New South Wales Supreme Court CITATION : Brennan v Duncan [2006] NSWSC 674 HEARING DATE(S) : 26 & 27/06/06 JUDGMENT DATE : 27 June 2006 JURISDICTION : Equity Division JUDGMENT OF : White J EX TEMPORE JUDGMENT DATE : 06/27/2006 DECISION : Proceedings stood over to 9.30am Tuesday, 1 August 2006 for Short Minutes of Order and costs argument. CATCHWORDS : EQUITY – Trusts and trustees – Implied trusts – Resulting trusts – Plaintiff and defendant were in de facto relationship – Plaintiff and defendant purchased property as joint tenants – Plaintiff contributed disproportionately to purchase price of property – Defendant contributed disproportionately to payment of plaintiff's personal expenses – Plaintiff and defendant separated – Joint tenancy severed – Whether defendant holds entirety of interest in property on resulting trust for plaintiff – Whether property held on resulting trust in proportion to parties' contributions to purchase price – Presumption that property held on resulting trust – Evidence of parties' actual intentions – Presumption rebutted – Plaintiff's claim rejected - EQUITY – Trusts and trustees – Implied trusts – Constructive trusts – Plaintiff's contribution to purchase price made immediately prior to termination of parties' de facto relationship – Whether plaintiff's contribution to purchase price made in expectation of continuing relationship – Whether defendant holds interest in property on constructive trust for plaintiff on principles in Baumgartner v Baumgartner (1987) 164 CLR 137 – Constructive trust found – Plaintiff's claim made out. Baumgartner v Baumgartner (1987) 164 CLR 137 Ingram v Ingram (1941) VLR 95 Currie v Hamilton [1984] 1 NSWLR 687 Calverley v Green (1984) 155 CLR 242 Ryan v Dries [2002] NSWCA 3 Bloch v Bloch (1981) 180 CLR 390 Muschinski v Dodds (1985) 160 CLR 583 CASES CITED : West v Mead [2003] NSWSC 161 Anshun v Anshun [2004] NSWSC 766 Morris v Morris (1982) 1 NSWLR 61 Forgeard v Shanahan (1994) 35 NSWLR 206 Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060 Shephard v Cartwright (1955) AC 431 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 Brown v Brown (1993) 31 NSWLR 582 Bryson v Bryant (1992) 29 NSWLR 188 Mark Kenneth Brennan PARTIES : v Jennifer Mary Duncan FILE NUMBER(S) : SC 3062/05 COUNSEL : Plaintiff: D Bernie Defendant: L Judge SOLICITORS : Plaintiff: Coleman & Greig Solicitors Defendant: Sydun & Co. Solicitors IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION WHITE J Tuesday, 27 June 2006 3062/05 Mark Kenneth Brennan v Jennifer Mary Duncan JUDGMENT 1 WHITE J: The plaintiff, Mr Brennan, claims that the defendant, Ms Duncan, holds her 50% interest as a tenant in common in a property at 81/8 Water Street, Birchgrove in trust for him. 2 The principal issues in the proceedings are as follows. First, whether Ms Duncan holds her interest in the property on a resulting trust for Mr Brennan. Secondly, whether the property is held on a resulting trust in the proportions of 63.6% to Mr Brennan and 36.4% to Ms Duncan. Thirdly, whether Ms Duncan holds her interest on a constructive trust in favour of Mr Brennan on the principles in Baumgartner v Baumgartner (1987) 164 CLR 137 at 148, and if so, in what proportions. Fourthly, whether Mr Brennan is entitled to a charge over the property to secure repayment of an amount of $181,000 contributed by him to the purchase of the property. Fifthly, whether Mr Brennan is entitled to contribution to the extent to which mortgage payments made by him, and payments made by him to meet expenses in connection with the property, exceed his beneficial interest. 3 The property was purchased by Mr Brennan and Ms Duncan as joint tenants. The contracts for purchase were exchanged on 2 November 2001 and the purchase was completed on 19 December 2001. The purchase price was $633,000. The cost of purchase, including stamp duty on the contract of purchase, legal fees, stamp duty on the mortgage, loan application fees and other miscellaneous expenses was $661,405. 4 At the time the property was purchased, the parties were living together as de facto partners. That relationship commenced on 1 September 2000 when Ms Duncan moved into the house which Mr Brennan was renting in Louisa Road, Birchgrove. Their relationship was terminated on 25 March 2002 when Ms Duncan left. 5 The parties jointly borrowed $481,000 from Perpetual Trustees Australia Limited and these moneys were applied towards the purchase of the property. Of the balance of about $181,000 provided by Mr Brennan, $179,425.07 was paid by a company, Rosepool Pty Ltd, of which Mr Brennan was a director and the sole shareholder. 6 Although Rosepool did not keep proper books of account at that time, and although there is no evidence of any board resolution for the making of a loan, and although no later accounts were tendered showing how the payment was recorded in the books of Rosepool, I accept that the payment was a loan from Rosepool to Mr Brennan. He described it as a drawing from Rosepool and that characterisation of the transaction was not challenged in evidence. There is no evidence that the payment by Rosepool was by way of a loan to both parties, and there is no evidence that any officer of Rosepool intended that that company should have a beneficial interest in the property purchased. 7 Accordingly, I accept that the payment made by Rosepool should be treated as a loan made by it to Mr Brennan and that Mr Brennan contributed $181,000 towards the purchase of the property. 8 As the parties were joint borrowers from Perpetual Trustees Australia Limited, the application of the advance of $481,000 towards the purchase of the property should be treated as a contribution to the purchase of the property made by them equally (Ingram v Ingram [1941] VLR 95 at 102; Currie v Hamilton [1984] 1 NSWLR 687 at 692; Calverley v Green (1984) 155 CLR 242 at 251, 257-258 and 267-268). 9 Accordingly, Ms Duncan contributed $240,500 to the purchase price and associated expenses of $661,405, or 36.4%, and Mr Brennan contributed the balance. For the purposes of this calculation, contributions to the purchase price include incidental costs, fees and disbursements involved in the acquisition of the property (Ryan v Dries (2002) 10 BPR 19,497 at 19,508-19,509; [2002] NSWCA 3 at [52]-[53].) 10 If the parties were husband and wife there would be a presumption of advancement in these circumstances. That is to say, it would be presumed that Mr Brennan intended to make a gift to his wife such that she should have a beneficial interest in the property which coincided with the legal title, even though she did not contribute 50% of the purchase price. However, there is no presumption of advancement between de facto couples (Calverley v Green). Nonetheless, to say that there is no presumption of advancement between de facto couples is not to deny that the parties' relationship as de facto partners is relevant to whether they intended that Ms Duncan and Mr Brennan should have equal beneficial interests in the property. 11 The initial presumption is that the parties intended that the beneficial interest in the property should be in accordance with the legal title (Currie v Hamilton at 690; Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060 at [128]). 12 That presumption may yield to the presumption that, where property is purchased in the names of parties jointly and the parties did not contribute equally to the purchase price, they intended that beneficial title to the property should be held in the same proportion as the proportions in which each contributed to the purchase price. 13 However, this presumption of a resulting trust in accordance with the parties' contribution to the purchase price will itself yield to evidence of the parties' actual intentions, if they can be reliably ascertained. The presumption of a resulting trust is not lightly to be set aside. (Shephard v Cartwright [1955] AC 431 at 455; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365; Brown v Brown (1993) 31 NSWLR 582 at 596). 14 The parties' actual intentions may be determined by what they said and did when the property was purchased, and by their later conduct in so far as it throws light on what those intentions then were. Subsequent declarations of intention are only admissible against interest (Calverley v Green at 262 and 269; Charles Marshall Pty Ltd v Grimsley at 365; Bryson v Bryant (1992) 29 NSWLR 188 at 215). 15 The parties had known each other from about April 1999. It is common ground that when they commenced their cohabitation in September 2000, they agreed that each would pay his or her own personal expenses and that they would contribute equally to joint expenses. In about November or December 2000, they agreed upon a savings plan whereby Ms Duncan's income would be used to pay for expenses, and they would save Mr Brennan's income. Mr Brennan worked as a consulting software engineer in the computer industry. His services were contracted to third parties through Rosepool. He drew a minimal salary from Rosepool so that Rosepool accumulated substantial cash resources. 16 By Ms Duncan meeting personal expenses of Mr Brennan or his company, and by her contributing more than half to the parties' joint expenses, the cash reserves of Rosepool were able to be increased. Those reserves were also increased according to the fortunes of the company. As at 1 December 2000, Rosepool had cash investments of about $135,000. The figures fluctuated from day-to-day. There was substantial movement in both directions in relation to that balance in subsequent months. By 1 November 2001, that is to say immediately before contracts for the purchase of the property were exchanged, Rosepool had cash investments of about $240,000. Again, the figures fluctuated from day-to-day. 17 Mr Brennan agreed that from September to November 2000, Ms Duncan paid half the monthly rental on the Louisa Road property and contributed equally to joint household expenses. He acknowledged that from January 2001, Ms Duncan increased the share of expenses she had been paying. The figures cannot be determined precisely. It appears, however, that after November 2000, Mr Brennan paid rent of $12,250 on the Louisa Road property, whilst Ms Duncan paid $23,360: that is to say, she paid about $5,500 more than a half share of the rent. 18 Following November 2000, Mr Brennan paid about $15,700 towards expenses incurred by him on his American Express card. Ms Duncan paid $25,190 of the American Express bills, of which she estimates about $10,000 was for personal expenses of Mr Brennan or Rosepool. The balance, I understand, she claims to have been joint expenses. On that basis it would appear that she paid $10,000 of personal expenses of Mr Brennan and Rosepool and about $7,600 more than her half share of joint expenses. 19 Mr Brennan paid $4,475 on his Visa account. Ms Duncan paid off $2,183 from his Visa account. Ms Duncan's bank records show that she made payments of about $35,000 to what she claims were joint expenses. It is not possible to say what the total of the parties' joint expenses was. Nor is it possible to say whether these were all of the payments made by Ms Duncan. Nor is it possible to say precisely how much Mr Brennan paid towards those expenses. 20 However, it follows from the evidence of Mr Brennan to which I referred previously that he accepts that Ms Duncan paid more than half of joint expenses following November 2000. Both parties claim to have made cash payments towards such expenses. 21 In considering the question of whether the presumption of a resulting trust has been rebutted, it is not necessary to quantify precisely how much more than 50% of the parties' joint expenses Ms Duncan paid, or to quantify how much of Mr Brennan's or Rosepool's personal expenses she paid. 22 What is significant is that at the time the parties entered into the contract to purchase the property, they had reached an agreement, which was being at least partially implemented, and which they intended to be a continuing arrangement, whereby Ms Duncan was to meet a majority of their expenses from her income, so that Mr Brennan's income could be saved, and reserves could be built up by him or by Rosepool which could later be used for their joint benefit. 23 Both parties made the decision to purchase the property. This was not the first property they had inspected. They had considered buying a farm. Their initial intention was that the property be an investment property but their plan was eventually to live in it themselves. 24 After they had made an offer on the property and reached a preliminary agreement on price with the vendor, but before the contracts were exchanged, they consulted a solicitor, Mr Brown. The recollections of what they were told by Mr Brown differed somewhat. Mr Brennan recalled some matters and Ms Duncan recalled others. It is not necessary to choose between their evidence on this topic as, in any event, I prefer Mr Brown's evidence of their meeting. His evidence was not seriously challenged in cross-examination, and he was a disinterested witness. 25 To some extent his evidence is supported by a contemporaneous file note. The parties met with Mr Brown on 23 October 2001; that is to say, ten days before contracts were exchanged for the purchase of the property. He and the parties discussed what was then a draft contract. The question came up as to whether the parties should buy the property as joint tenants or as tenants in common, and if as tenants in common, in what shares. 26 Mr Brown gave the following evidence, which I accept: " I said, 'On the front page of the Contract you will see that it says we have to state whether you are purchasing the property as joint tenants or tenants in common.' They said, 'What is the difference? ' I said, 'Well if you buy jointly, then if one of you dies the survivor automatically inherits the other's interest in the property and you don't have a specified share in the property, you both own the whole property. With tenants in common, it is entirely different. You can own a specified share in the property and it could be any share you might wish to nominate. It might be 50/50 or it might be 1/3 or 2/3. If you hold a property as tenants in common, then if one of you dies, then the other doesn't automatically inherit that person's share of the property, but it has to be dealt with in your Will and it can be bequeathed to whoever you want, it doesn't have to be bequeathed to your co-tenant. It could be bequeathed to anyone. In addition, if you purchase as tenants in common, you can do other things as well. For instance, you might enter into a formal pre-nuptial agreement, a de-facto agreement, or some other form of agreement. We acted for one young couple and they purchased a property as tenants in common. In that agreement we tried to set out a framework governing their ownership of the property. For instance, we made provision for who was to pay the mortgage and how much, whether they could mortgage separately their interest in the property, who paid the outgoings, like Council rates, water rates and insurance and in what proportions and what would happen if they split up, giving each of them a right of first refusal to buy the other's share and then making provision for a sale by auction if they couldn't agree and that was then backed up with mutual Wills. That is a Will which is made by one person in consideration of another person making a Will and which can't be altered except with the other person's consent. Obviously if that is what you want to do, you need to change your arrangements from time to time as your circumstances change, but it gives you a backstop or a framework to operate in if you can't agree.' They said, 'Which do you recommend?' I said, 'Well it is up to you. Married people usually buy properties as joint tenants and single people buy as tenants in common. What do you want to do?' They both then looked at each other, smiled, looked at me and said, 'We want to buy as joint tenants.'" 27 The parties adhered to their initial view that they would buy as joint tenants. It is clear that they had ample opportunity between meeting Mr Brown and contracts being exchanged to consider that matter. Mr Brown raised with the parties the fact that if they bought the property as joint tenants they would both own the whole property, and that if one of them died the property would pass to the survivor automatically. He also discussed with them the fact that if they held the property as tenants in common they would hold specified shares in it, which might be in proportions of 50/50, or could be in other proportions. 28 There was also discussion about the possibility of the parties entering into an agreement to set a framework governing their ownership of the property or to deal with their property if the parties separated. It was in that context that the parties agreed that they would buy the property as joint tenants, in the same way as they were told persons who are married usually buy property. 29 I accept that when they made this decision both parties expected that their relationship would be a lasting one. However, they must also have considered the possibility of their separating and decided to buy as joint tenants notwithstanding that possibility. They must also have considered the possibility of the property being held in distinct shares and rejected it. 30 I infer that both parties intended that, irrespective of their financial contributions, they would hold the property beneficially as joint tenants. 31 [At this point the judgment was adjourned to Wednesday 28 June 2006 at 9.15am]. [UPON RESUMPTION] 32 HIS HONOUR: That inference is supported by the fact that Ms Duncan to that point had met more of their expenses, and it was expected that she would continue to do so. She thereby gave indirect assistance to the accumulation of cash reserves in Rosepool. 33 Following the completion of the purchase, both parties were involved in the process of letting the property. They did not engage agents. Ms Duncan interviewed the tenant to whom the property was let. Both parties were involved in preparing the lease. This conduct is consistent with their intending that both have a beneficial interest in the property. 34 After an initial hiccup, the parties established a procedure by which they equally contributed to the mortgage payments. The loan was a line of credit loan under which they were required to pay interest, but could reduce principal and then redraw principal if they wished. The rent was paid into a mortgage account and used to reduce principal. Interest on the loan was paid by the lender debiting the amounts of interest from Ms Duncan's account with her Building Society. Mr Brennan paid half of the required interest to that account. Other expenses such as rates and strata levies were shared equally. Again, this conduct is consistent with the parties' intending that the property be beneficially owned by them equally. 35 Ms Duncan left Mr Brennan on 25 March 2002. There was no evidence as to why she did so, or when she first decided to do so, or considered doing so. The arrangements for meeting the mortgage payments and property expenses continued notwithstanding the parties' separation. Ms Duncan deposed that shortly after separation, a conversation took place to the following effect; " I recall a discussion shortly after separation as follows: JD: 'At least something beneficial has come of this relationship. Let's continue to pay capital and interest and keep it as a joint asset. I'm happy for the mortgage payment to continue to come out of my account. You transfer your share (of the mortgage repayment) to me and we'll contribute more with Damien putting the rent directly into the account. Why don't you pick up the rates and levies and all and I'll reimburse you for my half. I'd rather keep your payment to me and my payment to you separate to make it easier to understand who has paid what'. MB: 'That's sensible'." 36 Mr Brennan admitted that there was a conversation between he and Ms Duncan to the effect that they would make equal contributions to the outgoings on the property until such time as they could work out a final settlement between them. 37 Subject to one modification made in about May 2002, these arrangements for the making of mortgage payments and meeting the property expenses continued until August 2003. In about May 2002, Ms Duncan demanded that Mr Brennan make a larger mortgage contribution. She contended that the interest rate on the loan was 1% higher than it would otherwise have been because it was a "low doc" loan; that is, a loan made without the lender requiring tax returns or financial statements from the borrowers. Ms Duncan claimed that the parties were paying the additional 1% interest because Mr Brennan had not prepared his tax returns and that he should compensate her for this in the mortgage payments. It may be noted that Ms Duncan had not prepared her tax returns either. Nonetheless, until August 2003 Mr Brennan paid slightly more in mortgage repayments than did Ms Duncan. I attribute this to his having at least partly acquiesced in her demand. 38 In August 2003, Ms Duncan stopped making payments for the mortgage debt. Since then, Mr Brennan has made all the mortgage payments. He has paid all of the expenses associated with holding the property save for one insurance payment. Thus, he has paid all the rates and strata levies. He has received all the rents from that time, although I understand that these have been applied towards the payments of interest on the loan. 39 On 2 March 2005, the joint tenancy was severed. Accordingly, each party now holds the legal title of the property as tenants in common in equal shares. The parties have also drawn back $55,000 under the mortgage. Mr Brennan has received $30,000 and Ms Duncan $25,000. However, in March 2002 Mr Brennan paid Ms Duncan $5,000 and that payment has been treated at the hearing before me as an equalising contribution. 40 In substance therefore, after the parties separated, and until August 2003, they met the mortgage payments equally. They also paid the expenses associated with owning the property equally. This confirms that it was their intention when the property was purchased that it be owned by them equally. That is, that they beneficially own the property in accordance with the legal ownership. Claim that Defendant's Interest held on Trust for Plaintiff 41 I turn to the plaintiff's first claim of 100% beneficial ownership. 42 Mr Brennan's primary claim is that all of Ms Duncan's interest is held on trust for him because he provided all of the "net equity". That contention must be rejected. Where parties intend to acquire property subject to a mortgage, the moneys raised on the mortgage are treated as a contribution by the parties who have borrowed the money from the mortgagee (Ingram v Ingram at 102; Currie v Hamilton at 692; Calverley v Green at 251, 257-258 and 267-268). 43 The position will be different if the parties intend to acquire the property unencumbered by the mortgage debt. In such a case, the contributions made to discharge the mortgage will be taken into account in determining their respective contributions to the acquisition of the property in the condition in which they intended to hold it (Bloch v Bloch (1981) 180 CLR 390. However, that is not the usual case (Currie v Hamilton at 692). It is not this case. Even if it were this case, it would not assist the plaintiff's contention that it is only the parties' contribution to the "net equity" which should be considered. 44 Here the parties intended to acquire the property subject to the mortgage. They intended to be equally responsible for the mortgage debt. This case cannot be distinguished on the ground that the property was bought as an investment. Even that is only partially true as the parties' longer-term intention was to live in the property. But even if that were not so, the fact that the property was bought as an investment is not a sufficient ground for distinguishing the case from the usual case where it is presumed that the parties intend to own the property beneficially in accordance with their contributions to the purchase price and associated expenses, which contributions include moneys borrowed by them to pay the purchase price and its expenses. Thus, the first claim fails at the outset, irrespective of the parties' actual intentions. Resulting Trust in Proportion to Contributions to Cost of Purchase 45 The second claim is that the parties hold the property on a resulting trust in accordance with their contributions to the purchase price and associated expenses. There is a presumption that that is the case. However, that presumption will yield to evidence of the parties' actual intentions. For the reasons above, I conclude that their actual intentions were that they hold the property beneficially as joint tenants. 46 Matters leading to that conclusion have been referred to previously but they are: first, that Ms Duncan contributed to the plaintiff's, and to Rosepool's, expenses as part of a savings plan with Mr Brennan, thereby facilitating the accumulation of assets in Rosepool. Secondly, the parties expected that to be a continuing arrangement. Thirdly, the advice given by the parties' solicitor and their decision to buy as joint tenants confirms that intention. They were advised that that is how husbands and wives usually purchase property. For them to have bought as joint tenants is consistent with Mr Brennan intending to advance Ms Duncan, that is, to make a gift to her of an equal share in the property to the extent her contributions fell short of such an equality. Fourthly, that the parties jointly arranged the purchase and the finance and the leasing of the property. Fifthly, that following completion, and even following separation, the parties contributed substantially equally to the mortgage payments and to other expenses associated with the holding of the property. Accordingly, I reject the second claim. A Baumgartner Trust 47 The plaintiff's third claim is based on the submission that his contribution of $181,000 to the purchase of the property was made in the expectation of a continuing relationship. He submits that it is inequitable that Ms Duncan should obtain the benefit of half of that contribution when the relationship failed just three months later. This submission, which was made belatedly, raises the principles considered by Deane J, with whom Mason J agreed, in Muschinski v Dodds (1985) 160 CLR 583 at 620, and by Mason CJ, Wilson and Deane JJ in Baumgartner at 147-148. 48 In Baumgartner, their Honours referred (at 148) to: "… 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". 49 Their Honours referred with approval (at 148) to the principles stated by Deane J in Muschinski v Dodds: "... 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 party to the extent that it would be unconscionable for him so to do". 50 As Campbell J explained in West v Mead [2003] NSWSC 161 at [52]-[64], the High Court applied to domestic relationships principles which courts of equity have developed in relation to claims for property entitlements of partners in failed commercial ventures. 51 Put in terms of the passage quoted above from the judgment of Deane J in Muschinski v Dodds, there was in this case a joint relationship and endeavour between the parties that they would share a life as de facto husband and wife, and as a result of that relationship, hold property together. The substratum of that relationship failed without attributable blame on the part of Mr Brennan or, I might add, without attributable blame on the part of Ms Duncan, but in this context it is the position of Mr Brennan which is relevant. Mr Brennan contributed money to the extent of a gift of $90,500 which increased Ms Duncan's beneficial interest in the property from 36.4% to 50%. He did so for the purposes of their relationship. She seeks to enjoy that contribution in circumstances where he contends it was not specifically intended or specially provided that she should do so. Equity will not permit her to retain that benefit to the extent it would be unconscionable for her to do so. 52 Subject to considering two matters, I accept that that principle is applicable to the circumstances of the present case. The first matter to be considered is whether it was not "specifically intended", or "specially provided", that Ms Duncan should enjoy equal ownership of the property following the parties' separation. The second matter involves determining the extent to which it would be unconscionable for Ms Duncan to deny Mr Brennan's claim to have his contribution restored, taking into account the contributions which she made to the parties' expenses. 53 In relation to the first matter, Campbell J said in Anson v Anson (2004) 12 BPR 22,303 at 22,309-22,310; [2004] NSWSC 766 at [38]: "As the passage quoted from Baumgartner ... shows a constructive trust will not be imposed to alter legal property rights which were specifically intended or specially provided to apply at the end of the joint relationship or endeavour. That is because if the parties have specifically considered how the ownership of the property should lie at the end of their relationship and intend that the ownership should be in accordance with the legal interests in that property there will be nothing unconscionable about the ownership being as they had intended regardless of what contributions each of them had made to the property". 54 The emphasis is on specific intention or special provision by agreement. Here I have found that the parties intended that they would both be beneficially entitled to the property as joint tenants. I have found that Mr Brennan formed that intention after considering advice from the parties' solicitor which adverted to the possibility of separation and to alternatives in relation to the holding of property or the making of specific agreements to deal with the consequences of separation. Nonetheless, I have also found that when the property was acquired Mr Brennan expected the relationship to be a lasting one. One of the reasons for which I have inferred that Mr Brennan intended that Ms Duncan should beneficially take as joint tenant was that the parties expected that the arrangement for meeting expenses from her income would continue. More importantly, he expected that all of the benefits from their relationship as de facto husband and wife would continue. 55 In my view, he did not have a specific intention as to what should happen to the property if the parties separated only months after its purchase. I am satisfied that he would not have intended to make a substantial gift of a beneficial interest in the property to Ms Duncan had he contemplated that their relationship would end before April in the following year. 56 It was submitted by counsel for Ms Duncan that the conduct of the parties after separation showed that they both intended that Ms Duncan have an interest beneficially as joint tenant even after separation. However, I think that conduct is equally referable to their intending, when the property was purchased, that she should have a beneficial interest as joint tenant. The parties acted on the basis of that intention after separation. It does not follow that when the property was purchased, Mr Brennan intended that Ms Duncan should enjoy an equal ownership of the property even if the relationship failed only months later. That possibility did not come up for consideration. 57 Accordingly, I consider that Mr Brennan is entitled to have his contribution of $90,500, or 13.6% of the purchase price, restored to the extent it would be unconscionable for Ms Duncan to retain that benefit. 58 That raises the question, which it was not necessary to determine when dealing with the earlier claims, of the extent to which Mr Brennan's contribution of funds to the purchase price was matched by Ms Duncan's meeting his or Rosepool's personal expenses, or by her contributing more than half of their joint expenses. To the extent she did so, it would not be unconscionable for her to retain the benefit of Mr Brennan's contribution to the purchase price. The onus lies on Mr Brennan to show the extent to which it would be unconscionable for Ms Duncan to retain the benefit. 59 It was submitted by counsel for Ms Duncan that, by reason of the arrangement for meeting expenses, the moneys contributed by Rosepool were held on trust for her. That cannot be right. I see no basis for saying that Rosepool's money was held on trust for Ms Duncan. Nonetheless, it would not be unconscionable for her to retain the benefit she received to the extent that she advanced the interest of Mr Brennan or Rosepool by meeting expenses beyond what was originally agreed in September 2000. 60 The figures referred to earlier show that Ms Duncan made a contribution to such expenses of between $25,400 and $60,000. The evidence is unclear within that range. However, assistance can be gained from considering Ms Duncan's income. There is no evidence that she had any substantial savings on which to draw to meet such expenses. The evidence of the income available to Ms Duncan at the relevant time is not very satisfactory as she did not prepare tax returns. However, her group certificates for the relevant periods show that she received income after deduction of tax as follows: 1 July 2000 to 21 December 2000, $29,773; 2 January 2001 to 30 June 2001, $31,840 plus a car allowance of $7,500; and 1 July 2001 to 27 June 2002, $71,524 plus a car allowance of $15,000. 61 The period from December 2000, when the savings plan started, to March 2002, when the parties separated, was about 15 months. On the basis of these figures, the available after tax income was about $90,000 plus the car allowance. Ms Duncan owned her own property at Darlinghurst which was negatively geared and which cost at least $8,000 during this period. Her half share of the parties' joint expenses for rent and the American Express bills alone totalled $25,300. She would have had other personal expenses and contributions to joint expenditure. Taking into account her available income after meeting these expenses, it is safe to conclude that her contribution to the personal expenses of Mr Brennan and Rosepool, and her contribution to more than 50% of the parties joint expenses, did not exceed $45,000. 62 I therefore conclude that it would be unconscionable for Ms Duncan to retain the benefit of the contribution to the purchase price made by Mr Brennan to the extent of the difference between $90,500 and $45,000; that is, $45,500 or 6.9% of the purchase price. It is impossible to make a precise calculation on these matters and I will round that figure to 7% (see Baumgartner at 150). 63 In Muschinski v Dodds, the principle which I have quoted was applied by the Court's ordering that the parties' respective contributions be repaid and the proceeds of sale of the property divided equally after that division. A different remedy was applied in Baumgartner, where the parties had pooled their funds to acquire property. The beneficial interests were held in the proportion of the parties' actual and notional contributions to the pooled funds, and then subject to other adjustments. 64 Here, the relevant contribution to be restored is a contribution to the purchase price of property which has appreciated, and probably depreciated, over time in accordance with the changes in the property market. For better or worse, the parties invested in the property market. The appropriate way, in my view, to restore to the plaintiff the contribution to the purchase price in circumstances where it could not have been intended that the defendant enjoy that contribution, and to the extent it is unconscionable for her to retain it, is by imposing a constructive trust in Mr Brennan's favour to the extent of 7% of the beneficial interest in the property. 65 I will, therefore, declare that the property is held by the parties on trust for themselves in the proportion of 57% to the plaintiff and 43% to the defendant. Charge to Secure Repayment of Contribution 66 I deal next with the plaintiff's claim to a charge to secure repayment of his contribution. Counsel for the plaintiff submitted that Mr Brennan was entitled to a charge or equitable lien over the property to secure the repayment of his contribution to the purchase price of $181,000. Counsel referred to Morris v Morris [1982] 1 NSWLR 61. There, McLelland J (as his Honour then was) held that a man who paid money for the extension to the house of his son and daughter-in-law, for the purpose of providing accommodation for himself, was entitled to a charge over the land to secure repayment of his expenditure when that purpose became incapable of fulfilment. 67 I do not consider that case to be relevant to the present facts, except that it lies in the same general area of discourse. In my view, this case falls to be decided on the principles applicable where title to land is put in the names of two parties, with one providing the majority of the costs of purchase, and by the principles applicable where one party makes contributions to a joint endeavour which fails in circumstances where it was not intended that the other party should enjoy them. 68 There is no utility in pointing to other remedies which may be available in other factual circumstances which bear no relationship to the present case. Here, the demands of good conscience are satisfied by the trust which I have found to exist and, accordingly, I reject this claim. Contribution 69 I turn then to the claims for contribution. 70 The plaintiff is entitled to contribution of 50% of the mortgage payments made by him since August 2003. Those payments were made to satisfy a joint debt. He is entitled to a charge over the property to secure the right of contribution (Ingram v Ingram at 102; Currie v Hamilton at 692-693; Calverley v Green at 263). 71 He is not entitled to receive less than 50% contribution to those mortgage payments by reason of the defendant's having a 43% beneficial interest in the property. Her borrowing of half the purchase cost has already been taken into account in determining the quantum of the contributions which the plaintiff is prima facie entitled to have restored to him; that is, 13.4%, not 50%. 72 I do not consider that Mr Brennan is entitled to an adjustment with respect to the excess payments to the mortgage he made before August 2003. This was apparently due to his acquiescence in the plaintiff's demand arising from the loan being a "low doc" loan. The arrangements which the parties made at that time should not be disturbed for the period during which the parties acted on them. However, I do not consider that the reasons advanced by Ms Duncan as to why it was equitable for Mr Brennan to pay more than 50% of the mortgage are such as to warrant any different amount of contribution following August 2003. As I have said, neither party was in a position to provide a lender with tax returns. In any event, both parties joined in the mortgage on the terms which were then offered by the lender. 73 The parties are also jointly liable for rates and strata levies. Mr Brennan is entitled to contribution from the defendant in respect of his payments of those rates and levies since August 2003. However, as he will enjoy 57% of the fruits of the property he is only entitled to contribution in respect of 43% of those payments. 74 It is a condition of the plaintiff obtaining a declaration of a constructive trust of the property, and declarations as to the defendant's obligation to make contribution, that he do equity. To do equity, he is required to account for 43% of the rents received by him. To do equity, he is also required to make contribution to Ms Duncan for 14% of the contribution made by her in payment of rates, levies and other expenses, that is to say, 7% of the total of such payments. By the same token, on an accounting, the defendant should give credit for 7% of the rents received up to August 2003. These were applied in reduction of the principal, and after the adjusting contribution of $5,000 is taken into account, the parties have shared equally in those receipts. 75 Finally, Ms Duncan contended that on an accounting, Mr Brennan should be surcharged for an amount of rent which was not received for a period of some weeks after August 2003 when the property was vacant. I doubt that a co-earner is liable to be so surcharged (Forgeard v Shanahan (1994) 35 NSWLR 206 at 221-224). In any event, the evidence does not establish that Mr Brennan was in any way at fault in the property being vacant for a period between tenancies. I do not accept that the defendant is entitled to the benefit of such an adjustment. 76 I am conscious that the plaintiff has not claimed any of the remedies to which I have concluded he is entitled. He sought more extensive relief, which I have refused. This may well have costs consequences. However, I am satisfied that the way in which I have resolved the issues is within the parameters of the parties' respective cases fought at the trial. I will, therefore, stand over the proceedings to a convenient date for counsel to bring in short minutes of order consistent with these reasons and to hear argument on the question of costs. ****** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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