Webb v SCHULZ - [2012] SADC 43

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
WEBB v SCHULZ
[2012] SADC 43
Judgment of His Honour Judge Cuthbertson
13 April 2012
FAMILY LAW AND CHILD WELFARE - DE FACTO RELATIONSHIPS
- EQUITY - TRUST & TRUSTEES - CONSTRUCTIVE TRUSTS - RESULTING TRUSTS
The parties were in a relationship in the nature of a de facto relationship from approximately 1998 to early 2006. The plaintiff claimed that he had provided financial contributions to the partnership and domestic services so as to be entitled by constructive trust to a share in the house they both resided in and the superannuation accumulated by the defendant. In the alternative the plaintiff claims a resulting trust in relation to certain items purchased by the plaintiff's money.
HELD: (1) The financial contributions to the relationship were grossly in favour of the defendant and any domestic services provided by the plaintiff were not greatly significant. (2) The plaintiff had not acted detrimentally. (3) It was not unconscionable for the defendant to retain beneficial ownership in the property in which they both lived together and the benefit of his superannuation. (4) There was no resulting trust in favour of the plaintiff. (5) The defendant had not been unjustly enriched.
Muschinski v Dodds (1985) 160 CLR 583; Baumgartner v Baumgartner (1987) 164 CLR 137; Napier v Public Trustee (WA) (1980) 32 ALR 153, referred to.

WEBB v SCHULZ
[2012] SADC 43
Issues

The plaintiff and the defendant, both males, lived in a de facto relationship as partners for approximately 7 years. They lived in homes owned by the defendant.
The parties having separated, the plaintiff claims a constructive trust over the defendant’s house property and superannuation to represent the claimed worth of his financial and homemaking contributions to the partnership during the time they were together.
In the alternative the plaintiff claims a resulting trust in relation to certain payments and in the further alternative resolution on the basis that the defendant has been unjustly enriched.
Their meeting
The plaintiff met the defendant at the Edinburgh Castle Hotel in about 1997. At that stage the plaintiff was working at the hotel. The defendant, who was some 16 years his senior, was new to Adelaide, having previously resided in Port Lincoln where he was employed with a bus company
At the time the plaintiff was living with another gentleman and the defendant was living in the upstairs unit of a block of units at Warradale. The defendant’s brother occupied the ground floor level. They had both recently purchased the units.
A relationship ensued between the plaintiff and the defendant and the plaintiff moved in with the defendant in the unit at Warradale. The defendant had recently purchased new furniture for the unit.
It is with the aftermath of this subsequently failed relationship that the Court has to deal.
Their time together
The plaintiff for most of the time they were together was on the invalid pension due to chronic asthma and the defendant continued to work for a bus company at the Franklin Street bus terminal.
During the time they were together in the unit the plaintiff did some limited work involving painting of the unit and some gardening. I do not think that the work performed by the plaintiff was extensive in nature.
The plaintiff introduced the defendant to friends he had in Adelaide and it would appear that the two socialised mainly with friends of the plaintiff.
I gained the impression that the defendant was the more cautious of the two.
He had not been involved in a relationship like this before. No doubt the opportunities for doing so would have been much less in Port Lincoln, the country town from whence he came. His cautiousness made him more careful and indeed more frugal with money. I think it was important to him to own his own home and to look to safeguard his financial security. The plaintiff on the other hand was younger, had been in male to male relationships and had given no indication of any desire to save for the future and to create financial independence and had no assets of any significance whatsoever.
Much of the plaintiff’s life revolved around hotels and gambling on the pokie machines. I find that the plaintiff introduced the defendant to this lifestyle in which the defendant became a somewhat reluctant participant.
The defendant was going to work regularly working between the hours of 1 pm and 9 pm at the Franklin Street bus depot and the plaintiff was spending time at home as he was not working.
A nearby snack bar at Warradale came on the market and another couple, both males, friends of the plaintiff and the defendant, indicated an interest in purchasing the shop. It was purchased by one of those two other males and the defendant with the intention of providing employment for the plaintiff and the other male’s partner.
The venture proved to be unsuccessful and was sold at a loss.
It cost the defendant about $6,000 in losses.
At some stage while the plaintiff was living at the unit at Warradale the defendant’s brother became unhappy about him being involved in a relationship with the plaintiff and that led to tension between the defendant and his brother. Ultimately both the plaintiff and the defendant agreed that the defendant sell the unit and that they obtain premises elsewhere.
While living at Warradale they had both undertaken what is described as a ceremony of commitment. It was in the nature of a marriage ceremony for a heterosexual couple.
A house became available at Morphett Vale and it was decided by both that that house should be purchased and that they would live together in it. They moved together into the premises at Morphett Vale.
The house was purchased in the name of the defendant. It is suggested that the reason for this was that it was simply to roll over the loan on the Warradale premises. It may be also that it was easier for the defendant to obtain a loan as he had a steady job and the plaintiff was a pensioner. I have no doubt the defendant, given his cautious nature, would have wanted again to own his home and would have intended to do so.
I do not think at the time the plaintiff cared about this issue beyond the immediate fact that he had a place to live.
I accept that some work was done by the plaintiff on the premises at Morphett Vale after they moved in but I do not think that the work was onerous or extensive. (T75 & T99)
At all relevant times during their relationship the defendant worked at the bus company in Franklin Street. The plaintiff, on the other hand, was on a disability pension as he had chronic asthma which prevented him from doing the job for which he was trained, namely cooking. Such a job required him to go into a cool room and thus exacerbate his asthmatic condition. I have no doubt the plaintiff could have obtained another job if he wished to but in my view he was quite happy to stay at home in the house provided by the defendant and living on social security.
Towards the end of their relationship the plaintiff obtained a job at Firefly Coaches, also working at the bus depot in Franklin Street. There seems no reason why the plaintiff could not have obtained a job at an earlier stage in his relationship with the defendant. Nor was there any agreement between them that the plaintiff not obtain employment.
The plaintiff claims that he used the time to keep the house tidy and that he did some landscaping and other work around the premises.
I have no idea of the extent of that work nor the amount of time that was expended on it. I get the impression that it was not a very lengthy time at all. To do some paving, to move a mound of earth and to dig a trench do not strike me as being particularly monumental enterprises given that the relationship extended for some seven years.
The relationship lasted until about March 2006. It is clear that both partners were living beyond their means and that from time to time new funds were acquired by borrowing on the mortgage.
Resolution of credibility issues
I prefer the evidence of the defendant to the evidence of the plaintiff where they conflict. It is sometimes hard to explain a preference for one witness over another but I have had a reasonable opportunity to observe both witnesses during the time they have given evidence before me in the witness box.
Some of the evidence of the plaintiff is unsatisfactory. He claims that he spent some $1,100 to concrete the floor of a shed on the property at Atkins Crescent. The defendant denies that the floor of the shed is concreted or has ever been concreted. Such an issue could easily have been resolved by evidence of the presence of concreting if the plaintiff wished to do so. I find that he was initially inaccurate on this topic. (T97)
The plaintiff probably claimed to Centrelink that he was paying rent so as to receive more income in the form of a rental subsidy. (T250)
The plaintiff has claimed that he did extensive work around the premises at Atkins Crescent including landscaping. When questioned, the evidence of the extent of this became somewhat unsatisfactory. (T99)
There are clearly a large number of entries in internet banking statements where money is shown to have been taken out of the defendant’s account. The plaintiff claims that it was always done by him with the defendant’s consent and supports this argument by asserting that he would have to ask the defendant for his PIN number on each occasion as he could not remember it. (T144, T154, T160 & T166) I find this evidence difficult to accept. I find it unlikely that he would not write down the PIN number given the numerous transactions. As the uncontroverted evidence is that the PIN number was the defendant’s birth date (T268), and as the two were in a romantic relationship, I find it difficult to accept that the plaintiff would not remember the PIN number.
In evidence he conceded that he made a number of withdrawals from the defendant’s account into his own account on the internet.
Further, he claims that in 2005 he had no recollection of the purpose of regular payments being made to GE Victoria. I find this to be disquieting. (T163)
I am not prepared to accept the evidence of the plaintiff, where it is in conflict with evidence of the defendant.
I am not prepared to accept the plaintiff’s evidence as to the amount of housework and the extent of assistance he provided around the house and garden.
The nature of the relationship
There is no doubt that the plaintiff and the defendant commenced and for a period of time conducted the emotional relationship of a couple. They set up home together firstly at Warradale and then at Morphett Vale in homes owned by the defendant. The fact that they undertook a ceremony is indicative of the fact that there was a commitment between the two which they hoped and intended to carry on in the indefinite future and possibly for the rest of their lives.
The relationship was not, however, similar to the usual failed relationship constructive trust case where one partner, usually the husband, undertakes employment and the other partner, usually the wife, eschews employment and the opportunity to make economic advancement on her own behalf in order to raise children and look after the home.
Whether the plaintiff and the defendant met or not the defendant was always going to be steadily employed and a home owner. That was his background, and was a consequence of his caution.
The defendant during most of the time they were together elected not to work. In my view this was because he did not want to work. He could have worked if he wanted to. He preferred to stay home and collect social security benefits.
He did not stay home and eschew the earning of an income in order to keep the house. There was no agreement between the two that he should stay home. I rather suspect that the defendant would have preferred him to go out and get a job.
The plaintiff decided that, rather than have a job, he would collect benefits and thus he was earning considerably less than the defendant. He did not give up anything or contribute anything of significance as a consequence of the relationship. As he was home most days with nothing to do it might have been expected that he would have done some cleaning and gardening.
The first premises they shared was a flat and there was very little to do in the way of gardening or cleaning. The house that the defendant subsequently purchased at Morphett Vale was modest and again, there would not have been a great deal in the nature of cleaning and gardening to be done.
Rather surprisingly, given that the plaintiff was a chef by training, he did not regularly prepare the evening meals. The pair would eat out frequently at hotels.
I do not think the plaintiff gave all his social security benefit to the defendant and kept $50 of it. I do not accept this evidence. In my view the probabilities are that the defendant during most of this time subsidised the plaintiff from his increased income as I find that both would frequently attend hotels where they would gamble on pokie machines and have meals.
The relative contributions of the parties
The plaintiff claims to have received between $300 and $500 per fortnight social security benefits over the period of the relationship. He claims that he retained $100 a fortnight for his own personal use and gave the rest to the defendant. I have already indicated that I do not accept that evidence.
I note too that the defendant was obtaining the benefit of a rental subsidy when he was not paying any rent by claiming to Centrelink that he was paying rent.
He received a payment of $49,527 as an insurance payment for a disability, namely his asthma. His maximum contribution therefore over the relationship that lasted about six years was $49,527. I will assume, for the purposes of the exercise, that the entire $49,527 was devoted to the joint funds of the relationship.
This is to be contrasted with the contribution of the defendant.
The defendant was working throughout the period and earning approximately $600 a week. Over a seven year period that amounts to $218,400 by way of his contribution.
In addition the equity in the unit which was provided by him and which was available for the purchase of the premises at Morphett Vale was $7,617.56.
The defendant also made capital injections to the relationship by drawing down his loan facility on the home by the following:
·    $34,202.32 in March 2000 upon the sale of the Warradale property,
·    $15,000 on 4 October 2002, and
·    $14,196 between 11 April and 12 May, subject of three draw downs from the Westpac line of credit.
·    $10,000 approximately from the Liberty mortgage replacing the Westpac mortgage
Accordingly during the time of the relationship the defendant’s contribution was $299,415.88.
Even if I were wrong about my finding that the plaintiff did not hand his social security payment over to the defendant and if one was to assume that he did contribute his social security payment to the joint funds then assuming that he received $400 per fortnight over seven years his contribution would have been a further $72,800 making a total contribution of $122,327 compared with the contribution of the defendant of $289,415
When one looks at the respective financial contributions of the parties it can be seen that it would be manifestly unfair if the defendant was now to account to the plaintiff for part of the value of his property which he has been paying off.
It may have been different if the plaintiff’s lack of financial contributions to the enterprise was by virtue of the fact that he had voluntarily deprived himself of the opportunity of economic advancement by undertaking domestic chores and other responsibilities as his contribution to the relationship.
I have already found that he did not do so. He was free to work, he was able to work and he chose not to do so. At some stage when he determined to obtain limited employment, he did so and he was able to do so, although the amount received is not of any great significance to my calculations of the relative contributions of the parties.
The defendant did not request him to stay at home and not work. There was no reason in the relationship that required him to stay home and not work as, for example, the need to nurture children or to stay at home to cook the evening meal.
In my view his undertaking of some domestic duties was purely as a result of him being home and not working and as a gesture as the defendant was working fulltime. I do not regard the work that he did either by way of painting or cleaning or in the garden as onerous in any way or preventing him in any way from going out and earning an income.
These two lived very much an adolescent lifestyle. Although the plaintiff was home all day he did not cook the evening meal even though he was a chef. Most evenings they went out to hotels and played the pokie machines and drank alcohol.
They lived beyond their means hence the need for injections from the equity in the home made by the defendant from time-to-time.
Constructive trust
The law in this country dealing with constructive trusts is set out in the judgment of Deane J with whom Mason J agreed in Muschinski v Dodds[1].
Viewed in its modern context, the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual or presumed agreement or intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle. (See p 613)
[1] (1985) 160 CLR 583
At p 620 His Honour continued:
Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do.
[A]ny 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, home-making and family care.
(See p 622)
The analysis and statement of principle was affirmed by the High Court in Baumgartner v Baumgartner[2] per Mason CJ, Wilson and Deane JJ.
[2] (1987) 164 CLR 137 @ 147-148
In my view there were no contributions made by the plaintiff which would make it unconscionable conduct for the defendant to rely on his legal ownership of the premises where they jointly resided, having regard also to the length of time of the relationship.
In my view there is no unconscionable conduct by the defendant in asserting legal and beneficial ownership of the property that he had purchased and maintained payments on and permitted the plaintiff to live in, nor in relation to his superannuation policy.

Any contributions by the plaintiff were more than offset by the contributions of the defendant to the plaintiff’s lifestyle.
Alternative remedies
In the alternative the plaintiff claims a resulting trust in relation to payments made from the plaintiff’s insurance monies that went to items which became part of the realty and thus passed into the legal ownership of the defendant.
In particular there was the payment of $10,000 for a shed (although the exact amount is disputed), and a hot water service for the house. There was no evidence advanced of value but I will assume it cost about $1,500.
In addition the proceeds from the sale of a Ford Maverick purchased by Mr Webb from his insurance payment were put back into the home mortgage account.
In Napier v Public Trustee (WA)[3] Aickin J said as follows:
The law with respect to resulting trusts is not in doubt. Where property is transferred by one person into the name of another without consideration, and where a purchaser pays the vendor and directs him to transfer the property into the name of another person without consideration passing from that person, there is a presumption that the transferee holds the property upon trust for the transferor or the purchaser as the case may be. This proposition is subject to the exception that in the case of transfers to a wife or a child (including someone with respect to whom the transferor or purchaser stands in loco parentis) there is a presumption of advancement so that the beneficial as well as the legal interest will pass. Each of the presumptions may be rebutted by evidence.
[3] (1980) 32 ALR 153 @ 158
In my view the evidence establishes here that these payments were merely part of the quid pro quo contribution of the plaintiff to the defendant, having regard to the defendant’s grossly superior contributions towards the plaintiff’s upkeep.
It was not intended that property in the items purchased using, in part, the plaintiff’s financial contributions would remain with the plaintiff. Rather it was intended by both parties that the property would become part of the real estate owned by the defendant and would itself be owned by the defendant and that the bringing of the proceeds of the insurance payout by the plaintiff to the relationship was simply a contribution, a goodwill gesture by the plaintiff, who was receiving much more in the form of free rent and the benefit of the defendant’s superior income in return.
In my view there is no resulting trust.
Unjust enrichment
In Australian law there is no general doctrine of unjust enrichment. (See Muschinski v Dodds per Deane J.[4]
The most that can be said at the present time is that "unjust enrichment" is a term commonly used to identify the notion underlying a variety of distinct categories of case in which the law has recognized an obligation on the part of a defendant to account for a benefit derived at the expense of a plaintiff: …
[4] (1985) 160 CLR 583
I have already determined that there is no basis for a constructive trust in favour of the plaintiff.
As part of my determination of that issue I have determined that there has been no unjust enrichment by the defendant as he has more than adequately provided for the plaintiff during the time of their relationship and anything received by him from the plaintiff has been more than offset by his contributions to the plaintiff during the course of that relationship.
Conclusion
There will be judgment for the defendant on all claims.
I will hear the parties as to costs.