HIBBERSON v GEORGE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL Hope, MAHONEY and MCHuGH JJA 22 November 1988, 13 February 1989 [1989] NSWCA 100 trusts — De Facto Relationships Act TRUSTS — constructive trust — de facto relationship — house — in name of respondent who paid deposit and repayments — appellant paid for furniture and furnishings, spent money on renovation of house and relieved respondent of expenses for which he was responsible. DE FACTO RELATIONSHIPS ACT — commencement of Act — appellant leaving respondent just before Act came into operation — claim by respondent she was considering going back — principles applicable. HELD constructive trust in favour of the appellant for 40% of beneficial interest, subject to adjustments. ORDERS (1) Appeal allowed. (2) Declaration and orders made by Cohen J set aside. (3) Declare that the respondent holds the land comprised in Certificate of Title Volume 7201 Folio 136 known as 168 Young Street Annandale on trust for himself beneficially as to 60 per cent and for the appellant beneficially as to 40 per cent. (4) Declare that the respondent is entitled to deduct from the proceeds of any sale of the property the sum of $10,000 and any further sum paid by the respondent in respect of the purchase of the property or in connection with the ownership of the property since 21 May 1985. Such further sums should carry interest at 10% since the date of payment by the respondent. The sum of $10,000 should carry interest at 10% from 21 May 1985. (5) Declare that the appellant is entitled to have deducted from the proceeds of the sale and paid to her the sum of $6,250 together with interest at 10% from 21 May 1985. (6) Order the respondent to do all acts and sign all such documents necessary to effect the sale of the property within a reasonable period and, after payment out of all legal costs and commission in connection with the sale and moneys payable to the appellant and respondent out of the proceeds of the sale, to distribute the nett proceeds of sale between the parties as to be 60 per cent to the respondent and 40 per cent to the appellant. (7) Order the appellant to deliver a registrable withdrawal of caveat No W238684 at the settlement of the sale of the property pursuant to par 5 of this order. (8) Leave to apply to Equity Division for any further orders arising out of the operation of these orders. (9) Respondent to pay three-quarters of the costs of the appellant's costs of the appeal and of the summons and cross-claim. Hope JA I agree with McHugh JA. Mahoney JA This appeal poses a number of issues of importance which have frequently arisen in disputes between parties living together outside marriage. It involves an examination of the, on one view, considerable changes which have been made by Baumgartner v Baumgartner 164 CLR 137 to the operation of the law of trusts in this area; and it involves an examination, for the first time by this 2 UNREPORTED JUDGMENTS Court, of the nature of the relationship, the "de facto relationship", to which the De Facto Relationships Act 1984 is directed. Maree Hibberson and Lance Allen George lived together outside marriage, in a house owned by Mr George. They commenced to live together in March 1976; they separated in 1985. Mr George wished to sell the house. Miss Hibberson placed a caveat on the title. Mr George brought the present proceedings to determine whether she had any such interest in the house as would base such a caveat. Miss Hibberson claimed alternatively: that Mr George bought the house on trust for herself and himself; that she was entitled to an equitable charge on the property for moneys spent in respect of it; and that she was entitled to an order under the De Facto Relationships Act. Cohen J held: that the land was not held on trust for her; that she was entitled to a charge in the amount of $3350 plus interest at 10 per cent per annum from the 21 May 1985; and that the de facto relationship having ceased from 1 July 1985 the Act did not apply to it. Miss Hibberson has appealed to this Court in respect of each of these matters. 1. The Facts: The facts, and his Honour's finding in respect of them, are set out in his Honour's judgment. Mr Hamilton QC, for Miss Hibberson, did not, I think, seriously contest his Honour's findings in relation to the essential facts. If and insofar as such facts are in contest, my conclusion is that, subject to such matters as may require particular examination, his Honour's findings were correct. His Honour set out his general conclusions: "The plaintiff and the defendant commenced living as husband and wife in a de facto relationship in about March 1976. The defendant bore two children of whom the plaintiff is the father, namely Lance born in April 1977 and Pauline born in June 1980. The parties first lived together in the defendant's bed-sitting room. They were both working, he as a stevedore and the defendant as an employee of Kodak. She then earned about $200 per week and the plaintiff earned somewhat more than that. When the defendant fell pregnant in about July 1976 she suggested buying a house to the plaintiff. She said that they could 'put our money towards it'. She said that the plaintiff agreed to this. The plaintiff denies that he agreed in those terms and in his affidavit he said that he would buy the house and that it would ultimately go to their children. He already had two children by a previous marriage. In cross-examination however he accepted that the house was to be a home for him and the defendant and the expected child. He also agreed that they both went to look for a house and that the defendant expressed a preference for the property at Young Street Annandale, upon which he agreed to buy it. The contract was entered into in about November 1976 and they moved into it in January 1977. The purchase price was $24,500 of which $14,500 was obtained by a loan secured by mortgage and the balance of $10,000 and costs was paid by the plaintiff. At the time of the commencement of the association between the parties the plaintiff had savings of about $15,500 and the defendant had about $2,000. There is nothing to suggest that much of that money had been spent before the house was bought. At the time of the arranging for the mortgage and the purchase an officer at the bank asked whether the house was to be in the two names but the plaintiff said that it was only to be in his name. The defendant continued in her employment until shortly before Lance was born. She said that she paid the hospital bills and the medical expenses in relation to that birth. The plaintiff was not very definite as to this and he thought that he URJ HIBBERSON v GEORGE (Mahoney JA) 3 may have shared some of these expenses. I think that it is more likely that the defendant is correct. She was unemployed for about one year after her son's birth when she went back to work, at first for three days a week and later for five days. She again stopped work shortly before the birth of Pauline and remained unemployed for the next six months. She returned to employment in what would have been about January 1981. She said that a friend looked after Pauline and Lance attended a pre-school. She said that after a further six months the plaintiff's elderly mother came to live in the house and she stopped work in order to look after her for the next eighteen months. The plaintiff said that the period of time of looking after his mother was only about eight months. There is no way of my telling which of these versions is correct and it is probably not of any great consequence. It seems to be agreed however that the plaintiff's mother was sick and needed caring for, a task which the defendant undertook. At the end of this period of caring the defendant went back to work, at first as an employee of the Stanmore cinema and then at a TAB agency. She has continued in work since. There was no claim that the parties had pooled their earnings or that in any way they had established a common or jointly held fund. They apparently kept their own finances independently of each other. There is a dispute as to the extent to which the defendant contributed to household expenses, to work which was carried out on the house and to the buying of furniture and furnishings. The defendant said that her $2000 savings went into the purchase of furniture. The plaintiff denied this, although he accepted that the defendant bought a colour television and a refrigerator, the cost of which was not stated. In addition to the expenditure on furniture the defendant said that she spent various amounts of money on the renovation of the house. This included payments for work done to the ceilings, to electrical work, to the purchase of tiles, paint and curtains and a contribution to new carpets. She said that certain of the ceilings were re-plastered and from her savings she paid a total of $1200. In addition she said that in 1983 there was some further renovation and that she paid another $700 for the replacement of ceilings in two rooms, she paid $500 for electrical work and $270 for tiles. In addition she said that she paid for paint at a cost of about $400 and that she and the plaintiff both painted the inside of the house. In addition to the work on the house itself she said that she purchased some new curtains at a cost of about $80 and that she contributed $200 towards the cost of carpets, the total price of which was $1500. Apart from her savings she said that she had about $1600 consisting of money she won in Lotto and a tax repayment. In her affidavit the defendant spoke of other work which was done to the house but she did not say that she had paid for it and I have accordingly refrained from listing those items. The plaintiff denied that the defendant had paid out as much as she claimed. He said that she had not been responsible for payments for items in the house but that this money had come from his account. He agreed that she may have paid for some of the money to tradesman or to stores but he said that he had given her the money for this purpose. He accepted that she had spent money on paint, curtains and carpeting and on some other expenditure. He said that he did the shopping for food and that he paid for it himself. He credited the defendant with very little contribution to the house although when he was asked how she had spent her money he said that she had made payments for the children, including school fees at a Catholic school, school clothing, shoes and pocket money. He 4 UNREPORTED JUDGMENTS somewhat grudgingly accepted that she had paid for school expenses and for a baby sitter whilst she was at work and there was no one available to look after the children. I am satisfied from the evidence, having seen both of the parties, that the defendant is more readily to be believed as to the expenditure which she had incurred. She was in regular employment except for periods after the birth of the children and there is no reason to suggest that she spent very much money on herself. I am satisfied that her evidence as to her expenditure on the house itself amounted to a little over $3000 and that in addition she purchased items for use in the house, including a television set, a video and a refrigerator. This would have amounted to a further $2000. She seems to have been mainly responsible for the expenditure on the children once they went to school. The plaintiff had a much better income than she did, particularly in more recent times. She was able to relieve him of much of the expenditure he would otherwise have had, particularly in respect of the children. It is difficult to assess the amounts she spent in this regard but she seems to have little money left on separation and I consider that it can reasonably be assumed that she spent most of her earnings on the house, its contents or the family. The parties separated in 1985. For reasons which will become apparent it is necessary to look at the circumstances of that separation in some detail. The defendant said in her affidavit that there had been problems in the relationship for some time, although she did not give any particulars of those problems. She said that she left the home with the two children on 21 May 1985 and went to stay with her brother as she wanted time to work things out and to think about her relationship away from the plaintiff. She said that in June the plaintiff failed to return the children to her after an access period and that he later made an application to the Local Court at Newtown for custody of the children. From other evidence it seems that this application was made in July. The defendant said that at about the time when the plaintiff failed to return the children to her in June she was considering returning to him but that the removal of the children caused her great stress and she and the plaintiff did not communicate very well for some time after that. In cross-examination she denied that when she left in May it was her intention to leave permanently and she said that despite the fact that they could not speak very easily they did talk a few times about getting back together. She said that it was the plaintiff who asked her to return but in fact that did not come about. Again, In cross-examination, she was asked about her intention to return to live with the plaintiff and she said that she was caused stress when he took the children from her although she wanted to go back many times but they got nowhere with their discussions. In August the plaintiff obtained a flat for herself and the children and in September the custody dispute was settled when the plaintiff consented to an order that the defendant have custody of the children and that he pay an amount of $30 per week for each of them. Thereafter the parties had little to do with each other except for a casual encounter towards the end of the year when the plaintiff took the defendant and the children for a meal. In February 1986 there was some conversation between the plaintiff and the defendant when the plaintiff suggested that they should try to get back together again. He said that he still loved the defendant and would always do so. The defendant said that she would come back and she said that she considered the matter and was prepared to return to the plaintiff. A day or so later the plaintiff telephoned and said that he had changed his mind and that they were not getting URJ HIBBERSON v GEORGE (Mahoney JA) 5 back together again. Certainly at some stage of the discussions about the return of the defendant to the plaintiff she made it clear that she wanted their relationship to be on stronger terms, that is she wanted the plaintiff to marry her but he declined to do so. She said that she wanted to be married when she went back to the plaintiff. The plaintiff did not dispute most of this evidence but he put the date of their separation as March rather than May. He was cross-examined about an affidavit he had sworn in support of his application for custody and his answers rather suggested he had then said that they had separated at a date that would have been probably about early June. Unfortunately the actual contents of the affidavit were not conceded by him, nor was it put into evidence. I consider that the probabilities are that the parties did separate towards the end of May although this may not be of great significance." His Honour made further findings in relation to particular portions of the claim of Miss Hibberson. It is not necessary to refer to these at this stage. In relation to the witnesses, the learned judge indicated a preference for Miss Hibberson in relation to expenditures. He did not express any general conclusion in this regard. Otherwise, he made findings separately in relation to separate portions of the evidence. 2. Trust: Miss Hibberson claimed that, although the land is owned by Mr George, he holds it as a trustee for himself and herself, either in equal shares or in shares calculated in accordance with the principles established in Baumgartner v Baumgartner 164 CLR 137. The learned judge found against Miss Hibberson in this regard. However, he did so before the decision was given by the High Court in Baumgartner. It is therefore necessary to examine the basis of this claim to determine whether, on the facts as they have been found, the land is held, in whole or in part, for Miss Hibberson. The land was transferred into his name alone. When he was arranging to buy it, he was asked whether the land was to be bought in both names: he said that it was not. Miss Hibberson knew or "must have known" of this and did not suggest otherwise. The learned judge said: "T would infer from that that the defendant must then have known that he wanted the house to be his alone. My impression of the plaintiff is that he is not the sort of person who would pay the whole of the deposit and commit himself under a mortgage for the payment of the balance with any intention that the defendant should have any equal rights of ownership. On the evidence there is no suggestion of any expressed intention to buy the house for them both and in my view the facts do not infer any actual intention of the parties at the time of the purchase." The price of the house $24,500 was met as to $10,000 by money supplied by Mr George and as to the balance $14,500 from an amount borrowed by him on a mortgage of it. The mortgage instalments were paid by Mr George with his own money. He paid the rates, taxes and similar expenses in relation to it. What, then, is the basis on which Miss Hibberson claims that the house is held on trust for her? As I understand the submissions made by Mr Hamilton QC for her, it is submitted that the circumstances are such that it would be "unconscionable" if the land were not so held and that therefore there is to be imposed on Mr George a constructive trust to the relevant effect. It is therefore necessary to examine the circumstances on the basis of which it is said that unconscionability arises. It is the effect of Baumgartner on which, in this regard, reliance is placed. 6 UNREPORTED JUDGMENTS Relevantly, Baumgartner did three things. First, it affirmed that to prove an actual, as distinct from a constructive trust, it is necessary to find that there was a subjective intention to create such a trust: see, eg, at 145-6. See also Muschinski v Dodds 160 CLR 583 at 611. Second, it reaffirmed the role of the constructive trust as being, inter alia, the prevented person insisting upon his legal rights to property in circumstances in which it would be, to another, unconscionable for him to do so: at 146-8, 152, 156. And, third, it indicated what is now to be taken, in the de facto context, as constituting unconscionable conduct: at 148-51, 153-5, 155, 156-7. It is in this last regard that, by Baumgartner and possibly by Muschinski, the law has been given an operation different from what previously it seemed to have. Mr Hamilton, I think, saw this as at the heart of his case in this regard. He has relied upon what was said by the High Court and has submitted that Baumgartner and what was said in it requires that a constructive trust be imposed. This requires careful consideration. In considering Miss Hibberson's case in this regard, it is necessary to examine three things: the structure of the financial relationship between the parties; the effect, in this regard, of what was decided in Baumgartner; and how the principles to be taken from Baumgartner are to be applied in this case. What is in issue in this regard is the ownership of the house and, accordingly, it is relevant to go primarily to what the parties said and did in relation to it. That will, to an appropriate extent, be affected by their relationship generally: but it is their relationship to the house itself which is, in the end, to be determined. As I have said, the house was purchased by Mr George in his own name alone. His intention at the time he purchased it was that it should be his alone. And what he did then and subsequently was known or must have been known by Miss Hibberson as indicating that she was to have no interest in it. Subsequently, he paid the general outgoings in respect of the house. Each paid individual amounts in relation to work which was done physically in respect of it. The learned judge quantified Miss Hibberson's expenditure on the house at $3,070. Other work was, it appears, done to the house which was paid for by Mr George. What he has spent was not quantified by the learned judge. In addition, Miss Hibberson spent money on furnishings and furniture amounting to some $280. In addition, she purchased particular items, eg, a television set, a video machine, and a refrigerator, costing about $2000. These last items were either taken by her on her departure from the house or, presumably, could have been taken by her. She was entitled to appropriate credit in respect of such items. But it was presumably in respect of the amounts of $3070 and $280, totalling $3350, that his Honour gave a charge upon the property. His Honour considered the relationship of the parties not merely to the house but generally. They did not pool their earnings or establish a common or jointly held fund. The learned judge said: "There was no claim that the parties had pooled their earnings or that in any way they had established a common or jointly held fund. They apparently kept their own finances independently of each other. There is a dispute as to the extent to which the defendant contributed to household expenses, to work which was carried out on the house and to the buying of furniture and furnishings..." In fact, they each spent money, apparently without any formal arrangement either by choice or because of the requirements of their lifestyle, on the living expenses of themselves and their children. In relation to the difference between URJ HIBBERSON v GEORGE (Mahoney JA) 7 their evidence in this regard, the learned judge said that Miss Hibberson was "more readily to be believed as to the expenditure which she had incurred". His Honour then said: "She was in regular employment except for periods after the birth of the children and there is no reason to suggest that she spent very much money on herself. I am satisfied that her evidence as to her expenditure on the house itself amounted to a little over $3000 and that in addition she purchased items for the use in the house, including a television set, a video and a refrigerator. This would have amounted to a further $2000. She seems to have been mainly responsible for the expenditure on the children once they went to school. The plaintiff had a much better income than she did, particularly in more recent times. She was able to relieve him of much of the expenditure he would otherwise have had, particularly in respect of the children. It is difficult to assess the amounts she spent in this regard but she seems to have little money left on separation and I consider that it can reasonably be assumed that she spent most of her earnings on the house its contents or the family." It was not suggested that, had Miss Hibberson not done what she did, Mr George would not have been able to pay, or would not have paid, the outgoings in respect of the house, by way of mortgage instalments, rates and taxes and the like, which he did pay. He may, to the extent to which he otherwise would have been required to pay for the children and household expenses, have had less money otherwise in his account. But no case was made out that he could not or would not have acquired the house as he did or acted in relation to it in some different way. I come now to the effect of Baumgartner. The principles established by the High Court, or which are to be drawn from what was decided, are to be taken from Baumgartner and Muschinski. However, Baumgartner referred to and was based on Muschinski and it applied and developed the principles relevant to a de facto situation. I shall therefore take what is to be drawn from these cases by reference to what principally was said in Baumgartner. The importance of the decision in Baumgartner lies, in my respectful opinion, in the fact that, by what it held to constitute unconscionable conduct in that case, it gave guidance to the Australian Courts in deciding what, in situations affecting de facto relationships, is to be seen as unconscionable. In Allen v Snyder [1977] 2 NSWLR 6835 at 704 et seq, reference was made to the generality of terms such as "unconscionable" and "in good faith and in conscience" and to the difficulty of deriving from such phrases a decision in an instant case. In Baumgartner, in the majority judgment, Mason CJ, Wilson and Deane JJ, said at 147-8: "Tn the ultimate analysis his Honour rejected the argument that the court would impose a constructive trust by reference to what was 'fair' in the ordinary sense of that term ([1977] 2 NSWLR at 707). But in the course of reasoning to that result Mahoney JA indicated some situations in which it might be appropriate to impose a constructive trust. Thus, he said ({1977] 2 NSWLR at 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 12 other equitable obligation should be imposed.' 8 UNREPORTED JUDGMENTS His Honour's reference to 'contrary to justice and good conscience' is to be understood as 'unconscionable'. The significance of this statement so understood is that it asserts that the foundation for the imposition of a constructive trust in situations of the kind mentioned is that a refusal to recognize the existence of the equitable interest amounts to unconscionable conduct and that the trust is imposed as a remedy to circumvent that unconscionable conduct. In Muschinski v Dodds (1985) 160 CLR 583 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 finalisation 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. 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 ((1985) 160 CLR at 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 374-375 and per Jessel MR, Lyon v Tweddell (1881) 17 Ch D 529 at 531.' His Honour pointed out 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' (1985) 160 CLR at 614: see also at 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 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 (1985) 160 CLR at 616." In the majority judgment, their Honours saw the basis on which Baumgartner and Muschinski were decided as being that there had been a "pooling of resources": at 141, 148, 149; see also per Toohey J at 154 and per Gaudron J at 155. In such a case the court saw it appropriate to apply "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": at 148. URJ HIBBERSON v GEORGE (Mahoney JA) 9 In Muschinski, the court decided that each party should receive, from the house, the amount of their respective contributions and that the residue should be held for them in equal shares. In Baumgartner, the approach was, at least in terms, somewhat different. The approach involved three stages. First, their Honours saw the purpose of the joint relationship in that case as being or including "to provide accommodation for themselves and their children": at 149. They saw their "earnings" as having been "pooled for the purposes of that relationship": at 149. And, the relationship having failed, they saw it as inequitable that the house, "financed in part through the pooled funds": at 149; should be held by Mr Baumgartner alone. Second, they favoured the treatment of the house as being held for the parties equally, at least as a starting point: at 149. See also per Toohey J at 154; and per Gaudron J at 155. They did so because the 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...": at 149. And, third, their Honours saw it necessary to adjust this prima facie approach because there would be "injustice" "if account were not taken of the disparity between the worth of their individual contributions either financially or in kind": at 149-50. In taking this third step, their Honours took into account the parties' respective contributions to the pool of resources, the payments made by Mr Baumgartner on the acquisition of the house, and the amounts paid by each of the parties on the acquisition of furniture and furnishings. And there is, in the judgment of the majority ("their individual contributions either financially or in kind": at 150) and, perhaps, also in the judgment of Gaudron J, the suggestion that, in calculating the parties' contributions to the pool of their resources, account is to be taken, not merely of the amounts actually contributed, in money or in kind, but also to the amount which Mrs Baumgartner "would have contributed but for her absence from work during the later stages of her pregnancy and after the birth of the child Dallas": at 157. I come now to consider the application to the present case of what is to be taken from Baumgartner. It is, I think, important that what is involved be stated and the basis of it be clearly understood. This is a case in which the house was purchased by Mr George with his own money and he intended that it should be his alone. Miss Hibberson knew or must have known this at all times. What is in question is whether, notwithstanding this, a court may require may him to hold his property, in whole or in part, for her, and the basis on which it may do so. The test that was adopted was "inequitability". That test is, necessarily, vague: what is inequitable to one is, to another, far from being so. And the discretion granted to a court by such a test may be wide indeed, depending upon what, as authoritatively laid down, is meant by it. In Allen v Snyder [1977] 2 NSWLR 685 at 707; Baumgartner at 147; it was suggested that the power to take a person's property contrary to what both parties knew to be intended is a power not to be exercised lightly: it is not a power to be exercised to achieve "fairness" or to avoid the ordinary abrasions of life. It was suggested that what is involved must go beyond this, so that "unconscionability" or "good conscience" are involved. In some cases, the seriousness of what is involved will not be in doubt. But in other cases, of which I think this is one, reliance is placed to establish the necessary breach of conscience upon a particular kind of conduct or relationship and a categorisation of it. 10 UNREPORTED JUDGMENTS It is, in the end, for the judges of the High Court to indicate what was the meaning of the terms which were used in this regard. But, having regard to the thrust of the submissions in this case, there is one thing which, in my respectful opinion, may be said. What was involved in Baumgartner was the application of established doctrine of law and equity: their Honours referred to "inequitable" and "unjust enrichment". The court was not, by what it did, entering upon a rearrangement of the results, in property or otherwise, seen as flowing from the stereotype of the domestic relationship, de facto or otherwise. It is tempting to see, in a stereotyped domestic relationship, a greater opportunity to acquire property in the partner who works than in the partner who does not; to see this as inequitable; and to correct the perceived inequity by requiring the one to hold property for both. I do not see that as having been involved in Baumgartner. In Mallet v Mallet 156 CLR 605 reference was made to the changes which, in recent times, have taken place in social values in this area. Gibbs CJ: at 607-8; said: "The Family Law Act was passed at a time when great changes had occurred, and were continuing to occur, in the attitudes of many members of society to marriage and divorce, but when it was (as it is now) difficult, if not impossible, to say that any one set of values or ideas is commonly accepted, or approved by a majority of the members of society. Conflicting opinions continue to be strongly held as to the nature of marriage, the economic consequences of divorce and the effect, if any, that should be given to the fault or misconduct of a party when a court is making the financial adjustments that divorce entails. It is not surprising that given this diversity of opinions the Parliament did not require the power conferred by s79 to be exercised in accordance with fixed rules. On the contrary, it has conferred on the court a very wide discretion to make such order as it thinks fit when it is satisfied that it is just and equitable that an order should be made... although there are some broad principles to which the court is required to give effect, and some circumstances which it is required to take into account..." Considerations of this kind may, I think, be relevant in the final determination of what degree of abrasion is involved in conduct which is "inequitable". It may be thought necessary, in order so to categorise conduct, that there be amongst all right thinking persons in the community, male or female, that what a party seeks to do is wicked to the extent that it should be so categorised. It may be that something less may be accepted. It is issues of this kind which underlie the submissions which, albeit with admirable brevity, Mr Hamilton QC has advanced in this case. The argument has inferred that from Baumgartner, several bases may be taken for a finding that what Mr George did was inequitable. Thus, the argument suggested, this may be drawn from the existence between the parties of "their joint relationship": 164 CLR at 149. The suggestion was that the house was acquired to be used for the joint relationship which the parties set up, viz, their de facto domestic relationship; that obligations of various kinds derive from the existence of such a relationship; and that such a relationship involves the obligation that, at least in circumstances such as the present, a house acquired for the purpose of it be owned beneficially by the parties to it. The law sometimes sees the relationship between parties as requiring that the property of one party be held for both of them. The relationship of partnership or joint venture is an example of this. The suggestion was that, in Muschinski and Baumgartner, the court saw domestic relationship as involving a "joint URJ HIBBERSON v GEORGE (Mahoney JA) 11 relationship" giving rise to such obligations as these and that the references to "joint endeavour": at 148; and "joint relationship": at 149; in Baumgartner supports this view. And the submission involved, I think, that the relationship of marriage now requires something of this kind and that the de facto relationship, having some analogies with marriage, makes it inequitable that property relationships be otherwise. Until the Family Law Act 1975, this would, I think, have been unarguable. The progress of the law during the past century and more has been towards treating each party to a marriage as separate and equal and the property of each as being his or her own. Thus, by the end of the 19th century the law was (special statutes apart) that one party did not have any right in the property of the other party to the marriage. In the United Kingdom, the effect of the Matrimonial Causes Act 1857, the Married Women's Property Act 1870 and the Married Women's Property Act 1882 was to abolish, for the future, the old unity of persons in marriage and, in substance, to treat the property of each as his or her own. In equity, the principle that the property of each was his or her own was given effect progressively from much earlier times. If property was intended to be the property of the woman equity would treat it as such, notwithstanding the position at law: it was seen as inequitable for the husband to treat it otherwise: see Bennet v Davis (1725) 2 P Williams 316; Graham v Londonderry (1746) 3 Atk 393, 394; Tullett v Armstrong (1838) 1 Beav 1; (1840) 4 My and Cr 377. It was accepted that the relationship of marriage involved that one party (ordinarily the male) had an obligation to provide support for the other: Millichamp v Millichamp (1931) 146 LT 96. That obligation was given effect in the law by, eg, the recognition of the right in the wife to pledge the husband's credit for necessaries: Miss Gray Limited v Earl Cathcart (1922) 38 TLR 562; cf Gomme v Franklin (1859) 1 F and F 465; see generally Halsbury's Laws of England, 2nd ed, Vol 16, at 693 et seq. And, on the modification of the marriage by a decree of separation or its dissolution by divorce, the public policy of the law: Hyman v Hyman [1929] AC 601; was that the one should provide support for the other. But there was nothing in the law, either in the general law or the statutory law, which suggested that the nature of the relationship of marriage involved that, eg, the property of the wife should be that of the husband or that there was inequity if it was not. The obligations of marriage were seen as, in substance, limited to the provision for maintenance, in the sense referred to in Hyman v Hyman: see Gardiner v Gardiner 25 SR 274. The law is, if I may with due diffidence so suggest, accurately summarised to this effect in Mackenzie's Law of Divorce (NSW), 6th ed, at 176-194, especially at 181-187. It might, perhaps, have been thought that the Family Law Act would have confirmed the treatment of the parties to marriage as, in respect of their property, separate and equal: see, eg, $72. But, in relation to property, some have seen the law as going in a different direction. The Family Law Act gave a general discretion to a judge of the Family Court of Australia to alter the interests of parties in the property owned by them: s79. That discretion did not, in its terms, provide that the parties were to be treated otherwise than separate and equal or that one should be liable to the other otherwise than in respect of support. But it did require the judge to "take into account" the "financial contribution made directly or indirectly" by the other party "to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them"; and it required account to be taken of the contribution, other than a 12 UNREPORTED JUDGMENTS 39 cee financial contribution, to that effect or "to the welfare of the family" "including any contribution made in the capacity of homemaker or parent": s79(4)(a), s79(4)(b) and s79(4)(c). The provisions of the Family Law act have, on one view, seen as an incident of the relationship of marriage, and therefore as the basis of what is to be done on the dissolution of it, that the property of one party may effectively be treated as the property of one or both. The nature and extent of this discretion has been considered by the High Court of Australia: see Mallet v Mallet 156 CLR 605 and Norbis v Norbis 161 CLR 513; and by the Family Court of Australia in a large number of cases: see, eg, the cases referred to in Mallet. It is not necessary for the purposes of this proceeding to attempt to formulate with precision the basis on which essentially this power under the Family Law Act is exercised. In my opinion, even in the case of formal marriage, the existence of the domestic relationship does not create the kind of entitlement to which I have referred. It may be accepted that in the exercise of the statutory discretion, the purpose of the court is no longer merely to provide appropriate support for the less wealthy party to the marriage. But the discretion does not, I think, assume that marriage and the dissolution of it creates an entitlement in one party to half of the assets of the other. Reference was made to this in Mallet v Mallet. Gibbs CJ: at 608; saw two principles involved: that on dissolution there should be a final severing of the relationship; and that "the parties to a marriage are equal in status". The Chief Justice saw the circumstances to be taken into account fall into two main classes: those concerned with the past contributions of the parties to their assets, including "any contribution made in the capacity of homemaker or parent"; and the present and future resources and needs of the parties. His Honour did not, I think, see the relationship of marriage as itself creating such an obligation as is here in question. Mason J: at 623 et seq; saw the exposition by the Family Court decisions of "the proposition that equality is a convenient starting point proceeds upon a misconception of s79": at 625. His Honour saw the court as required, if there was to be equality of beneficial ownership, to "conclude on the materials before it that the indirect contribution of one party as homemaker or parent is equal to the financial contributions made to the acquisition of the matrimonial home on the footing that that party's efforts as homemaker and parent have enabled the other to earn an income by means of which the home was acquired and financed during the marriage. To sustain this conclusion the materials before the court will need to show an equality of contribution - that the efforts of the wife in her role were the equal of the husband in his". His Honour: at 625; said: "No doubt a conclusion in favour of equality of contribution will be more readily reached where the property in issue is the matrimonial home or superannuation benefits or pension entitlements and the marriage is of long standing. It will be otherwise when the property in issue consists of assets acquired by one party whose ability and energy has enabled the establishment or conduct of an extensive business enterprise to which the other party has made no financial contribution and where that other party's role does not extend beyond that of homemaker and parent." Wilson J considered this issue: at 635 et seq. His Honour, in considering the significance of the contribution of a wife as homemaker and parent: at 636; said: "The Act requires that the contribution of a wife as a homemaker and parent be seen as an indirect contribution to the acquisition, conservation or improvement of the property of the parties regardless of where the legal URJ HIBBERSON v GEORGE (Mahoney JA) 13 ownership resides. The contribution must be assessed, not in any merely token way, but in terms of its true worth to the building up of the assets. However, equality will be the measure, other things being equal, only if the quality of the respective contributions of husband and wife, each judged by reference to their own sphere, are equal. The quality of the contribution made by a wife as homemaker or parent may vary enormously, from the inadequate to the adequate to the exceptionally good. She may be an admirable housewife in every way or she may fulfil little more than the minimum requirements. Similarly, the contribution of the breadwinner may vary enormously and deserves to be evaluated in comparison with that of the other party. It follows that it cannot be said of every case where the parties reside together that equal value must be attributed to the contribution of each. That will be appropriate only to the extent that the respective contributions of the parties are each made to an equivalent degree. What the Act requires is that in considering an order that is just and equitable the court shall 'take into account' any contribution made by a party in the capacity of homemaker or parent. It is a wide discretion which requires the court to assess the value of that contribution in terms of what is just and equitable in all the circumstances of a particular case. There can be no fixed rule of general application." Deane J: at 639-641; stated the matter in terms which are, I think, broadly to the same effect. His Honour said: at 640: "What that reference to 'equality' involves is the enunciation not of a legal principle or presumption but of a general counsel of experience on the subject of what constitutes, in some types of case, an appropriate starting point for the determination of the particular order which should be made in the particular circumstances of the individual case. That general counsel of experience, derived from decisions in previous cases involving questions of fact, is that, in cases involving a long marriage where the parties have adopted the attitude that their marriage constituted a practical union of both lives and property, the notion of equality is likely to offer an acceptable and useful starting point at least as regards those assets, such as the matrimonial home, ancillary possessions and savings and investments for retirement, which are fairly to be seen as truly representing the fruits of a totality of efforts of wage earning, homemaking and mutual support." Dawson J: at 645 et seq; expressed similar views. If this be, in general, what is to be taken from the relationship of marriage, no more is to be taken from the fact that parties live in a domestic relationship outside marriage. I do not mean by this to suggest an equation between the two relationships: that is not a matter which arises for consideration in this case. But, in the case of marriage, the fact that the parties have lived in the relationship, and each have made contributions because of it as homemaker or otherwise, means that in principle the actual contribution of each is to be taken into account. As was emphasised by, eg, Wilson J, the result is not to be derived from a stereotype of the relationship or a stereotype of what by homemaking or otherwise one should or could have contributed to it. That leads to a consideration of the contribution made by each party to the acquisition of assets. It is clear that, in some circumstances, the fact that one party to the relationship has contributed to the acquisition of an asset may make it inequitable that he or she have no interest in it. The possibility of such an interest was referred to in Allen v Snyder and confirmed in Muschinski and Baumgartner. This, I think, was 14 UNREPORTED JUDGMENTS at least part of the basis on which Baumgartner was decided. As was there said, there was a pooling of the resources of the parties: Mrs Baumgartner did not intend her contributions to be a gift to Mr Baumgartner; and therefore, insofar as the common pool was used or seen to be used to acquire the assets, it was held inequitable that she have no interest in them. But the concept of contribution will require exegesis in subsequent cases. At least two things warrant reference in the present context. In Baumgartner, account was taken, as I have indicated, of the earnings of the parties as contributed to the pool of resources and, separately, to what was contributed to the purchase of the house. The court did not, at least in terms, indicate that a value was, for the purposes of assessing contribution, to be placed upon what one or other party had done as homemaker. As I have indicated, Gaudron J referred to this: at 155. The other members of the court referred to contribution financially or "in kind' but did not indicate whether an evaluation of the benefits or detriments of the homemaking activities of either party was to be made for this purpose. In the present case, as Cohen J held, there was no common pooling of resources. His Honour indicated that there was "no claim by the plaintiff' in this regard. This is of importance because Mr George was not required to deal in evidence with such a case and his Honour was not required to consider it. And, in my opinion, the evidence does not disclose that the parties addressed as an issue between them a contribution of either party based on 'homemaking'. In Baumgartner the court did not consider in terms the significance of the fact that a particular asset, or the contributions towards acquisition of it, came from resources which the particular party had apart from the marriage or de facto relationship. There is, in Mallet, a reference to the acquisition of assets during the course of the marriage relationship. It does not, I think, follow that assets which were owned by a party before marriage or the acquisition of which did not, in any relevant sense, result from the marriage but only during it, should be treated in this way. Assets earned before or not resulting from the marriage relationship may of course be relevant in considering the resources and needs of one of the parties. But, for example, I do not think that the fact that a woman had a house or the lease of a house prior to the relationship brings that house or the lease of it into consideration, at least in the present way, on the dissolution of a de facto relationship. In the present case, the moneys provided on purchase of the house came from assets owned by Mr George apart from the relationship. As I have indicated, he was personally and alone liable for the mortgage repayments. And no issue appears to have been presented that, apart from Miss Hibberson's contribution, he would not have been able to pay the mortgage instalments or the other outgoings in respect of the house. And there was, of course, no pooling of resources. I therefore see no basis in this regard for Miss Hibberson's claim. Contributions were made for work done on the house. It is not in question but that his Honour was entitled to charge on the property the amount of $3350. It was submitted by Mr Hamilton QC that his Honour erred in not adding a further sum of approximately $3000 to the charge. It was submitted that Miss Hibberson claimed to have expended particular amounts, that his Honour accepted her evidence and that by error he omitted to give a charge for them. URJ HIBBERSON v GEORGE (Mahoney JA) 15 It was submitted for Mr George that his Honour could have added these amounts but, because he did not add them, it should be inferred that he did not accept her evidence in this regard. Mr Jackson QC, for Mr George, pointed out that there had been a dispute between the parties in this regard and, the argument suggested, unless it appears clearly that his Honour was wrong in what he did, the court would not be justified in altering his judgment. The matter is not clear. On balance, I am not satisfied that the learned judge was wrong or that - and this is the basis of Mr Hamilton's submission - he omitted this amount by error. I do not think his decision should be altered in this regard. One further matter requires mention in this regard. As his Honour said, there is no issue between the parties that Miss Hibberson made any contribution to a common fund used for the payment of moneys under the mortgage. And, as his Honour said, the parties did not pool their resources but "kept their own finances independently of each other". However, as his Honour detailed, there were circumstances in which individually they made payments which the other might have made. His Honour made, in particular, reference to the support of the children. I do not think that by doing this there was created a "common pool" or a "pooling of resources" in any sense relevant in this branch of the law. The parties may, in the relevant sense, pool their resources notwithstanding that they do not pay them into, eg, a common bank account. But this case is not one in which such an issue was, I think, raised and fought. And I would not see what, on the learned judge's findings, Miss Hibberson did as constituting a pooling of resources in the sense referred to, eg, in Baumgartner. In my opinion, therefore, Mr George did not hold the house upon trust for Miss Hibberson in any relevant respect. 3. Charge for Work Done: As I have indicated, I see no reason to disturb the learned judge's findings or orders in this regard. 4. The De Facto Relationships Act 1975: The Act came into effect on 1 July 1985. The learned judge held that it did not apply because, from May 1985, there did not exist the de facto relationship upon the basis of which the Act operated and it had no retrospective effect. It was submitted to the learned judge, and the submission repeated here, that although the parties had lived apart from each other in separate homes from May 1985 onward, the relevant relationship had not ceased. The de facto relationship defined by s3 of the Act is a relationship "of living or having lived together as husband and wife on a bona fide domestic basis". The submission was, in effect, that a relationship existed between them; that they were apart only until they decided whether the relationship should end or continue; and that the decision to end it did not occur until after 1 July 1985. The learned judge decided against Miss Hibberson in this regard. In my opinion, his conclusion was correct. What is involved is "living... together as husband and wife on a bona fide domestic basis". It is correct, as Mr Hamilton QC has submitted, that the relevant relationship may continue notwithstanding that the parties are apart, eg, on holidays. And he referred to the law which was developed in the context of marriage upon the distinct question, viz, whether physical separation constituted desertion. There is, of course, more to the relevant relationship than living in the same house. But there is, I think, a significant distinction between the relationship of marriage and the instant relationship. The relationship of marriage, being based in law, continues notwithstanding that all of the things for which it was created 16 UNREPORTED JUDGMENTS have ceased. Parties will live in the relationship of marriage notwithstanding that they are separated, without children, and without the exchange of the incidents which the relationship normally involves. The essence of the present relationship lies, not in law, but in a de facto situation. I do not mean by this that cohabitation is essential to its continuance: holidays and the like show this. But where one party determines not to "live together" with the other and in that sense keeps apart, the relationship ceases, even though it be merely, as it was suggested in the present case, to enable the one party or the other to decide whether it should continue. The learned judge, correctly, treated the matter as a question of fact. His Honour said: "In the present case the defendant gave no details of what caused her to leave in May. There is no evidence of anything which she said to the plaintiff other than the making of a request for some blankets to be given to her and there was no suggestion made to him that she was going away temporarily in order to think about their relationship. Her evidence was that she had no intention to terminate the relationship permanently but wanted time to work things out. Her attitude changed when the plaintiff took the children from her and this caused her stress and prevented proper communication between her and the plaintiff. Nevertheless she accepts that he asked her to return and she would not do so. Assuming that when she first left she wanted to think about the relationship and whether she would go back to the plaintiff, it is difficult to point exactly to the time when her attitude changed. Certainly by the time the proceedings had started in court in July and when she obtained the lease of a flat in August she had no apparent intention of returning. If she did have that intention then she did not communicate it to the plaintiff and, on the contrary, she refused his request to her to return. The whole of the evidence has brought me to the conclusion that whatever uncertainty the defendant may have had when she left in May, if the matter had been looked at objectively in June, when the children were removed against her wishes, it would be impossible not to have said that the actions of both parties indicated their relationship had come to an end. The defendant was really only prepared to return if the plaintiff agreed to marry her, although it is hard from the evidence to know just when that condition was communicated to the plaintiff. As far as the evidence goes, her reservations as to where she stood in relation to the plaintiff were never conveyed to him and to use a phrase from the quotation in Pavey v Pavey, the defendant acted as if the relationship had been severed. The discussion in February 1986 did not really affect the situation as it existed in June 1985. Undoubtedly there was talk and in fact agreement as to resuming the relationship but it seems inevitable to me that before then the relationship of living together as husband and wife had ceased. In the absence of any overt act or indication by the defendant to the plaintiff that she was staying away only temporarily and intended to return it seems that I must find that the relationship had ceased by 1 July." I see no error of law in his Honour's approach to the question. On this basis, Iam not satisfied that he was wrong. Insofar as it may be relevant, I would come to the same conclusion. Miss Hibberson was asked to return: she refused. She conceded that "her attitude changed" when the plaintiff took the children and, as his Honour said, what happened when they were taken in June supports the factual inference that the relationship had ended. My conclusion would be that whatever had been the relationship before, it was clear that Mr George would not marry Miss Hibberson URJ HIBBERSON v GEORGE (McHugh JA) 17 and she would not return unless he agreed so to do; there was by the court proceedings an irrevocable breach in June 1985 and by that time at least the relationship had ceased. ORDER For these reasons, in my opinion, the appeal should be dismissed with costs. McHugh JA The facts and issues in this case are set out in the judgment of Mahoney JA which I have had the advantage of reading. Claim under the De Facto Relationships Act 1984 I agree with his Honour that the de facto relationship of the parties had terminated before the commencement of the De Facto Relationships Act 1984 on 1 July 1985. Accordingly, the appellant's claim under that statute fails. Expenditure by the appellant on the home However, I am unable to agree with the judgment of his Honour on the correctness of Cohen J's findings as to the amount of money expended by the appellant in renovating the house. Cohen J said that, having seen both parties, the appellant was "more readily to be believed as to the expenditure which she had incurred". His Honour also said that he was satisfied that "her evidence as to her expenditure on the house itself amounted to a little over $3,000". The appellant gave evidence that she spent money on replacing and replastering ceilings, on electrical work, on tiles and on painting. These items totalled $3,070. However, she also gave evidence that she spent $2,900 on the cement rendering of various rooms and carpentry work. Nevertheless, when reciting the appellant's evidence his Honour failed to mention her evidence concerning this work. It is plain, therefore, that when his Honour said that he was satisfied that the appellant's evidence "as to her expenditure on the house itself amounted to a little over $3,000", he made a mistake. Her evidence demonstrated that she had spent $5,970 in renovations. The respondent submitted that his Honour must have rejected the appellant's evidence in relation to the items totalling $2,900 because the respondent denied that the appellant had paid these moneys. The respondent claimed that the appellant had spent $600 only on renovating and redecorating the lounge room, some money on "some paint and some curtains" and $200 towards the cost of carpet. It is clear that his Honour rejected the respondent's denials in relation to the evidence of expenditure on the items totalling $3,070. No reason appears why his Honour would have accepted his evidence or rejected the appellant's evidence on the items totalling $2,900. Indeed the statements of his Honour indicate that he accepted the appellant's evidence about moneys spent on improvements. I conclude that, somehow or other, his Honour has made a mistake as to the effect of the appellant's evidence and that he intended to give her the benefit of all her claimed expenditure in respect of renovations. In the result his Honour gave the appellant a charge on the land for only $3,350 which consisted of $3,070 expended on improvements and $280 for curtains and carpets. The sum of $3,350 should be increased to $6,250. Constructive trust Tf the legal title to a home is vested in a party to a de facto relationship and the parties have pooled their earnings for the purposes of their joint relationship, one of the purposes of which is to secure the home as accommodation for themselves, it will be unconscionable for the legal owner to assert that the home is his property beneficially to the exclusion of any interest of his partner if the purchase of the home has been financed partly or wholly through their pooled earnings: 18 UNREPORTED JUDGMENTS Baumgartner v Baumgartner (1987) 164 CLR 137 at 149. In such a case Equity will intervene and will impose a constructive trust as a remedy to circumvent the unconscionable conduct of the legal owner: Baumgartner at 147. However, as Mr Jackson QC for the respondent conceded, pooling of resources is not "an absolute requirement in every case". Indeed it is not necessary that there should be a physical pooling. It is probably enough that by mutual arrangement the parties have each spent moneys for the purpose of their joint relationship knowing that part of it was to be spent in financing the purchase of the home. The learned judge found in the present case that it was the intention of the parties that the house when it was purchased would be the home for them and their future children. His Honour also found, albeit in the context of considering the claim under the De Facto Relationships Act, that: "The situation here is undoubtedly one where the defendant (i.e. appellant) used her earnings for the benefit of both parties in expenses incurred in the house, in the purchase of furniture and furnishings and in general household expenditure. It was even conceded with some reluctance by the plaintiff (i.e. respondent) that she was responsible for most of the expenses relating to the children and for some of the expenditure on the house. He was relieved of those expenses for which he would otherwise have been responsible and as a result he was no doubt able to increase his own assets. When dealing with the alternative claim that at least the appellant should have a charge over the land for the moneys which she had expended on the house, his Honour said that the appellant expended money on the repair and renovations of the house with the intention assuredly shared by the respondent that this would preserve and improve it and add to its value. The learned judge said that the respondent undoubtedly accepted the expenditure by the appellant with the knowledge that it would improve the home and add to its value. In these circumstances for the respondent to deny that the appellant has no interest in the home is an affront to conscience. Equity must intervene and impose a constructive trust to circumvent the respondent's unconscionable conduct. The only question is what form the remedy should take. In her evidence the appellant said that she suggested that the house should be bought and that they should put their money towards it. This conversation was denied by the respondent. Unfortunately, his Honour made no finding on the point. He said that, if "it was said" by the respondent, there were no following conversations or acts which would suggest that they intended contributing to the house jointly or that the money would in fact be directed to the paying of instalments. His Honour pointed out that when finance was being arranged at the bank the respondent had said that the house was to be in his name. The learned judge also expressed the view that he did not think that the respondent was the sort of person who would pay the whole deposit and commit himself under a mortgage to pay the balance of the purchase price with the intention that the defendant should have equal rights of ownership. However, the issue is not what the respondent's intention was but whether a constructive trust should be imposed and, if so, upon what terms. When the parties commenced to live together the appellant had savings of about $2000, the respondent savings of about $15,500. The appellant earned $200 per week, the respondent about $240 although the respondent apparently earned additional money from overtime. The purchase price of the home was $24,500 of which the respondent paid $10,000, the balance was financed by bank loan. The appellant seems to have spent all or most of her savings on furniture URJ HIBBERSON v GEORGE (McHugh JA) 19 and furnishings for the home. Although his Honour said that the parties "apparently kept their own finances independently of each other", in truth the respondent seems to have used most of her earnings for the benefit of their joint relationship. His Honour thought that she had little money when the relationship ended and, apart from expenditure on her car, the evidence does not show any of her earnings being used other than for the benefit of the joint relationship. It seems safe to conclude that she spent her money for the benefit of the joint relationship upon the basis that the home was for herself, the respondent and their children. The moneys which she spent on the improvements in 1983 were the product of a lotto win, a tax cheque, and her savings. It is difficult to believe that she spent this money on any basis except that it would enhance the home in which the parties contemplated spending their lives together. As Cohen J found she also used her earnings for the benefit of both parties and relieved the respondent "of those expenses for which he would otherwise have been responsible" This expenditure must also have been incurred on the basis that this would assist the respondent to pay the mortgage instalments. The relationship has now broken down and the appellant will be deprived of the benefit of the use of the home. Why should Equity permit the respondent to take the whole of the enhanced value of the property? Why should Equity permit the respondent to profit from the expenditure of the appellant which relieved him of expenses for which he was otherwise responsible? Equity favours equality. As Mason CJ, Wilson and Deane JJ said (at 149) in Baumgartner where the parties have lived together for years and have pooled their resources "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". In Baumgartner their Honours thought an adjustment was called for. They declared the interests of the parties in the proportions of 55 per cent and 45 per cent. They also made adjustments to take account of moneys paid by the parties. In the present case the respondent invested $10,000 of his own savings to purchase the home. The appellant appears to have spent $2000 of her savings to furnish the home. Thereafter the appellant spent nearly $6000 on improvements. However, the respondent also spent money on improvements although the precise amount was not established. The evidence also failed to establish the amounts which the parties otherwise contributed for the benefit of the joint relationship. In a case such as the present the evidentiary onus is on the respondent to establish that there should be a departure from the "equality" principle. Although the evidence is very thin, I think that the initial investment of $10,000 by the respondent compared to the appellant's contribution of $2000 to furnishing the home is sufficient to justify a departure from the equality principle. The beneficial interest should be apportioned in favour of the respondent on a 60/40 basis and adjustments should be made to compensate for other moneys. I would declare that the respondent holds the land comprised in Certificate of Title Volume 7201 Folio 136 known as 168 Young Street Annandale on trust for himself beneficially as to 60 per cent and for the appellant beneficially as to 40 per cent. I would also declare that the respondent is entitled to deduct from the proceeds of any sale of the property the sum of $10,000 and any further sum paid by the respondent in respect of the purchase of the property or in connection with the ownership of the property since 21 May 1985. Such further sums should carry 20 UNREPORTED JUDGMENTS interest at 10% since the date of payment by the respondent. The sum of $10,000 should carry interest at 10% from 21 May 1985. I would also declare that the appellant is entitled to have deducted from the proceeds of the sale and paid to her the sum of $6250 together with interest at 10% from 21 May 1985. I would also order the respondent to do all acts and sign all such documents necessary to effect the sale of the property within a reasonable period and, after payment out of all legal costs and commission in connection with the sale and moneys payable to the appellant and respondent out of the proceeds of the sale, to distribute the nett proceeds of sale between the parties as to be 60 per cent to the respondent and 40 per cent to the appellant. The respondent should pay three quarters of the costs of the appellant's costs of the appeal and of the summons and cross-claim. The parties have liberty to apply. Counsels for appellant: J Hamilton QC and Ms C Marlow Solicitors for appellant: MacElbing and Associates Counsels for respondent: D Jackson QC and P J McEwen Solicitors for respondent: Glasheen and Quilty