(1998) 195 CLR 566
Baumgartner v Baumgartner [1987] HCA 59
(2005) 64 NSWLR 360
Commonwealth of Australia v McLean (1996) 41 NSWLR 389
Davey v Lee (1990) 13 Fam LR 688
DFC 95-084
Davies v Dabela [2011] NSWSC 12
Delany v Tenison (1758) 3 Bro PC 659
1 ER 1559
Dwyer v Kaljo (1987) 11 Fam LR 785
Evans v Marmont (1997) 42 NSWLR 70
Friend v Brooker [2009] HCA 21
Source
Original judgment source is linked above.
Catchwords
(1998) 195 CLR 566
Baumgartner v Baumgartner [1987] HCA 59(2005) 64 NSWLR 360
Commonwealth of Australia v McLean (1996) 41 NSWLR 389
Davey v Lee (1990) 13 Fam LR 688DFC 95-084
Davies v Dabela [2011] NSWSC 12
Delany v Tenison (1758) 3 Bro PC 6591 ER 1559
Dwyer v Kaljo (1987) 11 Fam LR 785
Evans v Marmont (1997) 42 NSWLR 70
Friend v Brooker [2009] HCA 21(2009) 239 CLR 129
Gazzola v Gazzola [1990] HCA 13(1990) 92 ALR 45
Giumelli v Giumelli [1999] HCA 10(1999) 196 CLR 101
Grant v Edwards [1986] Ch 6382 All ER 426
Gray v Haig (1855) 20 Beav 219(2005) 33 Fam LR 402
Jackson v Jackson [1999] NSWSC 229
Jones v Dunkel [1959] ALR 367(1959) 101 CLR 298
Kardos v Sarbutt [2006] NSWCA 11
(1985) 160 CLR 583
NWR FM t/a North West Radio v Broadcasting Commission of Ireland & Anor [2004] IEHC 109
Paino v Paino [2008] NSWCA 276
(2008) 40 Fam LR 96
Parianos v Melluish (Trustee) [2003] FCA 190
(2003) 30 Fam LR 524
Ross v Elderfield [2006] NSWCA 192
Ryan v Kalocsay [2010] NSWSC 620
Selmore v Bull [2005] NSWCA 365
19 Fam LR 430
West v Mead [2003] NSWSC 161
Judgment (3 paragraphs)
[1]
o v Broadcasting Commission of Ireland & Anor [2004] IEHC 109
Paino v Paino [2008] NSWCA 276; (2008) 40 Fam LR 96
Parianos v Melluish (Trustee) [2003] FCA 190; (2003) 30 Fam LR 524
Ross v Elderfield [2006] NSWCA 192
Ryan v Kalocsay [2010] NSWSC 620
Selmore v Bull [2005] NSWCA 365; (2005) 34 Fam LR 488
Sharpless v McKibbin [2007] NSWSC 1498
Shepherd v Doolan [2005] NSWSC 42
Smith v Pearson [2011] NSWSC 600
Stowe v Stowe (1995) 15 WAR 363
The Ophelia [1916] 2 AC 206
Vollmer v Hauber Davidson [2006] NSWCA 79
Wallace v Stanford (1995) 37 NSWLR 1; 19 Fam LR 430
West v Mead [2003] NSWSC 161; (2003) 13 BPR 24,431
Texts Cited: Heydon and Leeming, Jacobs' Law of Trusts in Australia (6th and 7th edn)
Parkinson, "Doing Equity between de facto spouses: From Calverley v Green to Baumgartner" (1988) 11 Adelaide Law Review 370
Category: Principal judgment
Parties: Margaret Elderton Anderson Austin (Plaintiff/First Cross-Defendant)
Gregory Anthony Hornby (Defendant/Cross-Claimant)
Veronica Margaret Austin (Second Cross-Defendant)
Representation: Counsel
P J Livingstone (Plaintiff/Cross-Defendants)
G P McNally SC with Ms T Gordon (Defendant/Cross-Claimant)
Solicitors
Rafton Family Lawyers ((Plaintiff/Cross-Defendants)
Matthews Dooley & Gibson (Defendant/Cross-Claimant)
File Number(s): 10/272508
[2]
Judgment
1HER HONOUR : These proceedings were commenced by Mrs Margaret Austin by Summons filed on 17 August 2010, seeking the release to her of the sum of $200,000 presently held in her solicitor's trust account, which moneys the defendant, Mr Gregory Hornby (the former de facto partner of Mrs Austin's daughter, Ms Veronica Austin), claims are held on a constructive or implied trust for him. Without intending any disrespect, I will refer to each of the parties by his or her given name.
2The sum of $200,000 represents the balance of the net proceeds of sale of a property at Kurrajong (after payment out of the mortgagee and sale expenses and after the payment of an amount of $360,670 to Veronica at the time of completion). It was paid into Margaret's solicitor's trust account to be held pending the resolution of the disputes in the current proceedings (in order to secure the withdrawal of a caveat placed on the Kurrajong property by Gregory and hence permit completion of the sale in question).
3Gregory brings two discrete claims by way of Amended Cross-Summons in these proceedings:
(i) as against Margaret, he seeks a declaration that the Kurrajong property was held, as at 1998, on trust for Veronica and, as at the date of sale in 2010, on trust for Veronica and him jointly; alternatively, a declaration that the sum of $200,000 is held pursuant to a constructive or implied trust for him;
(ii) as against Veronica (but pressed only if his claim against Margaret fails or a constructive trust is imposed for less than the amount claimed by Gregory on the constructive trust claim), Gregory brings a claim under s 20 of the Property (Relationships) Act 1984 (NSW) for an adjustment of interests with respect to the property of his domestic relationship with Veronica (the amount so claimed by way of an adjustment of the said property interests being specified in the Amended Cross-Summons as $180,000, that representing roughly half of the proceeds of sale received by Veronica) and consequential relief to facilitate payment of that sum.
4When the hearing commenced, Senior Counsel for Gregory (Mr McNally SC) made it clear that, whether in the alternative or in aggregate, Gregory's claim is not (as Margaret and Veronica had perceived it to be) for any sum over and above the proceeds held in the solicitor's trust account (i.e. $200,000).
5There is no dispute that there was at one time a domestic relationship between Gregory and Veronica within the meaning of the Property (Relationships) Act . The dispute is as to when that relationship came to an end. Veronica (who consents to the order sought by her mother in relation to the payment out of the $200,000) maintains that the relationship came to an end in December 2005 and therefore that Gregory's Property (Relationships) Act claim has not been made in time. If that contention is correct, then Gregory seeks leave pursuant to s 18(2) of the Act to bring his claim against Veronica. For his part, Gregory maintains that the couple lived in a de facto relationship from about March 1997 to about late 2006 and then again from late 2007 until January 2009 (although he was vague not only as to the precise dates on which the relationship first came to an end but also as to when it recommenced and subsequently terminated).
6Gregory's claim against Margaret is put on the basis of an implied or constructive trust arising out of the arrangements pursuant to which he carried out or contributed to particular improvements to the Kurrajong property (in the form of a shed and then a more substantial house built on the property). His claim against Veronica under the Property (Relationships) Act is based upon the substantial benefit that he says Veronica has obtained, out of the sale proceeds of the Kurrajong property, from the work that he performed on the property.
Issues
7The issues to be determined are therefore:
(i) was the Kurrajong property held on trust by Margaret for Veronica and/or Veronica and Gregory at the relevant times or, in the alternative, are the proceeds of sale of the Kurrajong property held on implied or constructive trust for Gregory?
(ii) is Gregory now able to maintain a Property (Relationships) Act claim for an adjustment of the property interests of his relationship with Veronica and, if so, is it just and equitable that any order for adjustment of property interests be made, having regard to the contributions of each falling within s 20(1)(a) and (b) of the Act?
8Logically, the trust claims fall to be determined first, since any determination of the Property (Relationships) Act claim (assuming leave is either not necessary or is given for the bringing of Gregory's claim) must involve an assessment of the property of the couple and their respective contributions to that property during the course of the relationship.
9There are numerous factual issues in dispute between the parties, including whether Gregory contributed money towards the improvement of the Kurrajong property or to the living expenses of the household (through a settlement reached with his former wife and/or by way of income from his earnings as a bricklayer over the period); what work was done by Gregory in the construction of the improvements and the value of that work (compared with work done by paid or volunteer tradesmen or members of the Austin family including Veronica) and what work was done after the relationship between Gregory and Veronica had (on any view) come to an end; what was said to Gregory as to the basis on which he and Veronica would live (and build) on the property; and when Gregory first became aware that Margaret was the sole registered proprietor of the property. A critical issue (since it goes to whether leave is necessary for the Property (Relationships) Act claim) is the date on which the domestic relationship between Gregory and Veronica came to an end.
Summary
10For the reasons set out below, I am of the view that:
(i)(a) the beneficial interest in the Kurrajong property was at all relevant times held by Margaret;
(b) the sum of $100,000 out of the proceeds of sale of the Kurrajong property presently retained in Margaret's solicitor's trust account should be paid to Gregory (with any interest thereon) by way of recoupment by Gregory of the contributions he made to the failed joint endeavour between the parties (with the balance to be paid to Margaret) but no declaration of a constructive trust over the proceeds is necessary in the circumstances;
(ii)(a) the domestic relationship between Veronica and Gregory did resume for part of 2008 and subsisted at least as at December 2008 and therefore Gregory is now able to maintain a Property (Relationships) Act claim for an adjustment of the property interests of his relationship with Veronica;
(b) I not been so satisfied then I would not have granted leave now to make such a claim since I am not satisfied (having regard to the order to be made in accordance with my finding in (i) above) that there is a greater hardship to Gregory if leave is not granted than the hardship to Veronica if it is); and
(c) I am not satisfied that it is just and equitable to make any order for the adjustment of the property interests of the parties to the relationship out of the divisible pool of their assets (taking into account the order to be made in accordance with (i) above and having regard to the contributions of each falling within s 20(1)(a) and (b) of the Act).
Background Facts
Initial purchase of Kurrajong property
11Margaret, now a widow in her early 70's, was at all material times the sole registered proprietor on the title of the Kurrajong property. The property was bought with cash when her late husband was still alive but in her name as he was ill.
12In her first affidavit (sworn 23 September 2010), Margaret says that she initially purchased the (then vacant) Kurrajong property (comprising 12 acres) in about 1990. However, as the Real Property Act 1900 (NSW) transfer in her favour was registered in May 1995, it seems likely (and Margaret conceded as much in the witness box) that her memory as to the timing of events at least in this regard is unreliable. I say this without criticism of Margaret, who presented as a truthful witness and gave her evidence directly and without fuss. She conceded that her recollection of the chronology of various events could be wrong.
13Similarly, Margaret's evidence as to the time at which a mortgage was first granted by her over the property is unreliable. In her September 2010 affidavit, Margaret says that the first time a mortgage was obtained against the property was in about 1996 for an amount of approximately $180,000 and that it was taken out in the joint names of herself and Veronica, the purpose of so doing being to build a dwelling on the Kurrajong property ([18], [19], [21]) and then refinanced and increased to $380,000 in about 2000. However, there is no evidence that there was a mortgage on the property prior to Veronica moving onto the property in 1998 nor was there any such mortgage prior to the taking out of an NAB flexiplus mortgage facility in about 2002 (to which Veronica deposes in her affidavit of 29 October 2010 and which is pleaded in the Defence to Cross-Summons). Further, Margaret's evidence in this regard is internally inconsistent with her evidence that Gregory had told Veronica and her how much they would need the mortgage to cover (T 86) (since the relationship with Gregory had not yet commenced in 1996). Margaret conceded in the witness box that it could have been that the first mortgage was taken out in June 2002 and refinanced in November 2002 (86.41) and that seems to be the case.
14The purchase price disclosed on the 1995 transfer was $144,000.00. The Kurrajong property was later sold by Margaret (at Veronica's suggestion) in April 2010 (by which time there was a large house and shed on the property) for the sum of $925,000. At that time, the NAB flexiplus mortgage over the property secured borrowings of $338,000 (the bulk of which are said to have been incurred in relation to the construction of the house on the property). After the mortgage was discharged (and other expenses paid), the net proceeds amounted to about $587,000, of which the sum of $360,670 was paid by way of cheque drawn in favour of Veronica, in accordance with the settlement instructions (presumably given by Margaret as vendor) (see settlement sheet attached to the affidavit sworn 18 October 2010 by Gregory's solicitor, Mr Mark Ford). (As noted earlier, prior to the settlement, Gregory had lodged a caveat over the title, which led to the agreement under which payment of the sum of $200,000 remains held in the solicitor's trust account.)
15In Margaret's September affidavit, she deposed that the balance of the funds paid on completion of the sale (after sale fees, payment of the mortgage and the sum paid into the trust account) was paid to her ([6(d)]). However, as noted above, the settlement sheet on completion disclosed payment of $360,670 by cheque drawn payable to Veronica and the funds appear to have been paid into a bank account in Veronica's name. Margaret was adamant in the witness box that those moneys were not paid to her (contrary to her earlier sworn affidavit evidence, which she said was a mistake) and that Veronica "got the balance that was left" (T 84.49). Veronica denies this (a matter to which I later return). Margaret does, however, maintain that it was not her intention that all the sales proceeds go to Veronica "because she had to pay me for the land" (T 85.49) and hence she is seeking the release to her of the $200.000.
16The parties have obtained a joint valuation report (from Mr KD Wood) which assesses the unimproved value of the land at the relevant times at $430,000, thus enabling the value of improvements to be assessed having regard to the ultimate sale price of $925,000.
[3]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 08 September 2011
Commencement of the relationship between Gregory and Veronica
17There is a factual dispute as to when Gregory and Veronica commenced living together in a de facto relationship. As noted above, Gregory says they cohabited from about March 1997 until about late 2006 and again from late 2007 until January 2009. (As discussed later, Gregory's recollection of the dates is unreliable. In cross-examination he put his initial departure at various times in 2006 and his later departure at around Christmas 2008 - T 42.41, though later he suggested that he was living at a property in Kermond "like a refuge" at that time "when things got into trouble" for a couple of days - T 63, which might be consistent with a departure in early 2009). Veronica accepts that there was a de facto relationship but says that it commenced in about mid-1998 (when they moved to the Kurrajong property) and that the final separation occurred in December 2005. (Depending on which version of the evidence is accepted, the relationship was therefore somewhere between 7 and 10 years in duration.)
18In 1997 Veronica was living in Housing Commission accommodation at Lethbridge Park (near her mother's house at Lethbridge park). (She also at that time had a quarter interest in property at Myrtle Creek for which she says she later received a payment of $15,000 from one of her brothers, Reginald). Gregory says that he moved in with Veronica in March 1997 while she was living at Lethbridge Park. Veronica denies this. She says that a "boyfriend and girlfriend type" relationship began with Gregory in early 1997 and that in approximately July/August 1997 Gregory began to stay overnight at her home two to three nights per week, but that Gregory did not reside at the Lethbridge Park home (Margaret's second affidavit is consistent with this). Both Margaret and Veronica say that the couple first began living together in mid 1998 when they moved onto the property at Kurrajong.
19There seems to be no dispute, however, that from some time in 1997 there was a relationship between Gregory and Veronica that at least included Gregory regularly staying overnight at her house and little ultimately turns on whether there was a domestic relationship prior to 1998 (the time at which Veronica concedes such a relationship).
20In 1997/8, Veronica had three children living with her (from a former relationship) then aged around 12, 10 and 5, respectively, and Gregory had a young child (from his former marriage) who lived with his Gregory's ex-wife but who stayed with Gregory (and Veronica) from time to time.
21In February 1998, Gregory and his ex-wife reached a property settlement, as a result of which Gregory received payment of a sum of $40,000 (out of which he paid about $2,000 in legal fees). At that time, he says he had a small amount of cash, a one tonne ute, superannuation entitlements of about $16,000 and about 4 trail (or motor) bikes. He had an obligation to make ongoing monthly support payments (which he said were $100 per month) for his son.
22Gregory is a bricklayer by trade and he worked as such (off and on) during his relationship with Veronica. He was employed for a time prior to 2000 by his father and for a time during the period around 2000 by the owner of a pub at North Richmond. Apart from that, he seems to have worked at various places out of Sydney (including Mittagong and Forster) as and when work was available. During part or all of the relationship with Veronica he did not have a fixed regular wage - it being dependent on whether and when he obtained work. It is not disputed that there were times that he had no work and was dependent on Veronica to support his living expenses. Gregory readily conceded in the witness box that Veronica had been a great support to him over the period. It appears that for some of the period he was in receipt of unemployment benefits (such as in 2007, when he said he had no work - T 64).
23Veronica was unemployed throughout the whole of the relationship. Her income was derived solely from unemployment and parenting benefits from Centrelink (and was in the order of $580 per week although this varied over a fortnightly period depending on which particular benefit she received each week in that period). She says that she received board from the children once they turned 15 or 16 (though she was unable in the witness box to say when that was - at T 94, she said that she "wouldn't have a clue" when her daughter had turned 15 or 16, though conceding that she knew what year she was born). In her affidavit Veronica said that the "mortgage payments" were made out of the $250 per week board that she had received. (In the witness box she said, instead, that it was an interest only mortgage with no repayments and that the money was just drawn out of account there "automatically every month" - T 90 - and that no one made loan repayments "it just came out of loan money" - T 92.) Gregory, similarly, referred to mortgage repayments but seems to have understood that they were debited directly by the bank.
What was said about the Kurrajong property
24Gregory says that at the commencement of their cohabitation, Veronica told him that she owned a property at Kurrajong ([11], [21], [27] of Gregory's first affidavit). In the witness box he described this conversation as Veronica saying to him "she had some acreage at Kurrajong" (T.60.40/46). (When it was suggested to him that this was unlikely as Veronica was at the time living in Housing Commission property, Gregory commented that "she also owned land at Myrtle Creek there as well" (T 61.37), something not denied by Veronica - indeed Veronica maintains that the sale of her interest in that land for the sum of $15,000 was one of the sources of income for the construction of the shed on the property.)
25Gregory says that it was Veronica who said that she wanted move the children out of Sydney and suggested that "we could build on the Kurrajong property and move up there" ([16]) (which is what in fact they did) and that at that time he had no idea that Margaret had any interest in the Kurrajong property. (As Mr Livingstone notes the latter assertion is inconsistent with the later assertion by Gregory's solicitors, when the present dispute arose, that Gregory's belief at all times was that Veronica and her mother jointly owned the property.)
26Veronica denies that it was her idea that they move to Kurrajong and says that the idea of building a shed and moving to the property was Gregory's idea ([16] of her affidavit in reply). However, she also said that "It was me or my brother who was going to build on the property" -124.32 - and that "Greg jumped in first", which suggests that she at least had in mind that she might build on the property at some stage (but also suggests that what was involved at that stage was not contemplated to be the transfer of any beneficial interest in the property - it being a question of who in the family might be allowed to build and live there at the time).
27Veronica denies that she ever told Gregory that she owned the property. Similarly, Margaret says that in conversations with Gregory she said that she owned the property at Kurrajong and that she also heard Veronica say this to Gregory. (Both women refer to later conversations, during the course of the house construction, in which it is said that Gregory acknowledged or displayed awareness of the fact that Margaret owned the property.) Gregory maintains that he only learnt that Margaret's name was on the title deeds when the couple started to build the house and that he was at that time told by Veronica that Margaret's name was on the deed "to cover for her".
28In general I accept Margaret's evidence in this regard. That said, having regard to the conflicting evidence by Veronica and Margaret as to the moneys received on settlement of the sale of the property (Veronica asserting that all she received was $170,000 and that the balance belongs to her mother but in a bank account in Veronica's name so that it does not affect her mother's pension), and the general tenor of Veronica's evidence (to which I will refer later), it seems to me by no means inconceivable that if Gregory had raised the issue of ownership of the property with her, Veronica could well have explained Margaret's name on the title deeds in that way to Gregory. She seems to have regarded (and been allowed to treat) the property as her own in a practical sense. Similarly, it appears that Veronica acted from time to time as if it were her property (at least by the time of the house construction and the later giving of instructions to the real estate agents for the sale of the property). Therefore, it would not be surprising if she had earlier conveyed the impression to Gregory that she had an entitlement to the property.
29Nevertheless, there is nothing to suggest that when the property was acquired by Margaret there was any intention on her part to confer a beneficial interest on Veronica or that she had later declared any trust over the property in Veronica's favour. The most likely explanation of the evidence, it seems to me, is that Gregory assumed that Veronica had an interest in the property because she behaved as if she were entitled to it and because they were moving onto and building on it.
Construction of shed
30Towards the end of 1997, construction began of a shed on the Kurrajong property into which Gregory and Veronica moved (with her 3 children) in the first half of 2008. There seems to be no dispute that Gregory was involved in the construction of the shed (which commenced in 2007). However, Veronica says that the shed was built by a number of people (including Gregory) and that, in addition to the shed, stables were built (at a cost funded by her daughter Felicia, who can then have been only about 12, but who apparently provided some funds out of the sale of a motor bike [35]), and by Veronica's ex partner (who she said had provided the beams and structural materials from his workplace at no cost) [36].
31Pausing there, Veronica seemed to be at pains throughout her evidence to denigrate and downgrade the role that Gregory had played in the construction of the shed and of the house and to criticise the quality of his work. However, there is a logical inconsistency, it seems to me, in saying (for example) that Gregory was only one of a number of people who built the shed and stables and then seemingly blaming Gregory alone for any shoddy construction work - such as she did in relation to the stables by reference to an incident when the horse cut itself on exposed building materials - T 115.16; T 115.26.)
32Gregory says that he spent approximately $40,000 of his money on the construction of the shed ([25]), out of the moneys from his property settlement with his ex-wife (though he does not deny that some materials for the stable were provided by Veronica's ex-partner). He says that out of those settlement moneys he "refunded the sum of $12,000 to Veronica and paid a total of approximately $28,000 for the construction of the shed". (He also says that he gave Veronica a sum of $4,000 to put in a trust account for his son so that he would be in the same position as her children.)
33Further, Gregory says that after moving into the shed he built a new fence along the rest of the property (and rural wire fences down both side boundaries with the assistance of neighbours) and built a stable for Felicia's horse. He says that he paid approximately $4,000 for the materials for the fencing and $5,000 for the stables ([29]). He also says that he paid $13,000 for the cost of installation of a large water tank ([35]).
34Veronica denies that Gregory contributed any moneys at all towards the construction of the shed. She claims that she had three sources of income which she used for the construction of the shed ([31]) - $12,000 held in a bank account in trust for her children (which is consistent with Gregory's understanding that the three children each had the benefit of a trust fund of $4,000); $20,000 of personal savings; and $15,000 received from her brother Reginald for her share of the Myrtle Creek property.
35Of the three sources of income that Veronica says were available to her, there is doubt in relation to when she received the sum of $15,000 said to have been referable to the acquisition of her share in the Myrtle Creek property. The transfer in respect of her share was dated 10 May 2000 (well after the shed was complete). If payment for the transfer was effected at the time of the transfer then she could not have had those funds available to use in the construction of the shed in 1997/8.
36In cross-examination, Veronica gave conflicting evidence as to this issue. After asserting adamantly that she had enough funds to complete the shed on her own (T 110.46) and referring to her share of the Lismore property, Veronica accepted (at first) that the sale transaction was effected on the one day (T 11.23); she then said that she had received the sum from her brother Reginald at an earlier time (i.e. before the transfer of her interest ion the property); then she said that when she had referred to the $15,000 she received from Reginald she was referring to the water tanks or fences not the shed (T 112 .47), saying that "The shed classified as septic, everything that is around it, not just specifically one shed" (T 113.7). Finally, Veronica conceded that she did not have the money from sale of that property "when the shed first went up" (T 112.19).
37(I interpose to note that no evidence was adduced from Reginald as to the time when money was paid to Veronica for her share in the Myrtle Creek property).
38As to the payment out of the children's trust moneys, there is some consistency between the evidence given by both Gregory and Veronica on this issue - in that both say that Veronica was proposing to use the moneys held for her children, but Gregory says that he refunded those out of his property settlement moneys.
39At T 62.4, Gregory said that to "start the shed" there was $4,000 to be put out of each of Veronica's three children's trust accounts and $4,000 that was to go into his son's account was also used for the shed; but he also said that he had given Veronica $16,000 out of the moneys from his settlement to go into each of the four trust accounts (though there is no reference to that in his affidavit). The evidence in this respect was confusing but it would seem that what was contended by Gregory (as is set out in the conversation to which he deposes at [19]) was that Veronica had agreed to use moneys for the construction of the shed at the outset out of her children's funds and that he was then to pay her back for those moneys out of his property settlement - and that this was the $12,000 of the funds from his property settlement by which he said her had refunded those amounts ([25]). Needless to say, that is denied by Veronica.
40Veronica says that of his property settlement, Gregory paid her $10,000 to repay her a loan for the purchase of a Holden ute (the acquisition of which Gregory says came later than the settlement and was a loan that he says he repaid with moneys handed over from his wages) and she also claims that he paid some $24,000 for a motor bike. Gregory does not deny that he bought a motor bike after the property settlement (though he says it was at a much lower cost - around $8,000 or $9,000, and not the $20,000 that was put to him in cross-examination) (T 38).
41If, as Gregory says, the sum of $12,000 (advanced out of Veronica's children's accounts) was repaid by money he provided out of his property settlement, then taking into account the legal fees of around $2,000, that would have left no more than $26,000 available for contribution to the shed construction costs (of which it seems to be conceded that some $8-9,000 was spent on a motor bike at least). (That would be consistent with a payment of around $9,000 on the fencing and other materials but leaves unclear from where the funds for the water tank were derived - assuming all these amounts were paid at around the time of construction of the shed. Alternatively, it would be consistent with payment of the costs of the water tank but would leave unclear how Gregory could have funded the fencing and stable materials, at least without another source of income.)
42No invoices were produced in relation to the amounts said by each to have been expended on the shed. Gregory did receive a net sum of about $38,000 out of his property settlement of which it is feasible that he could have expended around $30,000 on construction of the shed and items such as the water tank (assuming the motor bike was in the order of $8,000) (and would be consistent with his assertion that he repaid the amount of $12,000 funded through Veronica's children's trust funds), though that amount would not have covered the total amount that he says was spent by him in connection with the shed, stables and fencing.
43Apart from the amount he received from his property settlement, Gregory's ability to fund payments of the kind that he says he made towards the shed seems to have been limited. Mr Livingstone pointed to Gregory's tax returns for the 1998 and 1999 years to show that his income was limited and would not have permitted contributions of the kind that Gregory said had been made. (For the year ended June 1998, during which year he said he had broken his leg and was unable to work as much, Gregory's total taxable income was $15,822; in 1999 it was $26,211.)
44In that regard, there was a suggestion that Gregory may not have disclosed all of his income over the period (he said in answer to questions as to his taxable income for those years that there may have been cash jobs). Gregory referred to "cashies" as payments received in cash and agreed that they were not recorded in his work diaries (T 29.35). His evidence in the witness box suggested that he might not have regarded those as income he was required to declare. At T 27.19/25, Gregory said that the wages "would all be on there" but some money was not on the books and he seemed to suggest that moneys paid in cash might not have had to be declared.
45However, to the extent that his filed tax returns should be taken to reflect what his income was for the period, this does not reveal a ready source for payment in respect of the construction of the shed and Gregory conceded (at T 28.29) that there was not a lot of money left out of his wages after child support, petrol, cigarettes and the cost of living.
46Veronica sets out at [32] of her first affidavit the amounts she asserts were paid from her own moneys in relation to the construction of the shed (including for that purpose amounts that she says were referable to the water tank and fence). According to Veronica (and leaving aside the cost of materials for completion of walls and floors, which she did not attempt to quantify), she expended a total of some $45,000 on the shed, fencing and water tank. If those estimates are reliable (and I treat them as no more than assertions given the lack of any documentary evidence and the general tenor of Veronica's evidence) then even if Gregory had paid the whole of the net funds from his property settlement to Veronica (and deducting an amount for the motor bike), there would be a balance of some $15,000 that Veronica must have funded (out of her children's trust funds and/or whatever other funds were available to her - but not out of the moneys from Myrtle Creek, which she accepted she did not have at that stage).
47For the reasons that I outline later in this judgment, I consider that the evidence of both Veronica and Gregory in relation to financial matters needs to be treated with scepticism. I consider that the evidence establishes that Gregory must have contributed at least $15,000 and potentially up to $30,000 out of his property settlement moneys to the construction of the shed.
Relationship at Kurrajong
48There is no dispute that after the shed was built the couple lived in the shed on the Kurrajong property with Veronica's children from about 1998. There also seems to be no dispute that the relationship was a volatile one (to use a relatively neutral, and probably charitable, term). It was described as an "off and on" relationship (by Margaret, who deposes to periods during which Gregory lived at other locations - for up to approximately 9 months on one occasion) ([12]-[14]); or a "hot and cold" relationship, as conceded by Gregory himself (T 65.47). Felicia (who admittedly was not favourably disposed to Gregory and says she was forced to like him and regarded him as the enemy for most of the time of the relationship with her mother - see T 129.28; T 129 37) said that "it was always off and on that he was living at Kurrajong".
49Veronica more than once described it as an abusive relationship (see T 110.13; T 117.48) and said that the whole thing was a nightmare (T 119.14) and there was evidence from both Margaret and Felicia as to their observations of physical violence during that time. Veronica recounted in her affidavit various incidents of physical and verbal abuse (in the main denied by Gregory, although he did not deny that he had used offensive language to Veronica and he accepted that on one occasion he had injured Veronica's finger and she had required hospitalisation for the injury). Gregory's work diaries (to which he knew Veronica had access from time to time, though he suggested that this was a breach of his privacy) certainly contain offensive language (and hence it is not unlikely that Gregory used such language in the home) and, on occasion, crude messages (leading to the submission by Mr Livingstone that they were intended to harass or intimidate Veronica - although it is not clear whether she was in fact intimidated by the contents of the diaries). Gregory denied that when he wrote notes in his diary he intended to threaten Veronica (T 66.21) and said that his diary was his "own thoughts" and for him. He agreed that Veronica had written in them and had access to them but denied addressing comments in his diary to her and maintained that he did not even think about whether she would read it (T 67). In this regard, many of the notes seem to be admonitions to himself and it may well be that the notes written that were abusive of Veronica were not directed at her (although I was taken to a particularly crude drawing that is hard to read otherwise than as directed to her).
50Gregory accepted in the witness box that he had "probably" used bad language (T 37.15) "during some fighting, some had times" and accepted that his diary contained such language (describing the relationship as 'pretty hectic' throughout the period - T 64.48).
51On 8 January 2003, while the couple were still living in the shed, Veronica obtained an apprehended violence order against Gregory (that order being revoked on 25 June 2003), which in its terms prohibited entry by Gregory onto the Kurrajong premises. Gregory says that when that order was made, he lived for a time at a friend's place (though he was vague as to whether this was for a week or a month) and then moved back in with Veronica with her consent. (According to Gregory's evidence in the witness box, the order was amended on Veronica's application after 6 months. His evidence was vague as to when he actually moved back to the property). Veronica seemed to accept that the AVO had been amended with her consent "because things changed" (saying that the 3 months after that was the only period that the couple had "got on").
Decision to build on the property
52During 2002, it seems that there was discussion as to the building of a house on the property. Veronica's evidence in this respect was difficult to accept. She maintained in the witness box that the project was Gregory's idea "and solely his" (T 91.25) (which seems inconsistent with her mother's evidence) and one with which she reluctantly went along (T 107) and denied having any interest in the project.
53At T 106.49, she said that "Greg wanted to build the house to keep the cost down, not me Greg wanted to build the house", and that she was quite happy living in the shed (T 107). She said (at T 107) "He is the one who wanted to build the house. He is the one who promised everyone the world, and he is the one who did not deliver". (Somewhat inconsistently, she also said "I was going to go ahead and build a house regardless if he was in my life or not" (T 91.31).) At T 110.7, Veronica said "I wasn't interested (in the house)) in the beginning and I probably wasn't really - I didn't have a choice. I was told that I had to help and that was every day he was there I had to be there".
54Veronica was reluctant to accept that there was any intention for the home to be built for their joint future but did not deny it outright: asked whether they had moved to Kurrajong and started living in the shed with a view to a long term relationship, her answer was "not really" (T 91.13); asked if she understood Gregory was building the house for the future they were planning (T 92.6) she again said "not really" and added "He just lied all the time" (T 92.12); asked if it was the idea that all of them would live in the house, she conceded "Oh if it did get to that yeah" (T 110.16); but then said "it didn't last long - I wouldn't really say he stayed in the house too long" (T 110.22) (something inconsistent with the suggestion that he did not move into the house at all and only lived in the shed).
55Even if it be the case that it was Gregory's idea to build the house, it seems highly unlikely that Gregory would have taken on such a project if all he thought was that he would obtain more than the benefit of temporary (and rent-free) occupation in the property (which is what Veronica suggested at T 107.11). Furthermore, if accepted, Veronica's evidence that the construction of the house was all Gregory's idea and that she only reluctantly fell in with his wishes would seem to me to support the conclusion that Veronica understood that Gregory was to obtain some benefit out of the construction of the house (not simply that this was something to occupy his time or to provide temporary accommodation for him - since the former makes no economic sense and the latter ignores the fact that Gregory already had temporary accommodation in the shed). I have come to the conclusion that Veronica's evidence on this issue was an example of her insistence on down-playing the relationship and Gregory's role in it.
56Gregory says, variously, that it was when they were building the shed (T 50.4) and then that it was when the couple were discussing the construction of the house in about 2002 or starting to build the house (T 49.39) that he first learnt that Margaret's name was on the title deed. He says that Veronica told him this and that she said it was "to cover for me", explaining that she would need to get her mother to sign the mortgage documents ([33]). Veronica denies this conversation. (The reason that it might have been to cover for Veronica was not explored, although perhaps there would have been an issue as to her CentreLink benefits if she had owned an interest in the property.) Gregory also says that Veronica told him she had looked into transferring half of the property into his name but that it would cost about $30,000 for the stamp duty and they agreed that this was too much ([34]). Veronica denies the conversation in [33] but, perhaps tellingly, does not respond directly to the conversation in [34].
57Both Veronica and Margaret recount conversations in which they say Gregory complained (during the course of the construction of the house) that he was doing all the work and the property was not even his. Gregory denies this, but in any event, it would be consistent with Gregory's evidence that he was told at some stage that the title deeds were in Margaret's name and that he regarded this as inconsistent with the arrangement in relation to the house. Gregory, however, maintains that he understood that Veronica had a beneficial interest in the house and he asserted that "I thought she [Margaret] had her name on the deeds, I believed v owned it and the mothers name was on the deeds" (T 50.13). At least by the time that preparation for construction commenced, however, he knew that Margaret's name was on the deed (T 51.42).
Finance for construction of house
58Finance was obtained from the NAB in late 2002 for the purpose of construction of the house on the property. (Veronica made the loan application, falsely stating that she was employed at the time. When first questioned as to this, Veronica somewhat disingenuously suggested that she had not herself misinformed the bank but, rather, her accountant had. However, she did ultimately concede that she had knowingly signed a document containing the dishonest statement that she was in paid employment with EZI Grow Hydroponics, Mr Druitt (T 97.34) in order to obtain a financial advantage for herself (T 98.26).
59The loan was via a flexiplus loan facility secured by a first registered mortgage over the property. The facility operated such that the principal was not repayable during the term of the facility and interest was charged on a monthly basis and debited to the loan account (presumably up to the maximum level of the facility). Withdrawals from and payments into the loan account were permitted and operated either to increase or reduce the interest payable on the outstanding loan account balance. Relevantly, it seems that the living expenses for the household were also met from this loan account (into which Veronica's CentreLink benefits were paid) as well as the construction costs. (In 2007 and 2008, overseas holiday expenses for Veronica and members of her family were met out of the loan account.) Veronica conceded that it was used as a bank account.
60Gregory says ([25]) that he made mortgage payments during the course of his cohabitation with Veronica, by giving most of his wages to Veronica each pay packet ([27]) (though he also accepted in cross-examination that there were not mortgage repayments as such). He says that during the course of the relationship, he worked as a bricklayer and earned approximately $1,500 per week of which he says he gave about $1,000 per week to Veronica (which he says she used to pay for building materials for the house and repay the line of credit obtained from the NAB to construct the house). In cross-examination he was somewhat vague as to what had occurred in that regard and as to his earnings over the period.
61Having regard to the work diaries he kept over the period (in which he regularly records having no work but in which on other occasions he records amounts paid for wages and the like - including at least one entry where he notes that he was paid $1,800) it seems implausible that he received a regular wage that permitted him to pay $1,000 per week to Veronica (and the loan account statements do not record a regular deposit of such an amount). That said, the bank account do record cash deposits from time to time of amounts that do not seem to be referable to the CentreLink payments, which would support the inference that Gregory was providing Veronica with cash out of his wages at least from time to time (contrary to her denial to that effect). (This seems to me to put into context his concession at T 46.17 that all his expenses - bike, petrol, clothes, food, cigarettes, beer and marijuana - were met for him over a 10 year period; and that he did not do the grocery shopping (T 47) and that Veronica would sometimes buy clothing for him (T 46.44). To the extent that those payments came out of funds from the bank account, it seems to me likely that they came out of pooled funds albeit that Veronica's income was more regular and may have been more than his over the period - although no exercise was carried out to determine that).
Construction of house
62The construction of the house was as 'owner/builder' and it is not disputed that Margaret completed a TAFE course in June 2003, as required for the purposes of such certification. There is a dispute as to whether, as Gregory says, it was put to him that one or other of Margaret or Veronica had to do the course and the suggestion that Veronica did not do so because she was 'probably' required at home that day.
63Veronica accepted that Gregory "took control of the work", she says that this was something that she "just went along with" (T 107) and that he had liaised with the Council at first but that this changed after the house was complete (though quickly adding that it was "not actually complete because it was never complete").
64The building documents tendered by Gregory show that he was recorded on a number of the documents as the owner or builder, together with references to Veronica as owner, suggesting that the couple were not careful to specify accurately the position in that regard. (Exhibit 10 is a bundle of documents including a building inspection request dated 8 September 2003 showing the owner as 'Austin' but the builder as G Hornby; a second certificate of compliance describing the clients as Mr and Mrs Hornby; a residential construction specification in the name of G and V Hornby of 6 January 2003; an Avcot Engineering Services Agreement with G and V Hornby; and a certificate of compliance dated 18 September 2003 describing G Hornby as the builder.) This is consistent with the project being treated as a joint project (as are Veronica's own entries in Gregory's diaries during 2003).
65Construction of the house began during 2003. Gregory described the works that he says he co-ordinated during the construction process (at [39] of his affidavit and in considerably more detail in his oral evidence). It is common ground that Gregory did physically carry out some building works on both the shed and the house (though Veronica was at pains to stress that she was assisting him throughout and that others were involved) and there is a dispute as to the extent (and value) of those works.
66Veronica grudgingly agreed Gregory took charge of the construction (T 128.9) and "sometimes" was involved in the construction "when he would get off his benders he would go to work and then I would not see him for a week" (T 128). She asserted that the work was of "benefit for himself because he was the one who wanted the house" (T 128.22) and maintained that "No it was actually a headache to me something that I didn't want to go on lived on promises had no choice but to go ahead with the house" (T 128.25).
67Veronica consistently down-played the involvement of Gregory in the construction of the house, maintained that he had done much less than he said he had done, emphasised her own involvement in the construction of the house (and was critical of the quality of the work that he had carried out - describing most of it as 'poorly done' or very poorly done, including by reference to the cheap tiles that she said had been used). She did not refer in her affidavit to some of the work that she conceded Gregory had performed such as his use of a backhoe to excavate trenches (which she described as "Got on it all the time to destroy the property" T 113.49) because she said that her affidavit "didn't go into the nitty gritty" and it "wasn't my department" - T 114.12. I can only describe her attitude in the witness box in this regard as truculent, grudging and unco-operative.
68So, for example, of the tiling that she concedes Gregory carried out ("with assistance from me") T 114.23, she said that she did not mention this in her affidavit because "that's house things not women things its men things" and then said was a "very poorly job" (T 114.36). She would not concede that the bricklaying (in which she said they had all assisted) was an important contribution ("No because he done a very poor job. All things were out of line, depreciated the value of the house because they were cheap tiles" - T 114.46; then, when it was pointed out that on her case she had paid for the tiles, she said the reason that the tiling depreciated the property was because they were not laid properly they were all over the place T 115.7 and again that they were "not the best of tiles", "when people would throw things on it and smash them no not the best of tiles" - T 115.11). Veronica gave varying estimates of the bricks laid by Gregory (70% or 80%) but says "I was there, every brick" (T 91.42/.48) (her assistance not being disputed by Gregory). Asked about work on the fence she said "Not all of it" T 99.5.
69At T 98.38, Veronica claimed "I done more work than he ever done"; at T 98.45 "He did a lot less work than he is claiming that he has done".
70In response to the suggestion that she considered that every piece of work carried out by Gregory had been done poorly, Veronica said "it had to get fixed up a lot of things had to be fixed up" (T 115.26).
71As to Gregory's evidence of the work carried out by him, while vague in much of the rest of his evidence, he became most animated when describing the tasks that he had performed or organised others to perform in relation to the works (presumably because this was an area of evidence closer to matters of which he was familiar and felt comfortable discussing). He did not deny that Veronica (and others) had assisted him and I did not form the impression that he was overstating the work that he personally had done. I accept that in general terms his evidence as to the steps taken by him and others in the construction process was credible and where there is a conflict between his evidence and that of Veronica as to the work that was done and by whom I would accept Gregory's evidence as the more reliable.
Cost of construction
72Veronica denies that Gregory contributed any of his own money to the construction of the house. Certainly, as Mr Livingstone developed in cross-examination of Gregory, his financial ability to contribute to the costs of the materials for the construction works (having regard to his inconsistent work history and tax returns) was limited. It is submitted (and I accept) that Gregory's overall circumstances were such that he did not have significant funds (whether by way of capital or income) to invest in the Kurrajong property (having regard to the spasmodic nature of his earnings and his ongoing legal obligation to provide support for his child under the Child Support (Registration and Collection) Act 1988 (Cth) and the Child Support (Assessment) Act 1989 (Cth)).
73Gregory's tax returns certainly do not reveal a large income sufficient to meet construction costs in the vicinity of somewhere in the order of $330,000 over the period in which the main construction work was carried out. He was employed for a time from about 1996 in his father's electrical contracting business and paid (variously by cash or cheque) depending on the amount of work he had done from week to week. He says that out of his pay he gave his mother money for his child support payments (to pay his ex-wife). Mr Livingstone placed some weight on the fact that there was no evidence adduced by Gregory's mother (as to the alleged payments to Gregory or as to where Gregory was living in 2007/2009 (the disputed period)). There was evidence, however, from his father Mr William Hornby that supported in general terms his employment of Gregory for some part of the period in which Gregory was in the relationship with Veronica (although he no longer retained records in relation to the wage payments) and, relevantly in light of the criticism that Gregory's mother was not called to give evidence, William was not cross-examined as to where Gregory was living at the particular time.
74It seems fair to say that Gregory's employment over the period from 1998 to 2009 was of a sporadic nature (whether due to injury, as seems to have been the case in 1998, or because of a lack of available work). There was a suggestion in the course of cross-examination that Gregory had been prepared to take unemployment benefits while fit and working on the construction of the house. However, Gregory's explanation seemed to be that there was not available work in the whole of the period. I was taken to various diary entries by Gregory that suggested that, over the course of his relationship with Veronica, there were indeed periods in which he had no or little work. However, given that Gregory seems to have been prepared to travel out of Sydney in order to obtain work (and to stay in a van or other temporary accommodation to do so) I do not conclude that he was unemployed from time to time because of any general disinclination to work.
75As noted earlier, Veronica was unemployed for the whole of the period. There is no evidence as to any attempt by her to gain employment in the period. She was in receipt of welfare benefits (a maximum of $580 per week) that do not seem to account for all the cash deposits into her bank account (which suggests that Gregory did provide her with income from time to time, as he says he did).
76Veronica's explanation for the various cash deposits (in amounts varying over the period February 2003 to January 2006 from as low as $300 to as much as $4,800, leaving aside a deposit described as "Cash and/or Cheques Deposit of $14,763.85 in February 2004) was that those were (on every occasion) payments back into the account of moneys that she had previously withdrawn to pay workmen (and then re-deposited when the need to pay those workmen did not arise). (She said in relation to one such entry "That was money that I would have taken out of the bank to pay for things, didn't use the money and put it back into the bank" (T 101.11) and then "Well during the period I've taken money out to pay for things. If people didn't show up or nothing got paid, the money got put back into the bank" (T 101.24). That may well have been the case on some occasions but it seems unlikely to account for the regularity of such cash deposits into the account. Her evidence was frankly implausible on this issue and seemed to have been an attempt to avoid the conclusion that Gregory had in fact given her moneys over the period for contribution to household expenses or the like.
77I was left to conclude that both the parties were less than upfront as to financial matters - it seems to me quite possible that there was a non-disclosure in Gregory's tax returns of at least some of the cash income he received over the period (if, indeed, his contribution to the relationship was as he said it was); by the same token Veronica herself was not averse to presenting an inaccurate financial picture if that would be of benefit to her or her family (insofar as she signed a false statement as to her income when applying for the NAB loan and she seems to have been unconcerned at the suggestion that moneys might be placed in an account in her name in order, on her version of events, to present a misleading picture in relation to her mother's pension).
78It seems to me likely that Veronica's denial of any contribution whatsoever to financial expenses by Gregory over the period is consistent with her desire to minimise the contribution made by Gregory in other ways and I treat it with scepticism accordingly. Veronica's explanation as to the bank cash deposits (as noted above) lacked credibility in my view. In the absence of evidence that Gregory maintained a separate bank account during the period (and given that of the two of them Veronica seems to have been the one to have assumed the responsibility for attending to the household expenses - grocery shopping and the like - as well as for making the payments to the tradesmen and at least supervising, if not attending to, the lodgement of documents with the Council, having regard to her entries in Gregory's diary), the suggestion that Gregory gave Veronica some or most of whatever wages he received (less money for cigarettes or 'beer money') over the period seems to me to be more credible than that Veronica was the sole financial support for the household throughout the whole of the period of what she said was an abusive relationship (with only one three-month period in which they got on). That said, it does not seem likely that Gregory made either a regular or a particularly large financial contribution to the costs of construction of the house (the bulk of which seem to have been funded through the NAB facility).
79What is clear is that, other than the provision of her land as security for the NAB facility, Margaret did not contribute financially to the construction of either the shed or the house. Tellingly, she explained this in cross-examination by saying that this was because it was to be "their house". However, both Veronica and Gregory obtained the benefit of rent-free accommodation over the period in which each resided on the Kurrajong property.
2005
80The house was completed in 2005 (or at least sufficiently complete that it was ready for occupation). Gregory says that he and Veronica and her children then moved into the house. Veronica says that she moved into the house in April 2005 but that Gregory remained living in the shed. (According to Gregory, the shed remained a source of accommodation for him at least to the extent that he says he slept there when there was trouble with Veronica).
81As to any suggestion that Gregory never lived in the home (if that be the intent of Veronica's affidavit) it seems inconsistent with her assertion that "Gregory never resided in the home after December 2005" ([at 29]) (my emphasis) and while Margaret gave evidence that she did not see any of Gregory's possessions in the house after December 2006, she gives no such evidence as to the period before then. (It is also inconsistent with Veronica's evidence that he did not stay 'long' in the house, to which I have referred earlier.)
82As to any non-financial contributions to the relationship (such as driving the children to school or helping with the cooking or the like (which Veronica again denies or, in effect, dismisses as minimal), it is submitted by Mr Livingstone that the quality of Mr Hornby's non-financial contributions is outweighed by the evidence of physical and verbal abuse on Gregory's part, as well as inappropriate behaviour (such as offensive language and illicit drug use in the presence of Veronica's children).
83Although much of the evidence of violence was denied (such as the 'pitchfork' incident and the 'spark plug' incident - those being denied on the basis of matters suggested to show that they could not have occurred - or incidents of violence in the car), there were at least two incidents that were conceded by Gregory (the injury to Veronica's finger, that required hospitalisation and that Gregory implicitly concedes was distressing to Veronica's children since he referred to a lot of screaming and carrying on, and the throwing of some ham (be it a few slices or otherwise) at Veronica or over her head).
84There is also support for the likelihood that Gregory was prone to use offensive language towards Veronica from the contents of his diaries in which such language is rife. That said, Veronica too seems to have accepted that she used offensive language. Both Gregory and Veronica insisted that they only used offensive language in retaliation for its use by the other (which rather begs the question as to who first engaged in such behaviour).
85As to the drug use by Gregory, which he says was the smoking of marijuana and which he says he tried to do discreetly (although that is not necessarily consistent with a photograph tendered by Veronica), there was a suggestion that this was not something frowned upon in the household as a general principle (on the basis that Gregory maintained that Veronica's brothers partook of similar behaviour) but that assertion was not able to be tested on the evidence before me.
86Suffice it to say that this seems to have been a not particularly harmonious relationship and was certainly not one in which the interests of the children had been of sufficient concern to lead Gregory and/or Veronica to modify inappropriate behaviour (such as offensive language, whether that be retaliatory or otherwise, or drug use by Gregory) in front of the children.
2006
87There is no dispute that at least by some time in 2006 the couple had separated. Gregory, in his first affidavit, says that the parties separated in late 2006 for 12 months and he claims that he then moved back in with Veronica at the Kurrajong property in late 2007 (at the suggestion he says of Veronica) ([44]). Veronica, to the contrary, says that she and Gregory separated on a final basis in December 2005 (Veronica's first affidavit [16]) and did not resume a de facto relationship thereafter.
88It seems to be accepted that when Gregory left the property (be that late 2005 or late 2006 or sometime in between) that marked the end of the relationship at that point. He says that he attended Felicia's 18 th birthday party in December 2005. Neither Veronica nor Felicia admit to seeing him there (though do not deny that he was there), saying it was a 'big party'. Veronica was prepared to admit that Gregory had helped to set up for the party, which would be consistent with Gregory still being treated as part of the household on that occasion. Felicia was adamant that after the party, Gregory was no longer living on the property.
89Gregory refers to his diary as indicating when he was at the property (and, relevantly, when the relationship came to an end at that point). I was invited by Mr Livingstone to review the diaries (not simply as to this issue, I hasten to add). From the 2006 diary entries it seems that Gregory was at the property in early 2006 up until March but that he left at some time around 19/20 March and that the relationship was (at least so he was informed by Veronica) over at that point. There is nothing to suggest that the relationship subsisted through to late 2006. Gregory's own evidence in the witness box seemed to place the end of the relationship at an earlier time although he was unclear as to whether it was while he was living in Mittagong that they finally separated (i.e. sometime around April) or in mid June when he was working in Forster.
90The 2006 diary shows entries for 22 and 23 January 2006 respectively as "at home" and "mowed lawns", which Gregory said was a reference to Kurrajong, and similarly for 16 February 2006 "at home". From my review of the diaries "at home" or "in shed" are references to the property at Kurrajong. (Gregory explained references to at shed as being times when he retreated or was banished when there was confrontation within the house and that seems consistent with the content of some of the entries). When Gregory stayed at his mothers he referred to that as "at mum's" and when he stayed elsewhere (Mittagong etc) he noted that. Significantly, there were entries for March (10, 12 and 13 March 2006) referring to commencement of work on the garage, which must relate to the Kurrajong property (there being no suggestion that he worked on the construction of any other garage in that period).
91Therefore, I find that there was still a domestic relationship (though it may well have been a troubled one) as at mid March 2006. However, I find that the relationship had come to an end by the end of March (and probably around 20 March 2006). (There was in evidence a birthday card sent by Veronica to Gregory's son in October 2006 and signed by her on behalf of Gregory, herself and each of her children, which is inconsistent with the relationship being over at that stage. However, the diary entries are inconsistent with the maintenance of a domestic relationship after March 2006 and I therefore accept Veronica's evidence that this was done as no more than a gesture to Gregory's son.)
2007/2008
92Gregory says that during 2007 Veronica sent him a number of text messages (there is no diary for 2007 but his diary of 2006 records some messages having been received from Veronica after the time at which Veronica had told him the relationship was over, and Gregory seems to have seen this as a hopeful sign). He says that they had dinner and spent the night together when he was working in Mittagong on at least occasion and after that (when Veronica returned from a trip to Europe in 2008) they "hooked up" again. Although his timing was again vague on this issue (and it is not helped that there is no 2008 diary from which to test his recollection), he placed the timing of the resumption of their relationship by reference to events that it is not disputed did occur (namely, Veronica's European holiday in 2008). He says that he moved back to the Kurrajong property when Veronica came back from Europe in Europe in 2008. That is denied by Veronica (and by Felicia).
93The resumption of a relationship at that stage would not be inconsistent with the sentiments expressed in a postcard sent by Veronica to Gregory from Europe (tendered as Exhibit 9), which was expressed in affectionate terms: "Can't wait to hold you again Love and miss you, you big poof Love Veronica". Certainly, this does not suggest that any separation was regarded by her at that stage as final. Veronica said in the witness box that she says "lots of love" to everyone (T 119) but the message on the postcard seems to me to go beyond a generic expression of affection.
94There is little evidence beyond the parties' respective assertions as to whether in 2008 Gregory was living in the property or not, although Veronica accepts that he "would have done a bit of work in 2008" (T 122), the value of which she again minimised (saying that he was paid to paint the outside to the house, pulled a bath out in the children's bathroom, worked on a couple of tiles around edges and did a bit of gardening and that she gave him "some money for smokes", as they were "so important to him" - T 123).
95Gregory's 2008 diary is missing. Unlike Veronica, who was quick to accuse Gregory of stealing invoices to support her claims as to the amount of moneys she says were paid for items for the shed (T 113.19) but who based this allegation of theft on no more than supposition:
Probably when he has come up to the property I would say. The shed was always open, All the documents were in the shed" T 113.25
Well I know he would have stolen them because they disappeared and no one had seen them so yeah he would have taken them - T 113.30
Gregory does not accuse Veronica of stealing the diary. In his first affidavit he says that when he packed up his clothes and personal belongings "when he left the Kurrajong property" (by which I understand him to mean when he left at some time after 2005/6) and Veronica gave him a bag which contained his work diaries and a few miscellaneous receipts and that was all he had. Clearly the 2008 diary would not have been in existence then.
96If, indeed, Gregory did return to live on the property during 2008, it is quite possible that any remaining papers were later thrown out (deliberately or not) by Veronica (who seems by 2009 to have been determined to be rid of anything relating to the relationship, having regard to her evidence that: "I gave away everything I had, everything else was destroyed. The whole thing was a nightmare and I didn't want anything to do with it again ... everything that concerned him and the so-called relationship we were supposed to have" - T 119.14.)
97There are some matters that seem objectively to point to Gregory's whereabouts during 2007/2008 (although to an extent they conflict with each other).
98First, there is correspondence with the Council that suggests that the final inspection reports were obtained with reference to Gregory on the documentation (supporting his assertion that when he returned in 2008 he assisted in finalising the construction works). Exhibit 3 is a Hornsby Council document dated 22 January 2009 (a mandatory inspection report) on which the contact name is noted as Gregory's name. It is possible that this may simply be a function of his name having been on earlier documents but on its face it supports Gregory's evidence that he was there and assisting in relation to the final approvals at that time. (I note that Veronica herself says that Gregory finally moved his 'stuff' out in 2009 - if, as Gregory's 2006 diary indicates, on his first departure his belongings had been removed, then this is support for him having moved back in at some point prior to early 2009.)
99Second, Gregory was involved in a car accident during that period and the traffic incident report of April 2007 notes his address as the address occupied by his parents. Gregory says that this address was taken from his licence and that he had not changed his licence back to the Kurrajong address at that stage. However, when the police came to follow up the report of the incident Gregory was at his parents' address, which would be fortuitous if Gregory was not living there at the time. Gregory's explanation that he may have been just visiting does not seem to me to be credible.
100Third, there is evidence of a document in relation to long service leave on which Gregory has noted his parents' address. Gregory says he did this, in effect, because of the long-term nature of such leave entitlements. That seems to me to be plausible.
101Fourth, tendered at the close of the case (Exhibit 7) was a receipt from a recreational imports business for a purchase by Gregory in 2008 which shows his address as at 7 December 2008 as being at Kurrajong. Of the above pieces of evidence it seems to me that the last is the most conclusive. There would seem to be no reason at all for the Kurrajong address to be listed on the receipt had Gregory not been living there at the time. If he had been living at his mother's address (and only staying in the shed while he was carrying out some chores for Veronica) it would make sense to put his mother's address on the receipt.
102On the balance of probabilities I would accept that there was a resumption (albeit it would seem relatively brief) resumption of the domestic relationship during 2008 (not 2007) and that Gregory was still living at the property in December 2008 in a domestic relationship with Veronica (thus within two years of his application by Cross-Summons in these proceedings which was filed on 22 September 2008).
2009/2010
103Gregory accepts that by early 2009 the relationship had come to an end (and in around March/April 2009, Margaret says that she moved into the house and that Gregory was not there). As noted, Veronica concedes that Gregory "finally" moved his belongings out in January 2009 (T 117.29).
104Prior to the sale of the house in April 2010 there were further works carried out to the property - in particular, rectification of some of the electrical work (as to the initial quality of which Veronica was scathing) and the filling in of a large hole that had been excavated on the property (that Gregory said had been dug for a proposed swimming pool near the house but that Veronica described as Gregory having deliberately damaged the property).
105Veronica said that in order to sell the property she needed to make a number of financial contributions towards the property in order to improve it to an appropriate standard - those are quantified by her (at [81]) as totalling $31,500 in what she ways was rectification of faulty work done by Gregory or to fill in the large hole and (at [82]) in the sum of $112,500 for other improvements to increase its sale potential.
106No invoices or independent corroboration of those asserted amounts were provided. Veronica seemed to suggest first that invoices had been stolen by Gregory, then that Gregory had no business knowing what had been spent, and then that the invoices had been provided to the incoming purchaser (even though at the time of the sale Veronica was on notice of the claimed interest by Gregory since he had lodged a caveat and had retained solicitors - who presumably would have advised her in relation to the retention of documents).
107Veronica said as to the further moneys that were spent finalising the house that they came from her brother (Mark) selling his business and the sale of a boat (T 117.37), though there is no suggestion of this in her affidavit (she explains the omission of any such information in her affidavit as being because it was "no concern of [Gregory's], I was not with him at the time"). It was in that context that she went on to say that "Anything that happened after January 2006 had nothing to do with him. I was out of an abusive relationship I didn't want to go back there anything I have done there I didn't want anything to do with him" - T 117.48 (though this is inconsistent with the communications that passed between them in 2008 and with the fact that Gregory, even on her own case, was carrying out work on the property in late 2008).
108Veronica said that she did not keep the invoices as to moneys spent on the house ("I gave them to the owner of the house" - T 118.9) and that she did not keep copies. She accepted that before settlement of sale she knew that Gregory was making a claim of some sort in relation to the house - T 118 - but then suggested that the invoices may have been provided before the claim was known since the owner had moved in before settlement date and she had moved out. (Veronica's explanation in the witness box was that the purchaser had occupied the property under licence before completion, though there was no evidence as to this and it was not referred to in her or her mother's affidavits. Indeed, it is inconsistent with Margaret's evidence at [28] of her second affidavit that she "continued to live with Veronica at the Kurrajong property until the property was sold and settlement took place in April 2010 " (my emphasis).
109Veronica also said that she did not ask for copies of the invoices from the owner because she only had one day before she had to send everything in - T 118 (but later seemed to suggest that the Notice to Produce served had not related to her documents, so it is not clear that her evidence was consistent even on this point).
110It is also not clear why the purchaser would need invoices relating to matters such as landscaping of the yard (even if invoices relating to particular items purchased, such as a roller door, might be useful for warranty purposes) and nor was there any evidence that the purchaser had been asked if those invoices had been retained for the purpose of adducing them in evidence.
111I pause there to note that to the extent that Veronica seems to have given everything away or destroyed documents, even though there may be a quite understandable desire to be rid of the memories of an unsatisfactory relationship, that would not preclude an inference arising as a result of the destruction of evidence of that kind. (And, even though I find the explanation as to the giving of documents to the incoming purchaser lacks credibility, an inference may similarly arise if Veronica put the documents out of her possession and made no attempt to retrieve them for the purposes of the hearing.)
112Where particular evidence can be identified as having been deliberately or recklessly lost, or destroyed, or not disclosed, this gives rise to a presumption at least that the contents of that evidence would have been entirely against the defaulting party (in accordance with the maxim omnia praesumuntur contra spoliatorem which has been translated as "all things are presumed against the wrongdoer" per Mozley and Whitley's Law Dictionary as cited in NWR FM t/a North West Radio v Broadcasting Commission of Ireland & Anor [2004] IEHC 109).
113In Allen v Tobias (1958) 98 CLR 367 at [375], the High Court adopted the following statement of principle in this regard:
... no statement of the principle could be more apposite than that of Sir Arthur Channell delivering the opinion of the Privy Council in The Ophelia [1916] 2 AC 206:
If any one by a deliberate act destroys a document which, according to what its contents may have been, would have told strongly either for him or against him, the strongest possible presumption arises that if it had been produced it would have told against him; and even if the document is destroyed by his own act, but under circumstances in which the intention to destroy evidence may fairly be considered rebutted, still he has to suffer. He is in the position that he is without the corroboration which might have been expected in his case.
114There is some divergent judicial opinion on the nature of the inference to be drawn. Some cases (such as Allen v Tobias and The Ophelia [1916] 2 AC 206 ) suggest that the inference is limited to matters which could likely have been established by the evidence which has been destroyed or withheld. Other cases suggest that presumptions will be raised against the spoliator on all issues which are not otherwise positively proved, i.e. whether the use of the word "omnia" means all things which could have been proved by the spoliated evidence or means all things in the matter. Even if the more limited definition is accepted, adverse inferences as to credit are likely be drawn from deliberate spoliation of evidence.
115There is also a debate as to the amount (if any) of "wrongdoing" or fault required to enliven the maxim, whether the blameworthiness requires malus animus or mala fides , ( Delany v Tenison (1758) 3 Bro PC 659; 1 ER 1559 ) or whether it is sufficient for the presumption to be available that it cannot be shown that the destruction of evidence was proper or justifiable ( Gray v Haig (1855) 20 Beav 219; 52 ER 587). Nevertheless, the passage of The Ophelia approved by the High Court suggests that even bona fide destruction can have negative consequences in that even where "the intention to destroy evidence may fairly be considered rebutted, still [the destroyer of evidence] has to suffer. He is in the position that he is without the corroboration which might have been expected in his case."
116Therefore, to the extent that Veronica has deliberately thrown away or not produced documents that might have proved her claims as to the moneys spent on the house prior to its sale, I consider that there is an inference available that those would not have supported her claims.
117I also note that elsewhere in her evidence Veronica has had a tendency to inflate amounts that might assist her claims - such as the suggestion that the mortgage over the property had been of the order of $400,000, when it was no more than $338,000 at the time of sale of the property. (Similarly, albeit in the context of the earlier contributions, when Veronica said that the only thing Gregory ever bought was a chainsaw for $500 and the only money he ever gave her was $235 towards wire for fencing (at T 99.27), there is no way of assessing those assertions, the figures seemingly being plucked out of the air.)
118There was no evidence adduced from Veronica's brother Mark to support the quantum of the funds allegedly provided by him out of the sale of the business for those works (even though Veronica says in the witness box that the moneys came from the sale of her brother's business) or as to the sale of the boat to which she referred. This raises the issue as to what, if any Jones v Dunkel [1959] ALR 367; (1959) 101 CLR 298 inferences should be drawn in this case (both Counsel seeking such inferences to be drawn against the other party on different aspects of the case).
119Mr Livingston placed weight on the fact that Gregory had not adduced evidence from his mother as to the living arrangements in 2008 (though his mother was in Court during the hearing). Mr McNally on the other hand placed weight on the fact that neither Reginald nor Mark was called to give evidence of the moneys provided on the transfer of an interest in the Myrtle Creek property or the (only recently disclosed) provision of funds to complete the rectification works said to be required before the sale of the property in 2010, respectively.
120It is trite law that a Jones v Dunkel inference can only be drawn if there is a matter which calls for explanation and that the rule in such a case would permit evidence in relation to that matter to be given greater weight, and an inference or inferences to be more readily drawn, when the party who might have called evidence to the contrary has chosen not to do so.
121In Commonwealth of Australia v McLean (1996) 41 NSWLR 389, Handley JA and Beazley JA said; "... The rule typically applies to strengthen or weaken an inference otherwise available on the evidence for the benefit of the party not in default.") A Jones v Dunkel inference, if one does arise, would do no more than permit the inference that the uncalled evidence (or missing material) would not have assisted the defendants' case; it would not permit the inference that that the uncalled evidence was in fact damaging to their case.
122As to the position in relation to Gregory's living arrangements in 2008, the evidence of the 2007 traffic incident report and the long service leave application would support, perhaps, an inference that Gregory was and remained at his parents' place during the course of 2007/2008. However, as noted, there is also evidence that points to the contrary. Therefore, it is by no means clear that the whereabouts of Gregory was something that called for explanation from his mother. In any event, his father was not cross-examined at all about this issue (and yet his address as per his affidavit is the same as that of his wife). Therefore, even if the rule did apply, I do not accept that in the circumstances it places sufficient weight on the inference that Mr Livingstone seeks me to draw as to Gregory's whereabouts as to lead to a finding that the relationship had not resumed and was not in existence as at September 2008.
123As to the fact that Veronica chose not to call either of her brothers to give evidence as to financial matters asserted by her (when there was no suggestion that they were unavailable) I consider that there was a matter relevantly calling for explanation in relation to their evidence and that the failure to call them would permit an inference that they would not have been able to assist Veronica's case. In any event, whether or not such an inference should be drawn, the fact remains that Veronica has done no more than make assertions as to the expenditure in question and I am not prepared to accept that evidence without some form of corroboration, given the bias in her evidence against Gregory and her unwillingness to concede matters that even her own witness (her mother) has accepted as to the understanding on which the house was built.
124Veronica's position in the witness box, as already noted, seemed to be one of truculence at any suggestion that she should account for what had been done in relation to the property after January 2006 or the proceeds of sale (or anything else after the conclusion of her relationship with Gregory). She was confrontational (T 111.44) and an uncooperative witness. Her response to the Notice to Produce served on her suggests that at best she was careless of her obligations in connection with this litigation or at worst deliberately uncooperative. Her response to questions such as in relation to the loan application (that her accountant had informed the bank of her false employment status not her) and in relation to the receipt of the proceeds of sale (that the bank had received the money, when it was paid into an account in her name and was hardly money to which the bank had a claim) seemed to show an inclination to take technical points.
Proceeds of sale
125After the sale of the property, Veronica used part of the proceeds ($170,000) paid to her to buy a property elsewhere. $70,000 of this was, she said, to repay the cost of the further works after Gregory left and $100,000 to reward her for all the "hard work I put in" on the property T 124.36). In the witness box Veronica denied receiving the $360,000 out of the settlement on the basis that it was the bank that had received that amount (T 124.43). She said she did not know where the balance of the proceeds of sale paid to her had gone but then accepted that they were in a bank account in her name. She said these funds belonged to her mother (T 124.47). She said the account was in her name because "Mum was scared the pension department was going to find out" (T 124.47). Margaret adamantly denied that the moneys in the bank account were hers.
126As to the balance (the $200,000), Margaret was not prepared to concede that this was intended for Veronica (which perhaps gives the lie to the suggestion that the moneys already given to Veronica actually belonged to Margaret, since receipt of $200,000 alone might perhaps affect her pension). In her affidavit of 23 September 2010 Margaret said that the retention of the sum of $200,000 was causing her financial hardship as it had been her intention that the Kurrajong premises would be her "nest egg" and she "was hoping to have access to these funds on its sale" ([36]). If (as Veronica says) the moneys in the bank account in fact belonged to Margaret, then the asserted financial hardship by the retention of $200,000 would be hard to accept and it would be odd for the moneys in Veronica's bank account not to have been utilised. I therefore accept Margaret's evidence in preference to Veronica's evidence on this issue.
Margaret's intentions
127Margaret said (at [12] of her second affidavit that she had said to Gregory, at the time the construction of the shed began, that "I am allowing Veronica to go up and live [at Kurrajong]" and that "my name is on the deeds but as long as I make a profit and as long as I get my money back then I am happy". What she meant by that was clarified in cross examination where she said, tellingly (at T 47), that:
I said they could do that, build on the land as long as when they sell it I get my money back with a little bit extra.
128Margaret agreed (T 82.4/8) that she was content from about 1997 to allow Veronica and Gregory to build a shed on premises and from 2003 to construct a house on the property. Again, at (T 83.10) Margaret agreed that she was content for Veronica and Gregory to retain whatever they got for the sale of the property above and beyond what she had paid for it because (at T 83.13) they were doing the work to build it.
129Margaret accepted that there was no contribution of funds by her to the building of the house "No, because it was going to be their house" (T 83.44) (my emphasis) and that she did not help with the building work (T 82). Again, Margaret said "I let them do that [build on land] because by then I was widowed and they wanted to build so I said you can build on that land" (T 86.11) and she presumed they were going to live in it (T 86.16)
130Margaret accepted that it was her belief that Gregory was working on property to build it up for future of the family (T 87.9) "building the house for the children" (T 87.15) and that she was content for that occur.
Commencement of proceedings
131After the parties initially separated (whether that be in late 2005 or in late 2006), no steps were taken by Gregory to have any adjustment of the interests in the property of the relationship (whatever that might have been). Mr Livingstone suggests that this is because Gregory knew he had no entitlement to anything. It would, however, be equally consistent with Gregory having no understanding as to what rights he might in fact have in relation to the property. What Gregory himself says is that he still loved Veronica and was hopeful that they would reconcile.
132In April 2010, Gregory became aware that the Kurrajong property had been sold. A caveat was lodged on his behalf. At that time, his solicitors asserted (presumably on their understanding of Gregory's instructions) that their client was at all times of the belief that the Kurrajong property was owned by both Margaret and Veronica (inconsistent with what Gregory now says was his belief at that earlier time).
Credit
133Before turning to the issues for determination, I comment briefly on the credit of the witnesses, having regard to the matters already noted above.
134First, as to Margaret, while there were matters on which her evidence was unreliable (as to the chronology of events in particular) I consider that this was due no more than to the frailty of human memory (and perhaps having regard to her age). I accept that she was a truthful witness and note that she was prepared to acknowledge matters (such as the understanding of the arrangements for the construction of the house) even where that was of assistance to Gregory's case. I broadly accept her evidence. Insofar as I have come to a view as to Gregory's presence at the Kurrajong property in late 2008, I do not see this as inconsistent with Margaret's observations in 2009.
135As to Veronica, Mr McNally raises a number of matters that he says go adversely to her credit:
(i) first, her evidence as to the dishonest statement made to the bank on the application for bank finance (which is conceded by Veronica);
(ii) second, her evidence in relation to the sources of funding for the shed - it emerging clearly from the evidence that contrary to her assertions in [31] of her affidavit, the receipt of $15,000 from her brother was not available at the time of construction of the shed (Mr McNally also refers to Gregory's evidence as to the sum of $12,000 given to Veronica from his property settlement to repay monies drawn from her children's accounts, but this is not as clear as the $15,000 evidence);
(iii) third, as to the source of funds for the improvements after Gregory left - Veronica claims that some $122,000 was spent but the bank account balance only increased from $329,000 to $338,000 in the time and Veronica's evidence as to the source was proffered in cross-examination and without support or explanation from her brother;
(iv) fourth, the lack of invoices and Veronica's failure to respond to the notice to produce (to which I have referred earlier);
(v) fifth, the implausibility of Veronica's asserted lack of interest in the home (it being only Gregory's idea but nevertheless she says she was always going to build a house) seemingly to down-play Gregory's role and the relationship itself;
(vi) sixth, the inconsistency between her evidence as to the receipt of proceeds of sale of property and that of her mother; and, finally,
(vii) seventh, her evident determination to down-play the relationship in relation to other matters such as the extent and quality of Gregory's work on the property; the explanation for the European postcard; the implausibility of the explanation for the cash deposits in and out of her bank account; and the inconsistency between her evidence and the 2006 work diary that shows Gregory was on property in March 2006 working on the garage.
136I think there is force in each of the areas in which criticism has been made. As to weight, I regard the inconsistencies in Veronica's evidence (particularly where they relate to financial matters in respect of the property itself, as opposed to the more general criticism going to the loan application) as of the most weight, together with Veronica's obvious bias against Gregory (reflected in the fifth to seventh of the matters noted above), which lead me to the conclusion that Veronica's evidence is overstated.
137I have referred above to Veronica's grudging attitude during cross-examination and to her apparent lack of co-operation in the litigious process. I consider that the animosity she clearly bears towards Gregory (well-deserved as that may be) has coloured her evidence significantly and it must be treated with great caution. Revealingly, Veronica said, in answer to one of the questions put to her as to the non-disclosure of material that "I won't reveal because I don't want Mr Hornby to know my life" (T 125.44). That may be a perfectly understandable attitude in day to day matters but it means that, if the Court does not have a full picture of matters relevant to her defence to the Amended Cross-Summons, that is the result of a forensic decision by Veronica.
138As to Gregory, his evidence was undeniably vague and contradictory on various points (and his disclosure of his financial position seems to have been less than candid - at least to the Tax Office). I accept that the evidence suggests a pattern of behaviour (of domestic violence and offensive language) on his part that is by no means to his credit (and must be taken into account when considering his overall contributions to the relationship on the second of the issues before me). Quite rightly, it was put that domestic violence and offensive language of the kind that was used, as well as drug use in the presence of young children, was deplorable and should not be condoned.
139However, he (unlike Veronica) was readily willing to concede her contributions to the property and the relationship (see for example where he gave credit to Veronica for her assistance - T 24.28/40), albeit that his description was perhaps somewhat on the dismissive side (when he described Veronica as a 'brickies labourer' - T 68 - or the like); and I consider that the inconsistencies in his evidence turned more on his general vagueness and inability to recall matters than a deliberate intent to misstate or overstate his position. In particular, while I consider that the assertion that the relationship had persisted until late 2006 in the first instance is unsustainable by reference not least to his diaries, I note that in cross-examination Gregory himself seemed to point to the diaries as a more reliable source than his memory - and he did not generally seek to excuse the unpalatable material that those diaries disclosed (although I accept that he accused Veronica and her brothers of similar behaviour in relation to the language and the drugs respectively).
140I regarded Gregory on the whole as a truthful witness (though I cannot place much reliance on his ability to remember dates with any accuracy.)
(i) Claim against Margaret
141The trust claim against Margaret is put on alternative bases: first that she held the Kurrajong property on trust for Veronica as from 1998 and then, as from the sale in 2010, on trust for Gregory; secondly that there was an implied or alternatively constructive trust over the proceeds of sale of the property.
142The basis on which the implied trust was put seemed to be that Margaret was aware that Gregory and Veronica were erecting a house on the property at their own expense (and had encouraged or acquiesced in that course of conduct) and that she did not tell Gregory that the home was hers and that, inter alia, in the event of a sale she would be entitled to sell and retain the proceeds of the property.
143Reliance was placed on the principles expounded in Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583 and Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 for the imposition of a constructive trust where there is a joint endeavour between the parties in which expenditure is shared for their common benefit and that joint endeavour comes to an end, and it is found to be unconscionable for the contributions to or benefit of that joint endeavour to be retained.
144The difficulty I have with the suggestion that Gregory was permitted to carry out the construction works on a false premise (namely that Veronica owned the land and not her mother), at least once the construction works went beyond the shed, is that by that stage he was aware that Margaret's name was on the title (whether or not that be only to cover for Veronica and whether or not he thought that both names were on the title). According to his version of the conversation with Veronica, in which he asked that his name be put on the title, he knew that he had no legal interest in the property. It does not seem to me that the case is one where there was a mistaken expenditure on the property of another (Margaret) induced or encouraged by that other.
145In Jacobs' Law of Trusts in Australia (7 th edn) , the learned authors state (at [1219]) that orthodox legal theory would suggest that a person who expends time and money in improving another's property acquires no proprietary interest by so acting and therefore that the conclusion that equity should intervene in this circumstance is incorrect.
146The evidence does not in my view warrant a conclusion that there was a "common intention" constructive trust in favour of Gregory of the kind considered in Shepherd v Doolan [2005] NSWSC 42 . (Nor, in my view does it warrant the conclusion that as at 1998, by permitting Veronica to build a shed and move onto the property, Margaret had granted a beneficial interest in the property to her daughter - rather, the conduct seems to me to be consistent with a family arrangement between Veronica and her mother to permit the former temporarily to occupy the land).
147White J, considering a claim based on a common intention constructive trust in Shepherd v Doolan , said (at [33]):
Where a constructive trust is imposed, based upon the parties' common intention as to the ownership of property upon which the claimant has acted to his or her detriment, the inquiry is as to the actual intention of the parties . The law does not impute a presumed intention to the parties based upon what the Court considers fair and reasonable persons in the position of the parties would have intended had they turned their minds to the issue. ( Pettitt v Pettitt [1970] AC 777 at 804, 810, 816-817; Gissing v Gissing [1971] AC 886 at 900, 902, 905-909; Allen v Snyder [1977] 2 NSWLR 685 at 690, 698, 701). (my emphasis)
148His Honour noted that this class of trust has been classified as a constructive trust even though it is based on the parties' actual intention rather than imposed despite their intentions. The intention need not be that there be a specific share of the property. It may be sufficient that it be intended that the claimant should have a beneficial interest or some form of a proprietary interest. His Honour noted that the intention may be inferred from direct or indirect financial contributions to the acquisition of property "or the payment of expenses which free up the funds for the purpose", this being a wider enquiry than whether a contribution was made to the purchase moneys such as to give rise to a presumption of a resulting trust.
149For a "common intention" constructive trust the plaintiff must show that the plaintiff acted to his or her detriment in a way referable to the agreement (or understanding) that he or she have an interest in the property. White J noted that in Green v Green (1989) 17 NSWLR 343, Gleeson CJ (at [357]), (with whom Priestley JA agreed), had approved the test taken from the judgment of Sir Nicholas Browne-Wilkinson VC in Grant v Edwards [1986] Ch 638; 2 All ER 426 (at [657]) that:
Once it has been shown that there was a common intention that the claimant should have an interest in the house, any act done by her to her detriment relating to the joint lives of the parties is, in my judgment, sufficient detriment to qualify. The acts do not have to be inherently referable to the house. ... The holding out to the claimant that she had a beneficial interest in the house is an act of such a nature as to be part of the inducement to her to do the acts relied on. Accordingly in the absence of evidence to the contrary, the right inference is that the claimant acted in reliance on such holding out and the burden lies on the legal owner to show that she did not do so ...
150The quantum of the claimant's beneficial interest is that which the parties agreed or intended. However, where the parties did not turn their minds to the particular form of the title that they intended to have the court can impose a constructive trust which best gives effect to the intentions of the parties (White J noting Green v Green and Parianos v Melluish (Trustee) [2003] FCA 190; (2003) 30 Fam LR 524 in this regard).
151Margaret's evidence (which I accept) was that at the time of the construction of the shed she told Veronica and Gregory that she was allowing Veronica to go and live there and, in effect, to build the shed there as long as she made a profit and got her money back. Her understanding at the time the house was built, it seems to me, was different from her position as at that time. I am not satisfied that the expenditure in relation to the shed was such as to give rise to a beneficial interest in the land at that stage. The significance of the evidence that Gregory said he was spending his time and money on a home and he was not going to get anything out of it (as to which I accept Margaret's evidence) suggests that no common intention to transfer an interest in the property can be inferred simply by reference to the contributions he made to the property.
152As to a Baumgartner type of constructive trust, arising where there is a premature failure of a joint endeavour between the parties, it is noted in Jacobs' Law of Trusts in Australia (6 th edn) at [1301] that the enquiry is not as to the actual presumed intentions of the parties, but as to whether, according to the principles of equity, it would be a fraud on the party in question to deny the trust. Thus, as Mr McNally notes, equity intervenes to impose a constructive trust not so as to give effect to an actual specific intention of the parties but on the basis of a pooling of resources for the purposes of the joint relationship which has come to an end (referring to what was said in Green v Green per Gleeson CJ at [353]).
153In Green v Green , Gleeson CJ noted that the most common case where equity intervenes to declare the existence of a proprietary interest in a family home (there referring to the case where the interest was of a spouse or de facto partner) is where the person in whose favour a constructive trust is found has, directly or indirectly, made a financial contribution towards the cost of acquisition, improvement or maintenance of the property (at p 353).
154In Little v Saunders [2004] NSWSC 655, Campbell J (as his Honour then was) said (at [41]):
However, the fundamental matter which guides equity in deciding whether there is a constructive trust in this area, is whether the property would come to be enjoyed by a party in circumstances in which it was not specifically intended or specifically provided that the other party should so enjoy it.
155In Muschinski, Deane J said (at [618]) that a constructive trust may arise when an assertion of a legal right would be unconscionable:
Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specifically provided that that other party would so enjoy it. The content of the principle is that, in such a case, equity will not permit the other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable to do so ... (at p 620).
156In Baumgartner , the majority (Mason CJ, Wilson and Deane JJ) referred to the result reached by Deane J in Muschinski as an application of the general equitable principle which restores to a party contributions which he or she has made to a joint venture which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them. Their Honours cited what Deane J had said in Muschinski (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 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 [1858] LR 3 Ch App 369 at pp 374-375 and per Jessel MR, Lyon v Tweddell (1881) 17 Ch D 529 at 531). (my emphasis)
157In Jacob's Law of Trusts in Australia (7 th edn), J D Heydon and M Leeming express some criticism of the reasoning in Baumgartner , writing that:
... the reasoning in Baumgartner v Baumgartner , while purporting to be rooted in basic equity, gives no more predicability or consistency in result than that which follows from the English decisions espousing the 'new model' constructive trust. It remains unclear as to when and why the interposition of equity to prevent unconscientious reliance on legal rights in the Australian cases will give rise in equity to a proprietary rather than a personal right, and a proprietary right which is a constructive trust 'fashioned' by the court. (para 1353)
and Gummow J advocated caution in this regard during the special leave application in relation to Friend v Brooker [2009] HCA 21; (2009) 239 CLR 129.
158It has been held nevertheless that the pooling of labour by or on behalf of both parties, in the absence of the pooling of financial resources, may in itself found a constructive trust ( Miller v Sutherland (1990) 14 Fam LR 416 at [424] per Cohen J). Contributions to family welfare by way of domestic assistance (such as homemaker and parent) have also been held to amount to the imposition of a constructive trust in some circumstances ( Baumgartner at [155] - [156] per Gaudron J; Bryson v Bryant (1992) 29 NSWLR 188; Stowe v Stowe (1995) 15 WAR 363). The onus is on the party seeking the intervention of equity and the substantiality of the contribution in question will be a factor in determining the issue of unconscionability.
159In West v Mead , [2003] NSWSC 161; (2003) 13 BPR 24,431 Campbell J (as his Honour then was) considered what was to be established before such a constructive trust could be imposed: first, that there be both a joint relationship or endeavour, in which expenditure is shared for the common benefit in the course of and for the purposes of which an asset is acquired (noting that the scope of the joint venture in which the parties were engaging may be of relevance and as Deane J in Muschinski considered, may change from time to time); second, that the substratum of that joint relationship or endeavour must have been removed or the joint endeavour prematurely terminated "without attributable blame"; and, third, that there must be the requisite element of unconscionability (namely, that it would be unconscionable for the benefit of those monetary and non-monetary contributions to be retained by the other party to the joint endeavour).
160I consider those matters below.
Was there a joint endeavour?
161The first question to be addressed is whether there was a joint relationship or endeavour between the parties in connection with the improvement of the Kurrajong property.
162In this regard, I note that there was little apparent involvement by Margaret in the arrangements pursuant to which Gregory came to reside on the Kurrajong property in the first place - rather, the position seems to have been that she acquiesced in Veronica building a shed on the property and Veronica and Gregory living in that shed rent free. However, by the time the couple came to consider the building of a house on the property, Margaret was necessarily involved - first, because it was necessary for her to mortgage the land in order to obtain the funds for the construction of the house and then because she was required to be certified as an owner/builder for the purposes of the building. Therefore, no matter how limited the discussion as to what interest Gregory (or for that matter Veronica) might thereby obtain, Margaret was an integral part of the joint endeavour in which the couple were there involved. (In relation to the shed, it seems to me likely that any joint endeavour was one between Gregory and Veronica until limited, if any, involvement by Margaret.)
163Margaret herself accepted that the arrangement (or her understanding of the arrangement) was that Veronica and Gregory were to build the house at their cost (she contributing no more than the land by way of security for the loan facility) and to be responsible for the expenses (such as the rates) while they were living there rent-free and that the house was to be theirs (subject only to her being entitled to recover the purchase price and "a little bit extra").
164Mr McNally submits that although there is a factual dispute as to when Gregory became aware that Margaret was the registered proprietor of the property, there is no doubt that Margaret and Veronica were aware that Gregory wished to build a shed and a house on the property and they were content for him to do so (reference being made to Margaret's affidavits, in her first, at [12] and second, at [4(27)] and to Veronica's first affidavit at [26], [39]). Margaret said in her evidence that she told Gregory that she did not care who built on the property - she simply wanted to get back what she paid for it. It is submitted by Mr McNally, and this seemed to be accepted by Margaret in cross-examination, that this was no doubt with a view to Gregory, Veronica and her children residing together on the property.
165It is submitted by Mr McNally that at the time that Gregory performed the work in constructing the shed, the stables, and the house on the property, there was a joint endeavour between Margaret (as registered proprietor) and by each of Veronica and Gregory that the land would be improved by the erection by Gregory and Veronica of a shed and then a house in which Gregory, Veronica and her children could then reside and, if they so desired, could then be sold for their benefit.
166It seems to me that the circumstances in which Margaret accepted in the witness box that the house was built (and the joint nature of the involvement of Gregory and Veronica in that process - both recording entries in Gregory's diary as to the house and both being involved in the physical construction of the house) bear the hallmarks of a joint relationship or endeavour so as to satisfy the first part of the test and that this joint endeavour subsumed whatever earlier arrangements there were in relation to the shed alone.
Failure of joint endeavour without attributable blame
167The next question is whether the joint endeavour failed or was prematurely terminated "without attributable blame".
168In Cetojevic v Cetojevic [2006] NSWSC 432, Campbell J (as his Honour then was) applied the principles relevant to what he had explained as the principles relating to the imposition of a Baumgartner constructive trust in West v Mead to the joint relationship there between the parties. His Honour noted (at [43]):
In accordance with the principles set out at paragraph [59] in West v Mead [2003] NSWSC 161 where there is a joint relationship or endeavour, and an asset is acquired for the purpose and in the course of, and the joint endeavour comes to an end without attributable fault on anyone's part (as clearly happened here), a starting point for ownership of the asset is that the beneficial interest ought be shared equally. That application of the maxim equity is equality places an onus of attributing any other conclusion on a person who asserts that the title should be held unequally.
169In Henderson v Miles (No 2) (2005) 12 BPR 23,579, Young CJ in Eq, as his Honour then was, said at [18]:
As can be seen from its roots in cases such as Lyon v Tweddell, the expression "without attributable blame" in the standard formula does not mean that the court must try and work out which of the parties in a domestic relationship was of the greater fault; see Callaghan v Callaghan (1995) 64 SASR 396 at 407, where Perry J said that the question as to whether equity gives relief does not turn on the nice question as to where the blame lies [in the breakdown in the relationship between the parties in that case].
170The meaning (and potential uncertainty) of this requirement seems to have lead to the grant of special leave by the High Court in Gazzola v Gazzola [1990] HCA 13; (1990) 92 ALR 45 (where Brennan, Deane, Dawson, Toohey and Gaudron JJ said that their "main consideration" in granting special leave was that the issues would include "questions about the nature and effect of 'attributable blame'"). However, as it transpired, their Honours did not address what was meant by attributable blame because, the court having found that the facts precluded a finding of a common intention to create a trust and did "not give rise to, or warrant the imposition of, a constructive trust upon any of the grounds for which the appellants contend", the question as to attributable blame did not arise. Their Honours noted that "those questions only arise in the present case if the appellants succeed in showing either that there was a common intention among the parties to create a trust or that the facts of the case are such that, subject to any question of the existence or effect of any 'blame' or 'unconscionable conduct' on the part of one or both of the appellants, a constructive trust arose or should be imposed". The grant of special leave was accordingly revoked.
171In "Doing Equity between de facto spouses: From Calverley v Green to Baumgartner" (1988) 11 Adelaide Law Review 370, Patrick Parkinson suggested that it was likely that the notion of blame would quietly disappear as a meaningful statement in this kind of case, though expressing his opinion that "Presumably the relevant fault here is that of the claimant who will be denied a remedy if he or she is held responsible for the breakdown of the relationship". Such a presumption is, however, inconsistent with the notion that relief in equity does not turn on the "nice question" of where blame lies in the breakdown of relationships or joint endeavours of this kind (per Perry J in Callaghan approved as noted above in Henderson v Miles ).
172It seems to me that the apparent inconsistency in this regard is resolved if the question whether a joint endeavour has come to an end as a result of attributable blame (in circumstances where the breakdown is due to some wrongful conduct of the party seeking the imposition of a constructive trust) is one treated as part of the question whether it is unconscionable for the other party in those circumstances to retain the benefits of the joint endeavour. Thus, a lack of focus in the authorities such as Henderson v Miles on who might be to blame for the breakdown of the relationship or endeavour in question (when considering the "without attributable blame" part of the Muschinski formulation of the test) may be explicable if it is bound up in the question of unconscionability.
173The issue is of potential relevance here, where the suggestion is that the relationship may ultimately have broken down due the abusive nature of the relationship (and, in particular, the conduct of Gregory in that regard). However, in accord with Henderson v Miles , I do not embark upon a determination of who is responsible for the breakdown of the relationship between Gregory and Veronica. Rather, I consider factors of that kind in considering whether, on the breakdown of their domestic relationship, it is unconscionable for Margaret (or, for that matter, Veronica) to retain the benefits of Gregory's contribution to the joint endeavour without compensation for his work on the property.
Unconscionability
174The third issue is whether there is the necessary degree of unconscionability to warrant the imposition of a constructive trust.
175It is submitted for Margaret and Veronica that the value of the Kurrajong house and land increased through a combination of physical improvements and market improvements to the value of land over time. In that regard, the valuation evidence suggests that there was no increase in the unimproved value of the land over the relevant period (according to the valuer, Mr KD Wood, that remaining constant at around $430,000) and hence Mr McNally's submission that the benefit retained by reference to Gregory's work is some $495,000 (or around $415,000 if the value attributed by the valuer to the patio added after Gregory left the property is also taken into account).
176(I also note in this regard that Veronica's assertion that in 2002, when she and her mother borrowed funds to build the home, the vacant block of land was valued at $550,000 ([76]) is not supported by the expert evidence of its value at the relevant time(s).)
177Mr McNally submits that, assuming that the improvements carried out by Gregory and Veronica added, say, $375,000 to the value of the property, and (which is hotly disputed) that the value of Gregory's contribution overall to those improvements was 50/50 in comparison to that of Veronica, then the appropriate order would be that Gregory receive an interest in that part of the sales proceeds referable to the value of the improvements which equated to 50% of $375,000 (i.e. $187,500). (If a common intention constructive trust were to be the basis for the relief sought, then the enquiry would be as to what the parties had intended in that regard. The best evidence of that intention seems to be the evidence of Margaret in the witness box - namely that she would allow the couple to build a house on the property on the basis that she would get back the purchase price and a bit extra; and, implicitly, that they would have the balance of the proceeds of sale.
178Mr Livingstone, however, contends that Gregory's contribution to the value of the land (by reference to the improvements on the land) was offset by what he took out of the relationship (by way of rent-free accommodation) and notes that he made no contribution at all to the improvement in the value of Margaret's land over time. Further, it is said that in considering the benefit obtained out of the sale proceeds by reference to the physical improvements it is necessary to deduct from the sale price ($925,000) not only the moneys paid to discharge the mortgage ($338,000) but the unimproved value of the land ($430,000), leaving some $150,000 only that is referable to the physical improvement of the land.
179In Baumgartner the majority noted (at [148]) that Deane J in Muschinski had "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'" but had rejected the notion that it should be imposed in accordance with the idiosyncratic notions of what was just and fair.
180In West v Mead, Campbell J (as his Honour then was) said (at [62]) that:
The Baumgartner type of constructive trust is imposed to prevent an unconscionable assertion of legal title, in circumstances where the parties had no explicit intention about how the legal title would be held in the circumstances which have arisen. ... Part of the justification for imposing a Baumgartner constructive trust is that the parties have jointly been building up assets, on the basis that those assets will be available to the joint endeavour in future. Part of the reason why it can be unconscionable to let the legal title lie where it falls, if the relationship fails, is that each knew that the other was contributing to a common pool on the basis that the common pool and assets acquired from it, would be used for the ongoing common benefit. It is unconscionable for the party who ends up, at the end of the relationship, with a disproportionate share of the assets which were built up during the relationship, to keep those assets when he or she knew that that was the basis on which the assets were being built up . (my emphasis)
181In Cetojevic v Cetojevic [2007] NSWCA 33, Hodgson JA, with whom Tobias and McColl JJA agreed, said (at [34]):
I accept that it is insufficient for the establishment of a constructive trust that it be considered inconvenient or unfair that legal rights be relied on. I accept that in the circumstances of this case, it was necessary for the respondent to show both that circumstances had arisen which were so outside the contemplation or intentions of the parties at the time of entry into the joint endeavour that it can fairly be said that the joint endeavour had broken down, and also that in those circumstances it was unconscionable for the appellants to rely on their legal rights.
182In the present case the question is whether it is unconscionable for Margaret to retain the whole (or give to Veronica some and retain the balance of) of the net proceeds of sale of the property, having regard to Gregory's contributions and, if so, what relief should be granted to remedy such unconscionability.
183Brereton J in McKay & anor v McKay [2008] NSWSC 177, noted at [30] that "the fundamental principle in this area of discourse is the restoration of contributions upon failure of the substratum of a joint venture". His Honour considered that to allow one party to retain the benefit of the other's contribution in return for paying out the other, would be "inconsistent with the basal concept of a return of the contributions on failure of the joint venture".
184In Liquor National Wholesale Pty Limited v Redrock Co Pty Limited [2007] NSWSC 392 at [42], Brereton J (recognising that the principle explained by Deane J in Muschinski has potential application in commercial joint ventures) expressed the principle at [42] that "where money or other property is paid or applied on the basis of some consensual joint relationship or endeavour which fails without attributable blame, equity will intervene where it is unconscionable to draw a line leaving assets and liabilities to be owned and borne according to where they may, prima facie, lie, to the intent that the parties recover what they have contributed to the failed joint venture " (my emphasis).
185It is submitted by Mr McNally that where there was a pooling of both financial and physical resources, for the purposes of the relationship which has now come to an end, Margaret held the Kurrajong property on trust for both Gregory and Veronica (and that the proceeds of sale are impressed with such a trust).
186I also note that the High Court in both Bathurst City Council v PWC Properties Pty Limited [1998] HCA 59; (1998) 195 CLR 566 at [585] and in Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 at [113] has said that before a constructive trust is imposed the court should first decide whether, having regard to the issues in the litigation, there is an appropriate equitable remedy which falls short of the imposition of a trust. In Bathurst , their Honours noted that Gibbs CJ in Muschinski had seen the imposition of an equitable charge to secure the appellant's entitlement to a contribution from the respondent as an adequate equitable remedy. Therefore, if it were that a case to support a common intention constructive trust could be identified, it would not necessarily mean that such a trust should be imposed if lesser relief would be available and similarly in relation to a case based on the failure of a joint endeavour. (This is relevant in the present case when no more than an order that there be a payment out of part of the proceeds of sale held in the trust account would seem to be necessary in order to remove the unconscionability identified in the retention of the benefit of the contributions).
Conclusion as to constructive trust claim
187I consider that the evidence establishes that there was a joint endeavour in relation to the construction of the house on the property owned by Margaret, as part of which Gregory (and Veronica) were to have the benefit of accommodation in the house and, when it was sold, to share in the proceeds of sale by reason of their efforts in the improvement of the property. That joint endeavour came to an end (at the latest) when the property was sold. Arguably, it came to an end at an earlier time when the relationship between Gregory and Veronica came to an end and it was no longer possible for Gregory to have the benefit of accommodation in the property.
188In those circumstances, I am of the view that it would be unconscionable for Margaret to retain the benefit of Gregory's contributions to the improvement of the property. However, in the circumstances I consider that this requires no more than that Gregory recover the financial and non-financial (in the sense of his unpaid labour and his co-ordination role) contributions Gregory made to the building works. I am not persuaded that this should extend to a share of any profits in the sale of the land as improved, in circumstances where I do not consider that the joint endeavour contemplated an entitlement for Gregory to have an interest in the property as such and nor do I consider it likely that it contemplated an entitlement for Gregory to remain on the property if the relationship broke down (particularly in circumstances where there were issues as to the abusive nature of the relationship).
189I therefore consider that the limit of what it would be unconscionable for Margaret to retain (and for which she should now account) are any moneys that it can be shown Gregory paid towards the building works (which in my view were paid not as a contra for rent but with a view to Gregory building a house in which he and Veronica and her children could live) and an amount that represents the contribution of Gregory in his unpaid role in performing tasks such as bricklaying and tiling and in co-ordinating tradesmen to perform the relevant building tasks so that the house could be built most cost effectively.
190The difficulty lies in quantifying those contributions. I am not satisfied that Gregory has established that he paid more than (at most) $30,000 towards the construction of the shed. I accept that he made payments from time to time towards the living expenses of the household and which may presumably reduced the interest on the loan facility but I am not in a position to quantify those amounts. As to his non-financial contribution, apart from quantifying the bricklaying work at in the order of $35,000 ($1 per brick), it is difficult to put a figure on the value of his role as a co-ordinator of the project as a whole.
191Mr McNally urged upon me (albeit in the context of the second issue for determination below) that the difficulty of establishing the quantum of the financial contributions was such that I should apply a percentage to the proceeds of sale referable to the unimproved value of the land (initially put at 50% of $360,000 but in closing submissions at 50% of $415,000 having regard to the valuation report from Mr Wood). Mr Livingstone submitted that any such exercise should be predicated on a smaller sum ($157,000) and a smaller percentage (40%).
192However, when considering the contributions on a Baumgartner trust claim one is looking at the pooling of financial and physical resources and determining whether it is unconscionable for one party to retain the benefit of those. It can only be unconscionable if they can be quantified in some objective way. It seems to me that the appropriate order is to recompense Gregory for his contributions insofar as they can be measured. On the assumption that no more than $30,000 seems likely to have been contributed to the pool of funds from his property settlement and that his bricklaying work was worth in the order of $35,000, what value is to be ascribed to the substantial amount of tiling and other physical work (as well as carrying out a project management role)? It seems to me that it is not likely to be less in total than the amount referable to the bricklaying work (and I accept it might well be higher but I have had no guidance in that regard). That would suggest that Gregory's overall contributions to the building works were in the order of around $100,000.
193That may be tested by reference to the evidence of Veronica in the witness box that her mother had paid her $100,000 'for all [her] hard work'. Despite Veronica's denigration of the physical work carried out by Gregory on the property, I am satisfied that he played at least as great (and probably physically greater) role than Veronica in the works for the shed and house.
194Therefore, I consider that the appropriate order would be for Gregory to be paid the sum of $100,000 to remove the unconscionability that would otherwise arise if Margaret were to retain the proceeds of sale of the property improved (as part of the failed joint endeavour between her, Veronica and Gregory) without recognition of the contributions made by Gregory to the property.
(ii) Claim under the Property (Relationships) Act 1984 (NSW)
195I turn then to the claim under this Act, which (as I apprehend the submissions) is pressed in circumstances where Gregory has not recovered all that was sought by him on the constructive/implied trust claim.
196The first question that arises under this heading is whether Gregory's claim under the Act is out of time (which turns on when the relationship terminated). (Mr Livingstone submits that as the case for relief under s20 is non existent his claim for leave under s 18 of the Property (Relationships) Act 1984 should be dismissed (referring to Selmore v Bull [2005] NSWCA 365; (2005) 34 Fam LR 488; Beavan v Fallshaw (1992) 15 FamLR 686 at [687]). However, to determine that submission I need to consider the case for relief.)
197A 'de facto relationship' is defined in s 4 of the Property (Relationships) Act as follows:
(1) For the purposes of this Act, a de facto relationship is a relationship between two adult persons:
(a) who live together as a couple, and
(b) who are not married to one another or related by family.
(2) In determining whether two persons are in a de facto relationship, all the circumstances of the relationship are to be taken into account, including such of the following matters as may be relevant in a particular case:
(a) the duration of the relationship,
(b) the nature and extent of common residence,
(c) whether or not a sexual relationship exists,
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties,
(e) the ownership, use and acquisition of property,
(f) the degree of mutual commitment to a shared life,
(g) the care and support of children,
(h) the performance of household duties,
(i) the reputation and public aspects of the relationship.
(3) No finding in respect of any of the matters mentioned in subsection (2) (a)-(i), or in respect of any combination of them, is to be regarded as necessary for the existence of a de facto relationship, and a court determining whether such a relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case.
(4) Except as provided by section 6, a reference in this Act to a party to a de facto relationship includes a reference to a person who, whether before or after the commencement of this subsection, was a party to such a relationship.
198Pausing there, the fact that Gregory may not have resided at Lethbridge Park more than 2-3 nights a week would not necessarily preclude a finding that there was a de facto relationship but, in any event, it is admitted by Veronica that there was a de facto relationship from mid 1998 at least until late 2005.
199A 'domestic' relationship is defined in s 5 as follows:
(1) For the purposes of this Act, a domestic relationship is:
(a) a de facto relationship, or
(b) a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care.
(2) For the purposes of subsection (1) (b), a close personal relationship is taken not to exist between two persons where one of them provides the other with domestic support and personal care:
(a) for fee or reward, or
(b) on behalf of another person or an organisation (including a government or government agency, a body corporate or a charitable or benevolent organisation).
(3) A reference in this Act to a child of the parties to a domestic relationship is a reference to any of the following:
(a) a child born as a result of sexual relations between the parties,
(b) a child adopted by both parties,
(c) where the domestic relationship is a de facto relationship between a man and a woman, a child of the woman:
(i) of whom the man is the father, or
(ii) of whom the man is presumed, by virtue of the Status of Children Act 1996 , to be the father, except where such a presumption is rebutted,
(c1) where the domestic relationship is a de facto relationship between two women, a child of whom both of those women are presumed to be parents by virtue of the Status of Children Act 1996 ,
(d) a child for whose long-term welfare both parties have parental responsibility (within the meaning of the Children and Young Persons (Care and Protection) Act 1998 ).
(4) Except as provided by section 6, a reference in this Act to a party to a domestic relationship includes a reference to a person who, whether before or after the commencement of this subsection, was a party to such a relationship.
200The time limit for making claims under the Act is set out in s 18 of the Act as follows:
(1) If a domestic relationship has ceased, an application to a court for an order under this Part can only be made within the period of 2 years after the date on which the relationship ceased, except as otherwise provided by this section.
(2) A court may, at any time after the expiration of the period referred to in subsection (1), grant leave to a party to a domestic relationship to apply to the court for an order under this Part (other than an order under section 27 (1) made where the court is satisfied as to the matters specified in section 27 (1) (b)) where the court is satisfied, having regard to such matters as it considers relevant, that greater hardship would be caused to the applicant if that leave were not granted than would be caused to the respondent if that leave were granted.
(3) Where, under subsection (2), a court grants a party to a domestic relationship leave to apply to the court for an order under this Part, the party may apply accordingly.
201In Selmore v Bull , the Court of Appeal said that it was not mandatory for an applicant for leave under the section to explain the delay in commencing proceedings under the Act (at [13], citing Carlon v Carlon (1982) FLC 91-272). At [12], the President of the Court of Appeal said that the applicable principles were not in dispute: "Section 18 does not lay down a general time-limit, giving a discretion to the Court to extend it. Rather, it makes two different provisions. That found in subsection (2) is expressed in terms of power to grant leave to apply, not as a power to extend the primary time limit", referring to what had been said by Bryson J in Beavan v Fallshaw at [687]:
This section appears ... to treat an application for leave to apply as a normal event, calling for the Court to consider two stages, a finding relating to hardship and the exercise of discretion, without any special jealousy for the observance of the time limit or particular concern for it ... In considering whether a Court should exercise of discretion conferred by statute to make an order in favour of some course, it is usual to consider whether there is a sound and positive ground or a good reason for making the order. Ultimately however it is not ... legally necessary to define exactly the ground on which a discretion is exercised favourably to an applicant. .
202What is required to be demonstrated is a preponderance of hardship to the applicant if leave is not granted than will be caused to the respondent if leave is granted. If such preponderance is shown it does not automatically follow that leave is to be provided. There remains a residual discretion (as noted in Beavan v Fallshaw ).
203In Smith v Pearson [2011] NSWSC 600, Macready AsJ summarised the relevant authorities on applications for leave under s 18 by reference to the above and said (at [17]):
I also note that the question of delay is referred to by Bryson J in the case of Beavan v Fallshaw to which the President referred in Selmore v Ball in these terms:
The section appears to me to treat an application for leave to apply as a normal event calling for the Court to consider two stages, a finding relating to hardship, and the exercise of discretion.
204Mr McNally accepts that if the relationship terminated when Veronica said it did (i.e. in December 2005) and did not later resume, then an order under s 18(2) of the Act would be necessary and it must be shown that greater hardship would be caused to Gregory if leave were not granted than would be caused to Veronica if leave were granted.
When did the domestic relationship come to an end?
205For the reasons set out earlier I have found that by the end of March 2006, the domestic relationship between Veronica and Gregory had come to an end (whether it had come to an end some 3 months earlier would be of relevance only in considering the contributions of the parties to the relationship and, perhaps, their credit).
206A de facto relationship will not have been revived simply by reason of the occasional sexual encounter of the kind that is said to have occurred in Mittagong in 2007 and I accept that by March/April 2009 when Margaret came to live at the property there was no such domestic relationship. What happened in between those dates is the issue.
207Ultimately, I am persuaded that on the balance of probabilities there was a revival of the de facto relationship between Veronica and Gregory during the course (although not for the whole) of 2008 and that Gregory was sufficiently based at the property as at the end of 2008 to give it as his address for the purchase of the motorbike the subject of the invoice in Exhibit 9. On that basis as at September 2010 (when the initial Cross-Summons was filed it was within time).
208If that conclusion were to be wrong, and leave was necessary, would I have granted such leave? In the circumstances I would not have done so, because it seems to me that the result of a finding on the constructive trust claim is that Gregory will be compensated for his contributions to the property, insofar as they can be measured by any objective evidence. He is not now claiming an adjustment to the couple's property interests on any basis other than the contributions to be considered under s 20(1)(a). In other words no contribution other than the property contributions is now pressed in this regard.
209I have some difficulty in seeing how it would be just and equitable for any adjustment of the property interests in the divisible pool of assets would be warranted in his favour (once he has been adequately compensated for his financial and physical contributions to the improvement of the property) having regard to the circumstances I consider later. Therefore, I would not have granted leave to bring the application out of time (in the event that such leave had been necessary).
210However, had I found against Gregory on the constructive trust claim then I would have been satisfied that the hardship to Gregory of not granting leave was greater than the hardship to Veronica of granting leave and I would have come to the conclusion that leave should be granted.
211I turn then to the merits of the Property (Relationships) Act claim.
Merits
212Section 20 of the Act provides as follows:
20 Application for adjustment
(1) On an application by a party to a domestic relationship for an order under this Part to adjust interests with respect to the property of the parties to the relationship or either of them, a court may make such order adjusting the interests of the parties in the property as to it seems just and equitable having regard to:
(a) the financial and non-financial contributions made directly or indirectly by or on behalf of the parties to the relationship to the acquisition, conservation or improvement of any of the property of the parties or either of them or to the financial resources of the parties or either of them, and
(b) the contributions, including any contributions made in the capacity of homemaker or parent, made by either of the parties to the relationship to the welfare of the other party to the relationship or to the welfare of the family constituted by the parties and one or more of the following, namely:
(i) a child of the parties,
(ii) a child accepted by the parties or either of them into the household of the parties, whether or not the child is a child of either of the parties.
(2) A court may make an order under subsection (1) in respect of property whether or not it has declared the title or rights of a party to a domestic relationship in respect of the property.
213Although Mr McNally informed me that Gregory does not press the claim based on contributions made under s 20(1)(b), it was submitted by Mr Livingstone, and I accept, that matters relevant to Gregory's conduct within the relationship are of relevance in assessing the contributions made by each of the parties under s 20(1)(a) of the Act.
214In Sharpless v McKibbin [2007] NSWSC 1498, Brereton J (at [3]) noted that once it is established that there was a domestic relationship between the parties, the exercise of jurisdiction under s 20 involves three main steps:
The first is the identification and valuation of the property of the parties, which determines the "divisible pool of property" - that is, "the property of the parties to the relationship or either of them" referred to in s 20 which may be the subject of an adjustive property order under that section. The second is the identification, evaluation and weighing of the respective contributions of the parties of the types referred to in s 20, and typically though not invariably results in an apportionment between the parties on a percentage basis of the overall contributions (of the types referred to in s 20) of each of them, made to the date of hearing. The third is the determination of what order is required sufficiently to reflect and recognise the applicant's contributions, in the context of the contributions as a whole of both partners, and typically results in an order that leaves the applicant with that percentage identified in the second step of the divisible property identified in the first step [ Evans v Marmont (1997) 42 NSWLR 70 ; (1997) 21 Fam LR 760; (1997) DFC 94-184; Jones v Grech (2001) 27 Fam LR 711; (2001) DFC 95-234; [2001] NSWCA 208; Kardos v Sarbutt (2006) 34 Fam LR 550 ; [2006] NSWCA 11].
215As noted by Hallen AsJ in Davies v Dabela [2011] NSWSC 12 (at [29]), this approach has been followed in cases such as Howlett v Neilson [2005] NSWCA 149; (2005) 33 Fam LR 402; Chanter v Catts [2005] NSWCA 411; (2005) 64 NSWLR 360; Kardos v Sarbutt [2006] NSWCA 11; (2006) 34 Fam LR 550 ; Paino v Paino [2008] NSWCA 276; (2008) 40 Fam LR 96.
216In Evans v Marmont (1997) 42 NSWLR 70, a specially constituted bench of the Court of Appeal considered the test to be applied on such an application. Gleeson CJ and McLelland CJ in Eq cautioned that the reference to "adjustment" of property interests "does not sound like an invitation to engage in an unbounded exercise in distributive justice" (at p 10) and that the discretion given by s 20 is not unfettered.
217Their Honours noted that certain aspects of s 20 had been settled by the course of authority, saying at p 5:
For example, it would not now be suggested that one should approach an application for adjustment of property interests by beginning with an assumption that an equal division of property is appropriate and then asking whether the circumstances of the case require some departure from that position: Mallett v Mallett (1984) 156 CLR 605.
It would not now be contended that contributions of a de facto partner as homemaker and parent should be regarded as in some way inferior to the corresponding contributions of a spouse: Black v Black (1991) 15 Fam LR 109.
It would not now be suggested that an appropriate way to value the contributions of a homemaker or parent is by reference to wage levels applicable to a domestic servant, or any other commercial provider of corresponding services or benefits: Black v Black . It is also established that it is important to give full and proper value to contributions of the kind referred to in par (b): Singer v Berghouse (1994) 181 CLR 201; Green v Robinson .
218Their Honours approved the approach that had been set out in Dwyer v Kaljo (1987) 11 Fam LR 785 per Hodgson J (as his Honour then was) at 793 of his Honour's judgment (and approved by Mahoney JA dissenting on appeal in that case and in the majority in Wallace v Stanford (1995) 37 NSWLR 1; 19 Fam LR 430 ), namely that:
... I also agree with Young J that this [a party's contributions] is not the only factor which can be taken into account. In my view, if one considers the plaintiff's contributions and nothing else, this cannot conceivably lead to any view on what is just and equitable in the circumstances. However, it seems to me that the other factors can have no independent bearing on, what is just and equitable. Their relevance is only by reason of such relevance as they may have to the question: what is just and equitable having regard to the plaintiff's contributions?
In my view, some other factors will be relevant in this way in all cases . One such factor arises from the question whether the contributions of the plaintiff have been sufficiently compensated. The relevance of this question is confirmed by the terms of s 17 of the Act. This in turn requires the court to reach some view of the value of the contributions of the plaintiff, and some view of the value of what the plaintiff has received in return. (my emphasis)
In most cases, I think the financial circumstances of the parties will be relevant. Certainly, it is necessary for the court to ascertain what the property of the parties comprises at the time of the hearing, because it is to this that any adjustments of interest have to be made. Further, I think that in most cases the needs and means of the parties will have general relevance, as subsidiary factors, to the question of what is just and equitable having regard to the plaintiff's contributions. However, as indicated earlier, I accept that the needs and means of the parties has no relevance except via its relevance to this question ...
Other circumstances which may be relevant include such matters as the length of the relationship, any promise or expectations of marriage, and also I think opportunities lost by the plaintiff by reason of the plaintiff's contributions. This is by no means intended to be exhaustive. I do not think any limit can be set on what circumstances may be relevant, remembering always that the relevance must be to the question, what is just and equitable having regard to the plaintiff's contributions.
219In Evans v Marmont , their Honours said (at pp 6/7), having considered the above passage from Dwyer :
In general, we agree with those observations. It would be unrealistic to attempt to evaluate contributions of the kinds referred to in par (a) and par (b) for the purpose of determining what is just and equitable having regard to those contributions, in isolation from the nature and incidents of the relationship as a whole, relevant aspects of which may well include factors of the kinds mentioned by Hodgson J. ... it is important to bear in mind that s 20(1) directs that regard be had to contributions of the designated kinds made by each of the de facto partners: often it may be found that contributions of the kinds referred to in par (b) will involve shared activities or reciprocal benefits not giving rise to any disproportionate burden which it would be just and equitable to satisfy by an adjustment of interests in property.
220At pp 10,11, their Honours observed that it was not surprising that considerations of fault were not mentioned, even obliquely, in the Act, considering the background of a no-fault system of dissolution of marriage; and that nor was there mention in the Act of matters relevant to means and needs, of the kind referred to in the Family Law Act 1975 (Cth). Their Honours noted that paragraphs 20(1)(a) and par (b) "prescribe the focal points by reference to which the discretionary judgment as to what seems just and equitable must be made. They are not merely two matters, or groups of matters, which take their place amongst any other relevant considerations. It is by having regard to those matters that the court may adjust property interests in a just and equitable manner".
221Brereton J noted in Sharpless at [45] that contributions both before the commencement and after the termination of the domestic relationship may be taken into account for the purposes of s 20 (citing Foster v Evans (1997) DFC 95-193, 77,681; McDonald v Stelzer (2000) 27 Fam LR 304; (2001) DFC 95-233; [2000] NSWCA 302, [28]-[32] (Sheller JA), [34]-[36], [39] (Priestley JA); Jones v Grech , [24] (Davies AJA), [79]-[82] (Ipp AJA); Nguyen v Scheiff (2002) 29 Fam LR 177).
222Turning then to the three steps, I note as follows.
Identification and valuation of the property of the parties to the relationship or either of them (i.e. the divisible pool of property)
223Brereton J notes in Sharpless at [48] that the exercise of the identification and valuation of the property of the parties is undertaken typically, though not invariably, as at the date of trial, though sometimes the date of separation is adopted, saying that:
...The primary reason for this is that the jurisdiction under s 20 is to adjust interests with respect to "the property of the parties to the relationship or either of them" and speaks from the date at which the jurisdiction is exercised, so that what is in issue is the property of the parties and each of them at the date of trial. Establishing the divisible pool at any other date may lead to failure to have regard to relevant assets available for division, or to the bringing into account of property no longer available [ Kardos v Sarbutt ].
224In that case, his Honour also had reference to the assets of the couple at the commencement of their relationship. In the present case, at around the beginning of the relationship it is not disputed that Gregory had received the sum of $38,621.36 from his family law settlement with his ex-wife, he had a Holden one tonne utility, four trail bikes and some tools (as set out in his first affidavit at [7],[8]). Veronica had assisted him with the purchase of a second (updated) vehicle by way of what was said to be a loan of $10,000).
225Veronica, on the other hand, had $20,000 in personal savings and a part interest in the Myrtle Creek property presumably worth around $15,000 (based on the sum she later received for that interest from her brother). She also had $12,000 that she was holding on trust for her children (but that cannot be regarded as an asset of hers if it was, in fact, on trust for them).
226I do not accept that the evidence establishes that Veronica was a beneficial owner of the Kurrajong property at that time. Therefore, it would seem that at the commencement of the relationship their assets were fairly equal. The duration of the relationship was somewhere between 7 to 10 years (the difference not, in my view, being material when valuing their respective contributions).
227Account must be taken of the contribution to the relationship of the Kurrajong property (whether on the basis that due to Veronica's relationship with her mother she was able to provide Gregory with the benefit of rent-free accommodation and/or on the basis that the building of the property on the land was something able to be achieved by reason of the property being put up as security for the finance obtained from the NAB). Gregory clearly had the benefit of rent-free accommodation for a considerable period.
228As to the present assets of the parties to the relationship, as at the date of trial Gregory has a 1989 Mitsubishi vehicle (currently unregistered) said to be worth $1,000, a sum of $200 in a bank account and superannuation entitlements of $16,000 (Gregory's second affidavit at [37]). Relevantly, he also will now have the benefit of an order for payment of the sum of $100,000 to him out of the proceeds of sale of the Kurrajong property, which are presently held in trust by Margaret's solicitors. Veronica (whose assets, Mr McNally notes, have not been are not separately disclosed) received the sum of $360,670.99 from the sale proceeds of the Kurrajong property on or about 27 April 2010 (some of which has been used in the purchase of other property for the sum of $170,000, which is unencumbered, and the balance is held in a bank account in her name - and according to Margaret belongs to Veronica).
229(It was submitted by Mr McNally that the sum of $200,000 held in the solicitors' trust account might also be an asset of Veronica and/or Gregory to the extent that they have a beneficial entitlement in the proceeds of sale of Kurrajong. I have not found that the couple were beneficially entitled to the property. However, I have held that Gregory is entitled to half of the moneys presently held in the solicitor's trust account. On Margaret's evidence, it would seem that she has not disclaimed her interest in the balance of that fund in favour of Veronica so I do not include the remaining $100,000 in assessing the divisible pool of assets.)
230Therefore, the divisible pool of property seems to be the net proceeds of sale of the Kurrajong property received by Veronica ($360,670) plus the $100,000 to be received by Gregory as a result of the constructive trust claim (some $436,000 in total), ignoring the personal assets of Gregory, plus his superannuation entitlements and any personal (undisclosed) assets of Veronica.
Identification and valuation of the respective contributions of the parties to the relationship
231As to Gregory's s 20(1)(a) contributions, Mr McNally relies upon the fact that Gregory, as a qualified bricklayer, 'effectively' built the shed, stables, fencing and house on the property by co-ordinating the works and carrying some of them out himself (such as much of the bricklaying and the tiling). Mr McNally submits that the expenditure of Gregory on the shed, fencing, stables and water tank was quantified at a total of $58,000 (my arithmetic adding the sums in [25], apart from the $4,000 said to be for a trust account, [29] and [35] produces a figure of $62,000). In any event, I am not satisfied that Gregory has proved that he contributed the whole of those moneys. I would assess his proven financial contribution to the building of the shed at no more than $30,000 for the reasons set out earlier.
232I accept that a portion of Gregory's earnings from bricklaying were pooled with Veronica's and used to pay for materials in the construction and/or living expenses of the household. I do not accept that those can be quantified at over $1,000 per week. I note that in Sharpless , where the benefit received from contributions to living expenses could not be quantified with precision, Brereton J said at [58]:
However, the evidence does not permit the ascertainment with any precision of the extent to which Mr Sharpless derived benefits in this way. Ultimately Ms Stubbs, for Mr McKibbin, submitted that the appropriate course was to make some deduction for the reasonable living expenses of the parties, and add back as a notional asset in the hands of Mr Sharpless the remainder of the amounts particularised by Mr McKibbin as having been taken by him. But it is not possible to quantify an amount to be "added back" on this basis as a notional asset of which Mr Sharpless has the benefit. Ultimately, I propose to take this matter into account, not by adjustment to the pool of property, but in evaluating the quantum and quality of the contributions made by Mr Sharpless to, against the benefits derived by him from, the relationship.
233I accept that the work that Gregory did on the house was extensive and at least part of that work can be quantified (namely the bricklaying) at $35,000. (Reliance was placed on the evidence of his work on the property at T.20.12 - 23; T 20.36-45; and the cost saving obtained from his involvement at T 21.6; T 21.14-25.15).
234As to Veronica's contributions, she says that she spent some $45,000 on the shed ([32]). I am not satisfied that she has established that this is the case. (Mr McNally submits that if this is the case then $12,000 of that amount was refunded to her by Gregory referring to Gregory's affidavit at [25]. However, that has already been taken into account in the assessment of Gregory's contribution above.)
235As to Veronica's claim to have paid for rectification and improvement works from 2006 onwards (valued at $122,500 ([82]), I accept that there is no corroboration as to these amounts and I am sceptical of the claims that have been made by Veronica. Similarly, I am sceptical of the assertion that Veronica paid for all other work in the construction of the house. The construction costs seem largely to have been funded from the mortgage facility.
236I accept that Veronica made contributions to the household living expenses and to the interest on the loan facility out of her CentreLink benefits.
237As to the s 20(1)(b) contributions, Gregory did not press his claim that he had made contributions to the welfare of Veronica's children. Veronica's contributions in supporting Gregory and the children must be taken into account.
238When valuing the contributions between the parties, there have been two approaches identified (as noted in Davies v Dabela ): the global approach and the asset-by-asset approach. In Sharpless , Brereton J said at [60]:
The legislation does not dictate the employment of any particular method in the formulation of an appropriate order for the adjustment under s 20 of property interests, and it is not desirable to attempt to formulate principles or guidelines designed to constrain judicial discretion within a predetermined framework, although in the majority of cases, a global approach is likely to be more convenient than an asset-by-asset approach, provided that those who take the global approach heed the warning that the origin and nature of the different assets ought to be considered [cf Norbis v Norbis (1986) 161 CLR 513 ; (1986) 10 Fam LR 819; (1986) FLC 91-712]. Moreover, an asset-by asset approach almost always carries the risk of undervaluing domestic contributions that are not reflected in any particular asset. Some contributions are readily capable of evaluation in monetary terms. Others - such as those made in the capacity of homemaker and parent - are not. Because some assets depreciate in value, and because parties incur living expenses, the pool of property available for division will usually be less than the sum of the financial contributions, and more so when allowance is made for the value of non-financial contributions. An approach which focusses on the valuing of individual contributions item by item not only fails to pay regard to the overall picture, but risks serious injustice by devaluing those contributions which are not readily capable of evaluation in monetary terms. On the other hand, the "fruits of a totality of efforts of wage earning, homemaking and mutual support", referred to by Deane J in Mallet, do not usually encompass property which each party had before the relationship, or which either party introduced, not by way of their mutual efforts at wage earning, homemaking and mutual support, but independently through gift or inheritance from third parties.
239Ipp JA in Bilous v Mudaliar (2006) 65 NSWLR 615 at [43] said:
If a global approach is adopted, regard must still be had to the origin and nature of the different assets. If an asset-by-asset approach is adopted, care must be taken to avoid the risk of undervaluing domestic and non-financial contributions and regard must be had to the overall result: Kardos v Sarbutt at [51] and [54]. Some situations do not lend themselves either to a pure global approach or to a pure asset-by-asset approach. In some cases the judge may decide to have regard to the particular contributions made to individual assets, weigh up the overall respective contributions to the parties and make differing apportionments in relation to the interests of the parties in different assets.
240What seems clear is that there is not a rule that, for the purpose of determining the order to be made under s 20(1) any increase in value in assets initially contributed should be regarded in all instances as a contribution by the party who contributed the assets, though that may be a significant pointer to the extent to which each party should participate in the capital appreciation of the asset, particularly where the period of co-habitation is "not sufficiently long enough to justify any substantial erosion of the fact that the party brought a substantial asset to the relationship" (see Davies v Dabela ; Bilous v Mudaliar ; Kardos v Sarbutt ; Sharpless ).
241In Bilous at [63] Ipp JA, in a passage with which Brereton J has expressed his agreement, said:
Determinations as to what orders should be made under s 20 are to be made solely on the grounds of the justice and equity of the case. The justice and equity of the case may derive from the fact that the party who owns the family home or other property was able to retain that property, while the market value increased, because "of joint efforts of wage earning, homemaking and parenting, and mutual support". In some instances the non-financial contributions of one party may result in property of the kind in question not having to be sold. In other instances, the non-financial contributions of one partner may allow the other to advance his or her career and earn a high income that enables the property in question to be maintained and retained. Thus, an increment in capital value may well result, indirectly, from "joint efforts of wage earning, homemaking and parenting, and mutual support".
242In Sharpless , Brereton J said at [81]:
...I did not intend to suggest, in Kardos, that any increase in value in assets initially contributed should be regarded, in all circumstances, as entirely a contribution by the party who contributed those assets, nor that there was an onus on the other party to prove that the initial contribution should be eroded; but that (following Pierce) it is necessary to weigh the initial contributions of a party with all other relevant contributions of both parties, and that in doing so, regard must be had to the use made by the parties of the initial contributions, and that it was inappropriate to routinely regard increments in value of assets so introduced as the product of equal contributions by both partners.
243Referring to English authority, Brereton J noted at [85] that, while there are significant differences between the adjustive property jurisdiction in the United Kingdom, that under the Family Law Act and that under the Property (Relationships) Act , "there is universal recognition in the contribution-based systems of the prima facie claim of a party who introduces an asset to retain it, but also that the significance of such a contribution is diminished over time by the other relevant contributions. Ultimately, it is a question of weighing the initial contribution with all other relevant contributions to achieve a just and equitable result, the nature and the source of the property and the manner in which it has been used during the relationship being material considerations. This will typically involve one party being regarded as having contributed to the improvement or conservation of an asset introduced initially by the other, but in a lesser proportion than the first party's overall contributions to the relationship: as Macready AsJ has suggested, speaking extra-judicially at the 2006 Supreme Court Conference, usually it is neither appropriate that any increment in value of an asset introduced exclusively by one party be equally shared between the parties, nor that it be wholly attributed to the party who introduced it; the answer will usually lie somewhere between".
244I accept that account must be taken of the contribution by Veronica of the benefit obtained, through her mother's benevolence, of rent free accommodation and the fact that Margaret had made her land available for the borrowings (although the latter is hard to quantify unless it could be said that it led to, say, a more favourable interest rate or the like, as to which there is no evidence).
245The danger of double counting when one party occupies the property of another during the relationship was noted in Bilous at [122] in the context of considering whether notional rent should be taken into account:
The respondent's provision of the family home was a contribution to her by the partnership, and appropriate weight should be accorded to it. It could be wrong in principle however to accord it weight and then require a notional rental in respect of the appellant's accommodation in the home to be deducted from the value of his contributions. That would be impermissible double counting.
246If the unimproved value of the land was in effect taken out of the equation (it having not increased over the period) such that notionally the benefit obtained by Veronica did not include any benefit referable to the increase in value of property notionally contributed by her to the relationship, then there should be little danger of notional double counting in relation to the rental benefit. (The rental benefit is quantified by the valuer at somewhere in the order of $70 per week for the shed and $450 per week for the house). The fact that Veronica too occupied the property rent-free seems to me not to be relevant since that is not a contribution from Gregory to the relationship (but it might mean that the notional rent should be halved).
247In terms of non-financial contributions, as noted above, Veronica made a large contribution to the running of the household and Gregory conceded that she had "definitely" supported him over the period. Her contribution must also be seen in the light of difficulties in the relationship (as I discuss below).
Determination of what if any order is just and equitable having regard to those contributions
248In Manns v Kennedy [2007] NSWCA 217; (2007) 37 Fam LR 489, Santow and Campbell JJA and Bryson AJA noted the statement of McLelland J (as his Honour then was) said in Davey v Lee (1990) 13 Fam LR 688 at [689]; DFC 95-084 at 76,146, that under s 20 "the court is required to make a holistic value judgment in the exercise of a discretionary power of a very general kind" (approved in Ross v Elderfield [2006] NSWCA 192 at [35] and in Kardos v Sarbutt [2006] NSWCA 11 at [36]; (2006) 34 Fam LR 550 at [561]) but emphasised that while the task called for by s 20 "is not akin to an accounting exercise", at [65] that:
...even in carrying out that final step, "there is no warrant for ignoring the rigour that mathematics can provide": Ross v Elderfield (at [49] per Handley JA (with whom McColl JA and Hislop J agreed)). As Hodgson JA said in Howlett v Neilson (at [39]; 411):
... while I do not think that these matters can be determined on such mathematical calculations, I think mathematical calculations are of some use in guiding and testing conclusions about what is just and equitable, and also in promoting transparency and consistency in decision-making.
249Slattery J, in Ryan v Kalocsay [2010] NSWSC 620 referring to the above, said at [19]:
The court is not required in proceedings under Property Relationship Act s 20 to undertake a reductionist process, examining every alleged contribution with a view to putting a money value on each in order to reach an accounting balance, which balance is then to be eliminated by the requisite financial adjustment in the s 20 order.
250In Davies , Hallen AsJ noted at [46] that the role of the court is not to use the division of property to remedy any justified grievances that one party may have against the other, or to compensate a party for disappointed or unfulfilled expectations and that the fault for the breakdown of the relationship, wherever it may lie, is irrelevant.
251What order would here be required as a matter of justice and equity in order sufficiently to recognise and compensate Gregory's financial and physical contributions to the construction of the shed and the house? In my view, the answer to that is that there is no adjustment warranted in light of the fact that (by reference to the determination in (i) above) he will have received what represents the amount of his financial contribution (in money or money's kind) to the building of the shed and home on the property (to the extent that that can be quantified on the evidence before me) and which it would otherwise have been inequitable for Margaret not to reimburse in the circumstances.
252Having regard to the benefit that Gregory has obtained from the rent-free accommodation over the years (and the matters I refer to below) I do not consider that any adjustment to the property interests of the parties to this relationship (having regard to the order made above for recoupment by Gregory of the contributions he made to the building works) is warranted.
253Had I not found for Gregory on the constructive trust claim, I would have considered that an adjustment in the order of $100,000 out of the divisible pool of assets (that would then have been $360,670) in recognition of his s 20(1)(a) contributions would have been a starting point but that there would then have been a need to consider the reduction of that amount by reference to his behaviour during the relationship (noting what was said in Jackson v Jackson [1999] NSWSC 229). I would in those circumstances have been inclined to accept the proposition by Mr Livingstone that Gregory should receive a lesser sum - in the order of $60,000, being roughly 40% of $157,000. The difference in outcome is due to the different exercise being carried out as between the respective claims. (An order of that kind would have been made as against Veronica, not out of the monies referable to the balance of the proceeds of sale belonging to Margaret.)
254In Jackson , Macready M (as his Honour then was) considered a situation in which reference had been made to particular assaults and bad language (as well as an allegation of sexual abuse of which no evidence had been given before his Honour). His Honour went on to say (from [49]):
I turn to the question of what effect the assaults may have in the adjustment process. The defendant relied on two cases under the Family Law Act, Doherty v Doherty (1996) FLC 92-652 and Marando v Marando (1997) FLC 92-754. In the first of these cases the Full Court said at p82,683:-
On p26 the trial Judge made reference to the appellant's drinking habits and to domestic violence and aggression, which he exhibited towards the respondent and the children, particularly to S. Although the trial Judge did no more than record these events, it is clear from his findings that the wife's contribution as homemaker and parent may have been increased as a result thereof.
Although the domestic violence complained of related to a relatively small period of time at the end of the marriage, nevertheless, his Honour would, in my opinion, have been entitled to have found that because of the appellant's conduct, the respondent's contribution diminished as a consequence, leading to the overall weighting based upon contribution in favour of the wife being increased, albeit only slightly, having regard to the facts of this case."
Of interest is the reference to such conduct either increasing one party's contribution or diminishing the other party's contribution.
In Marando v Marando at 84,168-9 Gee J had the following to say about the issue of domestic violence.
In my opinion however, the wife over the very long period of cohabitation made a much greater contribution than the husband to the welfare of the family, particularly as homemaker and parent. I am satisfied on the evidence that in her homemaker and parenting role the wife in that role and by way of general contribution to the family's welfare carried out responsibilities well beyond the norm. She had the responsibility of the home and the children almost entirely without the husband's assistance for a very long period of time. Amongst other things, she thereby enabled him to work and earn income over and above his full time work as well as his full time work. In this family she was the uniting force and the one who provided the support, love and affection necessary to maintain this particular family unit over a long time.
This was made especially hard by the husband's abuse and denigration of her and the children in the ways described by them in their evidence, which I largely accept on this issue, as well as by his attitude to 'women's work' and by his drinking which necessitated the wife working especially hard and harder than would be usual in normal situations as homemaker, parent and as the prime navigator of the welfare of this family through the many seas of problems and difficulties which confronted them over the years.
255Referring to Cole J in Green v Robinson (1995) 36 NSWLR 96 at [119], his Honour went on to say:
Clearly his Honour includes the qualitative aspects as well as the quantitative. Accordingly in the adjustment process it is possible to take account of these actions of the plaintiff in assessing his homemaker contributions. ... (my emphasis)
The language used by the plaintiff was not said to cause an apprehension of physical contact and thus would not amount to an assault. The defendant's evidence did not indicate how such statements increased the difficulty of the work she did in her capacity as a parent and homemaker. No doubt it caused her distress and hurt. In contrast in the case of assaults the time spent recovering would have an obvious impact on her capacity.
The homemaker contributions put forward by the plaintiff are the execution of minor maintenance and repairs to the unit, managing finances and assistance with household chores. The defendant gave more detail in relation to household matters and it would seem that her input was far greater in this area. To the extent that he puts forward a claim for homemaker contributions the quality of that contribution should be judged bearing in mind his language. This should not be seen as a matter of penalising the plaintiff for his denigration of the defendant but more an assessment of the quality of the plaintiff's contribution. (my emphasis)
In respect of the four assaults it seems to me that to the extent that the performance of the defendant's homemaker contributions was affected by the assaults, that fact ought to be taken into account in her favour in assessing them. The time, a period of some weeks, is of minor significance in the overall time frame of the relationship.
The apprehension, contact and the injuries arising from the assault and battery is another matter. These are serious matters and are no less reprehensible because they occur within a domestic arrangement. They should be separately treated to show the Court's disapproval of such matters. This course is adopted from time to time in the Family Court. See In the Marriage of Kennon 22 Fam LR 289 at 296 where Coleman J, who was there concerned with exemplary damages said:-
This is a case where the message must be spelled out to persons such as the respondent that they cannot assault and beat wives or de facto wives and escape civil liability simply on the basis that it was 'a domestic'. I know of no principle which renders an assault and battery in a domestic context less reprehensible than that in any other context.
256I have referred to the evidence of regular offensive language (on both Gregory's and Veronica's part) and to the incidents of physical abuse (observed by members of Veronica's family and, at least on one instance, leading to the need for hospital treatment). On an assessment of the contributions of both parties to the relationship, I accept that this conduct would warrant greater weight being given to the contributions of Veronica than Gregory. (I note, in this regard, that the task of this Court in adjusting the property interests is neither to penalise nor to condone deplorable conduct such as domestic violence.)
257It is submitted by Mr McNally that assuming that Veronica received $360,000 from the sale of Kurrajong, then a large proportion of that sum was generated by the work that Gregory did on improving the Kurrajong property and that it is "just and equitable" that Gregory should receive a sum for the work that he did and money that he spent over 8 years in improving the property (and that any rental benefit is offset by Gregory's contribution to mortgage repayments). For the reasons given earlier, I consider that the order on the constructive trust claim adequately takes into account that contribution (and would be more favourable than an order I would have made under the Property (Relationships) Act in any event).
258Balancing the above factors, I take into account that Veronica's contribution to the relationship at the outset (in terms of bringing to the relationship the ability to occupy the property rent free) was greater than Gregory's (though their respective assets at the commencement of the relationship were otherwise equal). I accept that her day-to-day financial contributions seem to have outweighed Gregory's (although he did contribute from time to time) and she had the bulk of the responsibility for running the household (made harder by Gregory's behaviour). Nevertheless, I consider that Gregory's contribution to the building of the shed and house was a significant contribution.
259Having regard to the orders to be made on (i) above, I consider that there is no adjustment to the parties' property interests now warranted. Had the decision in (i) been otherwise, I would have adjusted the parties' property interests by an order in Gregory's favour of $60,000.
(iii) Costs
260At the outset of the hearing, in written submissions it was contended by Mr Livingstone that costs should follow the event save that in the event that Gregory obtained modest relief against Veronica he would not be entitled to costs if the proceedings ought to have been commenced in the Local Court (relying upon Harris v Schembri (1995) DFC 95-166; Vollmer v Hauber Davidson [2006] NSWCA 79) and that his claim for interest should be refused given that the delay in commencing the proceedings was as a result of his own error as to the law. It was further submitted that Gregory should pay the costs of the application for leave regardless of the outcome of the proceedings. However, at the close of the hearing both Counsel sought to defer submissions on costs until after the judgment.
261I will therefore hear submissions as to costs at a convenient time to Counsel.
Orders
262I therefore make the following orders:
1.I order that the second cross-defendant do all such things and sign such documents as may be necessary to cause Rafton Family Lawyers to pay to the cross-claimant within 7 days the sum of $100,000 (plus any interest accrued thereon from the date of payment of that amount into the said trust account).
2.I direct that the solicitor for the second cross-defendant, on payment of the amount referred to in order 1 above to the cross-claimant, be permitted to release to the second cross-defendant the balance of the funds held in the trust account of Rafton Family Lawyers out of the proceeds of sale of the second cross-defendant's Kurrajong property.