Lloyd v Tedesco
[2002] WASCA 63
•27 MARCH 2002
LLOYD -v- TEDESCO [2002] WASCA 63
| (2002) 25 WAR 360 | |||
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2002] WASCA 63 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:77/2001 | 5 DECEMBER 2001 | |
| Coram: | MURRAY J HASLUCK J PULLIN J | 27/03/02 | |
| 33 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| A | |||
| PDF Version |
| Parties: | KATHLEEN LOUISA LLOYD FRANCESCO TEDESCO |
Catchwords: | Equity De facto relationship Joint endeavour relied upon Claim for equitable compensation in part secured by equitable charge Increase in wealth of one party during relationship Unintended breakdown of relationship Whether unconscionable for party holding legal title to retain benefit General principles discussed |
Legislation: | Nil |
Case References: | Allen v Snyder [1977] 2 NSWLR 685 Baumgartner v Baumgartner (1987) 164 CLR 137 Bennett v Tairua (1992) 15 FAM LR 317 Giumelli v Giumelli (1999) 196 CLR 101 Grant v Edwards [1986] Ch 638 Green v Green (1989) 17 NSWLR 343 Kais v Turvey (1994) 11 WAR 357 Lloyd v Tedesco, unreported; SCt of WA; Library No 970391; 5 August 1997 Maharaj v Jai Chand [1986] AC 898 Mallet v Mallet (1984) 156 CLR 605 Muschinski v Dodds (1985) 160 CLR 583 Parij v Parij (1997) 72 SASR 153 Singer v Berghouse (No 2) (1994) 181 CLR 201 Stowe v Stowe (1995) 15 WAR 363 Stowe v Stowe (No 3), unreported; SCt of WA (Owen J); Library No 970389; 5 August 1997 Bathurst v PWC Properties (1998) 195 CLR 566 Bryson v Bryant (1992) 29 NSWLR 188 Carson v Wood (1994) 34 NSWLR 9 Commonwealth v Verwayen (1990) 170 CLR 394 Cooke v Head [1972] 2 All ER 38 Eves v Eves [1975] 3 All ER 768 Gissing v Gissing [1971] AC 886 Hibberson v George (1989) 12 Fam LR 725 Hussey v Palmer [1972] 3 All ER 744 In The Marriage of Ferraro (1992) 111 FLR 124 Lloyd v Tedesco, unreported; SCt of WA; Library No 970391; 5 August 1997 Miller v Sutherland (1990) 14 Fam LR 416 Ogilvie v Ryan [1976] 2 NSWLR 504 Pettitt v Pettitt [1970] AC 777 Stowe v Stowe (No 2), unreported; SCt of WA; Library No 960354; 4 July 1996 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : LLOYD -v- TEDESCO [2002] WASCA 63 CORAM : MURRAY J
- HASLUCK J
PULLIN J
- Appellant (Plaintiff)
AND
FRANCESCO TEDESCO
Respondent (Defendant)
Catchwords:
Equity - De facto relationship - Joint endeavour relied upon - Claim for equitable compensation in part secured by equitable charge - Increase in wealth of one party during relationship - Unintended breakdown of relationship - Whether unconscionable for party holding legal title to retain benefit - General principles discussed
Legislation:
Nil
(Page 2)
Result:
Appeal dismissed
Category: A
Representation:
Counsel:
Appellant (Plaintiff) : Mr C P Shanahan
Respondent (Defendant) : Mr K J Martin QC
Solicitors:
Appellant (Plaintiff) : Butcher Paull & Calder
Respondent (Defendant) : Deacons
Case(s) referred to in judgment(s):
Allen v Snyder [1977] 2 NSWLR 685
Baumgartner v Baumgartner (1987) 164 CLR 137
Bennett v Tairua (1992) 15 FAM LR 317
Giumelli v Giumelli (1999) 196 CLR 101
Grant v Edwards [1986] Ch 638
Green v Green (1989) 17 NSWLR 343
Kais v Turvey (1994) 11 WAR 357
Lloyd v Tedesco, unreported; SCt of WA; Library No 970391; 5 August 1997
Maharaj v Jai Chand [1986] AC 898
Mallet v Mallet (1984) 156 CLR 605
Muschinski v Dodds (1985) 160 CLR 583
Parij v Parij (1997) 72 SASR 153
Singer v Berghouse (No 2) (1994) 181 CLR 201
Stowe v Stowe (1995) 15 WAR 363
Stowe v Stowe (No 3), unreported; SCt of WA (Owen J); Library No 970389; 5 August 1997
(Page 3)
Case(s) also cited:
Bathurst v PWC Properties (1998) 195 CLR 566
Bryson v Bryant (1992) 29 NSWLR 188
Carson v Wood (1994) 34 NSWLR 9
Commonwealth v Verwayen (1990) 170 CLR 394
Cooke v Head [1972] 2 All ER 38
Eves v Eves [1975] 3 All ER 768
Gissing v Gissing [1971] AC 886
Hibberson v George (1989) 12 Fam LR 725
Hussey v Palmer [1972] 3 All ER 744
In The Marriage of Ferraro (1992) 111 FLR 124
Lloyd v Tedesco, unreported; SCt of WA; Library No 970391; 5 August 1997
Miller v Sutherland (1990) 14 Fam LR 416
Ogilvie v Ryan [1976] 2 NSWLR 504
Pettitt v Pettitt [1970] AC 777
Stowe v Stowe (No 2), unreported; SCt of WA; Library No 960354; 4 July 1996
(Page 4)
1 MURRAY J: This action proceeded to trial before Miller J upon an amended statement of claim the form of which owed much to the decision of Owen J in Lloyd v Tedesco, unreported; SCt of WA; Library No 970391; 5 August 1997. It is necessary to commence these reasons by reviewing the essential features of the pleadings because, as ought to be the case, the way in which the action was fought at trial and the way in which the judgment of Miller J is structured depend very much upon the basis upon which the plaintiff's case was pleaded and upon which the defendant responded to it.
2 The appellant's case emerges with clarity from the statement of claim as further and better particularised. Central to the case was the allegation that the parties maintained a de facto relationship from about July 1981 until about December 1990. A feature of that relationship was pleaded to be the "joint endeavour" described in par 2:
"2. At all material times from the commencement of cohabitation the parties applied their capacities and skill for work in their respective roles pleaded in paragraphs 3 and 4 herein in a joint endeavour, one purpose of which was the parties intention to provide the parties future financial security and benefits.
PARTICULARS OF INTENTION OF PERMANENT FINANCIAL SECURITY
(a) From at or about the commencement of co-habitation and thereafter on a number of occasions the Defendant said words to the Plaintiff to the effect that his work in the joint endeavour was for the purpose inter alia of her future and of providing for her financial security. The Plaintiff is not able to precisely recall the occasions, the date, time and place the said words were spoken.
(b) The parties agreed that the Plaintiff would not engage in full time employment or otherwise seek to enhance her own assets or otherwise pursue her personal financial security but would devote herself fulltime to her role as pleaded in paragraph 4 herein to enable and assist the Defendant in his work in business.
(Page 5)
- (c) At or about the commencement of cohabitation the Defendant promised to marry the Plaintiff after the dissolution of his marriage, gave the Plaintiff an engagement ring and repeated the promise to marry on a number of occasions during the relationship.
(d) The Defendant on a number of occasions said to the Plaintiff that she would be entitled to a one half interest of the assets that formed a part of or resulted from the joint endeavour. The Plaintiff does not recall the occasions, the date, time and place when the said words were spoken."
3 There are a number of things to be noticed about the pleading. One is that the appellant's case did not simply rely upon the existence of the de facto relationship but pleaded that it was a feature of that relationship that the parties would jointly work towards the provision of their joint future financial security and benefits. It was pleaded as a joint endeavour consciously entered into with that intention. It seems to me that subparagraphs (a), (b) and (c) of par 2 were intended to refer to the facts upon which the appellant would rely to establish the relevant nature of the joint endeavour.
4 Subparagraph (d) appears at first sight to be of a different character. It appears to be a direct claim to a half share to all the assets forming a part of or resulting from the joint endeavour. It is the sort of pleading which would lead one to anticipate that the claim of a beneficial interest in proprietary assets would be protected by a declaration of trust. That would be a claim for an implied or a resulting trust in the sense that the trust would be said to arise out of the intention of the settlor, the respondent in this case, or the intention of both parties to the transaction, the trust then being implied by law because of the intention of the parties.
5 Such a remedy might also be termed a constructive trust arising by implication from the common intention of the parties: Maharaj v Jai Chand [1986] AC 898, 907; Stowe v Stowe (1995) 15 WAR 363, 367-8. The central principle in such a case is that equity will imply a trust in such circumstances because it would otherwise be unconscionable to allow the defendant to retain sole legal and beneficial ownership of the property in question.
(Page 6)
6 The concept of a constructive trust in the remedial sense is much broader. It may be imposed upon a defendant as a remedy affecting his or her legal and beneficial ownership of particular property in any case where circumstances and the conduct of the parties are such as to make it unconscionable not to impose the trust. In that regard the inquiry will not be for the actual or presumed agreement or intention of the parties and, indeed, the remedy may be imposed contrary to that intention: Kais v Turvey (1994) 11 WAR 357.
7 The elucidation of the law in this regard owes much, in my respectful opinion, to the judgment of Deane J in Muschinski v Dodds (1985) 160 CLR 583 and particularly at 613-5. It is important, however, not to confuse the remedy with the cause of action by way of a claim for relief based upon the application of equitable principle. The equitable principle with which the Court is concerned is not to be found in what Deane J in Muschinski at 615 described as "the indulgence of idiosyncratic notions of fairness and justice", although, as his Honour recognised, notions of fairness and justice would necessarily be involved in the application of principle. The particular principle of equity identified in Muschinski was that which may simply be described as "unconscionability": Parij v Parij (1997) 72 SASR 153 per Debelle J at 161.
8 What then does the principle of unconscionability involve? The answer, I think, will depend upon the multitudinous circumstances of different cases and I do not think there can be any exhaustively defined list of circumstances which will constitute unconscionable conduct of a kind which will prompt the intervention of a court of equity, but for present purposes it is sufficient, in my opinion, to return to the judgment of Deane J in Muschinski at 620 where his Honour described particular circumstances which would constitute unconscionable conduct in the following way:
"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
(Page 7)
- benefit of the relevant property to the extent that it would be unconscionable for him so to do."
- Of course that statement of principle was made having regard to the particular circumstances of the case and the claim for a beneficial interest in particular property.
9 The principle of equity involved was soon revisited by the High Court in a de facto relationship case, Baumgartner v Baumgartner (1987) 164 CLR 137 where the majority of the High Court adopted the reasoning of Deane J in Muschinski to apply the concept of a constructive trust to prevent an unconscionable retention of property, the acquisition of which both parties to the relationship had contributed to by direct financial contribution or in other ways. In Baumgartner both parties contributed income which they pooled for the purposes of their joint relationship, one of which was found to be the provision of their mutual security in relation to their accommodation in a house built on land bought in the name of the male partner only. The pooled earnings were then applied to make mortgage repayments as well as for their mutual support as a household.
10 It was the process of pooling the resources which led the High Court to conclude that having regard to the way in which the pooled resources were used, a purpose of the joint relationship was to provide both with a beneficial interest in the property in question so that it would be unconscionable for the male defendant to be allowed to retain sole beneficial and legal ownership of the property when the relationship failed. The remedy of trust applied in that case was tailored by the Court to recognise the respective value of the contributions made, but not upon the basis that contributions of a non-material kind will be accorded less weight or value because they are not material contributions directly made to the acquisition, maintenance or improvement of particular property.
11 In Muschinski, although that case did not involve the need to examine the worth of indirect contributions, Deane J at 622 referred to the fact that:
" … any assessment of what would and would not constitute unconscionable conduct would obviously be greatly influenced by the special considerations applicable to a case where a husband and wife or persons living in a 'de facto situation' contribute, financially and in a variety of other ways, over a lengthy period to the establishment of a joint home. In the forefront of those special considerations there commonly lies a need to take account of a practical equation between direct
(Page 8)
- contributions in money or labour and indirect contributions in other forms such as support, homemaking and family care."
12 Therefore it seems to me that there is no doubt that the remedy of a constructive trust may be employed in various circumstances establishing unconscionability. In a case such as this where a joint relationship or endeavour of a particular kind is relied upon, if there is found to have been a "pooling" of resources, at least in the sense of a mutual commitment of resources, both financial and otherwise, directed towards the acquisition of or otherwise related to an asset, the Court will be more inclined to hold it to be unconscionable for one party to retain the entirety of the legal and beneficial ownership of that asset. The pooling of resources of which the courts have spoken has not been confined to financial resources. The courts do not draw artificial distinctions between the situation of a plaintiff who makes a direct financial contribution to an asset, one who makes a financial contribution which enables his or her partner to expend more of that person's money upon the asset, or one who contributes time and effort directed towards an asset rather than simply towards the maintenance of the relationship itself.
13 The Full Court decision in Bennett v Tairua (1992) 15 FAM LR 317 provides an example of the courts' flexible approach. The claimant for an interest in a home and contents had made no financial contribution to the acquisition or development of the property at all. There was a lengthy de facto relationship and when she worked, the plaintiff contributed her income to their joint living expenses, including the support and upbringing of children of the relationship. A declaration of constructive trust was made because it was held that those contributions were for all the purposes of the relationship including the acquisition, maintenance and improvement of the family home. The declaration of trust was supported by the relationship of the female plaintiff's endeavour to the family home and its contents in that, inter alia, it was directed towards its provision.
14 It was held in Stowe, in illustrating the limits of a claim to a constructive trust in relation to property connected to a de facto relationship, that the making of promises to marry were only relevant as illustrating the nature of the relationship and as providing colour to contributions made to the family home or other property owned by the other party. In other words, it would be a fact going to the establishment of unconscionability. It was further held that contributions of whatever kind related to particular properties, "do not give rise to a constructive
(Page 9)
- trust overall of the property of one of the parties to a de facto relationship where contributions have not been made to all the property." (373)
15 The important consideration where a claim for equitable relief is based upon unconscionability said to arise in the context of non-material contributions by one de facto spouse is that such contributions be related, where a declaration of trust is sought, to the particular items of property over which it is said the trust should be declared. It may be that one party to a relationship makes an important contribution to the relationship by performing a role of support, a role as caregiver, homemaker and the like. No doubt contributions of that kind will be referable to the mutual affection and concern for each other which the parties have.
16 But unless the purposes of the provision of a contribution of that kind go further and the court concludes that it is intended to enhance the material wellbeing of both parties, or to provide the contributing party with an interest in specific property, or that it is made upon the basis that that party would have an interest in such property, then it seems to me that equity will not hold to be unconscionable the retention of property in the beneficial ownership of the other party who has directly contributed to the acquisition, maintenance and enhancement of that material wealth or property: see Stowe at 373-4; Green v Green (1989) 17 NSWLR 343, 353 where Gleeson CJ with whom Priestley JA agreed said:
"It is clear that the mere existence of a matrimonial or de facto relationship, combined with express or implied undertakings to provide support and accommodation, will not form a sufficient basis for concluding that there is a constructive trust by virtue of which a proprietary interest in the home occupied by the parties is created … . In a legal system which does not include concepts of family or community property, and where an obligation on the part of a husband to house and provide for his wife is commonly regarded as an incident of the matrimonial relationship, an undertaking of the kind referred to cannot of itself confer upon a wife a legal or equitable interest in the matrimonial home. … The acceptance of an obligation on the part of the husband to house his wife would not normally be regarded as an undertaking to give her a proprietary interest in the home in which they live, and wives usually have reasons for living with their husbands other than an expectation that they will increase their assets."
(Page 10)
- Of course, the same observations will apply to de facto spouses and, I think, to a case where equitable relief is sought in a form other than a declaration of trust in respect of particular property. As will be seen, this I think is such a case.
17 It seems to me that par 2 of the statement of claim was formulated having the principles discussed above in mind and particularly perhaps their elucidation in the case of Stowe. A judgment about the sufficiency of pleading in that case was given by Owen J on the same date as he gave the judgment in this case to which I referred at the outset of these reasons. Paragraph 2 relied on the establishment of a joint endeavour "one purpose of which was the parties' intention to provide the parties' future financial security and benefits." That purpose was, in the particulars, described as an intention of the parties. The respondent's contribution, it was pleaded, was to be to work in business for the purpose of providing for the appellant's financial security and he promised her, so it was pleaded, that in any assets which resulted, she would have a half share. Her contribution was agreed to be to devote herself fulltime to the role pleaded in par 4 "to enable and assist the defendant in his work in business."
18 In view of the way that the claim was formulated, Owen J saw par 2(d), not as being a claim to an equitable interest in all of the respondent's assets, a claim in a form held to be impermissible in Stowe when lacking a plea that a contribution had been made to the acquisition of all those assets, but as being no more than an assertion that the nature of the joint endeavour in which the parties were engaged was one which they mutually intended would result in an increment of the respondent's wealth in which the appellant would be entitled to share. I note that when further particulars were provided in respect of this paragraph of the statement of claim, the relevant purpose of the joint endeavour was described as being "the provision of permanent financial security and benefits for themselves and their children."
19 Consistently with that pleading, par 3 of the statement of claim pleads that the respondent devoted his capacity and skill to work in his market garden business "to maintain and increase his wealth", performed work with respect to certain nominated properties and businesses held by companies owned by him "to maintain and increase their value" and to enable the acquisition of other companies, businesses and assets of which particulars are given.
20 Paragraph 4 of the statement of claim outlines the appellant's role pursuant to the joint endeavour and the agreement pleaded, that she "devoted her capacity and skill to, and did, enable and assist the defendant
(Page 11)
- to work as pleaded in par 3 by working as a de facto wife to the defendant, homemaker, mother to the children born of the relationship, book-keeper and assistant market gardener." Particulars of such contribution are given. By par 5 it is pleaded that "in contemplation of the financial security and benefits the joint endeavour would provide for the future, the plaintiff contributed financially to the joint endeavour." Particulars are given.
21 Then it is pleaded that there was an increase in the wealth of the respondent by and pursuant to the joint endeavour in that the value of his companies were increased and the respondent was able to purchase property and assets. It is pleaded that the relationship came to an end in December 1990 and that the respondent has retained the benefit of the increased wealth pleaded and has failed to account to the appellant for the value of her contribution as a homemaker and by way of financial contributions made "in the expectation that permanent financial security and benefits would accrue to her and to the children of the parties as a result of the joint endeavour." It is pleaded that the respondent's retention of that wealth and failure to account to the appellant is unconscionable conduct.
22 The appellant claims to be entitled to be compensated for the value of her contribution made in the various ways pleaded. The payment of compensation is to be secured, in part at least, by an equitable charge in her favour over the respondent's interests in nominated companies which it was asserted were the vehicles for his principal business activities. I have no doubt that if that case could be proved, it would support the relief claimed, not, it is to be noted, by way of trust to secure an interest in any nominated property, but by way of equitable compensation secured by an equitable charge.
23 Giumelli v Giumelli (1999) 196 CLR 101, which is authority for the proposition that if an equitable remedy is to be provided, it will be tailored to the circumstances of the case. At 113, the majority said that:
"… the Court must look at the circumstances in each case to decide in what way the equity can be satisfied. Before a constructive trust is imposed, the Court should first decide whether, having regard to the issues in the litigation, there is an appropriate equitable remedy which falls short of the imposition of a trust."
- It was made clear that where possible it would be preferable that an order was made for the payment of a monetary sum representing the present
(Page 12)
- value of the plaintiff's claim, that sum being charged on the whole of available property until payment. It is apparent that the appellant's claim in this case paid due regard to that approach.
24 The defence to that claim denied the truth of the factual assertions upon which it was based. There was, the respondent says, no promise to marry. Indeed, there were formal statements by the respondent to the appellant by his solicitors that he had no intention of marrying her. He denies that he told her that she would be entitled to a half interest in any of his assets or his assets generally. He refers to proceedings in 1984 in which the appellant sued the respondent and one of his companies after which he had his solicitors write to the appellant telling her that she was not to involve herself further in his financial affairs. In short, the pleaded nature of the joint endeavour relied upon by the appellant is denied, although it is admitted that domestic duties were performed.
25 The respondent asserts that since the "turbulent and intermittent" de facto relationship ended, he has taken over care and control of the children of the relationship. In short, the respondent's pleading put the proposition that although there was a de facto relationship for the period asserted, it was of a generally unsatisfactory kind and had no connection with his business activities in any way which would entitle the appellant to share in the fruits of those activities. The defence struck at the factual core of the appellant's case.
26 At trial, Miller J concluded that the appellant had failed to make out her case factually, having regard to the pleadings which his Honour carefully analysed and the matters of legal principle which I have discussed. His Honour was attracted to and adopted the formulation of those principles by Owen J in decisions given by him following the decision of Stowe in relation to the pleadings in that case and the decision of Owen J in this case in respect of the pleadings here.
27 Miller J expressed his conclusions about these matters as follows:
"9. It is clearly accepted by the plaintiff that the mere existence of a de facto relationship cannot of itself establish a joint endeavour of the type contended for by the plaintiff in this case. Upon the cessation of such a relationship the mere fact that a woman has performed household chores and acted as caregiver will not entitle her to seek relief by way of compensation. What is essential is that the plaintiff prove an actual intention to pool the resources of herself and the defendant for the
(Page 13)
- purposes of the alleged joint endeavour. If she is able to do this she will recoup by way of compensation such contributions as she made to that joint endeavour. The joint endeavour must, however, be established as a matter of fact. Likewise, if established as a matter of fact, any contributions to it must also be established as a matter of fact.
- 10. Consistent with the authorities to which I have referred, the plaintiff in this case is therefore required to prove the following:
(1) The existence of a joint endeavour between herself and the defendant for the object or purpose of providing permanent financial security and benefits.
(2) Valuable contributions by the plaintiff to the joint endeavour.
(3) An increment in wealth having accrued to the defendant as a result of the joint endeavour.
(4) The unconscionability of the retention of that wealth by the defendant to the exclusion of the plaintiff.
I stress that proof of the joint endeavour requires proof of an actual intention to pool resources for the purpose of that endeavour. Such intention need not, of course, be proven by direct evidence of the declaration by both parties of such an intention. It can, in an appropriate case, be inferred from all the facts and circumstances of the case. That is the situation urged by the plaintiff in this case."
28 Having regard to that statement of the law and his Honour's findings of fact, the appellant's claim was dismissed with costs. From that decision she appeals to this Court. The grounds of appeal are lengthy. They need not be set out in detail. The principal grounds are the first three. They complain that Miller J erred in law in holding that there was a need to establish an actual intention on the part of the parties to participate in the joint endeavour. It is contended that a claim such as this may succeed where there is no such common actual or inferred intention but where there is evidence that the parties pooled their financial and/or
(Page 14)
- non-financial contributions, or the claimant spouse in the failed de facto relationship contributed to the acquisition or improvement of property, albeit simply by her contributions as homemaker. It is contended that the only pooling of resources which is required is that the claimant make a contribution to the relationship as homemaker and this is sufficient to support the claim.
29 I have expressed my views about the law in the discussion of relevant authorities in which I have engaged. It follows, in my opinion, that although there may be a quibble about some of the terminology adopted by the trial Judge, in my respectful opinion, his Honour's statement of the relevant legal principles was correct.
30 The guiding principle is unconscionability. In this, as in every such case of a failed de facto relationship, there must be more than simply the performance by the plaintiff of the valuable role of the provision of love, care and support. The provision of such a contribution will be sufficient only if it is related in some factual way to the generation of wealth as part of a joint effort or endeavour to provide for the parties' mutual material welfare and security. That need not, of course, be the only purpose of the provision of such assistance to the defendant, but it must be one of the material purposes because it is that which marks out the character of the joint endeavour as being one which will generate a claim, upon the failure of the relationship, without the fault of the plaintiff, to a share in the property created, acquired, maintained and improved during the course of the relationship, where the endeavour can be seen to be related to particular items of property, or will generate a claim for compensation representing the value of the contribution made by the claimant to the increase in the material wealth which was intended to be enjoyed by the parties jointly.
31 A joint endeavour of this character is one which has the aim of adding to the parties' material wealth for their mutual benefit rather than being one where the plaintiff simply provides loving care and support to the defendant as a normal incident of a de facto relationship. In that sense it is right to say that the joint endeavour must be one intentionally or deliberately entered into for the purpose of advancing the parties' mutual material wealth. Only if it bears that character will it be unconscionable to allow the defendant to retain the entirety of the beneficial interest in that wealth. To hold otherwise, and in particular to hold that it would be sufficient if in fact the efforts of the plaintiff advanced the defendant's capacity to acquire wealth, would, in my opinion, be to commit the error
(Page 15)
- to which Deane J adverted in Muschinski of giving undue rein to the court's idiosyncratic notions of fairness and justice.
32 Ground 4 complains of an error of law in the decision of the trial Judge that what was required was a joint endeavour, the purpose of which was the provision of permanent as opposed to mutual or future financial security and benefits. I think the proposition advanced is that there is no requirement of law that the benefits to be acquired should have been intended to be of a permanent nature. I am not sure that I understand what the word "permanent" adds in this connection but I should say that I can see nothing in the decided cases to suggest that there is any such legal requirement to establish unconscionability. It follows that the view so expressed was, in my respectful opinion, in error, but nothing turns on it. The case was not decided upon that basis but upon the basis of his Honour's conclusion that the appellant failed to establish a joint endeavour of the requisite kind to give her a right to the equitable compensation she claimed.
33 A related area is the complaint in ground 6 that the trial Judge erred in law in holding that as the respondent's assets only increased by a modest amount over the period of the relationship, his retention of the entirety of the beneficial interest therein was not unconscionable. I do not think that in truth this was what his Honour held or that the case turned upon any such conclusion. His Honour's judgment makes it abundantly clear that it was upon the question of the establishment of a joint endeavour of the requisite nature that the case turned. His Honour said that in view of that, it was unnecessary to consider to what degree the respondent's wealth had increased over the period of nearly 10 years which the relationship spanned. But he did observe that he accepted in preference to other evidence the analysis of the position by the respondent's accountant and his Honour found that the net increase in the respondent's wealth upon that basis was about $170,000. His Honour continued:
"This I find to have been due entirely to his own efforts in the business of market gardening. Given the period of time in question, it cannot be said to have been a substantial financial increment in any event. It follows that the question whether there would be any unconscionability by the defendant retaining his increased wealth to the exclusion of the plaintiff does not arise."
(Page 16)
- I am not sure what the last sentence means but, with respect to his Honour, I do not think he intended to convey the view that simply because the amount at issue was small it could not be said to be unconscionable that it should be retained in its entirety by the respondent.
34 The remaining grounds of appeal deal with matters of fact. They do not quarrel with the views expressed by the trial Judge with respect to questions of credibility. His Honour found the appellant to be an unconvincing witness and generally speaking, although he expressed reservations about particular aspects of the respondent's evidence, he preferred that evidence to that of the appellant. However, as his Honour said, "The issue of credibility between the parties is of less importance than the existence of contemporaneous documentary evidence, which supports the defendant's case and undermines that of the plaintiff." The remaining grounds of appeal, so far as they require attention, attack the conclusions of fact drawn by the trial Judgeor more correctly, the failure of his Honour to draw conclusions of fact which would support the conclusion of conscious participation in a joint endeavour of an appropriate kind.
35 It was accepted that the parties were in a de facto relationship during the period July 1981 to December 1990. What his Honour described as confused evidence given by the appellant which suggested an earlier time for the formation of the relationship was rejected, as was her evidence, contrary to that given by the respondent, that the respondent promised to marry the appellant some five times in total, in 1970, in 1974, in 1978, in 1981 and in 1987. Miller J concluded that the appellant at all times hoped that the respondent would marry her. He found that although there was some early discussion of marriage during the period when the respondent remained married to his wife, from the time of his divorce in December 1982 he did not undertake to marry the appellant, but indeed told her on numerous occasions that he would not do so. This factual particular which might have contributed to the relevant nature of their relationship therefore fell away.
36 The respondent was some 10 years older than the appellant. He was a market gardener with three children, a son born in 1960, a son born in 1967 and a daughter born in 1970. By the use of corporate vehicles the respondent conducted a market garden business, first in Balcatta and then in Gibbs Road, Wanneroo where the land was only partially cleared. The appellant was from a farming family. She was an unmarried mother with one child, a daughter born in 1970. In 1973, upon the death of her uncle,
(Page 17)
- she inherited two farming properties and other property. She had a son by the respondent in 1978.
37 There was some dispute over when and in what circumstances the relationship between the appellant and the respondent was formed, but it is of no moment. Miller J found that cohabitation commenced in about July 1981, the date when the appellant pleaded the commencement of the relationship. By that time the respondent and his son were conducting the market garden business on the Gibbs Road property together. An adjacent property had also been purchased and partially cleared and irrigated. It seems that the parties were not then living on the market garden but in rented accommodation in Bedford.
38 A property adjacent to the market garden in Gibbs Road, Wanneroo became available for purchase. The appellant had received a substantial sum from the sale of a property left to her by her uncle. She invested this in the purchase of the property in Gibbs Road. She and the respondent moved in and this became the family residence. The appellant had other substantial sums available to her. She said that she gave the respondent about $160,000 to be used to advance his business. On the other hand, she was found by the trial Judge to have undertaken the performance of home duties, caring for the children, cooking, cleaning and the like.
39 The trial Judge found that the amount involved was some $61,000, the provision of which was supported by contemporary documentation. That money was apparently used to reduce loan accounts or bank overdrafts. As the trial Judge put it, there was contemporary documentation "inconsistent with the plaintiff's account of generally making available all of her money to the defendant on the basis that it would be used for their joint purposes".
40 Whatever was the amount involved, the trial Judge noted that on an occasion when the parties separated in 1984 the appellant issued a writ claiming the sum of $68,654. The action was settled by consent. Miller J quoted the agreed terms of settlement as including a requirement for the respondent to pay to the appellant the sum of $65,000 and interest over a period of about a year, the respondent being required to make minimum monthly repayments of $1,000. As his Honour put it:
"The conclusion I reach from this evidence is that as at 1984 the plaintiff and the defendant were not engaged in a joint endeavour whereby they were pooling their resources for the purpose of securing permanent financial security and benefits.
(Page 18)
- Everything points to the parties keeping their finances entirely separate, and in circumstances of dispute between them, the plaintiff recovering from the defendant such moneys as she had advanced to him."
- His Honour referred to other evidence which he said supported the conclusion that both parties were operating their finances separately and that each was of the view that so it should remain. His Honour referred to documents, including communications by the parties' solicitors in late 1986 and early 1987.
41 Having reviewed the evidence, Miller J concluded:
"… that the financial disputes between the plaintiff and the defendant illustrate very clearly that the de facto relationship between them was limited to the plaintiff performing the homemaker role, retaining such moneys as she had, and recovering from the defendant such moneys as she had advanced to him when after a separation the relationship had temporarily ended."
42 The trial Judge also found, having regard to the evidence, that minimal use of the appellant's property in Gibbs Road had been made for the purposes of the market gardening business and that over the whole period of the relationship the appellant had only been employed in a carrot-packing line in a packing shed for a period of four weeks, an effort of such a limited nature that the trial Judge concluded that it could not be said "to indicate any contribution from the plaintiff to the defendant's business affairs". The trial Judge found, having regard to the evidence, that the appellant did not otherwise perform manual work on the market garden properties of the respondent.
43 Other evidence concerning the nature of the relationship of the parties was reviewed by the trial Judge. His Honour referred to a separation between July and September 1987. Thereafter his Honour found that cohabitation was resumed at an address in Quinns Rocks. That continued until December 1990, during which period, although Miller J accepted that the appellant acted as homemaker, he found that was the extent of her role. The relationship then, his Honour found, effectively terminated.
44 Miller J summarised his conclusions of fact in the following way:
(Page 19)
- "The first question to be determined is whether there is evidence of the existence of a joint endeavour between the plaintiff and the defendant for the object or purpose of providing permanent financial security and benefits. For the reasons which I have already set out, I am of the view that the plaintiff has failed to prove the existence of any such joint endeavour. I do not believe that at any time the parties had an actual intention of pooling their resources for the purpose of any joint endeavour.
It is true that the plaintiff contributed the role of homemaker to the de facto relationship whilst it was on foot. She also advanced a substantial sum of money to the defendant at one time. However, that money was recovered in circumstances which I consider illustrated a very clear intention on her part to keep the financial resources of the parties separate. That intention was demonstrated on both sides.
Leaving aside the question of financial contribution, I am unable to find any evidence of an actual intention that the plaintiff's home-making role would be pooled by way of a resource with the resources of the defendant in his market gardening business with a view to the establishment of a joint endeavour. At best, it seems to me that there was a loose arrangement whereby the plaintiff performed the role of homemaker whilst the defendant went out and performed that of bread-winner. There was no intention of pooling those respective contributions by way of a joint endeavour for the object or purpose of providing permanent financial security and benefits. It was simply a de facto relationship of the ordinary kind, in which no thought was given to the long-term consequences. The plaintiff undoubtedly harboured a deep desire to be married to the defendant, but her wishes in that regard came to nothing. They were refuted by the defendant. The plaintiff may have hoped for long-term financial security and benefit herself, but I am unable to find that the defendant had any corresponding desire or intention."
45 As I have noted, there were some disputes between the parties in relation to matters of primary fact. These were generally resolved against the appellant. In doing so, Miller J was swayed by his view of the demeanour of the appellant and respondent and by the fact that contemporary documentation appeared to support the accuracy of the evidence of the respondent and to refute the claims made by the appellant.
(Page 20)
46 It seems to me that his Honour's conclusions of fact were, with respect, well open to him. Having reviewed the evidence and contemporary documentation, particularly that upon which the parties indicated they specifically relied when the matter was argued before this Court, I find myself quite unable to conclude that his Honour erred in not drawing conclusions which would favour a view of the facts consistent with the appellant's case. I have indicated that, in my opinion, the trial Judge did not make any relevant error of law, nor, in my opinion, did he in any way misuse his advantage as the tribunal of fact. I regret to say that this was a case in which the appellant simply failed to prove her case. In my opinion, her appeal should be dismissed.
47 HASLUCK J: I have had the advantage of reading the reasons for decision in draft of Murray J and Pullin J. I agree with the reasons of Murray J and with the conclusion reflected in both sets of reasons that the appeal should be dismissed. There is nothing that I wish to add.
48 PULLIN J: The facts and the pleaded case are related in detail in the judgment of Murray J. I will therefore merely highlight what I regard as the facts and aspects of the pleaded case which are critical to the conclusions that I reach.
49 First I note what the case was not. The appellant did not plead that there was a "common subjective intention" to create a trust. The phrase "common subjective intention" appears in Baumgartner v Baumgartner (1987) 164 CLR 137 at 146 in the joint judgment of Mason CJ, Wilson and Deane JJ. This is a shorthand reference to cases such as Allen v Snyder [1977] 2 NSWLR 685 and Grant v Edwards [1986] Ch 638, in which a defendant holds property on constructive trust for the claimant and the defendant, based upon (1) the existence of a common intention that both should have a beneficial interest in such property and (2) the claimant acting to his or her detriment on the basis of that common intention.
50 In Baumgartner, having decided that there was no "common subjective intention" to create a trust, Mason CJ, Wilson and Deane JJ went on to discuss the decision of the High Court in Muschinski v Dodds (1985) 160 CLR 583, and noted that in that case, the Court declared that the parties held their respective legal interests in a property upon trust to repay to each, his or her respective contribution, and as to the residue for them both in equal shares. They referred to the judgment of Deane J and noted that he reached the result by applying the general equitable principle
(Page 21)
- 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. They then quoted the passage in Deane J's judgment in Muschinski v Dodds at p 620, which explains the operation and content of such principle and which reads:
"… 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) LR 3 Ch App 369 at 374-375 and per Jessel MR, Lyon v Tweddell (1881) 17 Ch D 529 at 531."
"At all material times from the commencement of cohabitation the parties applied their capacities and skill for work in their respective roles pleaded in paragraphs 2 and 4 herein in a joint endeavour, one purpose of which was the parties intention to provide the parties future financial security and benefits."
52 The following paragraphs were then dedicated to pleading the material facts to establish the existence of the joint endeavour. Particulars were given of events occurring over the whole period of the de facto relationship. The pleaded case was that the purpose of the joint endeavour was to be discovered by looking at the events which took place over the nine years of their association. It was then pleaded that the appellant's contribution to the joint endeavour was to work as a "de facto wife", meaning providing support to the respondent emotionally, encouraging him in his work, and making a home for him. As a home-maker, the appellant pleaded that she cooked, cleaned, shopped and kept house, and oversaw maintenance, renovations, extensions, decorations, furnishing, landscaping, reticulation and gardening at the home in which the appellant and respondent lived. As a mother, she provided care for the children
(Page 22)
- which were born as a result of the relationship. As a bookkeeper and assistant market gardener, the appellant itemised accounts relating to the market garden business and stacked vegetable crates and drove the tractor on the properties. It was also pleaded that the appellant contributed financially by purchasing a property at Gibbs Road for $90,000; spent $40,000 improving the Gibbs Road property; borrowed money against this property for the purpose of the market garden business; and contributed to the respondent's wealth by paying off debts incurred by the respondent in the market garden business of $100,000. Paragraph 6 then pleaded that by, and pursuant to, the joint endeavour, the respondent was able to, and did, increase his wealth; that the relationship came to an end in December 1990; and that the respondent's work and her role as de facto wife, home-maker and mother, bookkeeper and assistant market gardener, and her financial contribution referred to above, was contributed "in the expectation that permanent financial security and benefits would accrue to her and to the children of the parties as a result of the joint endeavour".
53 In the premises, the appellant pleaded that the respondent's retention of wealth, and his failure and refusal to account to the appellant for the value of her contribution, was unconscionable, and that the appellant was therefore entitled to be compensated in a sum representing so much of the increase in the respondent's wealth during the relationship which reflected the value of her contribution.
54 The trial Judge correctly recognised that this was a claim based upon the existence of a joint endeavour. He quoted the passage from Deane J's judgment in Muschinski v Dodds which I have set out above.
55 The appellant's case was defeated because the trial Judge concluded at [26] that:
" … the plaintiff and the defendant were not engaged in a joint endeavour whereby they were pooling their resources for the purpose of securing permanent financial security and benefits. Everything points to the parties keeping their finances entirely separate, and in circumstances of dispute between them, the plaintiff recovering from the defendant such moneys as she had advanced to him."
56 At [28] he concluded:
"In my view nothing could be clearer than the fact that by late 1986 the defendant was making it quite clear to the plaintiff that
(Page 23)
- their respective financial situations were their own and would remain so."
57 At [50] the trial Judge concluded:
"… I am of the view that the plaintiff has failed to prove the existence of any … joint endeavour. I do not believe that at any time the parties had an actual intention of pooling their resources for the purpose of any joint endeavour."
58 At [51] the trial Judge concluded that there was a:
" … very clear intention on (the appellant's) part to keep the financial resources of the parties separate. That intention was demonstrated on both sides."
59 That conclusion seems to be entirely warranted on the evidence. The appellant bought a house at Gibbs Road in which the parties lived for some years. The property was purchased by the appellant with her money, and the property was registered in her name. Later the parties lived in a property purchased by the respondent, which was registered in his name. On another occasion, the appellant advanced $61,000 to the respondent, and then in 1984 sued the respondent to compel him to repay the loan. The trial Judge rejected the plea that any sum more than $61,000 had ever been advanced by the appellant to the respondent.
60 On the appeal, some attention was directed to the fact that the trial Judge had said in his reasons for decision:
"I stress that proof of the joint endeavour requires proof of an actual intention to pool resources for the purpose of that endeavour."
61 His Honour, however, went on to say:
"Such intention need not, of course, be proven by direct evidence of the declaration by both parties of such an intention. It can, in an appropriate case, be inferred from all the facts and circumstances of the case. That is the situation urged by the plaintiff in this case."
62 Counsel for the appellant accepted that a joint endeavour can be established by the intention of the parties, either expressly stated or inferred from the facts and circumstances. Ground 1 of the appeal,
(Page 24)
- however, raises the most significant issue on the appeal. The ground asserts that:
" … The Learned Trial Judge should have held that such claims, as the Appellant (Plaintiff)'s, may succeed where there is no such common, actual, or inferred intention where there is evidence that the parties to the failed de facto relationship:
(a) pooled financial and/or non-financial contributions (to the extent of such contributions); or
(b) the claimant spouse in the failed de facto relationship contributed to the acquisition or improvement of property, albeit simply by her contribution as homemaker, and such property has been retained by his or her ex-partner (to the extent of such contributions)."
64 I therefore turn to consider that case in detail.
65 Parij was a case of a de facto relationship between parties over a 17-year period. It is significant to note that they acquired three properties as joint tenants in which they lived during their relationship. When the relationship ended, the plaintiff claimed that Mr Parij held the interest in a superannuation fund, in his boat, his vehicle, a house which Mr Parij had acquired towards the end of the relationship and which became his home after the separation, and another property. These were all assets held by Mr Parij in his own name at the end of the relationship. The Court referred to them as the "other assets".
66 Debelle J, who delivered the main judgment, quoted the following words from the judgment of Deane J in Muschinski v Dodds at 622, where he said:
"The personal relationship provided the context and explains the content of the planned commercial venture. If the personal
(Page 25)
- relationship had survived for years after the collapse of the commercial venture, and the property had been unmistakenly devoted to serve as a mutual home, any assessment of what would and would not constitute unconscionable conduct would obviously be greatly influenced by the special considerations applicable to a case where a husband and wife or persons living in a 'de facto' situation contribute, financially and in a variety of other ways, over a lengthy period to the establishment of a joint home. In the forefront of those special considerations there commonly lies a need to take account of a practical equation between direct contributions in money or labour and indirect contributions in other forms such as support, homemaking and family care."
67 Debelle J in Parij particularly noted the words which I have highlighted in bold print. Then Debelle J noted the words which I have highlighted in the following passage from the judgment of Mason CJ, Wilson and Deane JJ in Baumgartner at 149-150, which reads:
"It therefore becomes necessary to determine the terms of that constructive trust. The facts that the [house] property was acquired and developed as a home for the parties and that, at least indirectly, it was largely financed out of money drawn from the pool of their earnings, this being one of the purposes which the pool was to serve, combine to support an equality of beneficial ownership at least as a starting point. Equity favours equality and, in circumstances where the parties have lived together for years and have pooled their resources and their efforts to create a joint home, there is much to be said for the view that they should share the beneficial ownership equally as tenants in common, subject to adjustment to avoid any injustice which would result if account were not taken of the disparity between the worth of their individual contributions either financially or in kind. The question which has caused us particular difficulty is whether any such adjustment is necessary in the circumstances of the present case to avoid any injustice which would otherwise result by reason of disparity between individual financial contributions. The conclusion to which we have come is that some adjustment is necessary."
68 Debelle J then had the following to say at p 163 and p 164 of Parij:
(Page 26)
- "These decisions establish in unambiguous terms that, when determining whether it is unconscionable for one party to a de facto relationship to retain the sole beneficial ownership of property acquired in the course of the relationship, regard will be had to the manner in which the parties have conducted their relationship and the contributions each have made. When assessing their respective contributions, regard will be had to non-financial contributions as well as to financial contributions. …
The principle that regard will be had to non-financial contributions when considering the division of property on the dissolution of a marriage has been affirmed on more than one occasion: see Mallet v Mallet (1984) 156 CLR 605 at 623 per Mason J and the cases there cited. … That principle was reaffirmed by Mason CJ, Deane and McHugh JJ in Singer v Berghouse (No 2) (1994) 181 CLR 201 at 212 - 213 in these terms:
'As recent cases in this Court have made plain (eg Mallet v Mallet (at 623)), it is important that the courts do not disregard or discount the non-financial contributions made to the property and finances of the party to a marriage or marriage-like relationship, such as the contributions made by parties as homemakers and parents, which are not directly productive of a monetary return.'
As I understand them, these remarks have a general application and are not, as the trial judge believed, limited to claims for what used to be called testator's family maintenance. That is evident not only from the manner in which the observations were made but, in particular, by the reference to Mallet. The reference to recent cases stating that non-financial contributions are relevant in marriage-like relationships is plainly a reference to Muschinski v Dodds and Baumgartner. Thus, Singer v Berghouse affirms the authority of those decisions."
69 Debelle J then continued by noting at 164:
"In this case, the trial judge rejected the plaintiff's contention that the other assets were impressed by a constructive trust, holding that the decisions in Muschinski v Dodds and
(Page 27)
- Baumgartner did not authorise the imposition of a constructive trust upon assets of the defendant where the plaintiff had made no financial contribution and could only point to performance of the roles of primary homemaker and caregiver. … The High Court has expressed a general principle and the application of that principle will vary according to the facts of each case. He has erred in rejecting the plaintiff's contention that regard should be had to her role as primary homemaker and caregiver when determining whether the other assets might be impressed with a constructive trust in her favour. It is, therefore, necessary for this Court to determine that question."
70 Debelle J in Parij then went on to decide that the "other assets" were held on constructive trust for the two parties, as did the other two Judges. It is to be noted that Debelle J would have decreed that the plaintiff had a 30 per cent interest in certain of the other assets. The other two Judges decided that the plaintiff had a 20 per cent interest.
71 The appellant in this case relies heavily on Parij and says, applying the reasoning in that case, the appellant is entitled to succeed in the absence of any finding that there was any intention to participate in a joint endeavour. The appellant argues that even where there is no such intention and the claimant spouse made contributions only as a home-maker and without any financial contributions, the appellant was entitled to succeed.
72 It is therefore necessary to decide whether that submission has merit.
73 The submission requires me to pay much closer attention to the decision in Parij. I make these comments concerning the case.
74 In Parij, Debelle J correctly observed (at p 162 and p 163) that in neither Muschinski v Dodds nor Baumgartner's case did the High Court have to consider the relevance of the claimant's contributions as a home-maker.
75 Debelle J nevertheless concluded at p 163 that those two decisions:
" … establish in unambiguous terms that, when determining whether it is unconscionable for one party to a de facto relationship to retain the sole beneficial ownership of property acquired in the course of the relationship, regard will be had to the manner in which the parties have conducted their relationship and the contributions each have made."
(Page 28)
76 It has to be borne in mind that in cases of this sort, the Court is dealing with a claim concerning property. The precise remedy claimed is equitable compensation but, in effect, it is a claim to a share of the increase in value of property of which the respondent is the legal owner. Such a remedy can still be described as a constructive trust. See Giumelli v Giumelli (1999) 196 CLR 101 at [3] to [4]. As Brennan J said in his dissenting judgment in Muschinski v Dodds at p 608:
"There is no jurisdiction in an Australian court of equity to declare an owner of property to be a trustee of that property for another merely on the ground that, having regard to all the circumstances, it would be fair so to declare: … The flexible remedy of the constructive trust is not so formless as to place proprietary rights in the discretionary disposition of a court acting according to vague notions of what is fair."
77 Similarly Deane J said at 615:
"… there is no place in the law of this country for the notion of 'a constructive trust of a new model' which, '(b)y whatever name it is described, … is … imposed by law whenever justice and good conscience' (in the sense of 'fairness' or what 'was fair') 'require it' … Under the law of this country - as, I venture to think, under the present law of England … proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion …, subjective views about which party 'ought to win' … and 'the formless void of individual moral opinion' …"
78 In Parij, the reasons of Cox J (agreed with by Millhouse J) leave me with the impression that the 20 per cent interest granted was his Honour's view about what was fair in the circumstances. All that his Honour says by way of explanation is that there was no general pooling of income, that the pair started with "practically nothing", and that the plaintiff earned an appreciable income in part-time and full-time employment. His Honour then concluded at p 155, "I would reckon her interest in the houses at St Agnes and Port Vincent and in the defendant's accountancy practice at 20 per cent of the defendant's beneficial interest in them." Similarly, the assessment by Debelle J of 30 per cent, which he would have preferred to give, in my view, cannot be understood as more than an assessment of what was a fair thing. There is no reasoning within the two judgments which allows the reader to know why 30 per cent or 20 per cent should be chosen. There is no reference to the type of dollars and cents calculation
(Page 29)
- which was made by the High Court in Muschinski v Dodds and in Baumgartner.
79 In Parij, reliance was placed on Mallet v Mallet (1984) 156 CLR 605 and Singer v Berghouse (No 2) (1994) 181 CLR 201 to support the view that the performance of home-maker duties alone can found a claim for a constructive trust (see Debelle J's judgment at p 163 and p 164). Both of those cases, however, involved claims where the Court was exercising a discretion to adjust property rights, which discretion had been conferred on the Court by statute. In Mallet, the dispute was between a married couple. The Family Law Act, confers a discretion on the Court to deal with property of the marriage. Singer's case was a testator's family maintenance claim. The legislation confers on the Court a discretion to make provision for maintenance, support and advancement in life of the applicant. There is no discretion to be exercised in this case. In my view, Mallet's case provides no support for deciding that home-maker duties are sufficient to found a claim by way of constructive trust in a de facto relationship case.
80 I do observe that in Singer's case, Mason CJ, Deane and McHugh JJ said at p 212-213:
" … it is important that the courts do not disregard or discount the non-financial contributions made to the property and finances of the parties to a marriage or marriage-like relationship, such as the contributions made by parties as home-makers and parents, which are not directly productive of a monetary return."
81 Mallet's case is cited.
82 Debelle J, in Parij, concluded that the reference to "marriage-like relationship" was unquestionably a reference to Baumgartner and Muschinski v Dodds, even though no reference was made to those cases. In my view, the comment by Mason CJ, Deane and McHugh JJ should be confined to cases where the Court has a discretion to adjust property rights. Even if the comment in Singer's case at p 212-213 should be read as a reference to Baumgartner and Muschinski, it does not mean, in my opinion, that the mere activities of a home-maker are sufficient to give rise to a claim to property.
83 In Parij at p 161, after quoting the important passage from Deane J's judgment at p 620 in Muschinski v Dodds which I have set out above, Debelle J says that the "guiding principle is, therefore, unconscionability".
(Page 30)
- I agree that unconscionable or unconscientious conduct must be shown before relief can be granted, as long as it is kept in mind that the factual finding which must be made before coming to consider the issue of unconscionability is that there was a joint enterprise of a commercial nature. Deane J, in the quoted passage from Muschinski v Dodds at p 622, used the words "commercial venture". If a man and a woman, each owning their own property, decide to live together in a de facto relationship but they agree that, notwithstanding the relationship, they will keep their property separate, no matter how long they live together, and if they keep to that arrangement, then a claim by one party after the relationship breaks down for a share in the property of the other could not succeed. In those circumstances, there would have been a de facto relationship but no joint enterprise in the nature of a "commercial venture".
84 It is not enough to merely prove that there was a de facto relationship and then to consider whether one party has acted unconscionably. Gleeson CJ in Green v Green (1989) 17 NSWLR 343 at 353 said:
"It is clear that the mere existence of a matrimonial or de facto relationship combined with expressed or implied understandings to provide support and accommodation will not form a sufficient basis for concluding that there is a constructive trust by virtue of which a proprietary interest in the home occupied by the parties is created … In a legal system which does not include concepts of family or community property and where an obligation on the part of a husband to house and provide for his wife is commonly regarded as an incident of the matrimonial relationship an undertaking of the kind referred to cannot of itself confer upon a wife a legal or equitable interest in the matrimonial home … The acceptance of an obligation on the part of the husband to house his wife would not normally be regarded as an undertaking to give her a proprietary interest in the home in which they live, and wives usually have reasons for living with their husbands other than an expectation that they will increase their assets."
85 This passage was quoted with approval in Stowe v Stowe (1995) 15 WAR 363 at 369. Similarly, Owen J said in Stowe v Stowe (No 3), unreported; SCt of WA (Owen J); Library No 970389; 5 August 1997 at p 8:
(Page 31)
- "The mere existence of a de facto relationship could not, of itself, establish a joint endeavour of the type contended for … The mere fact that a woman has performed household chores and acted as caregiver will not entitle her to seek relief from the man in the form of proprietary interest in property owned by him and nor will it entitle her to compensation …".
86 What has to be established over and above the de facto relationship is that the parties embarked upon a joint enterprise in the nature of a "commercial venture". In my view, the learned trial Judge correctly observed that the proof of the joint endeavour required proof of an actual intention to pool resources. Proving the existence of an intention of a joint enterprise in the nature of a "commercial venture" will usually lead to evidentiary issues, such as whether the parties expressly agreed to embark upon such a joint enterprise or whether that intention can be inferred from all the circumstances.
87 The facts in Parij suggest to me that the South Australian Court had sufficient material before it to infer that there was an intention to be involved in a joint enterprise in the nature of a "commercial venture". Such an inference could be drawn from the fact that, in that case, the parties purchased three houses and put them in joint names; that the plaintiff borrowed money for the purpose of making improvements to a house and repaid the loans; and that sometimes the plaintiff borrowed moneys and the defendant repaid the loans.
88 Once such an inference was drawn, then it would have been quite correct for the Court to reach the conclusion that it was unconscionable for Mr Parij to seek to deny that Mrs Parij had some interest in the "other assets". The facts in the case would support a conclusion that there was a joint enterprise of a "commercial nature". See p 164 and p 165, where Debelle J said:
"The parties did not pool their resources in any formal sense. They did not operate a joint bank account. However, it is apparent that, throughout their time together, the parties both contributed funds to discharge different aspects of family expenditure. … On two occasions the plaintiff borrowed small amounts of money for the purpose of effecting improvements to the home, and repaid most of those loans. On some other occasions, when the plaintiff had borrowed money, the defendant repaid the greater part of the loan. … In addition, the plaintiff has performed the roles of home-maker and caregiver
(Page 32)
- for the defendant and the children throughout the period of their relationship."
89 I have already mentioned the fact that the parties in Parij's case owned several properties as joint tenants. So the references to home-maker contributions are merely seen as additional matters to note, but it is the financial aspects that lead to the conclusion there was a joint enterprise in the nature of a "commercial venture" concerning property.
90 However, if I am wrong and if Parij should be read as concluding that the mere existence of the de facto relationship and the provision of home-maker duties is enough to ground a claim for a constructive trust over property, then I would respectfully disagree with that conclusion. As a result, I do not accept the appellants argument, based on Parij, that even if there were no intention to participate in a joint enterprise in the nature of a commercial venture, the appellant should nevertheless succeed in her claim because of her contributions as home-maker.
91 Having noted the type of evidence in Parij which would permit an inference to be drawn that there was an agreement or intention to embark upon a joint enterprise of a "commercial nature" based on the facts in that case, points up the great difference between this case and Parij. In this case, the parties never owned property jointly. In Parij they did. In this case, for part of the time they lived in a property which was owned by the appellant; for part of the time they lived in a property owned by the respondent; and at other times they lived in rental accommodation. In Parij's case, they lived in jointly owned property. In this case, when the appellant gained money from an inheritance, she did not share it with the respondent. She used it to buy a property in her own name. In Parij, money of one was at times used to pay off debts of the other.
92 The most telling point in this case is that when the appellant had $61,000 available, it was not gifted to the respondent or shared on the basis that it was their joint property. On the contrary, the $61,000 was treated as a loan attracting interest. At a later time, the appellant sued the respondent for repayment of that money, and secured repayment as a result of that litigation. The respondent made it clear at different points throughout the relationship that he did not intend to marry the appellant. The respondent incorporated companies and did not make the appellant either a director or shareholder of them.
93 The trial Judge made findings that the appellant performed very little work in relation to the respondent's market gardening businesses. Those
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- circumstances make this case quite different from the circumstances in Parij, and quite different from the circumstances in Baumgartner and in Muschinski v Dodds. For those reasons, ground 1 of the appeal must fail.
94 The appellant also argued that if a joint enterprise had to be shown, then the intention of the parties should be ascertained by events as they stood at the beginning of the relationship in 1981, and that all of the events thereafter were irrelevant to that question. In my view, there is no justification in principle, or authority, for that submission. It would be a strange result to decide that the parties' intentions must be ascertained at the beginning of the relationship and that the appellant's claim should be assessed by reference to the assets accumulated during the relationship, ignoring the events in the intervening period.
95 I agree with Murray J's reasons in relation to the other grounds of appeal, and I agree with his conclusion that the appeal should be dismissed.
90
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