36 On one view, analogy with Morris v Morris would have resulted in a charge, not for the value of care and accommodation to be provided under the arrangement, but for the amount of the under-value at which the property was transferred - which was, in effect, the true contribution of the plaintiff. But perhaps the better view is that Stoklasa is an illustration of the application of the principle that, in an appropriate case, equity may decree a remedy less than the prima facie remedy where to do so would be disproportionate to the requirements of the conscionable behaviour. As Gzell J pointed out in Stoklasa, the defendant had paid a price of $50,000 and another $50,000 for substantial renovations and repairs, which makes the case quite a different one, as to where the balance of equity and justice lies, from one in which the defendant has received, in effect, a voluntary transfer. In the present case, as distinct from Stoklasa, the plaintiffs gave no consideration for the transfer of Mr McKay's share, save that their agreement to provide a lifetime right of residence and care, which can no longer be provided.
37 The practical problems of the Stoklasa approach in a case such as the present involve the difficulty of valuing, not just the lifetime right of residence, but the right to receive care. Personal injury cases of seriously disabled plaintiffs show that the cost of care can be enormous. It is quite unknown whether, and if so for how long, Mr McKay would require intensive care in the future. While, as in common law personal injury cases, an estimate can be made, it is an unsatisfactory approach in the context of Mr McKay's reduced life expectancy, where the risk of error and consequent injustice is magnified in quantum. The Court might easily allow too much or too little in financial terms to care for him in the events which ultimately transpire.
38 Stoklasa does not affect the proposition that the principle and the prima facie remedy is the return of contributions. It is clear - indeed, from Muschinski and Baumgartner themselves - that adjustments may be made where justice and equity so require, but as a matter of principle the cases are not concerned with enabling one party to retain the benefit of the other's contribution at the price of paying damages to the other.
39 Two matters on the facts were advanced against the application of the prima facie remedy. The first was that for some time after the transfer - the parties agreed at least until early 1999 - Ms McKay cared for Mr McKay in accordance with the 12 December 1996 agreement. That circumstance features in a number of the authorities. It featured in Kriezis, where performance of the arrangements for years did not preclude relief by way of return of the contributions when the substratum failed. There may well be cases in which the performance of the arrangements so affect the equities arising from the initial contributions that a return of contributions would be disproportionate to the requirements of the conscionable behaviour; indeed, Stoklasa was such a case. But this is not one of them. The second matter advanced was that improvements had been effected to the property in the meantime. But so too had improvements been effected in Sirtes v Pryer, and in that case the counter-equity that arose as a result was satisfied by a charge for the value added by those improvements.
40 The facts of the present case are far removed from those in Stoklasa. They do not justify any remedy other than the prima facie one. To the extent that justice requires recognition of any other contributions, they may be dealt with by allowance or adjustment from the position produced by the prima facie remedy, rather than by adopting some different starting point. Accordingly, I am not satisfied that in the present case there is any sufficient reason why the prima facie remedy should not apply: that is, the return to Mr McKay of the half share that he contributed.
41 Several potential allowances or adjustments have been proposed or require consideration: first, the rendering of care services, at least until early 1999, by Ms McKay; secondly, the effecting of improvements to the property, principally by Mr Schiavo; thirdly, the mortgage debt, instalments in respect of it and the circumstance that it used the whole of the property, including Mr McKay's share, to acquire the half interest of Ms Bruce; fourthly, whether an occupation fee should be charged against Mr McKay from early 2002, since when he alone has been in occupation; fifthly, rates and outgoings paid by the plaintiffs; and sixthly, the benefits derived by the plaintiffs from being accommodated in the property, in particular, by freeing Mr Schiavo's Seven Hills property to generate rental income. I shall deal with each of these in turn.
42 As to the rendering of care services by Ms McKay, the parties agree that between late 1996 and at least early 1999 she cared for Mr McKay as required by the December 1996 agreement. However, that agreed fact is equivocal as to the quantum and quality of the care provided. Mr McKay says that, in fact, very little was provided. Ms McKay says [paragraph 65 of her affidavit] that on her return from work or her sporting commitments she cooked dinner, sometimes prepared meals for Mr McKay to take to work, cleaned the kitchen and washed up, washed, dried and folded clothes, shopped for groceries and household supplies, washed the floors, for the first 12 months cleaned Mr McKay's rooms, vacuumed the floors, took him to medical appointments when necessary and took him to the library to borrow books. But she also says [paragraph 70] that in early 1997 Mr McKay's condition improved to the extent that he was working at his factory at Revesby, and that he could lift things that she would find difficult to lift.
43 In other cases - I have already mentioned Kriezis - the rendering of the services contemplated by the arrangements for some considerable time have not only not precluded a return of contributions, but also have not resulted in any allowance. Indeed, I am not aware of a case in this area of discourse in which an allowance has been made for the provision of care. That is not to say that in an appropriate case, if appropriate evidence were adduced, such an allowance could not be made. But there is nothing in this case to suggest that Ms McKay gave up her employment, or forewent other opportunities, in order to render care to her father over the period in question, and there is even less to attribute any value in financial terms to what she did. The evidence does not descend to the detail that would be required to support a Griffiths v Kerkemeyer claim in a personal injuries action. In those circumstances, I do not think it is possible or appropriate to make any allowance for the rendering of care services.
44 The second question is an allowance for improvements. A co-owner who improves property is entitled to an allowance for those improvements [Forgeard v Shanahan (1994) 35 NSWLR 206, 223F]. For this purpose, improvements involve something more than mere repairs and maintenance [Forgeard v Shanahan, 224C]. Such an allowance is not a reimbursement for expenditure, but an allowance in respect of the amount by which the improvements have increased the value of the property [Forgeard v Shanahan, 223F]. Mr Schiavo described the improvements he undertook [paragraph 43 of his affidavit]. Many of them - such as mowing lawns, general gardening work, general maintenance jobs, replacing taps and hoses, replacing sewer pipes, clearing tree roots, and washing and painting walls and ceilings, were plainly in the category of mere repairs and maintenance. Some - such as renovation of the kitchen and building a carport - might exceed mere repairs and maintenance, but there is no evidence that those works have enhanced the value of the property at all, let alone as to the amount by which they might have done so. On the evidence, I am unable to be satisfied that there is a case for an allowance for improvements.
45 The third matter is the mortgage. As I have recorded, the price paid to Ms Bruce was raised by the plaintiffs on the security of the whole of the property, including Mr McKay's share. As between the parties, it is plain that the plaintiffs alone are liable for the mortgage debt and that Mr McKay is entitled to be exonerated and have the mortgage borne by the plaintiffs' share. Although the plaintiffs have themselves serviced the mortgage to this point. The plaintiffs have had the use of Mr McKay's half share as security for the borrowings with which they purchased their own half, no value has been attributed to this benefit, nonetheless, it is a countervailing benefit which they have enjoyed, and adds to the reasons for declining to make an allowance on account of care services rendered.
46 The fourth question is an occupation fee. A co-owner in occupation is not liable to pay an occupation fee to other co-owners unless he claims an allowance for improvements or he has excluded the other from the property; absent exclusion or ouster, the law treats a co-owner not in occupation simply as one who chooses not to exercise his or her legal right to occupy the property [Forgeard v Shanahan, 221G]. On the other hand, a co-owner who has been ousted from the property can bring proceedings for possession and for mesne profits [Forgeard v Shanahan, 222B]. The remedy is said to have been depended on an exclusion being a legal wrong [Luke v Luke (1936) 36 SR(NSW) 310, 314].
47 There is no little controversy as to what amounts to ouster, particularly in the context of a failed domestic relationship. On the one hand, authority establishes that a co-owner who obtains an apprehended personal violence order, or an order for exclusive occupation of the property under matrimonial laws, does not thereby exclude the other unlawfully and is not therefore liable for an occupation fee [Biviano v Natoli (1998) 43 NSWLR 695]. On the other hand, there is authority that a domestic partner who, upon the breakdown of the relationship, vacates in circumstances that it is no longer reasonable to expect him or her to remain in occupation with the other, may be regarded as having been excluded and may be entitled to an occupation fee [Dennis v McDonald [1982] Fam 63, 71]. The first instance judgment of Purchas J, as his Lordship then was, in Dennis v McDonald was upheld in the Court of Appeal, although the present point was not an issue on the appeal. Though doubted by Young J in Chieco v Evans (1990) 5 BPR 11,297, it was endorsed by Beazley JA, with whom Stein JA agreed, in Biviano v Natoli (at 702). The controversy was referred to, but not resolved, by Bell J in Rupchev v Callow [2007] NSWSC 1097.
48 The jurisdiction of matrimonial courts - including this Court in exercise of its jurisdiction under the (NSW) Property (Relationships) Act 1984 - to grant injunctions and make orders for the exclusive occupation of property is not fault based. The touchstone for such an order is that it is no longer reasonable or practicable to expect the parties to continue to live together in the same property [see, for example, In the Marriage of V and CL Fedele (1986) 10 Fam LR 1069, 1073 and the cases there cited]. Once that finding is made, the decision is made according to the balance of the convenience including, for example, where one party has the custody of children, whether it is preferable that that party or the other continue to occupy the former matrimonial home. The explanation offered by Powell JA in Biviano v Natoli - that the result in Dennis v McDonald is to be explained on the basis of one party effectively being responsible for the other not being able to live there - does not, with respect, sustain examination in that context.
49 It would be unfortunate if a party by vacating voluntarily, even in the face of a threatened application for exclusive occupation, could be regarded as having been excluded so as to claim an occupation fee, whereas one who was ejected by such an order after having opposed it, on considerations of balance of convenience but without fault, was not entitled to an occupation fee; yet that appears to be the effect of the current state of the authorities.
50 In matrimonial proceedings, this situation is typically addressed by taking into account, in evaluating the respective contributions of the parties for the purposes of discretionary property adjustment, the fact that since separation one has had the benefit of exclusive occupation of the former matrimonial home - either as a contribution by the other, or as a benefit already received by the party who remains in possession.
51 When, in cases such as Luke v Luke, it was said that an occupation fee was available only where there was a legal wrong, there was no jurisdiction to exclude a co-owner for personal reasons, despite the co-owner's legal rights; that jurisdiction, whether in the domestic violence provisions of the (NSW) Crimes Act 1900 or under matrimonial legislation, has been created since. When Long Innes J referred, in Luke v Luke, to the exclusion being a legal wrong, there was no difference between a positive (actionable) legal wrong, and the denial of a legal right. However, while a party who obtains an order for exclusive occupation or an APVO does no legal wrong by excluding the other, that other's legal rights as a co-owner to occupy are, nonetheless, denied. If a party is excluded by such an order, it can no longer be said to be a case of the party out of possession being one who merely chooses not to exercise his or her right of occupancy as a co-tenant; rather, he or she is prohibited from doing so. I, therefore, agree with Purchas J in Dennis v McDonald and Beazley JA in Biviano v Natoli, that the basic principle that a tenant in common is not liable to pay an occupation rent by virtue merely of his being in sole occupation of the property does not apply in the case where a matrimonial or similar relationship has broken down and one party is, for practical purposes, excluded from the family home. Upon breakdown of a domestic relationship, if it becomes no longer reasonable or practicably sensible to expect the partners to co-occupy the one property, the one who remains in possession may be taken to do so to the exclusion of the other, and to be liable to pay an occupation fee. At present, however, Biviano would seem to restrict that to a case in which the exclusion was not authorised by a court order - whether under matrimonial legislation or an APVO.
52 In this case, the plaintiffs left the property, in a sense voluntarily, in February 2002. However, I think it was not reasonable or sensible to expect them to continue to live there with the defendant. That involves no attribution of fault, simply that it was no longer sensible to expect all three to live there when there had been unpleasant, even violent, incidents between them. That would, on my view, entitle them to an occupation fee. But in this case, there is, in any event, more. The plaintiffs returned to the property once, but on their second attempt to return, found that the gates had been locked. The mere placing of a lock on a gate may not be enough to amount to exclusion [Jacobs v Seward (1872) LR 5 HL 464, 473]. However, in that case Lord Hatherley LC pointed out first, that there was no evidence as to whether the gate was kept locked or not - simply that there was a lock on it; secondly, that the defendant had allowed the plaintiff's son to enter when a request had been made; and, thirdly, that there was no evidence as to what was the object and intent of putting on the lock. In the present case, the evidence is that the gate was in fact locked. Moreover, the plaintiffs requested they be provided with keys and there was no response to their requests. In the course of this oral evidence, Mr McKay - when asked what he would have done had the plaintiffs attended and asked to be let in - said, "I would have made sure I had a witness and if they'd asked to come in, I'd have let them in, but I wouldn't have let them come in the place when I wasn't present because I was fearful of goods being taken and I would not have wanted them to come in unless I had somebody with me because of their actions and the way they had been behaving towards me". That intent is quite inconsistent with the rights of the plaintiffs as co-owners to occupy the property and to come to and from it as they please.
53 Thus, while it is true that in a sense they departed voluntarily from the property, that was in circumstances where it was desirable if not inevitable that one or other of the parties do so. After they departed, they were excluded physically by the lock on the gate, and that lock was accompanied by an intention inconsistent with their legal rights as co-owners. In those circumstances, I am satisfied that they were excluded in the relevant sense, and are entitled to an occupation fee against Mr McKay.
54 The proper measure of an occupation fee would seem to be half of the market rent of the property for the period of the exclusion [Biviano v Natoli]. The evidence establishes that the market rent was $430 per week as at 28 April 2007. Accordingly, the appropriate allowance for an occupation fee is half of that amount for the period from February 2002 until Mr McKay vacates. As the evidence of value is in today's values, it would be inappropriate to allow interest.
55 The fifth item is rates and outgoings. The plaintiffs have paid all the council and water rates since December 1996. They have also paid all of the outgoings for electricity, and they have kept the property insured. In my view, they are entitled to recoup by way of contribution for a debt paid on behalf of all of the parties half of their expenditure on council and water rates [Forgeard v Shanahan, 224F]. The apportionment which they propose so far as electricity is concerned, namely, 33 percent to Mr McKay up until February 2002 and 100 percent to him thereafter is appropriate, and they are entitled to recover those proportions of the amounts they have paid. However, they are not entitled to recoup insurance premiums; it has not been shown that the insurance was for the benefit of Mr McKay [Forgeard v Shanahan, 225B].
56 The final matter is that it was suggested on behalf of Mr McKay that the plaintiffs ought to be required to bring to account the value of the benefit to them of letting Mr Schiavo's Seven Hills property for rent, which only became available to them by reason of their ability to occupy the Ryde property. As they were co-owners of the Ryde property, for a half-share in which they paid, they were entitled to occupy it if they so chose. I can see no basis whatsoever for requiring them to give credit for benefits that they derived from letting the Seven Hills property.
57 It follows that, in my view, trustees should be appointed to sell the property and to pay from the proceeds of sale the costs of sale; to divide the balance into two shares, called the plaintiffs' share and the defendant's share; from the plaintiffs' share to deduct the amount required to discharge the mortgage and to pay the balance to the plaintiffs; and from the defendant's share to deduct and pay to the plaintiffs the occupation fee calculated in the manner I have indicated, and the amount of rates and outgoings to which the plaintiffs are entitled as I have already indicated, and then to pay the balance remaining of the defendant's share to the defendant. There should be judgment that the defendant pay the plaintiffs the sum of $20,000 together with interest at the appropriate rate. All the consolidated proceedings should be otherwise dismissed. I will hear the parties on the question of costs.
58 I direct the parties bring in short minutes to give effect to this judgment.
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