May v Costaras

As joint tenants, the plaintiff and the defendant are registered as proprietors of a property known as 9 Scott Street, Maryborough in the State of Queensland, being Lot 2 in Registered Plan 3893 and the whole of the land contained in Certificate of Title 13485053.

The plaintiff claims that the defendant holds her interest in the property on trust for him, in essence, because, he says:

The defendant contends that:

By her pleadings the defendant asserts an entitlement to an interest in the Cumberland Reach property based on an estoppel alleged to have arisen from promises of future benefit made by the plaintiff and relied upon by her in making financial and non-financial contributions to renovation of the property. Her pleadings do not, in terms, plead an estoppel against the plaintiff in respect of the Scott Street property but characterise the purchase of the Scott Street property in joint names as recognition of the contribution the defendant had made to the renovation of the Cumberland Reach property and a common expectation that the Scott Street property was a similar renovation project.

In substance, the way the defendant presented her case bears similarity with the elements of an equitable estoppel by encouragement identified by the majority of the High Court of Australia in Kramer v Stone [2024] HCA 48 at [36]-[41], published after judgment was reserved in the present proceedings, save that, in these proceedings, the defendant has been defending her legal title as a co-owner with a beneficial interest in the property.

Beyond noticing that similarity as a means of understanding how the defendant has articulated her case, I proceed on the basis that the parties are bound by their pleadings and the way they have respectively presented their cases at the final hearing of the proceedings.

On the defendant’s case, the purchase of the Scott Street property was accompanied by a reaffirmation to her by the plaintiff of his promise that she would benefit materially from her work, with him, on renovation projects. The promise of material benefit to the defendant, made at the commencement of their relationship, was a continuing one, not readily confined to the Cumberland Reach property. Even if it were, and if placement of the defendant on the title to the Scott Street property were to be discounted as “past consideration” (and, therefore, no consideration) for services to be rendered in a future “joint-venture”, the plaintiff’s claim to beneficial entitlement based upon a resulting or constructive trust does not do justice to the defendant’s claim that she is entitled to beneficial ownership of one half of the Scott Street property or equitable compensation.

To describe the defendant’s case as one based simply on a contention that the plaintiff “gifted” her an interest in the Scott Street property is to discount both the parties’ acceptance that the defendant had made a substantial contribution to their renovation of the Cumberland Reach property and their de facto relationship, as well as her involvement in identifying, and negotiating the purchase of, the Scott Street property as a joint investment.

Nevertheless, to describe the plaintiff’s decision to include the defendant on the title to the Scott Street property as a “gift” to her highlights the intentional character of his decision. The defendant was not named by the plaintiff as a co-owner by accident or by oversight, but deliberately and mindful of her expectation of co-ownership arising from her proven contribution to renovation of the Cumberland Reach property and a common expectation that the Scott Street property would be the subject of a like restoration project.

Her insistence upon, and expectation of, being named as a co-owner of the Scott Street property was, in all the circumstances of the case, not unreasonable. Her contribution to the renovation of the Cumberland Reach property involved extensive physical labour and project management work far beyond something nominal. It was of a nature consistent with a relationship between an established married couple, de facto or de jure. It was different in kind from performance of merely household chores, though those too were performed by the defendant.

Whether to characterise the parties’ de facto relationship as a “failed joint-endeavour” (and, if so, how to characterise the scope of any “joint- endeavour”) are questions which arise from the way the parties have framed their contest.

However one views the relationship it was not simply a “romantic” relationship, although that it was. Both parties wanted a stable, productive home environment and looked to property renovation projects as a means of mutual profit. The defendant had experience and skills in, and an aptitude for, property management that the plaintiff did not. He had worked hard as a truck driver and was looking forward to semi-retirement. From different perspectives they both hoped, and expected, to profit from renovation projects conducted as a joint endeavour founded upon a domestic arrangement in the nature of a marriage and in anticipation of a formal marriage at some indefinite future time.

If the starting point of analysis of the case is the fact that the defendant, without any allegation of fraud, is a registered proprietor of the Scott Street property the ultimate question for determination is whether (upon an irretrievable breakdown of their relationship) it would be unconscionable for her to insist upon her legal entitlement to the property as a co-owner in circumstances in which the plaintiff paid the whole of the purchase price for the property.

If the starting point is the fact that the plaintiff paid the whole of the purchase price of the Scott Street property giving rise to a presumption of a resulting trust in his favour, the ultimate question may be:

In short, perhaps, what is required of the plaintiff to “do equity” as the price for a grant to him of the equitable relief he seeks from the Court?

In my assessment the parties’ dispute is not to be determined by reference either to a “presumption of advancement” (depending perhaps on what one makes of a de facto relationship) or a “ presumption of resulting trust” (focusing on the plaintiff’s payment of the purchase price of the Scott Street property) because the particular facts of the case govern its outcome. If otherwise applicable they must be taken to have been rebutted. A determination of the facts depends upon an assessment of the whole of the evidence, including questions of credit affecting fact-finding and inferences to be drawn from the evidence.

The plaintiff’s case emphasises his contention that the purchase of the Scott Street property in co-ownership was conditional upon marriage (albeit at an unspecified future time) and focuses attention on what was (as is revealed by contemporaneous text messages) a stormy personal relationship which, on any view of the case, has since broken down irretrievably. It is within this context that he invites the Court to find, as a fact, that he intended to retain control of the property and did not intend that the defendant receive a gift of it or an unqualified beneficial entitlement to it. He contends that the purchase of the Scott Street property must (or at least should) be seen in isolation from earlier events in the parties’ relationship.

The defendant’s case emphasises promises of material benefits made by the plaintiff to her throughout their relationship upon which she relied in entering, and remaining in, a de facto relationship of marriage underpinned by an agreement for a joint project of property renovation for profit. On her case the parties’ relationship was essentially domestic rather than commercial, but it had a commercial flavour.

A determination of these proceedings requires that the force of each party’s “starting point” be noticed without disregard of the other. An analysis of the evidence in the process of finding facts material to a determination of the proper outcome of these proceedings, whichever “starting point” might for convenience be adopted, tends ultimately to focus upon the parties’ competing versions of a conversation, or conversations, at or about the time a decision was taken that the Scott Street property would be purchased, not in the name of the plaintiff alone, but in the parties’ joint names.

In short, the plaintiff says he agreed to purchase the property in joint names only upon a condition (to which the defendant agreed) that the parties marry.

In short, she says that they agreed that the property be purchased in their joint names in recognition of their existing relationship, the contribution she made in renovation of the Cumberland Reach property, and the purchase of the property as a new joint renovation project. She says that she told the plaintiff that she would not remain in their relationship if not acknowledged as a co-owner of the Scott Street property. On her version of events her inclusion on the title to the property was not conditional upon marriage.

The plaintiff commenced these proceedings (by a statement of claim filed on 27 October 2022) in New South Wales notwithstanding that the land in question is located in Queensland.

Both parties are resident in New South Wales and have submitted to the jurisdiction of this Court. The Court has jurisdiction by the combined operation of section 4(1) of the Jurisdiction of Courts (Cross-Vesting) Act 1987 Qld and section 9 of the Jurisdiction of Courts (Cross-Vesting) Act 1987 NSW, the effect of which is that the Court has jurisdiction to make orders in relation to the Scott Street property notwithstanding that it is located in Queensland.

The pleadings upon which the proceedings proceeded to a final hearing comprise the following:

By his statement of claim, the plaintiff claimed, in addition to consequential relief, a declaration that the defendant’s interest in the Scott Street property is held “subject to a resulting and/or constructive trust in favour of the plaintiff” and, in the alternative, a declaration that the legal interest in the property is subject to “a constructive trust to repay the contribution by the plaintiff to the acquisition and maintenance of the property (plus interest on those amounts), and as to the residue of such shares as the Court may deem fit”.

By her cross claim the defendant seeks, in addition to consequential relief, a declaration that the beneficial interest in the Scott Street property is held by the parties in equal shares; a declaration that the plaintiff’s interest in the Cumberland Reach property is held on trust in favour of the parties in equal shares; and, in the alternative to the second declaration, a declaration that the plaintiff’s interest in the Cumberland Reach property is held on constructive trust for the defendant “in sufficient proportion to account for the contribution made by [the defendant] to the renovation of that property and the joint endeavour of their relationship”, with the remainder held by the plaintiff.

At the hearing of the proceedings the focus for attention was on the state of the title to the Scott Street property, presently unencumbered. The Cumberland Reach property is the subject of a mortgage debt of a size sufficient to have left little ownership equity worth a contest between the plaintiff and the defendant.

The plaintiff’s written “Closing Submissions” dated 18 September 2024 included the following disclosure as a concluding comment:

No application was made to the Court consequentially upon this disclosure. Nor do I understand any caveat to have been lodged against the title of the Cumberland Reach property. The critical commercial fact is that the defendant is recorded on the title to the Scott Street property as a joint tenant and there is no encumbrance recorded on the title.

The parties’ respective cases are articulated at length in their pleadings, prepared at a time when both parties were legally represented.

At the final hearing of the proceedings the plaintiff was represented by counsel and a solicitor; the defendant was self represented, her lawyers having ceased to act.

Although there is disagreement about particular facts (about the timing of some events, for example) there is broad agreement about the factual parameters of the parties’ dispute. The main differences of fact appear to be about quantification of the defendant’s financial contribution to renovation of the Cumberland Reach property; the parties’ respective involvement in negotiations for the purchase of the Scott Street property; and whether the plaintiff’s agreement to purchase the Scott Street property in the parties’ joint names was conditional upon marriage. It is not disputed that the plaintiff funded the purchase of the Scott Street property, with no direct financial contribution by the defendant. Nor is it disputed that the defendant made a financial contribution to renovation of the Cumberland Reach property, although the amount of any such contribution is hotly contested.

The only witnesses who gave evidence at the final hearing were the plaintiff and the defendant personally. Their evidence of critical conversations was unsupported by contemporaneous notes save to the extent (if at all) that material inferences might be drawn from text messages passing between them about the “ups and downs” of their personal relationship. It is common ground that there was no written component of any agreement between them.

The plaintiff adduced no evidence from the solicitor who wrote a letter of demand addressed to the defendant contending that her beneficial entitlement to the Scott Street property was conditional upon marriage, despite evidence of the defendant which, if accepted, suggests that that contention was a recent invention inspired by legal advice from the solicitor. That such advice was given appears in the form of an email dated 21 September 2022 (approximately one month before the proceedings were commenced by the filing of a statement of claim on 27 October 2022) in which the plaintiff’s solicitor (under the heading “Legal Matter with Ex Partner”) provided to the plaintiff a commentary of McClelland J’s judgment in Jobson v Beckingham [1983] Fam LR 169.

To characterise the plaintiff’s evidence in these proceedings (that the defendant’s name was put on the title to the Scott Street property conditionally upon marriage) as a recent invention is however too strong. In my assessment, the plaintiff’s evidence of a conversation with the defendant in which he expressly conditioned a joint purchase of the Scott Street property on marriage was a rationalisation of events rather than a reliable account of what actually was said. It is, in any event, not far removed from the evidence of the defendant (which I accept) that she threatened to leave the parties’ relationship if not recorded on the title to the property as a co-owner.

The plaintiff adduced no evidence from the conveyancer to whom he gave instructions for the Scott Street property to be purchased in joint names, having initially instructed her that he was the sole purchaser. His evidence is to the effect that he did not explain to the conveyancer any reasoning process attending his change of instructions. He says he simply instructed her, without explanation or elaboration, to change the identity of the purchaser from himself alone to himself and the defendant as joint tenants.

On this basis it is not self-evident that, if called, her evidence would be of assistance to the plaintiff. There is no suggestion that he told her that he was engaged to be married to the defendant or that the purchase in joint names was conditional upon marriage.

A Jones v Dunkel (1959) 101 CLR 298 inference might be available in respect of at least the solicitor but, ultimately, the outcome of these proceedings depends upon the evidence of the parties themselves on questions of fact rather than formal inferences or presumptions.

The outcome of these proceedings does not depend upon whether the relationship between the parties is, or is not, formally to be characterised as a “de facto relationship”. The primary focus for attention is on their intention (and, in particular, the intention of the plaintiff) in the purchase of the Scott Street property as joint tenants.

Nor is there cause in these proceedings to apply, in terms, the definition of a “de facto relationship” found in section 21C of the Interpretation Act 1987 NSW.

Nevertheless, the statutory definition provides a convenient checklist of elements of the relationship enjoyed by the parties at and about the time the Scott Street property was purchased.

So far as may be material, section 21C is in the following terms:

The parties first met on 22 November 2020. They are not related by family. They were strangers until they met at a social event, described by the plaintiff as a “Facebook Page Single Parents Day event”. They commenced what their pleadings describe as “a romantic relationship” on or about 23 December 2020. The plaintiff moved into the defendant’s (rented) Eastwood residence on or about 10 January 2021. They became engaged to be married on or about 30 January 2021 when the plaintiff proposed to the defendant in front of her family and friends at Blacktown Skating Rink. There is no evidence that a date was ever fixed for a marriage ceremony to take place. In formal terms, it was, and remained, a proposal for marriage at an indefinite future time. Informally, it took the form of an immediate embrace of a de facto relationship with a commitment to life as a couple.

In or about February 2021 the defendant moved into the Cumberland Reach property, owned by the plaintiff. For about four months after that time the defendant contributed to household expenses by fortnightly payments of $800, which (in these proceedings) the plaintiff characterised as “rent” without any indicia of a lease arrangement.

That the parties’ arrangement was essentially domestic rather than purely commercial is confirmed by the plaintiff’s evidence that at about the time the defendant made her last fortnightly payment he said to her: “I do not want you paying me rent. If you want to contribute you can pay for groceries and, if you can, the energy bill”. He says that after that conversation, the defendant made contributions to the groceries and energy bill from about September 2021 to about June 2022.

The parties’ evidence differs as to the timing of the commencement of their sexual relationship and their engagement to be married. Any difference is immaterial. On any view, things moved quickly “in or about January 2021” (as the plaintiff deposed) and, for his part, he connected the two events in time. Both parties appear to have associated the commencement of their sexual relationship with a commitment to cohabitation and marriage.

In or about February 2022 the plaintiff (in consultation with the defendant who says she found the property) purchased 106 Ann Street, Maryborough in Queensland (“the Ann Street property”) and shortly thereafter the parties took up residence there. That involved a re-location from NSW to Queensland, perhaps a fateful shift in lifestyle that impacted their personal relationship.

The plaintiff purchased the Ann Street property by drawing down a loan secured against the Cumberland Reach property.

The Scott Street property was purchased for $180,000 by a contract dated 30 June 2022 and completed on 11 July 2022. At no time have the parties lived there. It has been rented out since its acquisition.

The contract dated 30 June 2022 (by which the parties purchased the property jointly) was preceded by a contract dated 4 June 2022 (“the first contract”) in which the plaintiff alone was named as buyer.

That “first contract” was rescinded by an undated (typed) document styled “Deed of Rescission” made between the sellers and the plaintiff which provided for the property to be purchased by the plaintiff and the defendant (as “buyers”) in a “second contract”, entry into which effected a recission of the first contract pursuant to the Deed.

On the face of the Deed the name of the defendant as a “buyer” was inserted in the preamble to the Deed in handwriting (of a person, on the evidence unidentified) and apparently initialled by one of the two “sellers”. The defendant was not a party to the Deed. The two “sellers” and the plaintiff signed the Deed and the plaintiff’s signature was ostensibly witnessed by one Angus Bennett, from whom no evidence has been adduced. The front sheet of the Deed bears the name of Crown Legal Services Pty Ltd, named as the “buyer’s solicitor” in each of the first and second contracts. In each of the first contract, the Deed and the second contract, the plaintiff’s address was given as the Ann Street property. In the second contract, in which both plaintiff and defendant were named as buyers, the defendant’s address was also recorded as the Ann Street property.

The plaintiff’s signature on the first contract was not witnessed. Nor were the signatures of the plaintiff and defendant on the second contract. Their respective signatures appear to have been “electric signatures” which, on the face of the contract documents, did not require a witness.

The email address for the “buyer’s solicitor” on each of the first and second contracts was specified as “Tammy@Crownlegal.com.au” . The email address for Crown Legal Services Pty Ltd on the front sheet of the Deed was a generic one with the prefix “admin”, accompanied by a reference “MMA: NM: 5221”. This is consistent with evidence of the plaintiff that he dealt with a conveyancer rather than a solicitor.

Both the first and second contracts provided for a purchase price of $180,000 with a deposit of $1,000. Both contracts recorded a “nil” entry against the words “Finance Amount”, “Financer” and “Finance Date”. That is consistent with the parties’ evidence.

The plaintiff borrowed the purchase price against the security of the Cumberland Reach property. His borrowings were not negatively geared against the Scott Street property which, at the time of purchase, the parties proposed to renovate rather than to occupy or rent out. There is evidence to suggest that there was some confusion in the plaintiff’s banking arrangements but, be that as it may, the Scott Street property was purchased without any mortgage debt charged against it.

The second contract provided for settlement “on or before 11 July 2022”. A copy of a title search of the property on 31 August 2022 records a “Dealing No” 721825580 against the date “11/07/2022” which (in the absence of a copy of that dealing) I infer was the date of settlement in fact. The plaintiff’s evidence is to the same effect.

The title search records the parties’ co-ownership of the property as registered proprietors as being that of joint tenants rather than tenants-in-common. In common experience, a joint tenancy is preferred by a married couple, whereas a tenancy-in-common is generally preferred by co-owners in a commercial relationship. That is because the former carries a right of survivorship (which allows property held in co-ownership to pass “by survivorship” to the surviving co-owner upon the death of the other), whereas the latter does not. Traditionally, the common law favoured a joint tenancy, and equity favoured a tenancy-in-common.

In these proceedings, the significance or otherwise of the parties’ acquisition of the Scott Street property as joint tenants has not been explored. Nor is there any evidence before the Court of steps taken, or intended to be taken, to sever the joint tenancy. Nevertheless, the fact that the Scott Street property was purchased in the names of both parties as joint tenants is consistent with the currency of a relationship in the nature of a marriage.

On 15 July 2022 both parties signed documentation for the appointment of a property agent for the purpose of the Scott Street property being leased. Their common address was the Ann Street property.

The parties’ relationship came to an end on or about 17 September 2022 and the defendant moved out of the Ann Street property on or about 18 September 2022.

The plaintiff’s version of how the parties’ relationship came to an end appears in paragraphs [29]-[33] of the affidavit affirmed by him on 27 April 2023:

The defendant’s version of how the parties’ relationship came to an end begins with a decision, unilaterally made by the plaintiff after the purchase of the Scott Street property, to rent out the property without doing renovations of it in circumstances in which, as the defendant records in paragraph [42] of the affidavit affirmed by her on 12 May 2023: “I wanted to continue as planned [with renovation of the Scott Street property] as I had left my place of employment in Queensland, and started project managing the Scott Street renovation acquiring quotes etc.”

She says, in paragraph [45] of the same affidavit that on 26 August 2022 the plaintiff handed her an eviction notice on a piece of paper and she vacated the property shortly thereafter.

A more focused account of what she says occurred on 26 August 2022 or thereabouts appears in paragraphs [144]-[149] of her affidavit affirmed on 2 November 2023 (the immediately preceding paragraphs of which are extracted below):

The parties shared a “common residence” for about 20 months between 10 January 2021 and 18 September 2022 or thereabouts save for a short period in November 2021 (the defendant suggests two nights) during which she moved out of the Cumberland Reach property to avoid friction with a daughter of the plaintiff, returning at his request after he asked his daughter to leave the property.

Prima facie, the Property (Relationships) Act 1984 NSW offers no foundation for an adjustment of the parties’ respective rights to property (by an order made under section 20 of the Act) if only because the relationship did not last the requisite two years (section 17) and no application for an order under the Act was made within the two years after cessation of the relationship (limited by section 18 of the Act) or at all. The inapplicability of the Act (and any comparable Queensland or Commonwealth legislation) was asserted by the plaintiff and not contested by the defendant. The parties’ respective rights are to be determined by reference to the general law.

During their relationship the defendant contributed to the expense of renovation works to the Cumberland Reach property and expenses associated with the Ann Street property and to household expenses while the parties were living at the Cumberland and Ann Street properties. She also resigned from her employment as a local government Building Services Officer to manage and carry out renovation works to the Cumberland Reach property.

Although the extent of her financial contribution is contested, that she made both a financial and a non-financial contribution to the material welfare of both parties is not in dispute. Nor is it in dispute that her non-financial contribution went beyond household chores. She personally performed work that required skill and care in management of renovation work and in location of the Ann Street and Scott Street properties.

At the time they began their relationship the plaintiff was 47 years old and had four adult daughters, aged in their 20s, no longer living with him. The defendant was 41 years old and had two adult children (a daughter aged 18 and a son aged 20) and two young daughters of primary school age.

The parties’ romantic relationship commenced on 23 December 2020 when the plaintiff visited the defendant at her home and stayed the night. Their sexual relationship commenced at that time.

Their relationship was public, and (as evidenced by their engagement, albeit unaccompanied by a fixed date for marriage) attended by a mutual commitment to a shared life. Theirs was not a casual or superficial relationship.

The defendant, in particular, had experience of an unhappy relationship attended by domestic violence, from which she sought to move on in her relationship with the plaintiff.

While it lasted the parties’ relationship was loving but emotionally demanding and given to stormy episodes. Both were anxious to be loved and respected. Although the defendant was as attentive to the plaintiff as convention would have a wife to be to a husband, the plaintiff often sought re-assurance, perhaps because (as evidenced by her career) the defendant is an independently minded person. She, for her part, thought that the plaintiff too often sought to control her, a reflection perhaps of the independence of mind he himself exhibited in his acquisition and management of property.

The parties’ move to Maryborough in Queensland was motivated in part by a desire to escape tensions in their relationship caused by friction between them and their adult children who, it may be inferred, did not fully accept their parents’ choice of a new partner.

The plaintiff’s evidence is that the parties’ relationship began to deteriorate when they moved to Maryborough. Neither party was working at that time and they knew nobody living locally.

In an affidavit affirmed by him on 27 April 2023, the plaintiff says that at that time he was content to relax as he had “worked very hard [his] whole life” (as a truck driver), he had raised four daughters on his own and he was approaching 50. He says that the defendant appeared to be unsettled, he would ask her “what is wrong?”, but she would not reply.

Paragraphs 14-17 of the affidavit depose to the following:

The tensions between the parties are on display in a series of text messages which evidence peaks and troughs of raw emotions.

Although the relationship was comparatively short it was in substance a de facto relationship rather than merely a “romantic” one. The distinction, if any, may bear upon the intention of the parties (particularly the plaintiff) at the time the Scott Street property was purchased in June-July 2022.

When the parties were living in the Ann Street property they located the Scott Street property, characterised by the plaintiff as an “investment” property. There is a dispute between the parties as to which of them “located” the property but, as they were then a couple, the likelihood is that they were both involved in that process.

A critical piece of the plaintiff’s evidence appears in paragraphs 19-25 (and particularly paragraph 24) of the affidavit affirmed by him on 27 April 2023 (with emphasis added):

The words the plaintiff here attributes to himself (“only on the basis that you are going to be my wife”) lack the certainty one might reasonably expect of a “condition of marriage” imposed on a specific property transaction, if that is what was at stake. The evidence nowhere discloses a concrete demand, a plan for a marriage ceremony or a sense of necessity attaching to a marriage ceremony. Their relationship having been consummated in every sense short of a formal marriage ceremony neither party appears to have harboured a felt need for urgency in setting a date for a formal ceremony. Form over substance was not valued. The words the plaintiff attributes to himself are not far removed from a simple affirmation of the parties’ ongoing de facto relationship rather than a formal proposal of a “lawful” marriage.

If (as I find) the parties were in a de facto relationship akin to a marriage at the time the Scott Street property was acquired in co-ownership as part of a joint endeavour for the benefit of both parties, and their joint endeavour terminated prematurely only after acquisition of the property, the plaintiff’s contention that the property was acquired “on condition of marriage” may not have a material effect on the outcome of these proceedings. The larger question is how to resolve the parties’ competing claims to beneficial entitlement to the property in light of the irretrievable breakdown of their relationship and, consequently, their joint endeavour.

Nevertheless, in his closing submissions (MFI P11) counsel for the plaintiff submitted that paragraph [24] of the plaintiff’s affidavit should be accepted as evidencing a “condition of marriage” because (with emphasis added):

The emphasis here given to the expression “must have” is implicitly based upon an acceptance of the plaintiff’s evidence about what was said (or, perhaps more accurately, what the plaintiff contends “must have been” said) between the parties at or about the time of the purchase of the Scott Street property and a rejection of the defendant’s evidence. Acceptance that something “must have been said” does not, of itself, favour either party.

The defendant’s response to the plaintiff’s affidavit of 27 April 2023 is an affidavit affirmed by her on 2 November 2023 (at which time she was legally represented).

Paragraphs [129]-[143] of that affidavit are here set out, noting that objection was taken by the plaintiff to paragraphs [132] and [135] because, when called upon to do so, the defendant was unable to produce the particular text messages ostensibly quoted. I admit those paragraphs into evidence subject to an order under section 136 of the Evidence Act 1995 NSW that they are evidence, not of the precise terms of a text, but of the defendant’s understanding of the course of events, providing context for conversations to which she deposes in paragraphs [129] and [136] of the affidavit:

In his closing submissions (MFI P11), counsel for the plaintiff submitted that the evidence of the defendant in paragraphs [129] and [136] of her affidavit of 2 November 2023, extracted above, should be rejected because:

Counsel’s reference to paragraphs [15] and [45] of the affidavit affirmed by the defendant on 12 May 2023 is to be read in the context in which those paragraphs appear in the affidavit. Paragraph [15] appears in the context of paragraphs [11]-[18]. Paragraph [45] appears in the context of paragraphs [39]-[40] and [42]-[46]. Those paragraphs are here reproduced, with minor omissions:

This evidence should be read in the context of paragraphs [11]-[25] of the affidavit affirmed by the defendant (described as “Lila”) on 2 November 2023:

In his closing submissions (MFI P11) counsel for the plaintiff submitted that, if the defendant’s evidence at paragraphs [129] or [136] of her affidavit of 2 November 2023 is accepted, the conversations to which the defendant deposed are evidence “of an arrangement between the parties that the transfer [sic] of the interest in Scott St to the defendant occurred in contemplation of the parties engaging in a joint endeavour to develop the property”, which development has not proceeded and will not proceed.

There is force in the plaintiff’s submissions about the defendant’s response (in her affidavit affirmed 2 November 2023) to the affidavit of the plaintiff affirmed 27 April 2023 but an assessment of the evidence as a whole requires a consideration of a broader context because of the plaintiff’s insistence that attention be focused only on events at and about the time of purchase of the Scott Street property.

The plaintiff invites the Court to focus on conversations between the parties close to the purchase of the Scott Street property without locating them, as they must be, in the period when they commenced their relationship and promises were made by the plaintiff to the defendant about material benefits for her if she dedicated herself to renovation of the Cumberland Reach property and future like projects. Conversations about Scott Street are only part of the narrative which commenced with their entry into a de facto relationship and continued throughout the relationship.

It may not matter a great deal but at the time the defendant affirmed her affidavit of 12 May 2023 she was not legally represented and may not have appreciated the significance which the plaintiff has since attributed to paragraph [24] of his affidavit.

The defendant’s focus at the time she affirmed her affidavit of 12 May 2023 was directed to detailing representations of the plaintiff upon which she contends she relied in giving up her employment at Hawkesbury Council as a Building Services Officer in order to focus solely on renovations and/or business ventures with the plaintiff, and in deposing to her financial and non-financial contributions to her relationship with the plaintiff.

I accept that some of the credit card statements relied upon by the defendant in these proceedings include patently falsified entries and, because the defendant professes to have no explanation for them, they bear heavily upon her credit, at least in relation to quantification of her financial contribution to renovation of the Cumberland Reach property and the payment of household expenses.

However, having had the opportunity to observe her, making submissions and giving evidence as a self-represented litigant, I am not prepared to treat her simply as a witness whose evidence cannot generally be accepted unless corroborated. In light of the whole of the evidence she has a story to tell, not to be lightly dismissed on a credit finding about her financial records.

The factual parameters of the case are largely agreed, but for quantification of her financial contribution and disputation about the course of the parties’ relationship.

On the former topic (quantification of the defendant’s financial contribution) it is common ground that she did make a substantial financial contribution to renovation of the Cumberland Reach property, although the extent of that contribution cannot reliably be determined from her records. With a construction project management background as a local government Building Services Officer she was nevertheless well-placed to manage a renovation project, which (at the request of the plaintiff) she did upon leaving her place of employment at Hawkesbury Council.

On the latter topic (the course of the parties’ relationship) I prefer the evidence of the defendant over the plaintiff about the course of their relationship because, even allowing for the tensions manifest in their text messages, she appears to have been a better historian.

Accepting that the defendant’s evidence can be characterised as a joint endeavour arrangement, attribution to it of that label does not of itself divert attention away from:

If the parties’ relationship-focused activities are to be analysed in terms of a joint endeavour, the starting point is not necessarily (as the plaintiff contends) the decision to purchase the Scott Street property in joint names but the point at which they became engaged to be married or, more concretely, at the point the defendant gave up her job to assist the plaintiff in renovation of the Cumberland Reach property, reinforced by her agreement with the plaintiff to start a new life together at the Ann Street property in Queensland and her decision there to give up another job to focus on the parties’ renovation plans (including those relating to the Scott Street property).

The forensic significance of “the starting point” may be discerned in the context of the following facts:

The plaintiff’s case depends largely upon treating the purchase of the Scott Street property as a “stand alone” transaction, conditional upon marriage. The defendant’s case depends largely upon the fact that she is a registered proprietor of the Scott Street property and that, having regard to the circumstances in which she entered upon her relationship with the plaintiff and acted to her detriment relying upon his promise of material benefit, there is nothing unconscionable in her retaining a beneficial interest in the Scott Street property after his unilateral termination of both their relationship and her opportunity to profit from its renovation by joint endeavour.

In my assessment, on the whole of the evidence, the plaintiff made a deliberate decision (not conditional on a future marriage but in the context of an existing de facto relationship in the nature of marriage) to purchase the Scott Street property in the joint names of the parties with the intent that, from the time of purchase, they both be beneficially entitled to the property as co-owners, in recognition of their then current relationship and wanting it to continue, in acknowledgement of the promises he made to the defendant about renovation of Cumberland Reach property and the prospects of other renovation projects, in recognition of an agreement for the acquisition of the Scott Street property as a renovation investment for both parties, and with a shared expectation that the defendant’s acquisition of a beneficial interest in the Scott Street property would compensate her for her past and future renovation work. The parties purchased the Scott Street property with the actual common intention that from the outset the defendant would be a co-owner, not merely a nominee of the plaintiff, in deployment of the Scott Street property as a shared investment.

The breakdown in the parties’ personal relationship may be accepted (as the parties themselves have accepted) to have been morally “without fault” attributable to either party, but the plaintiff’s contention that it would be unconscionable for the defendant to maintain an interest in the Scott Street property fails to take into account, on a legal analysis, that the defendant took up with him, twice moved, quitted employment and relied upon promises of material benefit from renovation projects only to have him unilaterally terminate their relationship (both personal and economic), denying her entitlement to any part of promised material benefits and opportunities for profit, and excluding her from any enjoyment of the Scott Street property (of which she was, and remains, at law a co-owner).

In my assessment, the defendant’s version of “the conversation the plaintiff submits must have happened” is more probably correct than the plaintiff’s version.

His version is based upon a reconstruction of events through a prism of romantic attachment, and a loss of it, at a particular time, discounting a broader perspective. Her version fits more realistically into the broader context of hard facts of life, including the economic necessity to provide for herself and her younger children in a committed relationship for which she had sacrificed her own interests in reliance upon the plaintiff’s promises of shared mutual benefit.

I accept that the plaintiff sincerely believes that he purchased the Scott Street property in the joint names of the parties “on condition of marriage” (albeit at an indefinite future time), but that belief strikes me as a narrowly focused reconstruction of events in the wake of a relationship breakdown and financial pressures. On the other hand, I accept that the defendant may have concocted some (transparent) entries in her financial records tendered in evidence, but she generally presented (as a witness and as a self-represented litigant) essentially as an honest and reliable witness of fact.

The question, then, is what legal consequences flow from the Court’s findings of fact?

The parties have agreed that their personal relationship broke down “without attributable blame” (an expression attributed to Deane J in Muschinski v Dodds (1985) 160 CLR 583 at 620, adopted in Baumgartner v Baumgartner (1987) 164 CLR 137 at 147-149) and I proceed on that basis, recognising, however, that in the present case, accepting that the parties’ personal relationship had broken down, the plaintiff unilaterally terminated both their personal and their quasi-commercial relationships simultaneously, leaving the defendant to accept the breakdown of the personal relationship and to insist upon her legal entitlement to a one-half share of the Scott Street property or, as she was prepared to accept, compensation for her purposeful contribution to the renovation of the Cumberland Reach property and, prospectively, the Scott Street property.

In Baumgartner v Baumgartner Mason CJ and Wilson and Deane JJ characterised the judgment of Deane J in Muschinski v Dodds as turning on the application of “the general equitable principle which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them”.

Deane J elaborated that principle in Muschinski v Dodds (at 160 CLR 620) in the following terms:

In applying the principle there identified, Mason CJ and Wilson and Deane JJ in Baumgartner v Baumgartner (at 149-150) summarised as follows the factual matrix presented for their consideration:

In extracting these observations I do not suggest that the facts of either asked Muschinski v Dodds or Baumgartner v Baumgartner are comparable in all respects with the present case or that equitable principles of the character discussed in those cases can be applied as rules. Each case must be considered on its own facts, recognising that equity generally operates upon an 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.

On the facts of this case, the parties acquired the Scott Street property for a common purpose (as a joint investment property, anticipating renovation and sale) and, allowing for past, present and prospective contributions to their common wealth, intending that their common purpose would be pursued, indefinitely, for their joint benefit. Shortly after acquisition of the property their “joint endeavour” ended prematurely when they each came to realise that their personal relationship was not sustainable.

The premature termination of their joint endeavour left each party with a disputed claim to beneficial entitlement to the Scott Street property unable to be resolved without the intervention of equity.

In taking possession of the Scott Street property upon completion of its purchase and excluding the defendant from the property, the plaintiff did not erase her interest in the property, but (by analogy with the observations of Dixon CJ in Peter Turnbull Pty Ltd v Mundus Trading Co (Australasia) Pty Ltd (1954) 90 CLR 235 at 246-247, followed in Mahoney v Lindsay (1980) 33 ALR 601 at 603) relieved her of any obligation to contribute further to renovation or maintenance of the property pending a determination of their respective beneficial entitlements.

In determining the beneficial entitlements of both parties it is, in my opinion, necessary and appropriate that the financial and non-financial contributions made by the defendant to the parties’ common wealth (largely by the expenditure of money and labour on renovation of the Cumberland Reach property) be taken into account, together with an allowance for her expected return on the joint investment in the Scott Street property, from which she was excluded by the plaintiff.

It is not necessary to settle upon a precise arithmetical calculation of the defendant's financial contribution for renovation of the Cumberland Reach property beyond a finding that it was substantial (in excess of $50,000 or thereabouts) and sufficient to explain the plaintiff’s agreement that the Scott Street property be acquired in joint names. Whatever value might be attributed to her financial contributions, it is more likely than not that she devoted to renovation of the Cumberland Reach property an amount of funds not only substantial in itself, but a substantial proportion of the funds available to her.

In assessing the parties’ respective contributions to the common wealth, I am conscious of a need to give effect to practical considerations, rather than to pursue complicated factual inquiries “which may result in relatively insignificant differences in contributions and consequential beneficial interest” (Baumgartner v Baumgartner (1987) 164 CLR 137 at 150) and, in the formulation of an equitable remedy, to endeavour to do what is “practically just”, accepting that once the Court has determined upon the existence of a necessary equity to attract relief, the moulding of relief may produce a final result which, after balancing competing interests, may not exactly represent what any party may have wished: Vadasz v Pioneer Concrete (SA) Pty Ltd (1995) 184 CLR 102 at 113-114; Bridgewater v Leahy (1998) 194 CLR 457 at 493-494; Delaforce v Simpson-Cook (2010) 78 NSWLR 483 at [57] and [60]-[61].

I am conscious, also, that, by excluding the defendant from possession and management of the Scott Street property the plaintiff denied her an opportunity to benefit from enjoyment of the property and, in time, realisation of her investment in it. Those factors are difficult to quantify, but they are no less real for that.

In my opinion, in all the circumstances of the case:

In my opinion, in balancing the competing claims of the parties a just outcome is that a declaration be made that the parties hold the Scott Street property on a constructive trust for themselves in the proportion of two thirds for the plaintiff and one third for the defendant, with (in the absence of agreement) consequential orders for the property to be sold and accrued rents (net of expenses) to be divided in the same proportion of 2/3rds:1/3rd .

I propose, upon publication of these reasons, to allow the parties an opportunity to bring in short minutes of orders to give effect to the judgment, at which time I will entertain submissions on any disputed question of costs.