to their respective contributions.
Finally, there can be no suggestion that the presumption of advancement applies in these circumstances. Although the question was “left open” in a recent decision of the High Court[60] the law in this country remains that the presumption of advancement does not apply to a de facto relationship[61].
[60] Trustees of the Property of Cummins v Cummins (2006) 227 CLR 278
[61] Calverley v Green (1984) 155 CLR 242, 260 and 268
Resulting Trust
As I have already noted, where as here, two persons contribute to the purchase of a property which is conveyed to them in their joint names, the presumption is that they hold the legal estate in trust for themselves in shares proportionate to their contributions[62].
[62] Calverley v Green
It now becomes a matter of determining the amount of their respective contributions towards the cost of acquisition.
The first question to be determined is the quantum of the acquisition cost. The weight of authority would suggest that it includes not only the contract price but also the costs, fees and other incidental expenses incurred in paying for the property[63].
[63] Ryan v Dries (2002) NSWCA 3; Currie v Hamilton at 691
As the farm was purchased with mortgage finance, the money is deemed to be contributed by the parties liable to repay, so that jointly borrowed funds raise an implication of joint contribution[64].
[64] Calverley v Green pp 257-258
Accordingly, the respective contributions to the acquisition should be the initial contributions of $30,000 and $10,000 by W and D respectively. To this must be added the sum of $14,780 reimbursed by W to D for settlement costs. To that I would also add the further sum of $10,000 contributed by W to reduce the mortgage. Although this sum was not paid at the time of purchase it is sufficiently proximate to the date of settlement as to warrant inclusion.
Accordingly, the respective contributions to the cost of acquisition were as follows, bearing in mind that the parties’ respective payments on purchase reduced the mortgage to $290,000:-

W

  D

              $145,000 [being his

  half of liability

  left under the
  mortgage]

                $145,000.00

              $ 30,000

$ 10,000.00

              $ 10,000

              $ 14,780

          $199,780.00

                        $155,000.00

This represents a contribution to the acquisition, by W, of 56.3% to 43.7% by D. For ease of calculation, I propose to round it off to 56% to 44%. Thereafter, the parties contributed to the mortgage by an arrangement which saw them set up a joint bank account into which they deposited monies. Payments were then made to meet and reduce the mortgage loans from their joint account.
As Gibbs J said in Calverley v Green[65]
The fact that the mortgage debt was repaid by the appellant is therefore not relevant in determining the extent of the interests of the parties in the land but it may be relevant on an equitable accounting between the parties (my underlining).
[65] (1984) 155 CLR at p 252
It is not possible, due to the absence of banking and other records, to determine exactly how much each party paid towards the mortgage. Doing the best I can, it would appear that D paid $2,000 per month or $24,000 per annum from the beginning of 1993 until early 1998. During that period W paid between $1,100 and $1,300 per fortnight or (using an average of $1,200 per fortnight) some $31,200 per annum.
W has therefore paid, during that period of 5¼ years, approximately $7,200 per annum more than D. This amounts to $37,800 more than D over the period during which that arrangement continued.
Thereafter, between March 1998 and October 2009, namely 11½ years, W paid $600 per fortnight and D $1,200 per month or $15,600 per annum to her

$14,400.
In total, during that period he paid some $12,600 more than D, bearing in mind that the third party LN paid a contribution towards the mortgage of $12,000 for the period during which it held its option.
In addition to the mortgage repayments W has continued to pay the rates and taxes on the property. Although there appears to be some division of opinion as to the proper approach to the issue of rates and taxes[66] I am satisfied that, in the circumstances, it is appropriate to take them into account. The parties are agreed that the total amount for rates (since D vacated the farm) is $19,229.
[66] Mc Kay & Anor v Mc Kay [2008] NSWSC 177; cf Tracy v Bifield (1998) 23 Family L R 260
To this must be added an amount for insurance. The parties are unable to agree the quantum for insurance. In relation to a premium of $2,875 for the 2011 year, $762 relates to home and contents. I do not know how this figure is split up as between the two. Doing the best I can I will allow $500 for the home. An amount of $614 related to insurance for farm buildings, farm vehicles, fencing, livestock and hay. Again it is not possible to determine how much of this sum relates to the farm buildings and fences. I will allow $400. This totals $900 or approximately 30% of the premium for the year. The evidence discloses that W paid premiums between 2002 and 2011 totalling $22,821. 30% of this amounts to $6,846. The combined amount paid by W, for rates and insurance, therefore, comes to $26,075.
W is entitled to 44% of this amount from D, being $11,473.
In summary, since the purchase of the farm and the commencement of the repayment arrangement, W has paid about $50,400 more towards the mortgage than D. In addition, he is entitled to a credit of $11,473 representing the rates and insurance. Accordingly, under the principles enunciated in Calverley v Green, W is entitled to a beneficial interest represented by 56% of the value of the farm together with an amount of $61,873 on an equitable accounting between the parties.
Constructive Trust
In the alternative, W invited the Court to construe a trust based upon the principles established in Baumgartner v Baumgartner[67] namely:
the general equitable principle which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them.
[67] (1987) 164 CLR 137, 148
It follows from what I have already said in relation to the issue of resulting trust that I am of the opinion that it would, in the circumstances be unconscionable for D to now claim an equal share of the farm in circumstances where W’s greater contributions towards the purchase of the farm were made on the understanding and expectation that they would share the rest of their lives together rather than the next four to five years[68]. If necessary, I would be prepared to construe a trust which declared the beneficial interests of the parties in the proportions 56% to W and 44% to D in addition to recognising the excess contributions referred to above made by W towards the mortgage and rates and taxes.
[68] Transcript p 241
Occupation Rent
I now turn to D’s other claims. As Gibbs J noted in Calverley v Green, a person in D’s position may be entitled to an occupation rent in respect of the period during which W had sole occupation of the farm.
D claims an occupation rent from W for the period from 1997 to the present. In normal circumstances, there would not be an entitlement for D to make such a claim because, unless co-owners have agreed otherwise, each co-owner is entitled to occupy the whole property along with any other co-owner who chooses to do so. Accordingly, a co-owner who exercises this right to use and occupy is not liable to pay an occupation fee to other co-owners[69].
[69] Scapinello v Scapinello [1968] SASR 316

However, this absence of liability is subject to exceptions, one of which is where the occupying co-owner has wrongfully excluded the other co-owner from exercising his or her right of occupation[70].
[70] Scapinello at pp 319-320
Liability to pay an occupation rent can be established, without a forceful exclusion by one party, where the parties are in a domestic relationship which has broken down and one co-owner, for practical reasons, can no longer live in the property with the other and leaves. The fact of the breakdown, making it impractical “or unreasonable” for one to stay, is enough, to establish a liability on the one who remains, to pay an occupation fee[71].
[71] Callow v Rupchev [2009] NSWCA 148
Although W suggested that he was content for D to remain living at the farm after the relationship broke down in 1998, he nevertheless accepted that it was “preferable” for her to move out given that their relationship by then was “sad” and that they “avoided each other”[72]. Her inability to return was, for practical purposes, confirmed when Ms LC moved into the farm to live with W in 2005.
[72] Transcript p 438
However, I am satisfied that the state of the parties’ relationship, in 1998, was such as to make it unreasonable for D to remain living at the farm and that, as a result, she is entitled to an occupation rent from 1998. If, contrary to my view, D is not entitled to an occupation rent on this basis, she would still be entitled to make such a claim given that W is seeking an allowance for expenses in respect of the property[73].
[73] Ryan v Dries (2002) NSWCA 3 at para 61
In support of her claim, D called a valuer Mr Wa who opined that during the period from 1998 onwards a dwelling of this nature could have attracted a rental of between $300 and $400 per week or $15,000 to $20,000 per annum[74]. He arrived at this assessment by looking at “comparable rental evidence of transactions in the marketplace”[75].
[74] Exhibit P1 Vol 1 p 158
[75] Transcript p 195
However, this approach makes no allowance for the reality that an actual letting would be likely to produce a lower amount to reflect the fact that any tenant would have to share the property with W[76].
[76] Biviano v Natoli (1998) 43 NSWLR 695, 704; also see Callow v Rupchev at para 53
The onus is on D to establish her claim to an appropriate level of rent. Although there is no evidence as to the extent to which a rental would be decreased in these circumstances, I am inclined to think that it would be significant. I would therefore fix the rental at $200 per week or $10,400 per year.
The valuer, Mr Wa, also attributed a value to the pastures and suggested a rental range of between $18,200 and $26,000 per annum. Although these were figures that he concluded were in the appropriate range, Mr Wa nevertheless accepted that a discount from these amounts may be appropriate to account for, inter alia, the following:
·    The size of the farm, being a “hobby farm”, made it likely to be attractive only to a short term renter;
·    No allowance had been made for the cost of maintaining the stock in terms of feeding, exercise and the like; and
·    If one agisted cattle on the land there would no room to agist other animals, e.g. horses[77].
[77] Transcript pp 197-203
Again, there is no hard evidence before me to say, by what amount these factors would reduce the rental range. Nevertheless it seems to me that the effect of these factors, in combination, would also be significant. I would be prepared to allow a figure, for this aspect of the rental, of $15,000 per annum. This makes a combined amount under this head of $25,400 per annum. D is entitled to 44% of this amount being $11,176 to reflect her ownership of the property.
Accordingly, I would be prepared to allow an annual figure of $11,176 for 13½ years which totals $150,876.
Equity of Exoneration
In addition to her claim for an occupation rent, the plaintiff also sought to invoke the equitable doctrine of exoneration, in relation to the monies used by W to “pay off” the debt on the Mitsubishi Triton.
The content of the doctrine was explained by Deane J in Farrugia v Official Receiver in Bankruptcy[78] in the following way:
Where the property of a married woman is mortgaged or charged in order to raise money for the benefit of the husband, it is presumed in the absence of evidence showing an intention to the contrary, that, as between her husband and herself, she meant to charge her property only as a surety. In such a case, she is, as between her husband and herself, in the position of a surety and entitled to be indemnified by the husband to throw the debt primarily on his estate to the exoneration of her own.
[78] (1982) 43 ALR 700, 702
I am satisfied that W obtained the sole benefit of the redrawn funds of $17,500 and that there was no intention that D was to have the benefit of ownership or use of the vehicle. She is therefore entitled to bring that amount into the accounting in her favour.
Conclusions
After considering the interests of both parties with respect to an overall property settlement, I am not satisfied that an extension of the limitation period under the Act is necessary to avoid serious injustice to W and I decline to make an order extending time.
This leaves the plaintiff’s claim for a sale of the farm and equal division of the proceeds, plus claims for occupation rent and equitable exoneration and the defendant’s counterclaim seeking declarations as to his beneficial interests in the farm and D’s other property.
There is no basis to conclude that W has any equitable interest in D’s assets other than the farm. I am satisfied that apart from the general notion that, if the parties continued living together into their retirement years, they would share in each other’s assets there was no understanding or agreement between them capable of supporting an equitable interest by W in the assets owned by D in her own name.
As to the farm, I am satisfied that, based upon the principles enunciated in Calverley v Green, W is entitled to a declaration that he has a beneficial interest in the farm which equates to 56% of its value with D’s interest being 44%.
In the alternative, I would be prepared to construe a trust in favour of W to the extent of a 56% share in the proceeds of a sale of the farm.
In addition W has, since the relationship commenced, paid $61,873 more than D represented by extra mortgage repayments and rates and insurance.
As against that, I am satisfied that D is entitled to an occupation rent which amounts to some $150,876 and an equity of exoneration for $17,500 being a total of $168,376.
As a result, although W is entitled to a larger share of the proceeds of a sale of the farm, in the rationalisation of the accounting between the parties, D is entitled to receive approximately $106,500 from W.
I am disposed to order a sale of the farm and a distribution of the sale proceeds to reflect these orders, but before doing so I will hear the parties on the specific orders I should make and costs.

W	D
$145,000 [being his half of liability left under the mortgage]	$145,000.00
$ 30,000	$ 10,000.00
$ 10,000
$ 14,780
$199,780.00	$155,000.00