Ryan v Dries [2002] NSWCA 3 (6 February 2002)

Last Updated: 11 February 2002

NEW SOUTH WALES COURT OF APPEAL

CITATION: Ryan v. Dries [2002] NSWCA 3

FILE NUMBER(S):

40261/01

HEARING DATE(S): 13 November 2001

JUDGMENT DATE: 06/02/2002

PARTIES:

Gregory James Ryan - appellant

Joanne Maree Dries - respondent

JUDGMENT OF: Sheller JA Giles JA Hodgson JA

LOWER COURT JURISDICTION: Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S): ED2754/99

LOWER COURT JUDICIAL OFFICER: Master McLaughlin

COUNSEL:

P. O'Connor for appellant

D.L. Warren for respondent

SOLICITORS:

Bayside Solicitors, Ramsgate for appellant

Cassidy Gibson Howlin, Cronulla for respondent

CATCHWORDS:

EQUITY - Maxims - "He who seeks equity must do equity"

REAL PROPERTY - Co-ownership (tenancy in common) - Incidents - Accounting in respect of occupation - Accounting in respect of repairs, maintenance, and outgoings, including mortgage repayments

TRUSTS AND TRUSTEES - Resulting trusts - Acquisition of land - Contributions to purchase money - Whether costs of acquisition included

PROCEDURE - Pleadings - Need for precision where claims made in the alternative to a claim for a broad statutory remedy. D.

LEGISLATION CITED:

DECISION:

1. Appeal allowed

2. Set aside orders 2 and 3, and declaration 1, below

3.Order that the appellant pay to the respondent within 28 days the sum of $133,070.00 (less any amount paid since 23rd March 2001) plus interest at Supreme Court rates from 23rd June 2001 on any outstanding balance, and that in return the respondent transfer to the appellant her interest in the property 255 Sylvania Road, Gymea

4. Order that the respondent pay the appellant's costs of the appeal incurred since 9th August 2001 and that she have a suitors' fund certificate if otherwise entitled, unless within 14 days either party provides to the Court written submissions on costs, in which event the Court will determine costs on the basis of those submissions and any submissions from the other party received within a further 7 days.

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40261/01

ED 2754/99

SHELLER JA

GILES JA

HODGSON JA

Wednesday 6th February 2002.

RYAN V. DRIES

Judgment

1 SHELLER JA: I have had the benefit of reading in draft the reasons for judgment of Hodgson JA and of Giles JA. For the reasons given by Hodgson JA I agree with the orders he proposes noting, as his Honour has done, that further submissions may be appropriate so that this Court can deal with the costs of the appeal. However, I wish to add some remarks of my own to explain why I have reached the conclusion that the appellant as part of the equitable accounting should do equity by making some appropriate adjustment in respect of his occupation or greater use of the property for the period up to November 1997.

2 A tenant in common, who has been in occupation of part of the common property, and who claims an allowance for improvements effected to any part of the common property, will only be granted such allowance on submitting to be charged with an occupation rent; Teasdale v Sanderson [1864] EngR 316; (1864) 33 Beav 534; (1864) 55 ER 476. This has been explained as an application of the equitable maxim that he who seeks equity must do equity; In re Jones; Farrington v Forrester [1893] 2 Ch 461 at 477-8 per North J; Luke v Luke (1936) 36 SR NSW 310 at 313. In Luke v Luke at 318, Long Innes CJ in Eq quoted from the judgment of Salmond J in McCormick v McCormick [1921] NZLR 384 at 387-8. Salmond J acknowledged that there was no general right even in a partition suit to charge an occupying owner with an occupation rent. His Honour said:

I think that the obligations of co-owners to account to each other are the same in equity as at law, and are the same in a partition suit as in other proceedings, save only that in a partition suit, if an occupying owner claims an allowance for his expenditure, he can obtain it only if he consents to be charged with an occupation rent.

3 Long Innes CJ in Eq said at 318:

To this statement of the position I would only add that, for my part, I can see no reason why the application of the maxim, he who seeks equity must do equity, should be limited to suits for partition, and I think it improbable that Salmond J was of a different opinion.

4 In this case the appellant claims as part of the equitable accounting an allowance for the whole of the mortgage instalments that he has paid being part capital and part interest.

5 In re Pavlou [1993] 1 WLR 1046 concerned a property transferred to a husband and wife as beneficial joint tenants. After both had lived in the property for some years the husband left the wife in sole occupation. The property had been bought with the assistance of a mortgage. After the husband left, the wife paid all the mortgage instalments. Ultimately the wife presented a divorce petition on the ground of desertion. The husband's trustee in bankruptcy applied for an order for sale of the property. The wife sought reimbursement for her expenditure on the property. This included money spent on repairs and improvements. It was agreed there should be an equitable accounting between the parties. I quote the following passages from the reasons for judgment of Millett J, as Lord Millett then was:

"The guiding principle of the Court of Equity is that the proportions in which the entirety should be divided between former co-owners must have regard to any increase in its value which has been brought about by means of expenditure by one of them." (1048)

"......in deciding as I do that the wife is entitled as against the trustee in bankruptcy to credit for one half of any repairs or improvements, there has to be an inquiry as to the amount expended and the increase, if any, in the value of the property thereby realised. ..... The wife will be entitled, as against the trustee in bankruptcy, to credit only for one half of the lesser of the actual expenditure and any increase in the value realised thereby."

"The same applies in my judgment to any capital element in the repayment of mortgage instalments. The repayment of the capital element in each instalment increases the value of the equity of redemption which inures to the benefit of both joint tenants." (1049)

"More difficult questions arise from the wife's continued occupation of the property. Is she chargeable with an occupation rent in respect of any period prior to the date of the bankruptcy order? And is she entitled to credit for the interest element in the mortgage repayments which she has made since the husband left her?" (1049)

"I take the law to be to the following effect. First, a court of equity will order an inquiry and payment of occupation rent, not only in the case where the co-owner in occupation has ousted the other, but in any other case in which it is necessary in order to do equity between the parties that an occupation rent should be paid. The fact that there has not been an ouster or forceful exclusion therefore is far from conclusive." (1050)

"There remains the question of the interest element in the mortgage payments which the wife has paid. Once again, prima facie, she is entitled to reimbursement since the date on which the husband left the property in January 1983 and not merely since the severance in March 1987. In many cases the court has simply set off the interest element in the mortgage repayments against an occupation rent, but as Vinelott J pointed out in In re Gorman (A Bankrupt) [1990] 1 WLR 616, 626, which, incidentally, was a case of joint tenants:

`That practice is not, of course, a rule of law to be applied in all circumstances irrespective of, on the one hand, the amount of the mortgage debt and the instalments paid, and on the other hand, the value of the property and the amount of the occupation rent that ought fairly to be charged. It is a rule of convenience and more readily applies between husband and wife or co-habitees than between a spouse and a trustee in bankruptcy of the other co-owner.'

In my judgment if the trustee in bankruptcy insists on the strict accounts being taken, then he is entitled to do so, unless it can be seen in advance that the amounts are likely to be so similar that the taking of the two accounts would be a waste of time and the costs would outweigh any possible advantage to be gained thereby. In such a case the court might well impose its own solution of directing the interest element in the mortgage instalments to be set off against the use and occupation without any further inquiry." (1050-1)

6 In my opinion the court in In re Pavlou correctly recognised that it may be appropriate, in order to do equity between two former co-habitees of a property, to set off against the claim by the one, who has remained in occupation but claims to recover for mortgage instalment payments made, an amount by way of an occupation rent. As Vinelott J said in the passage quoted that is not by application of a rule of law but simply by application of a principle of equity. Equity may require as a condition of the relief sought, namely that the respondent contribute to the payment of mortgage instalments and reimburse the appellant to the extent of the appropriate contribution, that the appellant be charged with an amount for his occupation. (Compare Spry, Equitable Remedies, 6th ed at 18-19.)

7 Hodgson JA has referred to an "appropriate adjustment in respect of [the appellant's] very much greater use of the property, and indeed exclusive use thereof since November 1997". I agree with his Honour's calculations and the reasons he has given for them.

8 GILES JA: I have had the advantage of reading the reasons of Hodgson JA in draft. I will assume knowledge of those reasons in what follows.

9 I agree with his Honour that -

(i) the property was presumed to be held on a resulting trust in the proportions 53 per cent to the appellant and 43 per cent to the respondent;

(ii) the evidence was insufficient to rebut the resulting trust;

(iii) the appellant is not shut out from claiming as on an accounting an allowance in his favour for his payment of the whole of the mortgage instalments;

(iv) the allowance in his favour should be for payment of interest as well as principal; and

(v) a counter-allowance should be made in the respondent's favour for the value of the appellant's occupation of the property from November 1997.

10 With one qualification, I adopt his Honour's reasons for these conclusions. The qualification is that it is sufficient that the conversation in the solicitor's office does not establish or contribute to establishing an intention in the respondent that the beneficial interests be as stated by the solicitor. It is not necessary to consider the significance, if any, of the solicitor's engagement by the appellant.

11 I respectfully differ from his Honour in relation to the counter-allowance for the value of the appellant's occupation of the property prior to November 1997.

12 The rule has long been established. One co-owner A in occupation of a property is not liable to pay an occupation fee to the other co-owner B unless A has excluded B from occupation or A is claiming from B an allowance for his expenditure on repairs or improvements to the property (Luke v Luke (1936) 36 SR 310). A different rule could have been devised in an attempt to adjust matters equitably between A and B. But, as Mahoney JA said of claims between co-owners in Forgeard v Shanahan (1994) 35 NSWLR 206 at 220, "[t]he decisions which have been laid down represent ... a practical attempt to accommodate the justice of competing claims of this kind".

13 The appellant enjoyed full time occupation of the property, and the respondent occupied it on one or two nights each week. But the appellant did not exclude the respondent from occupation, and so far as appears the respondent's limited occupation was in conformity with her wishes - it was the way the appellant and the respondent conducted their relationship. The respondent submitted that in re Pavlou (1993) 1 WLR 1046 at 1050 an agreed division of occupation short of exclusion had been recognised as sufficient for this limb of the rule. I do not think that is so, but in the present case there was no more than that the respondent did not choose to have greater occupation of the property. This limb of the rule is not available to the respondent.

14 Going to the second limb of the rule, the reason why in claiming from B an allowance for expenditure on repairs or improvements to the property A is liable to be charged with an occupation fee is that in seeking equity by getting the allowance for expenditure A must do equity by submitting to payment for his occupation (Luke v Luke at 313-4; Forgeard v Shanahan at 220, 223). The equity sought is because B has been benefited by the increase in the value of the property, and so the allowance is the lesser of the expenditure and the increase in the value of the property (Forgeard v Shanahan at 223). Presumably equity must be done because B is being required to pay for something he did not undertake to pay for by becoming co-owner, but the link between occupation of the property and increasing its value is really one of chance.

15 When A makes payments in discharge of the joint burden of the mortgage instalments, the situation is different. The equity sought is that B should bear his proper share of the burden jointly undertaken by A and B. The increase in the equity in the property is something he undertook to pay for by jointly undertaking the burden. I do not think that payment of the mortgage instalments is to be equated with expenditure on repairs or improvements enhancing the value of the property, and the argument that equity must be done by A is weaker.

16 Perhaps the rule could have extended to this situation as part of the practical attempt to accommodate the justice of competing claims. There must have been a myriad of such situations. But save for the decision of Rolfe J in Forgeard v Shanahan (18 February 1991, unreported) the rule has not encompassed them, and on appeal Meagher JA was not receptive to his Honour's view (see Forgeard v Shanahan at 225). The rule as long established has been otherwise.

17 A is seeking equity, but why must he do equity by submitting to payment for his occupation? In the absence of exclusion, whereby the first limb of the rule comes into play, A's occupation of the property has been with B's concurrence. Doing equity by nonetheless paying an occupation fee to B requires justification. That B is being required to pay for something he did not undertake to pay for by becoming co-owner has been regarded as a justification. That B is being required to bear his proper share of the burden he jointly undertook has not. In my opinion, on the established rule the respondent is not entitled to a counter-allowance for the value of the appellant's occupation of the property prior to November 1997.

18 The interests of the appellant and the respondent in the property and an accounting between them have been directed and accommodated by equitable principles. Assuming a contract amenable to relief, there is no occasion for relief under the Contracts Review Act 1980. I express no view on whether there was such a contract or whether relief would have been appropriate.

19 The figures in the reasons of Hodgson JA should in my view include a counter-allowance in favour of the respondent of $21,500, being 43 per cent of $50,000, in lieu of $55,900. Otherwise following his Honour's calculations, what his Honour describes as the respondent's net interest in the property as at the date of the Master's reasons is $88,350.

20 It appears to have been agreed at the trial that, whatever the figure arrived at, there should be an order that the appellant pay that amount to the respondent and the respondent transfer to the appellant her interest in the property. That position was maintained on appeal. The appellant had paid $95,750 to the respondent on 18 July 2001. Accordingly, the order to be made on appeal is that the respondent transfer to the appellant her interest in the property and pay to him $7,400 plus interest on $7,400 at Supreme Court rates from 18 July 2001.

21 There remains the appeal as to costs. It may have been overtaken by the result on appeal. We were asked not to deal with the costs of the appeal because of the possible effect of without prejudice offers. I agree with the order proposed by Hodgson JA as to the costs of the appeal.

22 HODGSON JA: On 12th December 2000, Master McLaughlin gave a decision determining proceedings brought by Joanne Dries against Gregory Ryan seeking relief in relation to the house property 255 Sylvania Road, Gymea. Master McLaughlin dismissed a claim made by Ms. Dries under the De Facto Relationships Act, and also a claim made by her under the Contracts Review Act, but found that she was entitled to a one-half interest in the property on the basis of a constructive trust. Master McLaughlin also decided that Ms. Dries held a share in a company Ryan Air Conditioning (Australia) Pty. Limited, on trust for Mr. Ryan.

23 On 23rd March 2001, Master McLaughlin made declarations to the effect of those findings, and also made consequential orders, and he ordered Mr. Ryan to pay one-half of Ms. Dries' costs of the proceedings. Mr. Ryan has appealed from the Master's orders concerning the house property and concerning costs.

CIRCUMSTANCES

24 The appellant and the respondent met in 1986, when the appellant was 27 years old and the respondent 25 years old. They commenced a romantic relationship, which lasted until about November 1997. However, according to a finding made by the Master which is not challenged on appeal, they did not live together except at weekends. At other times, the respondent resided with her mother in Nynga Avenue, Gymea, and, after the subject property was acquired in 1990, the appellant resided there.

25 The subject property was purchased in September 1990 by the appellant and the respondent, and the title notes them as being tenants in common holding interest of six-sevenths and one-seventh respectively. The purchase price of $200,000.00 was funded as follows: $120,000.00 borrowed from the National Australia Bank; $10,000.00 lent to the appellant by the respondent's mother; $30,000.00 advanced by the respondent; and $40,000.00 advanced by the appellant. The appellant also paid incidental costs connected with the purchase, totalling $9,224.08: stamp duty $5,491.00; solicitor's fees $1,964.00; bank fees $1,634.80; and adjustment of rates $134.28.

26 From the time the property was acquired, the appellant paid all instalments of the bank loan: from 28th September 1990, these amounted to $825.00 per fortnight, and from 10th November 1995, they amounted to $1,125.00 per fortnight. The loan was discharged in full by November 1998. The appellant also paid rates and other outgoings on the property, although the amount of these payments is not in evidence.

27 The appellant used the subject property for his business and as his residence; while the respondent generally stayed there overnight on one or two nights each weekend. The Master found that their relationship did not constitute a de facto relationship for the purposes of the De Facto Relationships Act. After the relationship ceased in about November 1997, it appears that the locks on the premises were changed; and it seems clear that the respondent did not have access to the premises after that time.

28 In the Statement of Claim in these proceedings, the respondent made the following allegations under the heading "Claim for a Constructive Trust and Rectification and Contracts Review Act 1980":

12. By a Contract for the sale of land entered into on or about the 19th October, 1990, the Plaintiff and the Defendant, as purchasers, contracted to purchase the residential house property known as 255 Sylvania Road South, Gymea Bay ("the property') for a purchase price of $210,000.00.

13. At all material times, prior to and at the time of signing the Contract for Sale, the Plaintiff and the Defendant, believed and intended that the property was being purchased by them as tenants-in-common in equal shares, and such was the true agreement between the Plaintiff and the Defendant.

14. The said Contract for Sale and Memorandum of Transfer registering the Plaintiff and the Defendant as registered proprietors of the property, was executed under a common mistake in so far as they did not provide for equal ownership of the property as tenants-in-common.

15. The Plaintiff claims rectification to the Contract for Sale and Memorandum of Transfer to reflect the true agreement of the parties referred to above, or alternatively, a declaration that the Plaintiff and the Defendant hold their legal estate in the property in trust for themselves as tenant-in-common in shares proportionate to their contributions to the purchase price, and consequential declarations and Orders relating to such relief.

16. Further, prior to entering into the Contract to purchase the property, the Plaintiff contributed $40,000.00 to the purchase price (or alternatively $30,000.00) as well as making herself jointly and severally liable under a mortgage to the National Australia Bank for $120,000.00 and in the premises. The Plaintiff and the Defendant hold the legal estate in the property in trust for themselves as tenants-in-common in shares proportionate to their contributions to the purchase price of $210,000.00.

17. Further, the Contract for Sale and Memorandum of Transfer were unjust in the circumstances relating to them at the time they were made, in not providing for a half ownership of the property for the Plaintiff.

18. Alternatively, the Plaintiff seeks and Order under S7 of the Contracts Review Act 1980 varying in part the Contract for Sale and Memorandum of Transfer so as to provide the Plaintiff to hold a half interest in the property as tenant in common.

The Defence did not specifically address those paragraphs although it did assert that the appellant repaid a $10,000.00 loan from the respondent's mother and repaid the whole of the loan from the National Australia Bank.

29 In relation to the circumstances in which the property came to be registered in the shares which I have identified, the appellant gave the following evidence in his main affidavit in the case:

I recall the execution of the Contract for the purchase of the property took place at the offices of my solicitor, Mr. Stephen Beaufils, who said to the Plaintiff in my presence, shortly before her execution of the Contract, words to the effect:

"You are purchasing this property with Greg as a tenant in common in 1/7 share to you and 6/7 share to Greg. This reflects your respective contributions to the purchase price of the property."

It was Mr. Stephen Beaufils who acted on behalf of the Plaintiff and myself in relation to the purchase of the property.

30 The respondent answered this paragraph as follows, in her affidavit in reply:

At the time that the Defendant and I went to see Mr Beaufils of Messrs Stephen Beaufils and Co. I had never used a solicitor and it was the Defendant who arranged to use the services of that firm for the conveyancing of the Sylvania Road property.

2. When I agreed with the Defendant to be part Owner with him and to proceed to purchase the Sylvania Road property I always assumed I was going to be a half owner of that property. I was aware that in the process of purchasing of that property I was going to sign as a co-mortgagor with the Defendant of the property in securing a loan from the National Australia Bank of $120,000 and I was aware that I was committing myself both jointly and severally to repay that amount to the National Australia Bank and that if anything happened to Greg I would be solely liable for that amount to the National Australia Bank. I regarded my giving of that mortgage and undertaking that commitment as a significant contribution to the purchase of the home. At no point of time did the Defendant or Mr Beaufils ever say to me or advise me to the effect that I was not going to be a half owner of the home but only a one seventh Owner of such home. If I had been told that I was only going to be a one seventh owner I would not have proceeded to buy the home and give the mortgage because I would not have regarded that as fair.

The respondent went on to assert that she did not become aware that she was not a half owner until she consulted the solicitor acting for her in these proceedings.

31 In cross-examination on this matter, the appellant gave the following answers:

Q. At no point of time did you ever say to the plaintiff, you are only going to be a 1/7th owner of this property?

A. It was discussed in the solicitor's office who calculated our contributions and he was the one that actually came up with that 1/7th ownership, based on her contribution.

Q. Is this your evidence: you left it to Mr Beaufils to work out what her contribution was which ought to be reflected in the legal ownership of the property?

A. Yes.

Q. And you were prepared to accept what Mr Beaufils advised on that point?

A. We both accepted what his advice was.

Q. I am asking you. You accepted and were prepared to accept Mr Beaufils' estimation of how the plaintiff's contribution ought to be reflected in the legal ownership of the property, correct?

A. Yes.

Q. I want to suggest to you also that at no point of time did Mr Beaufils ever say anything to the plaintiff in your , presence along the lines that she was only going to be a 1/7th owner? .

A. Joanne was in Mr Beaufils' office when he calculated from her contribution she was entitled to 1/7th of the property.

32 The respondent was cross-examined on this matter, and gave the following answers:

Q. You had a conversation with Mr Beaufields (sic)?

A. No.

Q. What, you went in there and remained mute?

A. I don't recall any specific conversation I had with him.

Q. Whether or not you had a conversation, do you recall anything that was said?

A. He probably said something while we were there.

Q. Did Mr Beaufields (sic) remain mute during the whole time you were there?

A. No.

Q. Did Mr Beaufields (sic)explain the contract to you?

A. No.

Q. You can remember he didn't explain it to you?

A. As I said, he didn't speak to me directly from what I can recall.

Q. Although he didn't speak to you directly, did he explain the contract to you while you were in the room?

A. No.

33 She was also cross-examined about the National Bank mortgage, and gave the following answers:

Q. How much were the mortgage payments to the National Bank on the $120,000 loan?

A. I have no idea.

Q. Any idea how much he paid?

A. No idea.

Q. Is the reason you have got no idea is because you felt it was no concern of yours?

A. The reason I have no idea is because he would never engage me in any kind of conversation in relation to it because it was a business as far as he was concerned.

Q. You didn't challenge that?

A. It was a bank account. I mean, it is a proviso, you can't--

Q. The reality is it was his loan?

A. No, it was our loan.

Q. You see, the reason it was your joint loan rather than just his loan was because your name was going to be on the title to the house?

A. No, it was our loan.

Q. It was your loan but you never concerned yourself with what the repayments were, is that the case?

A. No.

Q. It was your loan and you never actually made any repayments, is that the case:?

A. Not directly, no.

34 The parties provided the Master with written outlines of submissions. The respondent's submissions included the following:

4. Alternatively, to the claim under the Property (Relationships) Act the Plaintiff claims the following relief in connection with 255 Sylvania Road, namely:-

(a) she invokes the equitable principle and presumption that where two or more persons contribute to the purchase of property which is conveyed to them in their joint names, the equitable presumption is that they hold the legal estate in trust for themselves as tenants-in-common in shares proportionate to their contributions unless the contributions are equal - Calverley v Green ( [1984] HCA 81; 1984) 155 CLR 242;

(b) the equitable principle that equity will not permit one party to assert or maintain the benefit of property to the extent that it would be unconscionable for him to do so where the sub-stratum 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 the other party should so enjoy it -Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 at 619-620 and Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 at 147-148;

(c) It was the true belief and intention of the Plaintiff and the Defendant that the Sylvania Road property be held by them in shares proportionate to their contributions and an appropriate declaration ought to be made based on the Plaintiff's right to rectification to reflect that common belief and intention;

(d) The Plaintiff ought to be granted relief under section 7 of the Contracts Review Act so as to give the Plaintiff a half interest in the Sylvania Road property in that otherwise the original contract for the purchase of the Sylvania Road property and the present registered ownership of that property gives rise to an unjust consequence or result. The contract was unjust in the circumstances in which it was made because of the way in which it unfairly operates to deprive the Plaintiff of an ownership interest in the Sylvania Road property commensurate with her contribution and also because of the way in which it was made in that it was never made clear to the Plaintiff that she was not obtaining a half interest in the property - see West v. AGC (Advances) Ltd. [1986] 5 NSWLR 610.

(e) A constructive trust ought to be declared that the Defendant holds his interest in trust for the Plaintiff to the extent necessary to grant each of them a 50 per cent interest in the property on the basis that it would be unconscionable and inequitable in the circumstances for the Defendant to retain the benefit of the Plaintiff's original financial contribution by becoming joint mortgagor/borrower free from any obligation to recompense her for that contribution - Morris v. Morris (1982) 1 NSWLR 61.

35 The appellant's outline of submissions included the following:

22. There are no matters within the scope of Muschinki v Dodds to impose a trust as sought by the Plaintiff. This is because it is in no way unconscionable for the Defendant to assert his legal interest against the Plaintiff.

...

24. Although the Plaintiff was a joint borrower from the National Australia Bank of $120,000.00, this would bring her contribution up $90,000.00, or 45% of the purchase price.

25. However, to enable her to retain this would be unconscionable as:-

she made not one payment to the repayment of the mortgage;

the Bank was prepared to advance this sum to the Defendant without the Plaintiff's support;

it was always intended that the Defendant payout the mortgage;

this is consistent with the evidence of the defendant (defendant paragraph 15) as to the conversations in the solicitor's office.

26. The Plaintiff's contribution was only $30,000.00. This is l/7th of the total acquisition costs.

27 It is the present legal ownership.

28. There is no basis to disturb this ownership.

29. There should be no "adjustment " for any "occupation fee" because the Plaintiff has never been excluded from the property: Biviano v Natoli (198) 43 NSWLR 695 at 700-702. Indeed she never wanted to live in it.

THE MASTER'S DECISION

36 In his judgment, the Master made the following comment in relation to the respondent's evidence concerning what happened at the solicitor's office:

16 The evidence of the plaintiff under cross-examination concerning the visit to the solicitors was not very impressive. I am reluctant to accept the evidence of the plaintiff that nothing said to her, or that she heard nothing, during that visit to the solicitor concerning the interest which she would acquire in the house property. Indeed, I would consider it passing strange if the plaintiff had evinced no interest upon that visit to the solicitor concerning the share which she was to receive in the house property in return for her advance of $30,000 and the committing of herself as a joint mortgagor of the property.

37 The Master refused relief under the Contracts Review Act, for the following reasons:

27 In my conclusion the transfer does not constitute a contract between the Plaintiff and the Defendant of such a nature as to attract the provisions of the Contracts Review Act. The contract which the Plaintiff and the Defendant as purchaser entered into for the purchase of the Gymea property was not in evidence before the Court. It is not possible, therefore, for the Court to express any view concerning the terms of that contract. However, even if that document were to be in evidence, I consider that it would be necessary for the other party or parties to that document, being the vendor, to be joined as parties to any claim for relief under the Contracts Review Act.

28 Not only am I not satisfied upon the evidence presently before the Court that the Plaintiff has established any entitlement under the Contracts Review Act, but I consider that the proceedings as presently constituted are not such as would attract the provisions of that Act, or would entitle the Court, even if otherwise it were so minded, to grant to the Plaintiff any relief under the Act. It follows, therefore, that that claim for relief must be dismissed.

38 The Master determined the respondent's claim for a trust at general law as follows:

29 There still remains to be considered, however, the claim of the Plaintiff under the general law, grounded upon the principles relating to constructive trusts which have been enunciated by the High Court of Australia in such decisions as Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 at 619-620, Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 at 147-148 (see, also, Calverley v Green [1984] HCA 81; (1984) 155 CLR 242).

30 The facts of the present case fall squarely within the foregoing principles. It is all very well for the Defendant to say that the Plaintiff contributed only $30,000 to a purchase price of $200,000, and that in consequence her entitlement to an interest in the Gymea property is reflected in her being registered as to a one seventh share therein. Such an approach would, in my view, totally disregard the fact that the Plaintiff pledged her credit and accepted, with the Defendant, joint and several liability as mortgagor of the subject property. The circumstance that, in the event, the Defendant met the entirety of the mortgage payments does not alter the fact that had the Defendant been unwilling, or unable, to meet those payments, the National Australia Bank as mortgagee could, and probably would, have looked to the Plaintiff to meet the entirety of the indebtedness under the mortgage.

31 In my conclusion the Plaintiff is entitled to an interest in the Gymea property which reflects not only her actual contribution of $30,000, but also her joint liability under the mortgage of $120,000. That is, in strict arithmetical terms, the Plaintiff could be regarded as having an interest to the extent of no less than $90,000, and possibly as great as $150,000, in a purchase of $200,000. That would give to the Plaintiff an interest of between 45 per cent and 75 per cent in the house property.

32 I do not disregard the fact the Defendant has paid all outgoings in respect to the house property. That is only appropriate, since the house property was acquired to be, and for the past ten years has in fact been, the residence of the Defendant. There was never any intention that it should be the conjoint residence of the parties. Those payments do not affect the entitlement of the Plaintiff under a constructive trust.

39 The Master concluded that the respondent was entitled to a one-half interest in the property. It was apparently common ground that any such interest should be given effect to by a payment by the appellant to the respondent in return for an assignment to the appellant of the respondent's interest. The Master quantified such payment as one-half of $435,000.00, that is, $217,500.00.

GROUNDS OF APPEAL

40 The Notice of Appeal on which the appellant ultimately relied was a lengthy document, but the essence of the grounds of appeal can be stated shortly. I should say first that it was common ground between the parties that the primary basis on which the respondent claimed a trust at general law, and the substance of the basis on which the respondent succeeded before the Master, was correctly categorised as that of a resulting trust rather than a constructive trust. It was also common ground that the respondent's entitlement to relief on the basis of a resulting trust depended on a finding that the respondent contributed to the cost of acquisition of the property the sum of $30,000.00 and one-half of the money advanced by the National Australia Bank pursuant to its mortgage. The respondent conceded that this meant that she could not be entitled to any greater share in the property than 45%.

41 Leaving aside those matters, the essential grounds of the appeal were as follows:

(1) The Master should have found that the presumption of resulting trust was rebutted.

(2) The Master should have found that the $120,000.00 advanced by the National Australia Bank was in substance advanced to the appellant, because it was agreed or at least assumed that the mortgage was the appellant's sole responsibility.

(3) At worst for the appellant, the respondent's interest in the subject property through a resulting trust was no more than 43%, and there should be allowed in favour of the appellant against that 43% share, an amount representing the respondent's share of the mortgage instalments which were wholly paid by the appellant.

(4) The Master erred in the costs order.

42 The respondent put on a Notice of Contention, to the effect that the Master's decision should be affirmed on the ground that the relief granted ought also have been given on the basis of the Contracts Review Act.

43 It is convenient to deal in turn with the following issues: whether the presumption of resulting trust was rebutted, or alternatively whether the mortgage advance should be treated as a contribution to the purchase price by the appellant alone; whether there was a contract in relation to which relief should be given under the Contracts Review Act; what if any accounting should take place, by reason of the appellant's payment of the whole of the mortgage instalments; and costs.

REBUTTAL OF RESULTING TRUST

44 As submitted by Mr. Connor for the appellant, there was evidence which could support a finding that the parties had a common intention that the beneficial interest in the properties should be in accordance with their shares as stated on the title:

(1) the conversation at the solicitor's office, not effectively denied by the respondent and in substance accepted by the Master;

(2) the fact of the creation of the legal interests following that conversation;

(3) the respondent's lack of knowledge concerning mortgage repayments and the fact that the appellant paid all the mortgage instalments, which could together support an inference that there was an agreement or common intention that the mortgage be the appellant's sole responsibility; and

(4) the use of the property as the appellant's primary residence and business premises, which could support the inference that this was as intended.

45 It was submitted by Mr. Warren for the respondent that the appellant's acknowledgement in cross-examination that, if he "fell under a bus", the respondent would be liable for mortgage payments, was evidence against there being a common intention that the mortgage be the appellant's sole responsibility. However, in my view this carries little weight, as it could mean no more than that the mortgagee could claim against the respondent as a party to the mortgage, and does not touch upon the further question whether, in those circumstances, the respondent could get full indemnity from the appellant's estate or from the property.

46 There was more substance in Mr. Warren's submission that, even accepting that the conversation at the solicitor's office occurred in terms stated by the appellant, all it amounted to was erroneous advice as to the legal effect of the contributions actually made by the parties, and acceptance of that advice confirmed a common intention that the beneficial interest should in fact be in accordance with the actual contributions of the parties.

47 The matter is made difficult for this Court by the circumstance that there was no pleading raising the issue of whether there was a common intention rebutting a resulting trust, no written submission concerning that matter, and no record of any oral submissions (Counsel for the appellant before the Master died subsequent to that hearing, and Counsel for the respondent before the Master did not appear before this Court). In those circumstances, unsurprisingly, the Master did not directly address this issue. Mr. Warren submitted it was now too late for the appellant to claim that a resulting trust was rebutted; but in the event that this Court rejected that submission, he concurred with the appellant's Counsel that this Court should do its best to resolve the issue rather than send the matter back for a new trial.

48 In my opinion, the appellant should not be shut out from that submission. Although rebuttal of resulting trust was not pleaded, this could be partly because the respondent's Statement of Claim expressed her claim to be on the basis of "constructive trust"; and although the Statement of Claim went on to plead facts appropriate to give rise to a resulting trust, this way of pleading could have misled and confused the appellant and the Court. Furthermore, in my opinion, where a resulting trust is relied on, the question of whether it is rebutted by a common intention is intimately bound up with the claim being made. However, since the appellant never explicitly sought a finding that a resulting trust was rebutted by common intention, in my opinion this Court should not find error in the Master's failure to make such a finding unless, on the basis of the material before this Court, this Court takes the view that a failure to make such a finding, if it had been explicitly sought below, would have been an appealable error.

49 In approaching this question, I will assume that the Master accepted the substance of the appellant's evidence as to the conversation in the solicitor's office, and that it is reasonable for this Court to do likewise. However, that evidence is far from conclusive of a common intention rebutting a resulting trust. It could mean merely that the respondent simply adopted the solicitor's proposal as appropriate for the legal title, but as not affecting beneficial interests; or that her predominant intention was to have beneficial interests accord with contributions and that she went along with erroneous legal advice as to the consequences of this. Even if, as a result of the advice, the respondent intended that the beneficial interests be as stated, I do not think the appellant could rely on this if it was induced by erroneous legal advice given by a solicitor primarily engaged by him.

50 If there had been an agreement that the mortgage liability should be the appellant's alone, and that the mortgage advance should be considered as in substance made to the appellant, then the legal advice would not have been erroneous; but in circumstances where the appellant did not lead evidence of any conversation supporting such an agreement, I do not think this Court should infer that there was such an agreement merely on the basis of the respondent's lack of knowledge concerning mortgage repayments and the appellant having in fact made all such payments.

51 In all these circumstances, I do not think the evidence in support of a common intention rebutting a resulting trust was such that it would have been an appealable error had the Master found that the presumption was not rebutted.

52 The other question that arises in relation to a resulting trust is whether, taking the respondent's contribution to be $30,000.00 plus $60,000.00 (one-half the mortgage advance), her share should be calculated with reference to the purchase price of $200,000.00 (giving her a 45% share) or with reference to the purchase price plus expenses, totalling about $209,000.00 (giving her a share of 43%).

53 Mr. Warren submitted that the former position should be adopted as supported by Bryson J in Little v. Little (1988) 15 NSWLR 43 at 45A-46D, in preference to the view of McLelland J in Currie v. Hamilton [1984] 1 NSWLR 687 at 691. In my opinion, there is force in Bryson J's reliance on the authorities which refer to the share being proportional to the proportion of the price paid by each party, and in his reliance on the direct relationship between the price paid for the property and the property itself. However, on balance, consistently with McLelland J's view, I prefer the view that equity, dealing with presumed intentions and preferring substance to form, would have regard to the totality of the money which purchasers have in truth outlaid to obtain the property. That means that normally the proportions should be determined with reference to the proportions of payments for both the purchase price and the incidental expenses that had to be incurred in order to obtain the property. In this case, that translates to a share of 43%.

CONTRACTS REVIEW ACT

54 In view of my decision on resulting trust, there is no unfairness to the respondent which could justify application of the Contracts Review Act. However, if I had found a common intention displacing a resulting trust, I believe I would have found that there was a contract to which the Contracts Review Act could apply. This would not be identical with either the contract between the vendor and purchaser or the transfer, but rather would be a contract inferred as existing between the appellant and the respondent whereby they agreed that, in consideration of their respective contributions, they would hold the land legally and beneficially in the proportions six-sevenths and one-seventh. The basis of such a finding would have been their participation in the transaction giving rise to the transfer, coupled with the common intention that, on this assumption, I would have found in order to rebut the resulting trust.

55 In so far as that contract did not, on this assumption, take account of the contribution of the respondent through her liability under the mortgage, I believe I would have granted some relief under the Contracts Review Act.

EQUITABLE ACCOUNTING

56 On the basis that a resulting trust is not rebutted, the respondent has a 43% interest in the property based on a contribution of one-half of the mortgage advance, this carrying a correlative liability to contribute one-half of the mortgage repayments. In those circumstances, the appellant contends that there should be an allowance in his favour, because he has paid the whole of the mortgage instalments, including the 50% thereof which, on this approach, the respondent should have contributed.

57 Mr. Warren for the respondent accepted that there was a principle to this effect, but he contended that such a claim should not be allowed because equitable accounting was not sought below, or indeed on appeal until a Supplementary Notice of Appeal was filed in August 2001; and because this would require investigation of questions not investigated below, such as the extent to which the appellant benefited from his occupation of the property.

58 If, contrary to that submission, the appellant was allowed to seek such an accounting, Mr. Warren contended that it should be limited to repayments of mortgage principal, and that the value of the appellant's occupation of the property should be set off, certainly as from November 1997 when the respondent was excluded, but also for the earlier period because there was in substance an agreement to the effect that the respondent should have virtually exclusive use of the property. Mr. Warren referred to In Re Pavlou [1993] 1 WLR 1046, and Biviano v. Natoli (1998) 43 NSWLR 695 at 700-1.

59 Mr Connor for the appellant accepted that the appellant should account for the value of his occupation since November 1997 when the relationship ceased; but submitted that this did not apply in relation to any earlier period, because there was no ouster of the respondent prior to that period; and he submitted that there should be a contribution from the respondent for one-half the payments of both principal (amounting to $120,000.00) and interest (amounting to $75,000.00) under the mortgage.

60 In my opinion, the Court should permit the appellant to raise this question. Although it was not pleaded or raised below, plainly the appellant relied below on his actual payment of the mortgage instalments, and the De Facto Relationships Act claim required regard to be had to all the considerations of payments and occupation which would in turn be relevant to an equitable accounting. However, as before, I think this Court should approach the matter on the basis that it will interfere only if a refusal to give an equitable accounting would have been an appealable error.

61 There seems little question about the broad principle applicable in this situation: a co-owner of property who has exercised the right to occupy the property is not liable to be charged with an occupation rent unless he or she (1) has excluded the other co-owner from occupation or (2) is claiming an allowance for expenditure in respect of the property: see Luke v. Luke (1936) 36 SR(NSW) 310. If an allowance for expenditure is claimed, then, by reason of the maxim requiring the seeker of equity to do equity, the claimant can be charged with an occupation rent up to a limit of the amount allowed for the claim for expenditure: see Teasdale v. Sanderson [1864] EngR 316; (1864) 33 Beav 534; 55 ER 476; Brickwood v. Young [1905] HCA 12; (1905) 2 CLR 387.

62 However, there are some questions about the details. In particular, in relation to this case, there is the question whether a claim for contribution to payments of mortgage principal and/or interest should be treated as a claim for expenditure; and a question as to how the principle applies when the occupation by one co-owner is not exclusive because the other co-owner uses the property at weekends.

63 There is a quite detailed discussion of the principles by Meagher JA in Forgeard v. Shanahan (1994) 35 NSWLR 206 at 221-6. Mahoney JA (at 219) agreed in the principles stated by Meagher JA. However, some of the statements of principle in that case were obiter only, and in some respects I am not in complete agreement with them. Because some of these principles are relevant to this case, I should indicate the areas where I have some disagreement.

64 At 222, Meagher JA said that, apart from statute, there did not seem to be any action by which one co-owner could recover a share of rent received by the other co-owner. He referred to the case of Strelly v. Winson [1684] EngR 37; (1685) 1 Vern 297; 25 ER 480, which decided otherwise, but pointed out that this case had not subsequently been relied on or noticed. He noted that the same result was provided by a 1705 statute; but that this statute had been repealed in New South Wales by the Imperial Acts Application Act 1969, so that the remedy provided by the 1705 statute was not available in New South Wales.

65 For my part, with respect, I would be prepared to act on the authority of Strelly v. Winson, and would treat its lack of subsequent celebration as explicable by reason of the passing of the statute just twenty years later. For my part, I cannot accept that a court exercising equitable principles would not treat a co-owner of property who had collected rents paid for the use of that property as having done so as an agent for all co-owners and liable to account to other co-owners. I would respectfully agree with the statement made in the 1670s in Lord Nottingham's "Manual of Chancery Practice" and "Prolegomena of Chancery and Equity" (D.E.C. Yale ed., Cambridge University Press, 1965) at p.214 that in such a case "equity construes all receipts to the common profit, and that without great strain".

66 At 224, Meagher JA said that a co-owner who has effected repairs and maintenance to a co-owned property, as distinct from making improvements, cannot have any allowance, and he referred inter alia to Leigh v. Dickerson (1884) 15 QBD 60. That case did decide, as noted in the headnote, that a co-owner of a house who expends money on ordinary repairs has no right of action against another co-owner. However, the judgment of Cotton LJ at 67 makes it clear that, if the value of a property is increased by repairs, a co-owner who paid for the repairs is entitled, in partition proceedings, for an allowance in respect of that increase in value (that is, treating repairs as no different from improvements). Brett LJ at 65 noted that no claim for partition was made in that case, and while Lindley J did not refer to partition, he said he was of the same opinion as the other judges.

67 In my opinion, as a matter of principle and authority, there is no difference in the application of these principles as between an increase in value to property caused by improvements and such an increase caused by ordinary repairs.

68 At 224, Meagher JA also said that the principles can only be applied in partition actions, administration actions, where there is a fund in court, and where the court orders sale under s.66G of the Conveyancing Act. I note that in Luke at 318, Long Innes CJ in Eq. expressed the view that the maxim requiring the seeker of equity to do equity is not limited to suits for partition; and in my opinion, the principles may be applicable in a case where one party claims an interest in property by reason of a resulting trust or constructive trust, and the court is asked to quantify that interest.

69 The point most directly relevant to the present case was discussed by Meagher JA at 225, where he referred to the question whether one co-owner's claim that the other be charged with an occupation fee should be permitted where the latter is claiming an allowance, not for an increase in value to the property from improvements, but for the making of mortgage payments. Meagher JA set out the following passage from the first instance judgment of Rolfe J in that case:

Whilst in the present case the mortgage payment made by the defendant did not amount to improvements in the sense of physical improvements to the land enhancing its value, they are, in my opinion, to be equated to improvements because the effect of them is to increase the value of the equity of the parties in the property and hence the amount of the proceeds distributable to them. In the present case the defendant has asserted her equity to the mortgage payments and, therefore, in my opinion, must account for rents and profits.

Meagher JA then continued:

I have some difficulty with the last sentence I have quoted. There were no "rents and profits", and the plaintiff was seeking an allowance in respect of an occupation fee, which is rather a different thing. This difficulty apart, I am far from convinced by his Honour's reasoning. In the case where one party is claiming an allowance for improvements and the other is seeking to charge an occupation fee, both claims can arise in partition actions (and related actions), and only in such actions. Each claim is a potential incident of a partition action. In this context, "no rent if no improvements" makes good sense. The discharging of joint debts stands in a different position. An adjustment occasioned by such a discharge is not necessarily made in a partition action: it could be made in an action for contribution, which could be brought quite independently of a partition action (or its equivalent). In the present case, for example, the defendant could have brought an action for contribution before or after the s.66G case. In these circumstances to equate a claim for contribution with a claim for an allowance for improvements does not seem to me to carry much conviction. However, the defendant has not cross-appealed and his Honour's decision on this point must therefore stand.

70 One point made by Meagher JA is that the claim for contribution in respect of the discharge of a joint debt, such as a mortgage, can be made independently of a partition action or its equivalent. Indeed, it would appear that such a claim could even be made by an action at law, without the need to seek equity at all: see Meagher Gummow & Lehane, Equity, 2nd Ed., pars.1001-1003. If a co-owner makes a claim for contribution to mortgage payments in reliance purely on a legal right, with no reliance on equitable principles, then it would seem that the co-owner is not seeking equity and is not required to do equity. However, if the co-owner does rely on equitable principles in making such a claim, in my opinion the co-owner is seeking equity and is required to do equity, no less than if allowance for improvements was being sought.

71 Thus I agree with Rolfe J that, once an occupier is required to do equity because he or she is seeking equity, there is no reason to distinguish between improvements or repairs effected to the property on the one hand, and the reduction of a charge on the property through mortgage repayments on the other. I think this accords with what Long Innes CJ in Eq. said in Luke at 317, in commenting on the case of McMahon v. Burchell [1846] EngR 760; 5 HA 322:

In passing I may state that, by reason of the claim which was apparently being made by the plaintiff William McMahon for an allowance in respect of repairs and outgoings, an occupation rent might possibly have been properly charged in that case on the ground that a plaintiff seeking equity must do equity: Teasdale v. Sanderson [1864] EngR 390; 33 Beav. 524.

72 In the present case, no legal claim has been made. In essence, the appellant is relying on a defensive equity, unpleaded, to the respondent's resulting trust case. I note that, even if the appellant had sought contribution at law in a cross-claim in these proceedings, he would have been limited to contribution towards payments made by him in the six years prior to commencement of these proceedings, that is, since 17th June 1993: see Limitation Act 1969 s.74. (This limit does not apply to his defensive equity, because the respondent's resulting trust case depended on transactions in 1990 (and cf. Limitation Act s.47(1)(c)), thus enabling the appellant to rely defensively on intermediate transactions.) The appellant would still have had to account for his occupation of the premises since November 1997. I note also that if the appellant is not given an accounting in these proceedings, in fresh proceedings commenced now he would be restricted by the Limitation Act to an accounting from the end of 1995, and might in any event be defeated by an Anshun estoppel.

73 Applying these principles to the present case, I think it would have been an appealable error for the Master not to give the appellant the benefit of an equitable accounting in respect of his payment of mortgage instalments. There are respects in which the evidence relating to the application of the principles is less full and precise than desirable, but both parties have requested the Court to do its best. I propose to take a fairly broad brush approach, in the hope of thereby doing substantial justice to the parties.

74 In making the mortgage repayments, both principal and interest, the appellant was discharging a debt for which the respondent, on the assumption that she had the benefit of 50% of the mortgage advance, was liable to bear 50%. That prima facie gives rise to a claim for $97,500.00.

75 In my opinion, the principles supported in Luke mean that the appellant, now claiming equity in relation to those payments, should do equity by making some appropriate adjustment in respect of his very much greater use of the property, and indeed exclusive use thereof since November 1997. This is not a case where the greater use of the property by the appellant was in any way foisted upon him, so as to make questionable the justice of requiring him to make some recompense for that greater use. I think it is clear that it was wholly in accordance with the appellant's wishes and intentions that he have by far the greater use and benefit of the property. I think some allowance should be made for the use which the respondent got from the property, which I would assess to be 10% as against the appellant's 90%, up to November 1997. From November 1997, plainly the respondent had 100% use of the property. The value of occupancy of the property from September 1990 up to the Master's decision in the case has been calculated at about $150,000.00, of which about $100,000.00 relates to the period up to November 1997 and about $50,000.00 relates to the period since November 1997, and I will adopt those figures unless the parties seek a more precise calculation. The appellant is not to be charged with the whole of that $150,000.00, because of what I have held to be the 10% usage which the respondent had up to November 1997, so that the value of the appellant's usage for this period can be put at $90,000.00 and the value of the respondent's usage for this period can be put at $10,000.00. Accordingly, I put the figure for which the appellant should account to the owners of the property for this period at $80,000.00; and in addition he should account to the owners of the property for the whole $50,000.00 applicable to the period since November 1997, making a total of $130,000.00. The respondent's 43% of this amount comes to $55,900.00. Accordingly, the adjustment to be made in favour of the appellant against the respondent is $97,500.00 less $55,900.00, giving $41,600.00. I think it is fair to regard the appellant as becoming entitled to the whole of that adjustment half way through payment of the mortgage instalments, that is in about 1994, and thus to allow six years' interest on that amount at 5%, totalling $12,480.00.

76 The calculation then is as follows. The respondent's 43% of the value of the property of $435,000.00 comes to $187,150.00. There should be an adjustment in favour of the appellant of $41,600.00 plus interest of $12,480.00, that is $54,080.00, giving a net interest of the respondent in the property of $133,070.00 calculated at the date of the Master's orders.

77 Substantially the same result can also be reached by another route. Had the appellant explicitly claimed an account in his pleadings, the respondent could plausibly have contended that he was prevented from claiming interest payments by agreement or estoppel. It is reasonably possible that she could have led evidence of an agreement that he pay non-capital outgoings in return for his much greater use of the property, or at least of reliance by her to her detriment on a representation or assumption that he would do so. Then, the appellant's claim would be limited to contribution to the capital repayments, namely $120,000.00, of which the respondent's share would be $60,000.00. The respondent could still have claimed in respect of the appellant's exclusive occupation since November 1997, an amount of about $50,000.00, of which her share would be $21,500.00, giving a nett figure in favour of the appellant of $38,500.00. With an allowance of some interest on that figure, we again arrive at something approximating the $54,080.00 reached by the other route.

78 It is common ground that the respondent's interest is to be satisfied by a payment made by the appellant to the respondent. I understand that a payment on account has already been made. The amount still to be paid would be calculated by taking the sum of $133,070.00, adding interest at Practice Note rates, then making the adjustments appropriate by reason of the subsequent payment on account.

ORDERS

79 I propose the following orders:

1. Appeal allowed.

2. Set aside orders 2 and 3, and declaration 1, below.

3. Order that the appellant pay to the respondent within 28 days the sum of $133,070.00 (less any amount paid since 23rd March 2001) plus interest at Supreme Court rates from 23rd June 2001 on any outstanding balance, and that in return the respondent transfer to the appellant her interest in the property 255 Sylvania Road, Gymea.

80 In relation to the costs before the Master, the variation of the respondent's interest in the property from 50% to 43% is marginal. The other adjustment that has been achieved by the appeal through the equitable accounting was not claimed before the Master. On the whole, I do not think a ground is shown for interfering with the Master's decision on costs.

81 It is not possible to finally determine the costs of the appeal, because we have been told there were without prejudice offers which may be relied on in relation to those costs. However, I would express the tentative view that the appeal succeeded mainly on a ground added in August 2001, and would tentatively propose that there be no costs awarded to either side up to that time, but that the respondent should pay the appellant's costs incurred since that time. Accordingly, I propose the following additional order:

4. Order that the respondent pay the appellant's costs of the appeal incurred since 9th August 2001 and that she have a suitors' fund certificate if otherwise entitled, unless within 14 days either party provides to the Court written submissions on costs, in which event the Court will determine costs on the basis of those submissions and any submissions from the other party received within a further 7 days.

82 I note finally that this case illustrates the problems that can arise if parties, in proceedings where relief is sought pursuant to statutes which enable decisions to be made on broad considerations of fairness, give insufficient attention to grounds of relief claimed as alternatives in the event that the principal claim fails. In this case, the alternative ground on which the respondent succeeded was confusingly pleaded by the respondent, not dealt with at all in the appellant's pleading, and inadequately argued before the Master. The result was that this Court had to try to reach a reasonable solution on the basis of principles which were adequately raised for the first time in this Court.

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LAST UPDATED: 06/02/2002