Meagher JA then continued:
I have some difficulty with the last sentence I have quoted. There were no "rents and profits", and the plaintiff was seeking an allowance in respect of an occupation fee, which is rather a different thing. This difficulty apart, I am far from convinced by his Honour's reasoning. In the case where one party is claiming an allowance for improvements and the other is seeking to charge an occupation fee, both claims can arise in partition actions (and related actions), and only in such actions. Each claim is a potential incident of a partition action. In this context, "no rent if no improvements" makes good sense. The discharging of joint debts stands in a different position. An adjustment occasioned by such a discharge is not necessarily made in a partition action: it could be made in an action for contribution, which could be brought quite independently of a partition action (or its equivalent). In the present case, for example, the defendant could have brought an action for contribution before or after the s.66G case. In these circumstances to equate a claim for contribution with a claim for an allowance for improvements does not seem to me to carry much conviction. However, the defendant has not cross-appealed and his Honour's decision on this point must therefore stand.
70 One point made by Meagher JA is that the claim for contribution in respect of the discharge of a joint debt, such as a mortgage, can be made independently of a partition action or its equivalent. Indeed, it would appear that such a claim could even be made by an action at law, without the need to seek equity at all: see Meagher Gummow & Lehane, Equity, 2nd Ed., pars.1001-1003. If a co-owner makes a claim for contribution to mortgage payments in reliance purely on a legal right, with no reliance on equitable principles, then it would seem that the co-owner is not seeking equity and is not required to do equity. However, if the co-owner does rely on equitable principles in making such a claim, in my opinion the co-owner is seeking equity and is required to do equity, no less than if allowance for improvements was being sought.
71 Thus I agree with Rolfe J that, once an occupier is required to do equity because he or she is seeking equity, there is no reason to distinguish between improvements or repairs effected to the property on the one hand, and the reduction of a charge on the property through mortgage repayments on the other. I think this accords with what Long Innes CJ in Eq. said in Luke at 317, in commenting on the case of McMahon v. Burchell 5 HA 322:
In passing I may state that, by reason of the claim which was apparently being made by the plaintiff William McMahon for an allowance in respect of repairs and outgoings, an occupation rent might possibly have been properly charged in that case on the ground that a plaintiff seeking equity must do equity: Teasdale v. Sanderson 33 Beav. 524.
72 In the present case, no legal claim has been made. In essence, the appellant is relying on a defensive equity, unpleaded, to the respondent's resulting trust case. I note that, even if the appellant had sought contribution at law in a cross-claim in these proceedings, he would have been limited to contribution towards payments made by him in the six years prior to commencement of these proceedings, that is, since 17th June 1993: see Limitation Act 1969 s.74. (This limit does not apply to his defensive equity, because the respondent's resulting trust case depended on transactions in 1990 (and cf. Limitation Act s.47(1)(c)), thus enabling the appellant to rely defensively on intermediate transactions.) The appellant would still have had to account for his occupation of the premises since November 1997. I note also that if the appellant is not given an accounting in these proceedings, in fresh proceedings commenced now he would be restricted by the Limitation Act to an accounting from the end of 1995, and might in any event be defeated by an Anshun estoppel.
73 Applying these principles to the present case, I think it would have been an appealable error for the Master not to give the appellant the benefit of an equitable accounting in respect of his payment of mortgage instalments. There are respects in which the evidence relating to the application of the principles is less full and precise than desirable, but both parties have requested the Court to do its best. I propose to take a fairly broad brush approach, in the hope of thereby doing substantial justice to the parties.
74 In making the mortgage repayments, both principal and interest, the appellant was discharging a debt for which the respondent, on the assumption that she had the benefit of 50% of the mortgage advance, was liable to bear 50%. That prima facie gives rise to a claim for $97,500.00.
75 In my opinion, the principles supported in Luke mean that the appellant, now claiming equity in relation to those payments, should do equity by making some appropriate adjustment in respect of his very much greater use of the property, and indeed exclusive use thereof since November 1997. This is not a case where the greater use of the property by the appellant was in any way foisted upon him, so as to make questionable the justice of requiring him to make some recompense for that greater use. I think it is clear that it was wholly in accordance with the appellant's wishes and intentions that he have by far the greater use and benefit of the property. I think some allowance should be made for the use which the respondent got from the property, which I would assess to be 10% as against the appellant's 90%, up to November 1997. From November 1997, plainly the respondent had 100% use of the property. The value of occupancy of the property from September 1990 up to the Master's decision in the case has been calculated at about $150,000.00, of which about $100,000.00 relates to the period up to November 1997 and about $50,000.00 relates to the period since November 1997, and I will adopt those figures unless the parties seek a more precise calculation. The appellant is not to be charged with the whole of that $150,000.00, because of what I have held to be the 10% usage which the respondent had up to November 1997, so that the value of the appellant's usage for this period can be put at $90,000.00 and the value of the respondent's usage for this period can be put at $10,000.00. Accordingly, I put the figure for which the appellant should account to the owners of the property for this period at $80,000.00; and in addition he should account to the owners of the property for the whole $50,000.00 applicable to the period since November 1997, making a total of $130,000.00. The respondent's 43% of this amount comes to $55,900.00. Accordingly, the adjustment to be made in favour of the appellant against the respondent is $97,500.00 less $55,900.00, giving $41,600.00. I think it is fair to regard the appellant as becoming entitled to the whole of that adjustment half way through payment of the mortgage instalments, that is in about 1994, and thus to allow six years' interest on that amount at 5%, totalling $12,480.00.
76 The calculation then is as follows. The respondent's 43% of the value of the property of $435,000.00 comes to $187,150.00. There should be an adjustment in favour of the appellant of $41,600.00 plus interest of $12,480.00, that is $54,080.00, giving a net interest of the respondent in the property of $133,070.00 calculated at the date of the Master's orders.
77 Substantially the same result can also be reached by another route. Had the appellant explicitly claimed an account in his pleadings, the respondent could plausibly have contended that he was prevented from claiming interest payments by agreement or estoppel. It is reasonably possible that she could have led evidence of an agreement that he pay non-capital outgoings in return for his much greater use of the property, or at least of reliance by her to her detriment on a representation or assumption that he would do so. Then, the appellant's claim would be limited to contribution to the capital repayments, namely $120,000.00, of which the respondent's share would be $60,000.00. The respondent could still have claimed in respect of the appellant's exclusive occupation since November 1997, an amount of about $50,000.00, of which her share would be $21,500.00, giving a nett figure in favour of the appellant of $38,500.00. With an allowance of some interest on that figure, we again arrive at something approximating the $54,080.00 reached by the other route.
78 It is common ground that the respondent's interest is to be satisfied by a payment made by the appellant to the respondent. I understand that a payment on account has already been made. The amount still to be paid would be calculated by taking the sum of $133,070.00, adding interest at Practice Note rates, then making the adjustments appropriate by reason of the subsequent payment on account.