[Home] [Databases] [WorldLII] [Search] [Feedback] High Court of Australia

Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 (10 December 1987)

CATCHWORDS

HEARING

DECISION

5. A declaration be made that the appellant's
interest as tenant-in-common as aforesaid further
be charged with the amount of $7,500.00 being the
agreed value of the furniture removed by the
appellant from the property."

2. By her summons the respondent sought a declaration that the appellant held his interest in the property already described, upon trust as to one half for the respondent. By her amended summons she sought a declaration that the appellant held his interest in the property upon trust for her and, in the alternative, a declaration that the appellant held the property subject to a charge in favour of her.

3. The primary judge set out in his reasons for judgment the circumstances in which the proceedings originated. In June 1978 or thereabouts the appellant and the respondent became acquainted at their place of employment. The appellant had been married twice previously. The respondent was then married with two children. The relationship between the appellant and the respondent became so close that in September 1978 the respondent left her home, husband and two young children to live with the appellant in his home unit at Cabramatta. Their de facto relationship continued until August 1982 or thereabouts when the respondent left the appellant, taking with her a child named Dallas, the issue of their relationship. During the period of their cohabitation the respondent left the appellant on a number of occasions. One such occasion was in late 1978 and early 1979. One of the elements in the reconciliation which then took place was their decision to have a child. The child Dallas was born in February, 1980.

4. Before this separation, and probably in early 1979, there had been talk of marriage between the parties. The primary judge considered that the appellant then had a strong emotional attachment to the respondent, though the judge thought that the strength of the respondent's attachment to the appellant was doubtful. The appellant's jealousy was aroused in circumstances which need not be recounted. At all events the judge concluded that the decision to have a child was not related, as the respondent claimed, to plans to get married. In this respect his Honour preferred the appellant's evidence. Moreover, he held that the decision to have the child did not confirm the respondent's case that the parties had decided to marry and to purchase the land at Leumeah for the purpose of building a home which would in whole or in part belong to the respondent.

5. The appellant bought the land at Leumeah in his own name in October 1979 or shortly thereafter. The parties had decided that the home unit was too small and that it should be sold. The appellant took the initiative in deciding to buy the land at Leumeah, though he consulted the respondent and discussed the matter with her. There is no suggestion that he would have made the purchase without her consent.

6. The parties discussed the matter of ownership of the land. Unfortunately it does not appear whether the discussions took place before or after the purchase of the land. The appellant admitted that after they had a conversation with the builders of the house at Leumeah the respondent said to him, "Why can't the house be in my name as well?" and that he replied, "We're not married and the loan is in my name and is coming from the sale of the unit".

7. On another occasion, when the respondent objected to the appellant's absences early in the morning when he visited the building site, the appellant claimed that he said to her:

"Look I'm doing this for all of us you know, the
harder I am working the sooner I will have it paid
off and the better we will be in the future and
this is all the thanks I get."

8. On another occasion the matter was discussed by the parties when they visited the appellant's friends, the Schneiders, while the house was being built. According to the respondent, Mr Schneider asked, "What's happening with the house you're building - Are you going to put it in both your names?" The appellant replied:

"No, the Building Society won't accept both our
names on the title deeds because we're not married
and we're living in a de facto relationship only.
Anyway there is really no need for both our names
to go on the papers Frances knows that it's our
house once it's built."

9. Some time before October 1980 the appellant sold his home unit at Cabramatta and the parties began living in rented accommodation pending completion in October 1980 of the house at Leumeah. The net proceeds of sale of the unit, after discharge of the mortgage, was $12,883.41.

10. The respondent claims that in December 1980 she raised the question of marriage with the appellant who said, "I don't want to get married yet - just wait a while". She replied:

"Well you can at least have a will made out - just
in case anything ever happens to you. I will have
to have some proof that this is my home also,
otherwise there could be fights in court ..."

"You know I'm really doing this for all of us - for
you and me and Dallas. I'll make sure your name is
transferred to the title deeds when we get married
but there is no need to do this before we get
married."

11. The appellant denied that the respondent ever spoke of the need for proof that the house was her home or of fights in court. He admitted that on one occasion he said to the respondent, "Look I will do this one day (i.e. make a will) when the time comes if we ever get married and I will have the house transferred to our joint names".

12. The respondent gave evidence that on some later occasion after they had moved into the house, an argument arose over the appellant banking the respondent's pay each week and that the appellant said:

"I'm only saving you the time by doing all this
myself and anyway everything I do is for us as a
family, not just for me. If I do it it makes life
easier for us and I want to make sure that we get
everything finished like the house payments and car
payments so that we can enjoy our life later on
when we have got more time together."

13. On the respondent's account the appellant never gave her any reason for refusing to put the house in her name except expense.

14. His Honour found that when the parties commenced to live together the respondent generally gave the appellant her pay packet. They regarded this as a pooling of resources. The appellant paid rent, mortgage instalments and other expenses associated with the living accommodation. He also paid the ordinary expenses of running the household, including entertainment and the costs of the motor vehicle. At the time of the purchase of the Leumeah property the appellant still owed money on his unit. From the pooled resources he was able on about four occasions to make "double payments" in relation to his unit, the standard monthly mortgage payment being $170 per month. However, there was, so the primary judge found, no agreed division in relation to the respondent's contributions to the family finances. Nonetheless it is probable that the pooling of resources, as Priestley J.A. pointed out, had the effect of reducing the mortgage debt on the home unit more quickly than it would have been reduced had they not been pooling their resources. While the evidence about the appellant's earnings was somewhat imprecise, the parties have agreed that the total earnings of the parties available for contribution to the common pool during the period of cohabitation were $89,188.63 of which the appellant's share was $50,981.99 and the respondent's share $38,206.64. The difference is partly explained by the fact that the respondent was not earning for a period of three months in which she gave birth to Dallas and was subsequently caring for him. If we credit the respondent with the income of $3,000 which she would have earned in the period of three months, the aggregate earnings of the parties were contributed by the appellant as to 55 per cent and the respondent as to 45 per cent approximately.

15. In 1981 the respondent changed her name by deed poll to that of the appellant, i.e. Baumgartner. The judge found that her reasons for doing so were not clear. The change took place some time after her divorce and it indicates that she then accepted that the appellant did not intend to marry her and that she expected that they would continue living together. In fact they continued to live together until August 1982, when the respondent left, taking Dallas and much of the furniture.

16. The respondent says that after she left she had a conversation at work with the appellant about the furniture in which he said, "I suppose you think you're smart but that's the only thing you'll ever get from me". According to the respondent, she answered:

"Leo you know that's not fair - this house belongs
to both of us and I have put a lot of money into
it. Ever since we started living together I have
given you all my money and we always agreed that
whatever we had we would share."

17. When the relationship finally broke down, in March 1984, the property at Leumeah was valued at $67,650.00. Its value was said not to have altered significantly since then. The furniture which the respondent took with her is said to have a value of $7,000 or $10,000, though the judge seems to have thought that both valuations were unreliable. The furniture was bought with the appellant's money or money from the pooled resources. Rath J. was influenced by the circumstance that the respondent came to the appellant's home, in which she had no financial stake, and that she left that home "of her own will with a substantial quantity of furniture". In the circumstances his Honour rejected the respondent's implicit assertion that it was unfair that she should have to work and keep paying off the house if her name was not going to be on the title deed.

18. His Honour's ultimate conclusion was that there was no intention to create a trust, that there were no circumstances giving rise to a constructive trust and that there was nothing unconscionable or inequitable in the appellant retaining the full legal and equitable title.

19. In the Court of Appeal, Kirby P. inferred from the judgment of Rath J. and from his reading of the evidence that there were relatively few differences in the evidence of the parties. This being so, his Honour considered it to be a case in which the Court of Appeal could draw its own inferences. On the issue of intention to create a trust the President thought that conduct was more indicative than oral statements and that the appellant's ambivalent attitude to marriage was extraneous to the issue of intention to create a trust.

20. His Honour arrived at the conclusion that there was such an intention in this way:

"The (appellant) did not alone provide the
purchase price for the Leumeah property. Nor did
he alone extend monies on the cost of building
their home on the land at Leumeah. By pooling her
income (which was normally higher than his) with
that of the (appellant), the (respondent), week by
week, evinced her intention in respect of the
property. Week by week, in accepting it, the
(appellant), similarly evinced his intention ... In
combination with the undisputed evidence that the
parties were living together at this time, planning
and subsequently conceiving a child, inspecting and
choosing the property together, the inference is
inescapable that they intended this to be their
home for the indefinite future and for their new
family. Accordingly, they intended,
notwithstanding the legal title, that a trust
should be created in favour of the (respondent) in
proportion to the contribution each made to the
purchase price. As to whether the parties intended
joint tenancy or tenancy in common I am content to
agree with what Priestley J.A. has concluded on
that issue."

21. Priestley J.A., disagreeing with the conclusion of the primary judge, considered that there was ample evidence from which an inference could be drawn of actual common intention to create a trust or agreement to the holding by the appellant of the legal title to the land as trustee for himself and the respondent. His Honour then proceeded to draw the inference that:

"... the parties were proceeding on the basis, well
understood between them, that a deposit would be
paid for the purchase of the land from funds either
out of the common fund or available because of the
existence of the common fund and that on the land a
house would be built which would belong to them
both."

22. Mahoney J.A. on the other hand considered that the primary judge had accepted the evidence of the appellant in preference to that of the respondent, and that having regard to the appellant's evidence it was impossible to find an actual common intention to create a trust with respect to the land. His Honour refused to accept the respondent's claim that her moneys were used in the acquisition of the property at Leumeah. Moreover, he specifically refused to draw the inference that had the respondent not made her wages available in a pool but had used them for the support of herself and the child, the appellant could not have acquired the property or made payments for it.

23. We should mention that the approaches taken by the members of the Court of Appeal were influenced by that Court's earlier decision in Allen v. Snyder (1977) 2 NSWLR 685 where it rejected the proposition, suggested by some English decisions, that there was vested in the individual judge a jurisdiction to determine what were the proprietary interests of the parties according to notions of fairness. Likewise, in that case, the Court of Appeal held that a declaration of trust must be based upon actual subjective intention and not a common intention ascribed to the parties by operation of law (at pp 694, 701, 702). In the present case the Court of Appeal considered that it should continue to follow Allen v. Snyder. In so deciding it did not have the advantage of this Court's decision in Muschinski v. Dodds [1985] HCA 78; (1985) 160 CLR 583, which was delivered subsequently.

24. The appellant's case in this Court is that the Court of Appeal was not justified in interfering with the primary judge's conclusion that the respondent had failed to make out her case, a conclusion which was based on a refusal or an unwillingness to make such findings as were necessary to the success of the respondent's case. The appellant points out that the issue presented by the respondent at the trial was whether there was an oral agreement between the parties relating to the beneficial ownership of the land or alternatively whether there should have been inferred from the conduct of the parties an actual intention on the part of the appellant as registered proprietor to hold his interest upon trust for the respondent as to one half share. As a consequence the issues were issues of fact. Those issues necessarily involved matters of credibility, the evidence consisting mainly of affidavits by the parties and cross-examination on such affidavits. The appellant challenges the correctness of the approach taken by the Court of Appeal in looking to the common ground in the evidence given by the parties and drawing inferences exclusively from that material. The submission is that inferences must be drawn from the totality of the facts so that it was necessary to resolve the disputed issues of fact and take them into account in the process of drawing inferences.

25. As Mahoney J.A. points out in his dissenting judgment, the thrust of the respondent's case at first instance was that at all material times it was the intention of the parties that they should marry, that they both intended that the Leumeah property be owned by both of them, that when they married the property would be transferred into their names and that the reason why title was not acquired in their names was to avoid expense. The appellant denied each of these matters, conceding only that if they married, title to the property might be transferred. The primary judge dealt with these issues by holding that the respondent had not made out her case, thereby indicating that he was not prepared to make findings favourable to her on the issues presented by her case for relief. The tenor of his Honour's judgment is quite inconsistent with an acceptance of the respondent's case on any of the three issues stated above. And on crucial issues the primary judge preferred the testimony of the appellant to that of the respondent. Thus, he rejected the respondent's claim that the decision to have a child was related to plans for marriage. His judgment proceeds on the footing that the appellant did not commit himself to a marriage. It is significant that his Honour placed emphasis on the respondent's change of name by deed poll and the registration of Dallas in the name of the appellant and then quoted the following passage from the oral evidence of the respondent:

"Q. You see, madam, why then did you find it
necessary to have your name changed by deed
poll?

A. Because Leo kept putting it off to be married.
He kept always using the excuse that he had
been married twice before and he still wanted
more time to think and just generally be sure
that our relationship was going to work." (our
emphasis).

26. It is apparent that the learned trial judge was not disposed to accept the respondent as a credible witness where her evidence was in conflict with that of the appellant. And those conflicts, though comparatively few, were central to the respondent's case, that there was a common actual subjective intention to create a trust. In this situation it was not a legitimate exercise for an appeal court to ignore those conflicts and the way in which the primary judge resolved them and to draw inferences from the surrounding area of common ground between the parties, when the primary judge's resolution of the central issues was adverse to the existence of such an intention. Consequently the finding made by the majority in the Court of Appeal that there was a common subjective intention to create a trust cannot be sustained.

27. However, this conclusion does not dispose of the appeal. The question remains whether in the circumstances the respondent is entitled to relief by way of constructive trust. The answer to this question calls for some consideration of Allen v. Snyder, which was thought by the Court of Appeal to be an obstacle to relief on this footing, and of Muschinski v. Dodds, where the circumstances in which a constructive trust would be imposed were discussed.

28. In Allen v. Snyder a man and a woman lived together for many years, intending at first to marry, but not doing so. They lived in a house, of which the man was the legal owner, which was furnished by the woman out of her own funds. The house was purchased by the man during the period of cohabitation with the assistance of a loan. The Court of Appeal held that in the absence of a common intention to create a trust, there was no basis for holding that the man was a trustee of the house for the two of them in equal shares. The members of the Court of Appeal arrived at this conclusion for different reasons.

29. Glass J.A. (with whom Samuels J.A. agreed), when referring to cases in which a trust, not evidenced in writing, of a home has been recognized, said (at p.693):

"But when it is called a constructive trust, it
should not be forgotten that the courts are giving
effect to an arrangement based upon the actual
intentions of the parties, not a rearrangement in
accordance with considerations of justice,
independent of their intentions and founded upon
their respective behaviour in relation to the
matrimonial home."

"The doctrine that a trust of the matrimonial
home may arise in favour of a spouse as a result of
her contribution to the acquisition or maintenance
of the home, in the absence of any actual
understanding or reciprocal intention, is also
wholly inconsistent with the line of reasoning in
the High Court cases referred to in Hepworth v.
Hepworth [1963] HCA 49; (1963) 110 CLR 309, at p 318."

30. On the other hand Mahoney J.A. correctly acknowledged (at p 704), as did Samuels J.A. (at p 699), that a constructive trust may be imposed, even though the person on whom the trust is imposed had no intention to create a trust or to hold the property on trust. His Honour observed that in such situations an intention may be imputed in circumstances where the imputation is necessary "in good faith and in conscience", though he added that this expression was of such generality that it did not provide an acceptable test for decision-making. In the ultimate analysis his Honour rejected (at p 707) the argument that the Court would impose a constructive trust by reference to what was "fair" in the ordinary sense of that term. But in the course of reasoning to that result Mahoney J.A. indicated some situations in which it might be appropriate to impose a constructive trust. Thus, he said (at p 706):

"A husband may pay for the matrimonial home and
cause the legal title to be vested in the wife.
The wife may earn money and use it in defraying
household expenses, thus relieving the family
budget and allowing the husband to pay mortgage
instalments on the home. It will be necessary,
from time to time, to determine whether, in such
situations, the failure to recognize that the one
or the other has a proprietary interest in the home
is so contrary to justice and good conscience that
a trust or other equitable obligation should be
imposed."

31. In Muschinski v. Dodds a man and woman who had lived together for three years decided to buy a property on which to erect a prefabricated house and to restore a cottage. The woman was to provide $20,000 from the sale of her house and the man was to pay the cost of construction and improvement from $9,000 he would receive on the finalization of his divorce and from loans. The property was conveyed to them as tenants in common. Although some improvements were made by the man, the erection of the house did not proceed and the parties separated. The woman contributed $25,259.45 and the man $2,549.77 to the purchase and improvement of the property. This Court declared that the parties held their respective legal interests upon trust to repay to each his or her respective contribution and as to the residue for them both in equal shares.

32. Deane J. (with whom Mason J. agreed) reached this result by applying the general equitable principle which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them. His Honour said (at p 620):

"... 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 pp 374-375 and
per Jessel M.R., Lyon v. Tweddell (1881) 17 ChD
529, at p 531."

33. His Honour pointed out (at p 614) that the constructive trust serves as a remedy which equity imposes regardless of actual or presumed agreement or intention "to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle". See also p 617. In rejecting the notion that a constructive trust will be imposed in accordance with idiosyncratic notions of what is just and fair his Honour acknowledged (at p 616) that general notions of fairness and justice are relevant to the traditional concept of unconscionable conduct, this being a concept which underlies fundamental equitable concepts and doctrines, including the constructive trust.

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

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

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

37. It therefore becomes necessary to determine the terms of that constructive trust. The facts that the Leumeah 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 such adjustment is necessary.

38. Although the present case is close to the borderline, we do not consider that it is possible to treat the respective financial contributions of the parties as being approximately equal. Even after crediting the respondent with the amount she would have earned during the period of three months during which the respondent was precluded from working by reason of having and caring for their child, it is agreed that the respective contributions were approximately 55 per cent as to the appellant and 45 per cent as to the respondent, that is to say, the appellant contributed almost a quarter more than the respondent. The Court should, where possible, strive to give effect to the notion of practical equality, rather than pursue complicated factual inquiries which will result in relatively insignificant differences in contributions and consequential beneficial interest. We do not think, however, that the difference in the present case can be regarded as relatively insignificant. Nor has it been suggested that the difference in the amount of the financial contributions was offset by the greater worth of the respondent's contribution in other areas. In these circumstances, though acknowledging that the case is close to the borderline, we consider that the constructive trust to be imposed should declare the beneficial interests of the parties in the proportions 55 per cent to the appellant and 45 per cent to the respondent.

39. There are, however, other adjustments which should be made in the interests of justice. Those adjustments are all in favour of the appellant. The appellant should be entitled to receive from the proceeds of any sale of the property repayment of the contributions effectively made by him before and after the period during which the parties were living together and pooling their resources. That is to say, the appellant should be entitled to be paid the net proceeds of the sale of his unit ($12,883.41) which were devoted to the purchase of the property less the amount of payments of instalments under the mortgage over the unit which were made from the pooled earnings during the period of cohabitation. The appellant should also be entitled to be repaid the instalments under the mortgage over the property which he has paid during the period since the termination of the relationship between the respondent and himself subject to an off-setting adjustment to reflect any benefit enjoyed by the appellant through use and occupation of the property during that period. The final adjustment which should be made in the appellant's favour relates to the furniture which was taken by the respondent when her relationship with the appellant terminated. That furniture was largely acquired during the period of cohabitation and, in the context of other allowances made in favour of the appellant, can fairly be treated as purchased from the pooled funds. The order made by the Court of Appeal in relation to it is inappropriate on that approach. The appropriate adjustment would be that the appellant is entitled to be paid from the proceeds of any sale an amount equal to the value of that furniture. The appellant should be entitled to a lien over the property to secure the payment to him of the above-mentioned amounts from the net proceeds of sale of the property after discharge of the amount remaining outstanding under the mortgage. If the parties are not able to agree on the precise amounts of the above adjustments, it will be necessary to remit the matter to the Supreme Court to enable those amounts to be determined. That would involve further legal costs. Obviously, it is in the interests of both parties that any such further legal costs be avoided. In the circumstances, the appropriate course at this stage is to stand the matter over to a date to be fixed so that the parties have an opportunity of agreeing upon the content of the precise orders which should be made.

40. We would allow the appeal, set aside the orders made by the Court of Appeal other than in relation to costs and stand the appeal over to a date to be fixed so that the parties may have the opportunity of presenting submissions as to the terms of the consequential orders to be made. Since the appellant has been substantially unsuccessful in the appeal, the appellant must pay the respondent's costs of the appeal. If it becomes necessary to remit the matter to enable the determination of relevant amounts, the costs of the proceedings upon remitter will be reserved for the Supreme Court.

TOOHEY J. The story of the relationship between these parties and its disintegration is told in the reasons for judgment of Mason C.J., Wilson and Deane JJ.

2. I adopt their Honours' analysis of the evidence led at the hearing. Also, I agree with their conclusion that the circumstances of the case give rise to a constructive trust. However I wish to say something of the way in which such a trust may arise and as to the terms of the trust in the present case.

3. A convenient starting point is the decision of this Court in Muschinski v. Dodds [1985] HCA 78; (1985) 160 CLR 583. After an examination of the authorities, Deane J. (with whom Mason J. agreed) concluded, at p 614:

" 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."

" Once its predominantly remedial character is
accepted, there is no reason to deny the
availability of the constructive trust in any
case where some principle of the law of equity
calls for the imposition upon the legal owner of
property, regardless of actual or presumed
agreement or intention, of the obligation to hold
or apply the property for the benefit of
another".

4. I agree with Mason C.J., Wilson and Deane JJ. that in the present case, having regard to the way in which the parties pooled their earnings for the purposes of their joint relationship together with their contributions to the acquisition of land, the building of a house and the making of a home as part of that relationship, the appellant's assertion (after the relationship failed) that the Leumeah property was his alone attracted the intervention of equity and the imposition of a constructive trust. In their Honours' view, the unconscionable conduct of the respondent warranted these consequences. I accept that conclusion.

5. Nevertheless the question may still be asked - is the imposition of a constructive trust as a remedy for unconscionable conduct any more "principled" than the imposition of such a trust in order to prevent unjust enrichment? Each approach rejects Lord Denning M.R.'s notion of "a constructive trust of a new model" (Eves v. Eves [1975] EWCA Civ 3; (1975) 1 WLR 1338, at p 1341; 3 All ER 768, at p 771), imposed "whenever justice and good conscience require it" (Hussey v. Palmer ; (1972) 1 WLR 1286, at p 1290; 3 All ER 744, at p 747). Each looks to and builds upon particular situations. Each must come to grips with a variety of situations in which a person unconscionably retains property or is unjustly enriched by the retention of property.

6. It may be, as Lord Diplock said in Orakpo v. Manson Investments Ltd. (1978) AC 95, at p 104 that "there is no general doctrine of unjust enrichment recognised in English law". Or it may be, as the learned authors of Goff and Jones, The Law of Restitution, 3rd ed. (1986) suggest, at p 15, that "... the case law is now sufficiently mature for the courts to recognise a generalised right to restitution". Certainly the courts of the United States have no difficulty with the proposition just stated, as the Restatement of the Law of Restitution, originally published in 1937, evidences. This is an issue that does not need to be debated in order to resolve the present appeal. Unjust enrichment is at the very least "a unifying legal concept", as Deane J. noted in Pavey & Matthews Pty. Ltd. v. Paul [1987] HCA 5; [1987] HCA 5; (1987) 162 CLR 221, at p 256. And the development of a general doctrine is as important for the notion of unconscionable conduct as it is for unjust enrichment.

7. In Canada the opinion of Dickson J. in Rathwell v. Rathwell (1978) 83 DLR (3d) 289 became the basis of the decision in Pettkus v. Becker (1980) 117 DLR (3d) 257. In the latter case Dickson J. commented, at pp 273-274:

" How then does one approach the question of
unjust enrichment in matrimonial causes? In
Rathwell I ventured to suggest there are three
requirements to be satisfied before an unjust
enrichment can be said to exist: an enrichment,
a corresponding deprivation and absence of any
juristic reason for the enrichment. This
approach, it seems to me, is supported by general
principles of equity that have been fashioned by
the Courts for centuries, though, admittedly, not
in the context of matrimonial property
controversies."

8. Put this way, it is not enough that one spouse has benefited from the contributions of another. What is required is that the contributions of one spouse have enabled or assisted in enabling the other to acquire the asset in dispute: see Dickson J. at p 277. Professor Scott (Scott on Trusts, 3rd ed. (1967), vol V, par 462 has said of the person thus unjustly enriched:

" He is not compelled to convey the property
because he is a constructive trustee; it is
because he can be compelled to convey it that he
is a constructive trustee."

9. The notion of unjust enrichment, qualified in this way, is as much at ease with the authorities and is as capable of ready and certain application as is the notion of unconscionable conduct. No doubt, as Professor Waters suggested in "The Constructive Trust", Paper 1 in Where Is Equity Going? Remedying Unconscionable Conduct, lectures delivered at the Law School of the University of Western Australia this year, the task of the courts is "to continue sharpening the edges of the criteria which must be satisfied before the claimant can obtain constructive trust relief". But that exercise is necessary, whichever approach is adopted.

10. The existence of a de facto relationship between the parties constitutes no barrier in either case. The object of a constructive trust is to redress a position which otherwise leaves untouched a situation of unconscionable conduct or unjust enrichment. It is equally applicable to persons in a de facto relationship as it is to spouses.

11. In a situation such as the present one, where two people have lived together for a time and made contributions towards the purchase of land or the building of a home on it, an approach based on unconscionable conduct or one based on unjust enrichment will inevitably bring about the same result. Neither approach necessarily calls for a precise accounting of the contributions of the parties. Equally, the Court cannot ignore disproportionate contributions, especially where one of the parties makes available the proceeds of the sale of a property which he or she had acquired before the relationship began. Both Muschinski v. Dodds and the earlier decision of this Court in Calverley v. Green [1984] HCA 81; [1984] HCA 81; (1984) 155 CLR 242 had the result that each party received back basically what he or she had put into the venture: see Evans, "De Facto Property Disputes: The Drama Continues", Australian Journal of Family Law, vol.1 (1987) 234, at p 247.

12. The result proposed by Mason C.J., Wilson and Deane JJ. is consonant with an approach based on unconscionable conduct or one based on unjust enrichment. It takes as a starting point that the Leumeah land was bought and a house was built on it, as a home for the appellant and the respondent. When it is seen that the parties pooled their earnings to that end, a tenancy in common is the appropriate recognition to avoid an unjust enrichment of the appellant or the unconscionable conduct implicit in him retaining the property in his own name. There is something to be said for declaring an equality of interests even though the earnings of the parties were not equal. But, in all the circumstances, I do not dissent from the proposal that the constructive trust declare the beneficial interests of the parties in the proportions fifty-five per cent to the appellant and forty-five per cent to the respondent. Due regard must also be had to the appellant's particular contributions from the sale of his unit at Cabramatta and the mortgage payments made by him since the parties' relationship came to an end. Then there is the matter of the furniture taken by the respondent. I agree generally with the approach taken by their Honours.

13. It is eminently desirable that the assets of the parties be not further dissipated by any more steps in this litigation. But I see no alternative to the course proposed by their Honours, that the matter stand over to give the parties an opportunity to agree upon the precise orders to be made.

GAUDRON J. I agree with the orders proposed in the joint judgment of Mason C.J., Wilson and Deane JJ. and generally with their Honours' reasons. I would add some comments of my own.

2. Ordinarily, where two (or more) persons establish a fund constituted by their several contributions, it is recognized that they are entitled to that fund in proportion to their contributions. Where the legal ownership of that fund vests otherwise than in accordance with the parties' respective contributions that recognition is effected by Equity's implication of a resulting trust based on a presumption that the legal title is to be held on trust for those who provided the fund in proportion to their contributions. The presumption may be rebutted in relation to a joint fund (as in relation to any property in respect of which a resulting trust may be implied) by evidence of a contrary intention adduced from the surrounding circumstances, or it may be displaced by operation of the presumption of advancement: see Calverley v. Green [1984] HCA 81; (1984) 155 CLR 242, at pp 246-248, 258-259, and 266-267.

3. In the present case the parties established a fund constituted by their pooled earnings. There are no circumstances surrounding the establishment or purpose of the fund which warrant departure from the usual presumption that the fund was intended to be beneficially owned by the parties in proportion to their contributions thereto. The facts negate any intention on the part of the respondent to make a gift to the appellant of any part of her contributions to the fund. No presumption of advancement arises (Calverley v. Green at p 247). Thus, the applicant and respondent both had a beneficial interest in the fund.

4. Had the moneys in the joint fund been ventured as the consideration (or part thereof) for the purchase of the land and the erection of the house at Leumeah then, absent any supervening relevant intention or event to displace the presumption giving rise to a resulting trust, Equity would have regarded the legal title as held on trust for the parties in shares reflecting their contributions. However, the consideration for the purchase of the land and house came from a bridging loan obtained by the appellant, the proceeds of the sale of his home unit, and a mortgage given by the appellant over the land. Thus no resulting trust arose.

5. Although the resulting trust arises by operation of equitable principle, it has its foundation in Equity's aversion to that which is unconscionable. It would be unconscionable for one only of the contributors to the consideration for the purchase of an asset to hold that asset to the exclusion of any interest on the part of the other contributors in the absence of an intention, real or presumed, that the holder should take the entire beneficial interest.

6. In the present case, although the house was not purchased with the monies in the joint fund, the existence of the fund facilitated its purchase, and mortgage repayments were made from that fund. There is nothing to suggest that the parties intended (by the utilization of the fund for these purposes) to alter their underlying interests in the fund.

7. The utilization of the fund for the making of mortgage repayments should be viewed in the context that in this country homes are commonly acquired by means of credit foncier arrangements. Under these arrangements "equity" in the home is accumulated over time with the gradual reduction of mortgage debt by regular repayments apportioned to both principal and interest. Where a fund (which is the property of the contributors thereto) is used for the acquisition in this manner of "equity" in an asset, it is unconscionable for one only of the contributors to that fund to assert ownership of that asset to the exclusion of any interest in the other contributor(s). That situation is properly remedied by the imposition of a constructive trust.

8. Where a constructive trust is imposed by reason of the utilization of a joint fund to acquire "equity" in an asset, the terms of the trust will necessarily need to be fashioned to take account of contributions made other than from the joint fund. On occasions it may be sufficient to treat the contributions to mortgage repayments as if they were contributions to the consideration for the purchase of the asset, and to fashion the terms of the constructive trust along the same lines applicable to a resulting trust so that the beneficial interest is held in tenancy-in-common in shares proportionate to the total contributions made towards the acquisition of "equity" in the asset. However, other considerations may also be relevant. For example, in the context of domestic relationships it is relevant to inquire whether the asset was acquired for the purposes of the relationship, and whether non-financial contributions should be taken into account.

9. In the present case the fund constituted by the pooled earnings of the parties was established and used for the purposes of their joint relationship. The acquisition of the land and the subsequent building of the house constituted a joint undertaking designed to further that relationship. The substratum of that relationship and undertaking was removed without attributable blame: see Muschinski v. Dodds [1985] HCA 78; (1985) 160 CLR 583, per Deane J. at p 620. Those considerations warrant that, subject to adjustments for contributions otherwise made by the appellant, the constructive trust should be fashioned at least by reference to shares proportionate to the respective contributions made by the parties to the joint fund, rather than by reference to their contributions to the acquisition of "equity" in the house and land. The share actually contributed by the respondent should be increased by reference to the amount she would have contributed but for her absence from work during the later stages of her pregnancy and after the birth of the child, Dallas. Thus it is appropriate that the constructive trust to be imposed be fashioned by reference to a tenancy-in-common in the proportions 55 per cent to the appellant and 45 per cent to the respondent, subject to the adjustments as set out in the judgment of Mason C.J., Wilson and Deane JJ.

ORDER

Declare that the appellant holds his interest in that land being Lot 3 in Deposited Plan No. 231708 in the Municipality of Campbelltown, Parish of St Luke and County of Cumberland,and being the whole of the land comprised in Certificate of Title Volume 10524 Folio 23, known as 68 Angle Road, Leumeah on trust for himself beneficially as to 55 per cent and for the respondent beneficially as to 45 per cent, subject to such adjustments as should be made in accordance with the reasons for judgment of the Court.

Further order that the matter be stood over to a date be fixed to enable the parties to present submissions as to the form of the consequential orders to be made.