Plaintiff v Defendant

Plaintiff v Defendant - [2009] VSC 52 - VSC 2009 case summary — Zoe

[47]

The plaintiff denied that she met the defendant when she was working in a brothel in Geelong in September 2008, while the defendant was attending a taxation conference in Lorne.
The plaintiff denied that when the defendant commenced to reside at Gheringhap Street, Geelong, she remained at Illouera Avenue. Rather, she said that in the first half of 2001, she was asked by the landlord to leave the Illouera Avenue premises, on the grounds that she was no longer in crisis, because she was then dating a lawyer who had adequate means to pay rent. Accordingly, the plaintiff moved to live with the defendant at the Gheringhap Street premises.
The plaintiff agreed that while she and the defendant, and the plaintiff's children, were living at the South Yarra premises, the plaintiff's mother, Gail Cressy, also resided at those premises with her two other daughters. When the construction of the Dorrington Street premises was completed, the plaintiff, the defendant, the plaintiff's three children, Gail Cressy and her two children all moved to Dorrington Street.
The plaintiff denied that, from July 2003 to July 2006, the defendant's primary place of residence was Apartment 909, 668 Bourke Street, Melbourne, and, subsequently, an apartment on the 23rd floor of those premises.
The plaintiff denied that she was an employee of the defendant in the business known as the Gallery of Artemis in Geelong. Rather, she stated that she and the defendant jointly owned that business, that she worked there, and did not receive any payment for her work.
The plaintiff denied that when Illyana was three or four months old, she resumed work as an adult sex provider at brothels in South Melbourne. She stated that she did work at a brothel in South Melbourne in 2002 and 2003, while they were still living at South Yarra. She said that she last worked at that institution in 2004 or 2005.
The plaintiff agreed that when she worked for the defendant, performing office administration work, she was paid in cash. She agreed that most of the defendant's income was used to pay instalments of the mortgage debts, and to pay expenses such as rates, insurance and utilities on the properties. She denied that the defendant gave her the cash which she used to pay for household expenses and the like.
The plaintiff denied that the defendant did not live at, but rather was only a regular visitor to, the Dorrington Street premises, and, subsequently, the Queen Street, Altona premises.
The plaintiff agreed that in February 2007 she had the three children booked into extended after hours care while she was working. She denied that she had a relationship with any other man during her relationship with the defendant.

[71]

The defendant identified a driver's licence (Exhibit C), with an expiry date of 18 June 2001, endorsed with the 5 Illouera Avenue, Grovedale address. He also identified an AMP home loan application, signed by him (Exhibit D), in which he had noted the Illouera Avenue, Grovedale address as a "previous residential address".
The defendant identified a Valentine's Card (Exhibit E), which he had sent to the plaintiff in February 2000, in which he protested his unqualified love for her, and in which he stated: "I'd like you to think about moving back to Gheringhap Street. I'll move out". He denied that that was an acknowledgement of the fact that the plaintiff had, before that time, lived with him at the Gheringhap Street property.
The defendant agreed that he signed a large number of financial documents, including his income tax returns, in which he had stated the Dorrington Street, Point Cook address as his residential address between July 2003 and June 2006.
The defendant agreed that the plaintiff and he lived in the same premises at South Yarra from 2001 to 2003. Although he disagreed that, at that time, they were in a "domestic relationship", nevertheless he stated that he could "accept a finding" that he and the plaintiff were in a domestic relationship during that period of time.[7]
The defendant agreed that it was possible that he also used 166 Queen Street, Altona as his residential address. He identified an application dated 19 September 2007 to redirect mail from that address signed by himself (Exhibit O).
The defendant was cross-examined at some length on the contents of an affidavit sworn by him in the Federal Magistrates' Court proceedings on 13 September 2007. In that affidavit, he stated (paragraph 4) that he and the defendant had "lived, or partly lived together from December 1998 to January 1999 and from May 1999 to June 2007". He also stated (paragraph 6) that "since the respondent and I first met I have been a father to the children Treece and Skye". In paragraph 7, he stated "since the respondent and I ceased living or partly living together I have continued to support her and the children". In paragraph 8, he identified the times he had spent with the children "since June 2007 when the respondent and I ceased living together ... ". In cross-examination, the defendant denied that those parts of his affidavit were admissions by him that the plaintiff and he had lived together for the period 1998 to 2007. He stated that he had been troubled by the language used in the affidavit, and that he had sworn the affidavit based on the advice of the experienced solicitor then acting for him in the Family Law proceedings.
The defendant was cross-examined at some length about his income and his financial commitments. That cross-examination was undertaken by Mr Devries to demonstrate that, with the financial commitments undertaken by him in respect of the mortgages of the various properties, he could not have provided to the plaintiff the financial support which he claimed, during the relationship between them.
The defendant was also cross-examined about the work which the plaintiff had stated that she had done on the properties which he had purchased. He agreed that because he was very busy, he did not do much work on the properties himself. He agreed that generally the plaintiff had carried out the work on the property which she had described, but he stated that her evidence as to the quantity of that work was exaggerated. He also stated that the plaintiff did not fund the works. Rather, he gave her money for the work or reimbursed her later. In addition, he paid her for the work which she undertook on the properties.
The defendant agreed that after re-financing Gibson Street, and applying some of the proceeds of the re-finance for the purchase of the Torquay property, he had a balance of $98,000 cash, which he had banked into his account.
The defendant denied that the plaintiff earned a substantial income during the period 1998 to 2007. He particularly denied that, if it were not for income brought in by the plaintiff during that period, the tight financial structure, comprising the seven geared properties, would have collapsed earlier. He denied that the plaintiff and he had been engaged in a joint venture in relation to those properties.

[129]

105 In assessing the plaintiff's evidence, it is necessary for me to take into account the fact that she was not cross-examined by an experienced advocate. Nevertheless, as I have already remarked, the defendant is not altogether deficient in that respect. He was prepared to challenge aspects of the plaintiff's evidence, and he did cross-examine her at some length. In general, I have some reservations about the evidence of the plaintiff. In particular, as I shall explain later, I consider that her evidence was somewhat exaggerated as to the amount of work which she claimed to have done on the various properties purchased by the defendant. She was not forthcoming as to the circumstances in which she removed the defendant's documents and mobile telephones from the Dorrington Street premises. As I have stated, her credibility has also been affected by the additional evidence of the defendant that he found documents on 26 December 2008, for which the plaintiff had previously claimed she had fully accounted. However, and notwithstanding those reservations, I found the plaintiff's evidence, as a whole, to be credible as to the existence and duration of the relationship, which she alleges she had with the defendant. I do not consider that the relationship between the defendant and the plaintiff was as ordered or regular as that sought to be portrayed by the plaintiff. Clearly, the defendant lived a somewhat hectic, if not chaotic, lifestyle, in which he worked for two major clients for a substantial period of time (Prime Life and Barwon Water), maintained contact with the three children of his marriage, ran a city office, purchased and financed properties, and worked long hours. There were other unusual features of the relationship. However, and taking into account those reservations, nonetheless the evidence of the plaintiff was cogent, and consistent, as to the circumstance that, during the period from 1998 to 2007, she and the defendant did live together in a personal relationship at the addresses described by her, and that the relationship was based on mutual attraction and affection.

[157]

132 Thus, based on the evidence which I have detailed at some length, I am satisfied that the defendant did cohabit with the plaintiff at the addresses at Illouera Grove, Geelong, Gheringhap Street, Geelong, Nicholson Street, South Yarra, Dorrington Street, Point Cook, and Queen Street, Altona, during the periods from late 1998 to about Easter 2007. I accept that, from time to time, the defendant stayed overnight at other places, and he slept overnight from time to time at his offices in Bourke Street. However, in my view his substantial place of residence, throughout that period, was at the addresses to which I have just referred. I am also satisfied that, during that period of time, the defendant lived at those residences because he was in a relationship with the plaintiff. The relationship was a sexual relationship. There was clearly a degree of financial dependence or inter-dependence between the parties. The plaintiff relied on the defendant to pay the mortgage expenses, the rental expenses (when they were living at Gheringhap Street and South Yarra), rates, insurances and the like relating to each property. As I shall indicate later in these reasons, I also accept that the defendant provided some financial support to the plaintiff. On the other hand, the plaintiff was the prime carer for Illyana, as well as for her own two sons, to whom the defendant readily became a father. The plaintiff, the defendant and the three children shared a number of outings and interests together, as conceded by the defendant in his evidence. Mrs Gail Cressy and Mr Enright both regarded the plaintiff and the defendant as living together as a couple. Thus, the relationship bore the hallmarks of a domestic relationship indicated in the factors specified in s 275(2) of the Property Law Act. I am satisfied, on the balance of probabilities, that the plaintiff and the defendant did live together as a couple on a genuine domestic basis for the period commencing late 1998, and terminating at about April 2007.

[259]

"The guiding principle is unconscionability. In this, as in every such case of a defacto relationship, there must be more than simply the performance by the plaintiff of the valuable role of the provision of love, care and support. The provision of such a contribution will be sufficient only if it is related in some factual way to the generation of wealth as part of a joint effort or endeavour to provide for the parties' mutual material welfare and security. That need not, of course, be the only purpose of the provision of such assistance to the defendant, but it must be one of the material purposes because it is that which marks out the character of the joint endeavour as being one which will generate a claim, upon the failure of the relationship, without the fault of the plaintiff, to a share in the property created, acquired, maintained and improved during the course of the relationship, where the endeavour can be seen to be related to particular items of property, or will generate a claim for compensation representing the value of the contribution made by the claimant to the increase in the material wealth which was intended to be enjoyed by the parties jointly.

A joint endeavour of this character is one which has the aim of adding to the parties' material wealth for their mutual benefit rather than being one where the plaintiff simply provides loving care and support to the defendant as a normal incident of a defacto relationship. In that sense it is right to say that the joint endeavour must be one intentionally or deliberately entered into for the purpose of advancing the parties' mutual material wealth. Only if it bears that character will it be unconscionable to allow the defendant to retain the entirety of the beneficial interest in that wealth. To hold otherwise, and in particular to hold that it would be sufficient if in fact the efforts of the plaintiff advance the defendant's capacity to acquire wealth, would, in my opinion, be to commit the error to which Deane J adverted in Muschinski of giving undue rein to the Court's idiosyncratic notions of fairness and justice."[58]

[260]

196 In my respectful view, the passages from Green, Stowe and Lloyd v Tedesco, which I have quoted above, reflect the reasoning of Deane J in his seminal judgment in Muschinski v Dodds. His Honour commenced by identifying the constructive trust which was under consideration, namely one which was fundamentally remedial in its operation.[59] He disavowed the proposition that equity would intervene, to provide such a remedy, based on any idiosyncratic notion of justice and fairness; rather, equitable relief by way of constructive trust would only be available "if applicable principles of the law of equity" should require that the person, in whom the ownership of property is vested, should hold it to the use or for the benefit of another.[60] His Honour then identified the relevant principles of equity. He did so by referring to the equitable principles which operate when legal relationships, such as partnership and joint ventures, fail without attributable blame. In particular, where the legal source of the relationship (such as the contract) does not provide for relief, equity intervenes to entitle each party to such a relationship to a proportion of repayment of capital contributions made by them to the particular venture.[61] Deane J observed that that remedy was based on a more general principle of equity which "operates upon legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct".[62] That reasoning of Deane J immediately preceded the passage in his judgment, which I have already quoted[63], in which his Honour defined the circumstances in which equity would intervene to impose a constructive trust on the legal interests of the parties to a failed relationship. Thus analysed, the constructive trust identified by Deane J, and discussed in the interstate decisions to which I have referred, constitutes a remedy postulated on contributions made by parties in a relationship to property held by one of the parties to the relationship, where the relationship subsequently has failed without attributable blame, in circumstances in which the legal owner of the property would derive an unintentioned benefit at the expense of the other party, if not for the intervention of equity.

[262]

198 On the other hand, as expressly recognised by Deane J in Muschinski v Dodds[64], the context of the relationship between the parties is important in identifying the contribution by the party who claims rights under a constructive trust. In a "de facto" relationship, such as in this case, a contribution may be made in a different form, and in a less direct manner, than in a relationship which is wholly commercial in character, such as a joint venture or a partnership. As the decisions in Green, Stowe and Lloyd v Tedesco make clear, the contribution must not be solely directed to maintaining the personal relationship between the parties. However, in determining that question, it is important, of course, to take into account the realities of the type of relationship shared by the parties in a case such as this. Of its nature, such a relationship had, as its origin, the mutual love and affection on which it was based. It is that aspect of the relationship which was the source of, and which accounted for, the duration of the relationship. On the other hand, the nature of the relationship between the plaintiff and the defendant did, in time, evolve and develop, as personal relationships do. The first property purchased by the defendant - the Dorrington Street property - was, as I have found, the product of a shared concept between the plaintiff and the defendant. It was purchased and developed to be part of a family home shared by the parties. As the relationship developed and progressed, the plaintiff was sufficiently connected with the enterprise of the defendant, consisting of the purchase of the properties, to be involved in carrying out some works on them. Thus, she carried out some (albeit relatively minor) work on the Dorrington Street property, and subsequently carried out further work on the Hawkeshurst Court property and the Altona property. The fact that she worked on the Hawkeshurst Court property, notwithstanding that she did not live in it, demonstrates that she was not entirely detached from the investment enterprise undertaken by the defendant.

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Judgment (341 paragraphs)

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Cases Cited (21)