NSW Trustee and Guardian v Togias

1. [1]

   MITCHELMORE JA: This is an appeal from a decision of Sackar J, who declared that the appellant, the New South Wales Trustee and Guardian, holds 50 per cent of two properties for the benefit of the respondent, Ms Nicolitsa Togias, pursuant to a remedial constructive trust: Togias v State of New South Wales & Anor [2021] NSWSC 1588. The two properties are respectively located in Glenwood (“the Glenwood Property”) and Seven Hills (“the Seven Hills Property”), in New South Wales.

2. [2]

   The Glenwood Property and the Seven Hills Property were registered in the name of the respondent’s former de facto partner, Mr Wayan Arya Subakti. The respondent and Mr Subakti were in a relationship between 1998 and January 2010. On 29 January 2010, the respondent ended the relationship when she was notified of Mr Subakti’s arrest on a drug-related charge. Mr Subakti was subsequently convicted of the charge and sentenced to a period of imprisonment.

3. [3]

   On 5 May 2014, on the application of the NSW Crime Commission, the Supreme Court made a Forfeiture Order, pursuant to the Criminal Assets Recovery Act 1990 (NSW) (“CAR Act”), in relation to Mr Subakti’s interest in property, including the Glenwood Property and the Seven Hills Property. In the proceedings before the primary judge, the respondent contended that the Forfeiture Order did not cover her beneficial interest in the two properties.

4. [4]

   The primary judge concluded that a remedial constructive trust arose by reason of the indirect contributions that the respondent had made, through homemaking and domestic duties as well as work that she undertook in Mr Subakti’s business. By its Notice of Appeal, the appellant contends that the conclusion of the primary judge was the product of a number of errors. Its primary contention is that his Honour erred in finding that the respondent had established a joint relationship and endeavour to which she had contributed, so as to give rise to a remedial constructive trust of the type described by the High Court in Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 (“Baumgartner”).

5. [5]

   For the reasons I set out below, I consider that his Honour did not err in concluding that there was a joint endeavour between the respondent and Mr Subakti of a nature that was capable of giving rise to a remedial constructive trust with respect to the Glenwood Property. However, his Honour erred in concluding that the maxim “equity is equality” applied so as to confer on the respondent a beneficial interest in that property as to 50 per cent. I also consider that his Honour erred in concluding that the Seven Hills Property was acquired as part of and for the purpose of a joint endeavour as between the respondent and Mr Subakti, so as to give rise to a constructive trust with respect to that property.

Background to the proceedings

1. [6]

   There was no dispute as to the background to the proceedings before the primary judge, although the parties emphasised different aspects of the evidence for the purposes of their respective arguments. In what follows, I have relied primarily on the summary and findings of the primary judge.

2. [7]

   The respondent met Mr Subakti in mid to late 1997, when she was working in a café. In late 1998, when the respondent was 20 years old, she and Mr Subakti commenced a romantic relationship: [6], [105]. The respondent’s first child with Mr Subakti was born on 7 January 2001; the second was born on 25 May 2005: [9], [11], [111].

3. [8]

   In or around December 2000, Mr Subakti purchased a property in Fullagar Road, Wentworthville (“the Wentworthville Property”) for $235,000. The respondent had accompanied Mr Subakti on property inspections and he consulted with her on which property was best for them: [105]. The primary judge observed that it was unclear precisely how the purchase price for this property was funded, although it was common ground that Mr Subakti had received an award of compensation of $200,000 in relation to an industrial accident, which was reduced by legal fees and expenses to $180,000: [5], [125].

4. [9]

   Also in late 2000, Mr Subakti started a business as a sole trader, called “Bio-Form” (“the Bio-Form business”): [8]. It appears to have been a local distribution operation for a parent company in the USA. Following their move to the Wentworthville Property, the respondent and Mr Subakti began to concentrate more on the business, selling products to retail outlets and operating as a wholesaler.

5. [10]

   The respondent’s evidence was that she was responsible for “the housework, the grocery shopping, and sometimes the cooking”: [105]. She also worked in the Bio-Form business. According to the respondent, she promoted the products at shopping centres, placed advertisements and organised mail-outs. As English was not Mr Subakti’s first language, the respondent also communicated with the director of the Bio-Form company in the United States, organised import permits and deliveries, and issued tax invoices to customers: [106]. In late 2002 or early 2003, at the respondent’s suggestion, the couple leased a retail store in the Liverpool shopping area, which they opened in about July 2003: [108]. The respondent’s evidence was that in these early days, she worked in the store seven days a week: [109]. She also continued to market the Bio-Form products to wholesale customers.

6. [11]

   On 1 May 2003, the Glenwood Property was purchased for $690,000 in Mr Subakti’s name; settlement occurred on 24 July 2003. The respondent accompanied Mr Subakti to arrange finance for the property, and was told that the loan should be in Mr Subakti’s name “because of her lack of credit history”: [109]. The evidence was unclear as to precisely how the purchase price was funded. Perpetual Trustees Victoria Ltd provided a loan of $552,000: [126]. There was a particular dispute about the provenance of $37,000, which his Honour considered was not sufficiently explained in the absence of evidence from Mr Subakti: [127]. The Bio-Form business did not make a profit in any relevant year.

7. [12]

   In about July 2004, the respondent and Mr Subakti moved the business to different retail premises, still in Liverpool: [110]. In the first half of 2005, they attended a meeting with their accountant and were advised to operate their business through a company: [112]. On 1 August 2005, Bio-Form Nutrition Australia Pty Ltd was incorporated, with Mr Subakti the sole director and shareholder: [12], [112]. In about September 2006, the couple moved the Bio-Form business into premises at Liverpool Westfield: [112].

8. [13]

   All of the income from the business was paid into Mr Subakti’s personal bank accounts or into the company’s bank account after its incorporation. The loan repayments for the Glenwood Property and household expenses were drawn from Mr Subakti’s account: [113]. The respondent continued to work in the Bio-Form business but she did not receive a wage (until around November 2014).

9. [14]

   On 11 July 2006, Mr Subakti was charged with possession of a prescribed restricted substance, namely, 180 x 20mg tablets of Tamoxifen contrary to s 16 of the Poisons and Therapeutic Goods Act 1966 (Cth): [13]. On 21 February 2007, he was convicted in the Local Court at Liverpool.

10. [15]

    In mid-2007, Mr Subakti was admitted to hospital with acute renal failure, following which he received lengthy dialysis treatment every second day until undergoing a kidney transplant: [14]. The respondent looked after Mr Subakti between mid-2007 and 2009, including following his kidney transplant: [114].

11. [16]

    In early 2008, the respondent and Mr Subakti began looking for a warehouse to store the Bio-Form products. In May 2008, the Seven Hills Property was purchased for $342,000, in Mr Subakti’s name: [15]. The respondent said that the purchase was partly financed using a re-draw facility secured on the Glenwood Property, together with a business loan from Westpac which was secured by a first mortgage over the Seven Hills property: [115]. The primary judge found that the purchase was funded in part by a loan from Delta Home Loans of $106,000 and an amount from Westpac of $239,400: [128]. As to the Delta Home Loans loan, his Honour found that there were two deposits into that loan account; one in May 2008 from an account in Indonesia, and one in August 2008: [129]. His Honour found that the deposits from Indonesia were not credibly capable of explanation, and none was forthcoming from Mr Subakti: [141].

12. [17]

    Between May 2008 and May 2010, the respondent and Mr Subakti used the Seven Hills Property as an office, warehouse, and storage facility for the Bio-Form business: [16], [115]. According to the respondent, they made loan repayments on the Seven Hills Property using income from the Bio-Form business: [115]. Ultimately, the primary judge did not make a finding specifically in relation to this evidence, although as will be seen below his Honour considered the financial position of the Bio-Form business in some detail.

13. [18]

    On 29 January 2010, Mr Subakti was charged with supplying 279 grams of cocaine: [18]. It is common ground that the respondent ended her relationship with Mr Subakti that day: [18]. On 2 December 2011, he was convicted in the District Court at Parramatta of supply prohibited drug in a commercial quantity and was sentenced to a period of imprisonment.

14. [19]

    The respondent’s evidence was that she continued to operate the Bio-Form business after Mr Subakti was arrested and their relationship ceased. However, she found it difficult to obtain loans or funds for the cashflow of the business and her personal expenses, as she did not have a credit history: [117]. The respondent used Centrelink payments that she received for business and living expenses and received loans from family members.

15. [20]

    On 1 April 2010, the respondent was appointed director and secretary of Bio-Form Nutrition Australia Pty Ltd, and Mr Subakti ceased to hold those positions: [20]. She continued to operate the business through that company until 2015: [118]. In that year, the company went into liquidation and was deregistered: [29], [32]. From 2015 onwards the respondent continued to operate the business through another company that the accountant had arranged to be incorporated, Bio-Form Sports Nutrition Pty Ltd. Without making a positive finding, the primary judge observed that this appeared to be a “phoenix operation”: [155].

16. [21]

    In around May 2010, the respondent arranged to lease the Seven Hills Property to a third party: [21], [119]. The amount of the rental payments exceeded the amount of the mortgage and outgoings: [165].

17. [22]

    Upon his release on parole on 29 January 2014, Mr Subakti returned to live at the Glenwood Property with the respondent and their two daughters. Although they were living together, the respondent said that she and Mr Subakti remained separated. Nevertheless, the judge accepted he was available to give evidence to support her assertions and was not called: [161].

18. [23]

    On 15 February 2010, the NSW Crime Commission filed a summons in the Supreme Court seeking a restraining order in respect of Mr Subakti’s property under s 10A of the CAR Act (“the 2010 proceedings”): [19]. On 18 February 2010 and 8 March 2012, caveats were respectively placed on the Glenwood Property and Seven Hills Property.

19. [24]

    On 5 May 2014, the Supreme Court made orders by consent in the 2010 proceedings, pursuant to s 22 of the CAR Act, forfeiting Mr Subakti’s interests in property to the Crown. The six-month period precluding the appellant from taking possession of the Properties ended on 5 November 2014: [27]. It was around this time that the respondent started paying herself a wage: [28], [113].

20. [25]

    On 1 August 2014, Mr Subakti applied by way of a notice of motion for exclusion orders under s 25 of the CAR Act in respect of the Glenwood Property and the Seven Hills Property. In early 2016, Hall J heard Mr Subakti’s application along with an application by the NSW Crime Commission for a proceeds assessment order under s 27 of the CAR Act. On 6 October 2016, his Honour entered judgment for the NSW Crime Commission; and on 24 October 2016, his Honour made proceeds assessment orders in the amount of $899,739: New South Wales Crime Commission v Subakti [2016] NSWSC 1421: [321].

21. [26]

    In 2016, the respondent also filed a summons in the Supreme Court, seeking exclusion orders under ss 25 and 26 the CAR Act in respect of the Glenwood Property and the Seven Hills Property. In 2017, while these proceedings were on foot, Mr Subakti was charged with further drug supply and possession offences and reincarcerated until March 2020: [33]-[34]. On 22 October 2019, RA Hulme J dismissed the respondent’s application on the basis that she was not the de facto partner of Mr Subakti when the assets forfeiture order was sought (in April 2014) and made (on 5 May 2014): Togias v New South Wales Crime Commission [2019] NSWSC 1556. On 7 November 2019, his Honour also dismissed the respondent’s application for payment of an amount of the proceeds of the sale of forfeited property on the basis of hardship pursuant to s 24 of the CAR Act.

22. [27]

    Although his Honour dismissed the proceedings, RA Hulme J was satisfied that the respondent had no prior knowledge of any serious crime-related activities or illegal activities of Mr Subakti before his arrest in 2010. The appellant did not challenge that finding in these proceedings: [147].

The decision of the primary judge

1. [28]

   By her further amended statement of claim in the Equity Division, the respondent sought a series of declarations in the alternative, the primary one being:

2. [29]

   The case for the respondent relied primarily on her evidence, in an affidavit sworn on 2 October 2020. She was cross-examined about her knowledge of the Bio-Form business, but not about the non-financial contributions that she said she had made during the course of her relationship with Mr Subakti, including her work in the Bio-Form business. The primary judge summarised the respondent’s claim of beneficial interest as resting on “the matter being a contributions case in the sense of Muschinski and Baumgartner”, referring there respectively to Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 (“Muschinski”) and Baumgartner: [64]. The respondent submitted that:

   1. (1)

      the Bio-Form business in its various iterations was established “with the common intention of the [respondent] and Mr Subakti that his interest in the business and the income earned in the course of operating the business, was held for the benefit of the joint relationship between him and the plaintiff and for the purpose of enhancing their joint wealth and welfare”: [67];

   2. (2)

      the relationship had broken down without attributable blame: [68]; and

   3. (3)

      it would be unconscionable for the defendants to deny her beneficial interest in the two properties: [72], having regard to:

3. [30]

   The evidence for the appellant, which his Honour accepted, was directed towards “[identifying] the source of funds used to purchase the properties or to leave unanswered the origins of some amounts to suggest they were derived from illicit activities”: [121]. The appellant contended that any common intention or joint endeavour which may have existed by which the respondent would acquire a beneficial interest in the Glenwood Property and Seven Hills Property ended on the day that she ended the relationship with Mr Subakti: [79]. Before that time, she had not contributed money or other property to the acquisition of either property: [81].

4. [31]

   In so far as the respondent had worked in the Bio-Form business without pay, the appellant submitted that she did so only to develop the business: [82]. Further, in circumstances where the business expenses were approximately equal to income, the appellant submitted that the funds which financed the loan repayments and other expenses of the joint relationship were “entirely, or primarily, from unidentified sources”: [82]. The appellant submitted that the evidence did not support the respondent’s contentions in the further amended statement of claim, in particular that the Glenwood and Seven Hills Properties were acquired using funds from the Bio-Form business and that income from the business was applied to loan repayments and other expenses: [93].

5. [32]

   As to the respondent’s reliance on Muschinski and Baumgartner, the appellant contended that she had not contributed any money or property to the relationship and there was no pooling of earnings: [96]. Her unpaid work for the Bio-Form business was insufficient to establish an interest in the two properties, having regard to the income and expenses of the business and the likelihood that it was not the source of contributions to the acquisition or retention of those properties: [97]. Further, the respondent failed, in its submission, to discharge her onus of proving a “joint relationship or endeavour” and that the parties had made contributions on that basis: [98].

6. [33]

   In his Honour’s judgment of 10 December 2021, the primary judge set out the above background before turning to a consideration of the applicable principles. His Honour set out a comprehensive summary of the position regarding the development of the principles concerning constructive trusts following Baumgartner: [40]-[48]. His Honour also considered at some length the maxim that equity is equality, describing it as reflecting “the flexibility with which Baumgartner constructive trust cases can be applied”: [49]-[62].

7. [34]

   The primary judge commenced his consideration of the competing submissions by describing the matter as “an unusual case”: [122]. His Honour was satisfied that the respondent “never made and indeed was simply incapable of making any direct contribution to the purchase of any assets, property or chattels”: [122].

8. [35]

   In relation to the Bio-Form business, it became clear to his Honour in the course of the respondent’s evidence that she “did not have a detailed appreciation of the financial situation of Mr Subakti nor for that matter the Bio-Form business”, describing her knowledge as being “of a most vague and general nature”: [123]. He later referred to her lack of qualifications, and lack of experience in the products the subject of the Bio-Form business: [158]. Ultimately, his Honour characterised the respondent’s contribution to the business as that of “a clerical assistant attending to simple record keeping tasks”: [158]. His Honour then stated at [159]:

9. [36]

   Although the respondent made no direct financial contribution to the acquisition of the two properties, or the Bio-Form business, his Honour stated that, “like so many women she did substantially contribute in an indirect way”: [143]. His Honour continued, at [144]:

10. [37]

    His Honour considered that the respondent had “exaggerated some of her evidence”, without identifying in what respects. Having regard to questions that his Honour asked of the respondent during her cross-examination, this observation may have related to her claim to have worked in the retail premises of the Bio-Form business at all times. (It was apparent from her evidence that at some point Mr Subakti had instructed the respondent not to attend the shop, instead inviting the woman with whom he was having an affair to work there: [157].) His Honour’s observation may also have related to her evidence in response to questions about the business, which she was either unable to answer or able to answer only in vague and general terms.

11. [38]

    What was significant to his Honour was the motivation for her exaggerations, being “an understandable desire to salvage something out of what in many respects has been a disastrous relationship”: [145]. His Honour described the relationship as “marred … by Mr Subakti’s controlling, disrespectful and violent aggressive behaviour”: [156]. On “numerous occasions” Mr Subakti lied to the respondent, including about his age, his previous relationship and the children thereof, and criminal activity in which he engaged during the time of that relationship: [156]. He was also unfaithful: [157]. His Honour was satisfied that the respondent’s efforts “were frequently underestimated and hence underappreciated”, with much of what she did being “behind the scenes”: [148]. His Honour continued:

12. [39]

    In relation to the Bio-Form business, his Honour referred to the evidence of Ms Holz, who had analysed its financial position (using records from the Australian Taxation Office) and the home loan payments for the Glenwood Property between 2004 and 2010. According to Ms Holz, the income and expenditure for those financial years, on average, disclosed losses (with the exception of a small profit in two financial years): [131]. On the basis of Mr Subakti’s tax returns from 2005 to 2010, the salary he received from Bio-Form Nutrition Australia Pty Ltd varied from $35,665 at its highest, to $6,150 at its lowest: [132]. Having regard to other bank records, Mr Subakti’s ownership of luxury vehicles and share purchases, and the amount of cash found in his possession, at the Bio-Form shop and at the Glenwood Property at the time of his arrest, his Honour found that Mr Subakti had access to alternative sources of funding, the provenance of which was unknown: [134]-[138]. His Honour stated in this regard at [140]:

13. [40]

    Although it was undeniable that some of the sales of Bio-Form were for legitimate goods, his Honour described it as “impossible” to say how much: [142]. At the same time, it was “inescapable”, in his Honour’s view, that “money was coming from another source other than sales through the Bio-Form business for Mr Subakti to maintain his and the [respondent’s] lifestyle, with property purchases, stock, cars and shares”: [142].

14. [41]

    On the issue of the existence or otherwise of a common intention, the respondent gave no evidence of having any conversation with Mr Subakti in which he acknowledged that she had an interest of any kind in the Glenwood Property or the Seven Hills Property: [152]. The properties were in his name, and all relevant bank accounts were in his name or the company’s name: [152]. The respondent was also unable to provide anything except high level explanations when asked about the business and various discrepancies between income and expenditure: [153]. His Honour contrasted this with her “plight” following Mr Subakti’s arrest in 2010, when she had to source funds from her sister and even from her daughter, which was “suggestive of the fact that Mr Subakti made monies available from his criminal activities for the business and maintenance of the couple’s lifestyle”: [153]. His Honour stated at [154]:

15. [42]

    Ultimately, his Honour concluded that the contributions the respondent had made were not the result of a common intention, stating at [161]:

16. [43]

    The primary judge next turned to examine “whether in the absence of such a common intention [the respondent] is entitled to a finding of a remedial constructive trust”: [162]. His Honour set out his reasons for affirmatively answering that question at [162]-[163]:

17. [44]

    In terms of quantifying the respondent’s beneficial interest, his Honour had earlier stated that “[t]his is not a case where a simple mathematical calculation is possible”: [146]. At [164]-[165], his Honour considered the maxim “equity is equality”, stating:

The appeal to this Court

1. [45]

   The notice of appeal contains five grounds of appeal. The appellant contends that the primary judge erred in holding that the respondent had established that she and Mr Subakti formed a “joint relationship and endeavour” pursuant to which she made contributions to the acquisition of the Glenwood Property and the Seven Hills Property (Ground 1). Grounds 2 to 4 posit various errors that his Honour made as to how that contribution was said to be established, including by the respondent:

   1. (1)

      forgoing a wage for her work in the Bio-Form business (Ground 2);

   2. (2)

      being a homemaker and mother to Mr Subakti’s children (Ground 3); and

   3. (3)

      incurring borrowings and expenses after their relationship ended (Ground 4).

2. [46]

   As part of Ground 2, the appellant also contends that his Honour erred in relying on the respondent having contributed to the Bio-Form business in circumstances where she had not established that any legitimate funds from that business had been put towards the two properties.

3. [47]

   If the appellant does not succeed on the other grounds, Ground 5 alleges that his Honour erred in applying the maxim “equity is equality” and holding that the beneficial interest in the Glenwood Property and Seven Hills Property should be shared equally.

4. [48]

   In oral submissions, Senior Counsel for the appellant described the central issue in the appeal as the proper application of the principles in Baumgartner. He submitted that the primary judge had impermissibly expanded the operation of the principles that were applied in that case, beyond the manner in which they had been applied in intermediate courts of appeal.

5. [49]

   In relation to the facts, the appellant acknowledged that the respondent had worked without pay in the Bio-Form business and was a homemaker. Before the end of the relationship, she had made no direct financial contribution to the acquisition of the Glenwood Property or the Seven Hills Property. In so far as the primary judge relied, at [163], on the respondent having made significant contributions of a financial kind, she had done so only in the period after the relationship ended. This was specifically the subject of Ground 4, with the appellant submitting that whatever might have been the position before 29 January 2010, after that time the respondent’s contribution could not come within the Baumgartner principles. That said, the appellant accepted that adjustments would need to be made to reflect the payments the respondent had made with respect to the Glenwood Property after the relationship ended.

6. [50]

   As to the period before the relationship ended, the appellant submitted that the respondent had not established a joint endeavour as between her and Mr Subakti for the purpose of which the Glenwood Property and the Seven Hills Property were acquired. The appellant submitted that Baumgartner entailed a pooling of resources with the intention to enhance the material wellbeing of both parties to the de facto relationship. Senior counsel relied in this respect on the reasons of Murray J in Lloyd v Tedesco (2002) 25 WAR 360; [2002] WASCA 63 at [16].

7. [51]

   The appellant submitted that there was no evidence before the primary judge of a joint endeavour in support of which the respondent contributed to the Bio-Form business, including by forgoing a wage, for the purpose of adding to the wealth of the family in a manner which was referable to the two properties. Senior Counsel for the appellant submitted that such evidence could have been given by the respondent, for example as to conversations she had with Mr Subakti or as to the purpose for which she made the contributions. The respondent could also have called Mr Subakti to give such evidence.

8. [52]

   Instead, as his Honour found, the respondent had no involvement in the financing of the Bio-Form business, nor did she have any understanding of the business. The appellant submitted that having regard to the evidence, his Honour should have found that the respondent worked in the Bio-Form business as an incident of the domestic relations between her and Mr Subakti. As she had little in the way of experience and had never worked, the respondent was not giving away income that she might otherwise have earned, let alone for the purposes of a joint endeavour.

9. [53]

   In relation to Ground 3, the appellant emphasised the need for the joint endeavour to be referable to the two properties in question. By reference to the evidence of Ms Holz, Senior Counsel for the appellant submitted that the money for the Glenwood Property did not come from the Bio-Form business, but from Mr Subakti individually. The appellant submitted that the respondent could not establish that her work in the business was such that she made a contribution to the Glenwood Property. The situation was even less favourable for her in relation to the Seven Hills Property. In the appellant’s submission, there was no basis for concluding that the source of the funds for payments on that property was legitimate.

10. [54]

    Finally, in relation to Ground 5, the appellant submitted that the respondent had not established what any of her contributions were. In the absence of such evidence, the appellant submitted that the Court should not be persuaded that the principle “equity is equality” should be applied. The appellant contended that the primary judge had impermissibly extended Baumgartner in his application of the “equity is equality” maxim.

11. [55]

    The respondent contended that the primary judge correctly concluded that she substantially contributed to acquiring and maintaining the Bio-Form business and the two properties, in addition to bringing up the couple’s children. In oral submissions, Senior Counsel for the respondent emphasised that there was no challenge to her evidence about the nature of the relationship, and the domestic and work duties she performed. That evidence supported that she and Mr Subakti essentially worked in a partnership in which she looked after the home and children and assisted with the business for their mutual benefit. Working together, they had built up shared equity in both a residential property and a business property.

12. [56]

    As a matter of principle, nothing turned on whether the asset constituted accommodation or a business, or whether the respondent’s contributions were financial or non-financial, courts having recognised the validity of the latter. The respondent contended in this respect that the appellant’s reliance on remunerated work was misplaced: what mattered was the pooling of labour towards a common end. It was clear from her evidence that she and Mr Subakti had worked in the home (largely her doing) and in the business, combining their assets and their labour. It was impossible to reach the conclusion that someone in her position would have performed all of the work that she did without any expectation of receiving something in return in terms of an equity in the event that the relationship came to an end.

13. [57]

    The respondent submitted that the appellant sought to identify error by reference to a false premise, namely, that she and Mr Subakti intended to pool their resources. She contended that nothing in Baumgartner required any such intention. Rather, a trust may be presumed in the absence of express intention, from the contribution of a party to the means of acquisition. Senior Counsel for the respondent observed in this respect that “[e]quity acts negatively to prevent one party to the relationship from obtaining an advantage”. It followed that the absence of evidence from Mr Subakti was of no practical significance. Further, and in any event, she submitted that Mr Subakti was not naturally “in her camp”, relying in this respect on evidence she gave in re-examination about the difficulties of their relationship.

14. [58]

    As to Ground 3, the respondent submitted that it was not relevant to focus on how Mr Subakti funded the acquisitions of property. If this Court accepted, as had the primary judge, that the respondent made substantial contributions, equity’s conscience was enlivened once it became clear that someone, being the appellant (standing in Mr Subakti’s shoes), chose to assert full legal ownership. What was important, Senior Counsel contended, was vindication of the respondent’s rights in the face of unconscionable conduct by the legal owner. The respondent relied in this respect on the decision of the Court of Appeal in Green v Green (1989) 17 NSWLR 343 and the decision of Campbell J in West v Mead (2003) 13 BPR 24,431; [2003] NSWSC 161.

15. [59]

    In relation to Ground 4, the respondent observed that after January 2010, she had continued to pay the mortgage in relation to the Glenwood Property, thereby preserving the trust property. Senior Counsel submitted that the respondent’s evidence in answer to questions on this topic eloquently summed up why a court of equity would intervene, with the respondent stating that she was unaware of the finality of the situation and believed that she had an equitable interest, being the mother of his children and living in the home. In relation to the Seven Hills Property, the respondent accepted that the lease of that property from May 2010 meant that the rent exceeded the mortgage repayment and outgoings. However, she relied on the fact that from the earliest stage of the business Mr Subakti and the respondent were working together, and that same business was the reason the Seven Hills Property was purchased.

16. [60]

    Finally, in relation to Ground 5, the respondent submitted that the “equity is equality” maxim had the practical advantage of sparing the Court from complex factual enquiries as to the parties’ respective beneficial interests. In her submission, once the claimant’s contributions were shown to be substantial, the principle applied and the onus shifted to the party insisting that title should be held unequally. In the present case, the starting point was the respondent’s substantial contributions, on a domestic level and to the business. In so far as the appellant sought to rely on Mr Subakti’s illegal activities, the respondent submitted that involved an inversion of the principle of clean hands.

Consideration

1. [61]

   The simplicity with which the elements that must be satisfied to establish a joint endeavour constructive trust may be expressed belies the difficulty that can attend the application of those elements, and, if satisfied, determining the terms of the trust. The authors of Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis Butterworths) expressed the view that what remains unclear is “when and why the interposition of equity to prevent unconscientious reliance on legal rights in the Australian cases will give rise in equity to a proprietary rather than a personal right, and a proprietary right which is a constructive trust ‘fashioned’ by the court”: at [13-53]. The absence of clarity is more acute where, as here, the contributions relied on for the existence of a constructive trust are indirect and primarily of a non-financial character.

2. [62]

   In Woods v McKinlay (No 2) [2021] NSWSC 1510 at [231], Parker J distilled the principles in Baumgartner regarding a joint endeavour constructive trust as requiring satisfaction of the following elements:

3. [63]

   In Muschinski, the elements that Parker J subsequently summarised in Woods were readily ascertainable. Mrs Muschinski and Mr Dodds both held a legal interest in the property in issue, as tenants in common. Despite their shared legal interest, Mrs Muschinski had paid the whole of the purchase price. She had done so in circumstances where she and Mr Dodds had agreed to develop and use the land together, and Mr Dodds’ contribution was to put in the time, effort and funds to develop the property: at 610. As matters transpired, and without any suggestion of blame, “the substratum … of that arrangement … was largely removed and their joint project was abandoned”: at 610. Thus it transpired that Mr Dodds held a legal interest as to half of the property, as a tenant in common, in circumstances to which the parties did not advert and in which it was not specifically intended or specially provided that he should enjoy such a benefit.

4. [64]

   Deane J described the constructive trust as developing, as had the other types of trust, “as a remedial relationship superimposed upon common law rights by order of the Chancery Court”. Unlike express and implied trusts, however, the constructive trust “arises regardless of intention”, such that its rationale “must still be found essentially in its remedial function which it has predominantly retained”: at 613. The remedy was not available merely because it would be unjust or unfair in a situation of discord for the owner of a legal estate to assert ownership against another. Rather, it would “properly be available if applicable principles of the law of equity require that the person in whom the ownership of property is vested should hold it to the use or for the benefit of another”. Notions of fairness and justice remained relevant “to the traditional equitable notion of unconscionable conduct which persists as an operative component of some fundamental rules or principles of modern equity”: at 616.

5. [65]

   Deane J observed that both common law and equity recognised that “where money or other property is paid or applied on the basis of some consensual joint relationship or endeavour which fails without attributable blame, it will often be inappropriate simply to draw a line leaving assets and liabilities to be owned and borne according to where they may prima facie lie, as a matter of law, at the time of the failure”: at 618. His Honour referred in this context to the circumstances in which equity comes to the aid of a fixed term partner who has paid a premium, on premature dissolution of the partnership; and to the aid of a joint venturer in the event of premature collapse of the joint venture, precluding the attainment of the commercial advantage. Observing that the prima facie rules were properly to be seen as “instances of a more general principle of equity” (at 618-619), his Honour described that more general principle at 619-620 (citations omitted; see also at 599 per Mason J):

6. [66]

   The latter part of this passage was picked up by the majority in Baumgartner, to which I will return. Staying with Muschinski, Deane J observed that the operation of the principle precluded Mr Dodds from asserting or retaining, against Mrs Muschinski, his one-half legal ownership of the property to the extent that it would be unconscionable for him to do so. In this context, notions of what was fair and just were relevant “only in the confined context of determining whether conduct should, by reference to legitimate processes of legal reasoning, be characterized as unconscionable for the purposes of a specific principle of equity whose rationale and operation is to prevent wrongful and undue advantage being taken by one party of a benefit derived at the expense of the other party in the special circumstances of the unforeseen and premature collapse of a joint relationship or endeavour”: at 621.

7. [67]

   If no more than a commercial relationship had been involved, Deane J considered that Mr Dodds’ conduct in seeking to retain the unfair advantage of unforeseen circumstances by asserting his legal entitlement to a one-half interest in the property without any adjustment to compensate Mrs Muschinski would “plainly be unconscionable”: at 621. As his Honour recognised, the relationship between the parties was “a mixture of the commercial and the personal”, with the personal relationship providing the context and explaining the content of the planned commercial venture: at 621. Relevantly for present purposes, his Honour stated in this context at 621-622:

8. [68]

   In Baumgartner, the parties’ respective legal interests regarding the property in issue were as they are in the present case: the respondent held no legal interest, while the appellant held the entirety of that interest. Mason CJ, Wilson and Deane JJ referred with approval to the extract from Deane J’s reasons in Muschinski at 620 which I have set out at [65] above. In applying those reasons to the circumstances in issue, their Honours stated at 148-149:

9. [69]

   It was in this context that their Honours made the statement that is often cited in subsequent cases, at 149:

10. [70]

    It was unnecessary in either Muschinski or Baumgartner to consider the role of non-financial contributions. In Muschinski, Deane J contemplated that such contributions may have played a role if the personal relationship had survived the commercial, and the parties had continued to live in the property in question. Such contributions (had they been made) may have operated to negate the unconscionability of Mr Dodds retaining a half share in the property without making any allowance for the extent of Ms Muschinski’s contribution. In Baumgartner, Mason CJ, Wilson and Deane JJ contemplated that non-financial contributions may have a role, both as to the nature of the joint endeavour and the question of unconscionability, observing at 149-150:

11. [71]

    In Baumgartner it was appropriate to make an adjustment by reference to the respective financial contributions of the parties, albeit making an allowance for the respondent’s period of parental leave. In so doing, however, their Honours noted that it had not been suggested “that the difference in the amount of the financial contributions was offset by the greater worth of the respondent’s contribution in other areas”: at 150. Gaudron J, in agreeing, observed that in the context of domestic relationships it would be “relevant to inquire whether the asset was acquired for the purposes of the relationship, and whether non-financial contributions should be taken into account”: at 156.

12. [72]

    In Dunne v Turner (unreported, Queensland Court of Appeal, 20 August 1996), Pincus JA, with whom McPherson JA agreed, recognised that there was no binding authority on the question of whether contributions other than financial contributions should be taken into account when considering whether a constructive trust should be imputed. However, his Honour considered that both Muschinski and Baumgartner answered that question affirmatively; see also Miller v Sutherland (1990) 14 Fam LR 416 at 424 per Cohen J; Parij v Parij (1997) 72 SASR 153 at 163 per Debelle J. In Engwirda v Engwirda [2000] QCA 61, the Queensland Court of Appeal (Pincus and Davies JJA, Helman J) referred at [25] to Dunne v Turner in support of the proposition that the contributions made by parties to a relationship need not be of a financial kind.

13. [73]

    Accepting that to be so, as Nettle J observed in Read v Nicholls [2004] VSC 66 at [60], neither Muschinski nor Baumgartner explained “how one is to go about placing a value upon contributions of that kind”. In Parij v Parij, the appellant had contended that assets of her husband apart from the family home (in which she was declared to have an interest) were subject to a constructive trust. The appellant made no financial contribution to those specific assets and could point only to her performance of the roles of primary homemaker and caregiver with respect to them. In concluding that the primary judge erred in rejecting the appellant’s contention for a constructive trust in respect of those assets, Debelle J stated at 165-166:

14. [74]

    As to the terms of the constructive trust, Debelle J considered at 166 that the guidelines relating to an assessment of the contributions of the parties to a dissolved marriage were relatively well-established and were relevant. His Honour made particular reference at 167 to the need to examine the facts and circumstances of each case which “may lead to a determination that there should be equality, but equality is not the starting point”. His Honour also observed that substantial, not token, regard should be had to the contribution of the partner who is the homemaker and caregiver; and that, as a general rule, the domestic activities of one partner may properly be regarded as contributing towards the acquisition of property by the other partner through his or her business activities.

15. [75]

    Ultimately, Debelle J concluded at 168 that the appellant was entitled to a one-third share in the respondent’s accountancy business and two additional houses. Cox J considered that the appellant was entitled to a 20 per cent share, stating, at 155:

16. [76]

    In Cressy v Johnson [2009] VSC 52 at [192], Kaye J described the decision in Parij as “the high-water mark” in terms of the favourable application of the principles in Muschinski and Baumgartner to a person claiming a constructive trust over property.

17. [77]

    The Court of Appeal in Queensland reached a different result in Engwirda, albeit apparently without being referred to Parij. The appellant in Engwirda submitted that a constructive trust arose as to one half of all of the property owned by her de facto partner (who was a property developer) and companies that he controlled. She submitted that although her partner had no intention of holding any part of his property for her, she had made a contribution to the gaining, improvement or retention of that property, or of property from which that property was derived, on the basis of and for the purposes of their joint relationship. It was therefore unconscionable for the respondent to retain the property entirely upon the failure of the relationship: at [23].

18. [78]

    The Court recognised at [25] that contentions of the kind that the appellant was advancing were made and sometimes succeeded “in a context in which both parties to a relationship such as this have provided their resources, in money and labour, for the purpose of acquiring and improving assets to be used by the parties in their joint relationship; usually a residence but sometimes a business in which they were or expected to become involved together”. However, the contentions could not succeed in that case for two reasons, the first of which was outlined at [26]:

19. [79]

    The second, and related, reason was the nature of the pooling of resources which had occurred in that case, which the Court described as being “of a limited kind and for a limited purpose”: at [27]. The appellant and the first respondent had both contributed financially to the general running of the household, but this did not show “a pooling of resources or any expectation of it except for the limited purpose of running their household and then only in the sense that each contributed labour and money to that purpose, the source of the appellant’s money being, in substantial effect, a gift from the first respondent”: at [27]. The Court did not intend “to denigrate, in any way, the quality or value of the domestic contribution of the appellant to the welfare of the parties and their children”: at [28]. However, it did not follow that such a contribution “had any significant effect on the gaining, improvement or maintenance of the assets from which each derived their separate capital assets and income”: at [29].

20. [80]

    The Western Australian Court of Appeal had earlier reached a similar conclusion in Stowe v Stowe (1995) 15 WAR 363. As in Engwirda, the appellant sought a constructive trust with respect to all of the property of her former de facto partner. She relied in this respect on her former partner’s promise that he would marry her and that she would not need to work or make any contribution to acquire and maintain a home for herself and the child of a former relationship. She also relied on promises that particular homes would be the family home. The Court accepted that contributions by a de facto spouse to family welfare had been used to support claims for constructive trusts over family homes, in cases of a common intention: at 373. The Court also accepted that contributions to the family welfare or the parties’ general business activities could support claims for constructive trusts based on unconscionable conduct over other types of properties, where such properties have been improved by the contributions of a spouse: at 374. However, the Court considered that “on existing equitable principles, where there is no common intention to share all the property of one of the spouses, and there is no pooling involving all such property, and where only particular properties (but not all) owned by one spouse have been improved by contributions of the other spouse, contributions by the latter to the general welfare of the parties (whether to the general benefit of the family or to business activities carried on by them) cannot give rise to a constructive trust over all such property”: at 374.

21. [81]

    Stowe was decided before Parij but was apparently not drawn to the attention of the South Australian Full Court. Referring to Stowe in Lloyd v Tedesco, Murray J stated at [15]-[16]:

22. [82]

    In addition to Stowe, Murray J relied on the reasons of Gleeson CJ in Green v Green (1989) 17 NSWLR 343 at 353, where his Honour stated that the mere existence of a matrimonial or de facto relationship “combined with express or implied undertakings to provide support and accommodation” would not form a sufficient basis for concluding that there is a constructive trust by virtue of which a proprietary interest in the home occupied by the parties is created. Murray J stated, at [30]-[31]:

23. [83]

    Also in Lloyd v Tedesco, Pullin J referred to Parij and agreed with Debelle J that unconscionable conduct had to be shown before relief could be granted. However, his Honour considered that “the factual finding which must be made before coming to consider the issue of unconscionability is that there was a joint enterprise of a commercial nature”: at [83]. In this context, his Honour considered at [87] that the facts in Parij suggested that the South Australian Court had sufficient material before it to infer that there was an intention to be involved in a joint enterprise of that nature:

24. [84]

    In Pullin J’s opinion, it was the financial aspects that led to the conclusion in Parij that there was a joint endeavour, with the references to homemaker contributions being “additional matters to note”: at [89]. However, if his Honour was wrong, and Parij should be read as concluding that the mere existence of the de facto relationship and the provision of homemaker duties was enough to ground a claim for a constructive trust over property, his Honour respectfully disagreed with that conclusion: at [90]. Accordingly, his Honour did not accept that even if there were no intention to participate in a joint enterprise in the nature of a commercial venture, the appellant should nevertheless succeed in her claim because of her contributions as a homemaker: at [90].

25. [85]

    In referring to the need for a joint enterprise “of a commercial nature”, it may be that his Honour meant no more than what Murray J described as an enterprise “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”. So to construe his Honour’s requirement would be consistent with the nature of the assets which were in issue in Parij, being two houses (apart from the family home), one of which was used as a holiday home and the second of which was purchased shortly before the couple separated and into which the respondent moved upon separation. It would also be consistent with the conclusion that Pullin J reached regarding the circumstances in Lloyd: the parties did not own property jointly or live in property jointly owned; the appellant did not share an inheritance that she received with the respondent and instead loaned funds to him (which she later sued to recover); the respondent incorporated companies of which the appellant was not a director or shareholder; and the appellant performed very little work in the respondent’s business: at [91]-[93]. His Honour described these circumstances as “quite different from the circumstances in Parij, and quite different from the circumstances in Baumgartner and Muschinski v Dodds”: at [93].

26. [86]

    That conception would also be consistent with subsequent single-judge decisions, including that of Campbell J in West v Mead, from which both parties in the present case sought to draw support. Ms West and Ms Mead commenced a relationship in 1983. Ms Mead swapped residences with her mother so that she and Ms West (with their two children) shared her parents’ house, and her mother lived in Ms Mead’s unit. On his Honour’s findings, the couple, who had both worked up until 1986, did not have a joint endeavour resulting in the acquisition of any property for the purpose of their life together before that time: at [65]. His Honour continued at [66]:

27. [87]

    Campbell J observed that the notion of non-financial contributions raised the prospect of a difficulty of the operation of the principle in Baumgartner, which did not often become acute “because of that way that presumptions, and the onus of proof, work in this area”. His Honour explained that before any particular asset can become subject to a constructive trust in accordance with Baumgartner, “one needs to have a joint relationship or endeavour, and an asset acquired in the course of, and for the purposes of, that joint endeavour”: at [58]. His Honour stated at [59] that in accordance with the approach applied in Baumgartner, a plaintiff needs to establish:

28. [88]

    The respondent holds no legal interest in the Glenwood Property or the Seven Hills Property. In asserting a beneficial interest in those properties, her primary case (which was rejected) rested on the existence of a common intention as between her and Mr Subakti that he would hold the legal interest for the benefit of their joint relationship, for the purpose of enhancing their joint wealth and welfare. In the alternative, the respondent relied on a joint endeavour in which she and Mr Subakti pooled their resources (in her case, her labour both at home and in the Bio-Form business (without a salary)) for the purpose of enhancing their wealth and welfare.

29. [89]

    The findings relevant to the nature and scope of that joint endeavour are dispersed throughout the primary judge’s reasons. Drawing them together reveals the following:

    1. (1)

       The respondent made no direct financial contribution to the purchase of the Glenwood Property or the Seven Hills Property: [122].

    2. (2)

       The respondent made no direct financial contribution to the Bio-Form Business: [143].

    3. (3)

       The respondent contributed in an indirect way, as a support to Mr Subakti when he was deciding to purchase assets, as a homemaker and mother of his children, and working in or in connection with his business: [134]. The primary judge described these indirect contributions as substantial: [143]-[144].

    4. (4)

       Although the respondent did not put in her money, she did put in her time and her efforts: [146], [159].

    5. (5)

       The Bio-Form business operated from various premises between 1999 and 2010, including the garage at the Wentworthville property, shops in Liverpool and the Seven Hills Property: [130].

    6. (6)

       The respondent did not appear to be in the retail premises that often, “partly due to the fact that Mr Subakti would not permit it because he had the woman working there with whom he was having an affair”: [158].

    7. (7)

       Before January 2010, the respondent did administrative work on the accounts and from time to time provided information to the accountants for the preparation of the tax records: [152]. She was “in effect” a “clerical assistant attending to simple record keeping tasks”: [158].

    8. (8)

       The respondent did not have a detailed appreciation of the financial situation of Mr Subakti or the Bio-Form business: [123], [153].

    9. (9)

       After January 2010, the respondent used her funds and borrowed funds to pay expenses, both business and personal: at [153]. Her efforts in the Bio-Form business and in borrowing funds where needed had managed, in practical reality, to maintain both the Glenwood Property and the Seven Hills Property: [165].

30. [90]

    In determining the existence of a constructive trust, the primary judge relied on the respondent having made significant contributions, “financial and otherwise”: at [163] (emphasis added). Having regard to the findings I have set out above, his Honour’s reference to financial contributions can only relate to the period after 29 January 2010, when Mr Subakti was arrested and the relationship ceased. Before that time, as (1) to (4) in the previous paragraph indicate, the respondent had made no direct financial contribution to the purchase of the assets in question, and, at most, an indirect financial contribution in terms of forgoing payment for her work in the Bio-Form business.

31. [91]

    To the extent that his Honour relied on the post-January 2010 financial contributions as supporting the existence of a joint endeavour, the primary judge erred. That his Honour did so was relied on specifically for Ground 4 of the Notice of Appeal, and otherwise as part of the appellant’s contentions with respect to Ground 1. I note that the respondent did not seek to defend his Honour’s reasoning in this respect directly, instead contending that it did not make any difference to his Honour’s conclusion regarding the existence of a constructive trust and its terms.

32. [92]

    Putting the post-January 2010 financial contributions to one side, it remained the case that before January 2010, the respondent had made contributions both domestically and to the Bio-Form business. As the primary judge observed, the manner in which she contributed was not challenged: [159]. The appellant’s contention, as part of Ground 1 and more directly as to Ground 3, that the respondent’s contributions as a homemaker were irrelevant to the existence of a constructive trust absent a financial contribution, does not reflect the basis on which the respondent put her case as to the existence of a constructive trust. As the respondent submitted, she did not rely solely on contributions of that kind; and the primary judge did not find a joint endeavour on that basis alone.

33. [93]

    The evidence before the primary judge disclosed that the respondent and Mr Subakti’s relationship endured for some 11 years, between 1998 and 2010. The contributions that the respondent made during that time, in terms of her labours at home and in the Bio-Form business, support the existence of a joint endeavour with Mr Subakti, the purpose of which was to enhance their material wellbeing. His Honour did not err in accepting the respondent’s submission that having regard to the duration of the relationship and the nature of her contributions, both domestically and to the business, she did not merely gift those contributions to Mr Subakti.

34. [94]

    The more significant issue in the present case concerns whether the two properties were acquired within the scope of the joint endeavour that the primary judge found, so as to require the intervention of equity. There is, in this respect, a distinction of substance between the Glenwood Property and the Seven Hills Property, which his Honour did not separately consider.

35. [95]

    The Glenwood Property was purchased by Mr Subakti in 2003 as the family home. The couple lived in the Glenwood Property following its purchase in 2003, and, indeed, continue to reside there with their daughters (though they are now separated). Although Mr Subakti purchased the Glenwood Property in his name, the respondent explained in her evidence why she was not included on the title or in the mortgage. She was responsible for running that home and caring for their children, as well as carrying out tasks in the Bio-Form business, from its outset in 2000 and as it developed. His Honour did not err in concluding that the Glenwood Property was purchased in the course of and for the purpose of the joint endeavour that his Honour found and pursuant to which she made those contributions.

36. [96]

    The relationship having ended without blame on the part of the respondent, the benefit constituted by the entirety of the legal interest in the Glenwood Property would, absent equity’s intervention, be enjoyed by Mr Subakti (or the appellant, standing in his shoes) in circumstances where it was not specifically intended or specially provided that he should so enjoy it: Muschinski at 620. His Honour did not err in concluding that it would be unconscionable for Mr Subakti (or the appellant) to assert a legal interest over the whole of the Glenwood Property as against the respondent without making any allowance for her contributions. The following statement of Campbell J in West v Mead at [62] is apposite in this context:

37. [97]

    The appellant sought to rely on the questions surrounding the sources of the funds with which the Glenwood Property was purchased and maintained, as telling against the existence of a constructive trust. I accept the respondent’s submission that for the purposes of determining the existence of a constructive trust (as opposed to its terms), the focus is on the nature of the contributions made by the parties and the purpose for which those contributions were made. As the primary judge found, the respondent had no knowledge of any of Mr Subakti’s serious criminal behaviour.

38. [98]

    It follows that in so far as the Glenwood Property is concerned, Ground 1 and Ground 2 of the Notice of Appeal should be dismissed.

39. [99]

    By contrast, Mr Subakti financed and purchased the Seven Hills Property in 2008, in his name, for a solely commercial purpose. The respondent’s evidence was that the Property was purchased for use as an office and storage space for the Bio-Form business. Although she sought to characterise that business as a partnership between her and Mr Subakti, such a characterisation is inconsistent with her role as found by the primary judge, which was, in effect, that of a clerical assistant: [154], [158]. It is also inconsistent with his Honour’s further finding that the respondent’s knowledge of the business was vague and general. Having regard to the contributions that the respondent was found to have made, the acquisition of the Seven Hills Property did not form part of the joint endeavour as between the respondent and Mr Subakti.

40. [100]

    Although the respondent sought to rely on the decision in Parij, the nature of the contributions in that case provided a basis on which the Court could find, as was described in Lloyd v Tedesco, that the appellant had made contributions to the properties apart from the matrimonial home, as to which the respondent sought to assert full title. Similarly, in Read v Nicholls on which the respondent also relied, there was a nexus between the joint endeavour and each of the properties which were in issue, which the evidence in the present case does not support.

41. [101]

    It follows from the reasoning above that Ground 1 of the Notice of Appeal should be upheld with respect to the Seven Hills Property. Again, in reaching this conclusion I have not relied on the appellant’s arguments, advanced in support of Ground 2, regarding the sources of funds for the purchase of the Seven Hills Property.

42. [102]

    In finding that the respondent held a beneficial interest in the properties that was equal to that of Mr Subakti, the primary judge relied on the principle that “equity is equality”. As his Honour observed at [59], the maxim was adopted by Mason CJ, Wilson and Deane JJ in Baumgartner, in the passage which I have set out in [70] above. Their Honours there noted that, after years of a couple living together and pooling their resources and their efforts to create a joint home, there was “much to be said for the view that they should share the beneficial ownership equally as tenants in common”. That position was, however, “subject to adjustment to avoid any injustice which would result if account were not taken of the disparity between the worth of their individual contributions either financially or in kind”. In West v Mead, Campbell J explained the operation of the principle at [59], which is set out at [87] above.

43. [103]

    As I noted above, although the cases recognise that contributions to a joint endeavour may be other than financial, there have been few cases in which such contributions have fallen to be considered, and still fewer where such contributions were predominant. The cases on which the respondent relied included Read v Nicholls, in which the plaintiff claimed an equitable interest by means of a constructive trust in properties owned by her de facto partner. The plaintiff had not contributed financially to the purchase of those properties. However, Nettle J found that the couple had been in a relationship for some 30 years during which they cohabited and during which the plaintiff shouldered the bulk of the housework. Unlike the present case, the plaintiff had also made a contribution to the household expenses. Nettle J stated at [63]:

44. [104]

    Notwithstanding this finding, Nettle J made an adjustment to account for the fact that Mr Nicholls had made contributions from sources other than income. In his Honour’s opinion, the adjustment was consistent with “the sort of approach that was adopted in Baumgartner and Muschinski”: at [63].

45. [105]

    Another such case was Cressy v Johnson, in which the defendant had acquired a series of properties during the course of a nine-year de facto relationship with the plaintiff. The plaintiff had not contributed directly to the purchase price of those properties. However, she had made indirect financial and non-financial contributions, including by making improvements to the properties in question. Kaye J considered at [199] that by directing her part-time earnings to the maintenance of the defendant and the family, the plaintiff enabled the defendant to devote his income largely to the acquisition and maintenance of the properties. Equally, by undertaking the burden of prime carer for the three children, the plaintiff enabled the defendant to focus his efforts on acquiring, financing and maintaining the properties in his ever-expanding portfolio. Without identifying the reasoning, his Honour determined a constructive trust in favour of the plaintiff as to one third of certain of the properties in issue, being the family home and properties to which she had made improvements: at [202].

46. [106]

    I note that in Parij, to which I have referred above, Debelle J had regard to guidelines that the Family Court had developed for the purposes of the division of property under s 79 of the Family Law Act 1975 (Cth), which did not operate on the presumption that equity is equality: at 166-167. I have not had regard to the principles that apply in relation to s 79 of the Family Law Act in the present case.

47. [107]

    In applying the maxim that equity is equality in the present case, the primary judge took the view that “it would be almost impossible to precisely calculate the total sum of the plaintiff’s contributions financial and otherwise”: [164]. For the reasons I have outlined above, any financial contribution that the respondent made before January 2010 was, at its highest, indirect. The financial contributions that the appellant made after the cessation of the relationship – and, indeed, after forfeiture orders were made under the CAR Act – do not bear on the terms of the constructive trust as between the respondent and Mr Subakti. In concluding that the equity is equality maxim was applicable and not displaced, his Honour relied in part upon the respondent making those financial contributions. Without those contributions, the contributions the respondent made, as he found them, were indirect, albeit substantial.

48. [108]

    In support of the proposition that the primary judge erred in determining that the respondent held a beneficial interest in the Glenwood Property as to 50 per cent, the appellant relied on a number of matters, including that the respondent did not make any financial contributions before the cessation of the relationship and that her contributions did not otherwise generate any profit. The appellant also relied on the inference, which it submitted was available on the evidence, that “a significant portion of the financial contributions to Mr Subakti and the respondent’s expenses – and in particular property purchases – came from illegitimate sources”. As a matter of public policy, the appellant submitted, “it would be inappropriate for a Court, through creation of a constructive trust in equity, to grant the Respondent a 50% share of assets purchased using illegitimate funds. To do so would legitimise those funds.”

49. [109]

    The appellant’s reliance on the likely illegitimate sources of parts of Mr Subakti’s income is not relevant in the present case. In circumstances where the respondent did not know of Mr Subakti’s serious criminal activities, the nature of his activities should not operate to deprive her of an equitable interest where it is otherwise appropriate to confer it. I accept the submissions of the respondent in this regard.

50. [110]

    Nonetheless, the primary judge erred in applying the maxim that equity is equality in the present case. As Mason CJ, Wilson and Deane JJ stated in Baumgartner at 150, adjustments to an equal sharing of beneficial ownership may be necessary “to avoid any injustice which would result if account were not taken of the disparity between the worth of their individual contributions either financially or in kind”. In assessing the worth of individual contributions, one has to be careful not to accept an inherent inequality between the value of work inside the home and work outside of it; it is apparent from cases like Read v Nicholls that such notions are properly regarded as anachronistic. At the same time, it is the case that only by means of financial contributions can property be purchased and maintained. In the present case, although the primary judge was unable to be certain as to the source of all financial contributions to the purchase of the Glenwood Property, it was clear that Mr Subakti was solely responsible for the purchase funds, including the assumption of liability pursuant to the mortgage.

51. [111]

    In considering, in Muschinski, the possibility of joint endeavours in the context of personal relationships, Deane J stated that at the forefront of such circumstances “there commonly lies a need to take account of a practical equation between direct contributions in money or labour and indirect contributions in other forms such as support, home-making and family care”: at 622. In considering that practical equation in the present case, the Glenwood Property was purchased in 2003. By that time, the respondent and Mr Subakti had been in a relationship for five years, during which they lived together (with their first child born in 2001). The respondent was responsible for all home affairs. From 2000, she assisted Mr Subakti in the Bio-Form business, and from 2001 she looked after their child. The respondent continued to carry out each of these tasks (with the addition of a second child in 2005) until the relationship ceased on 29 January 2010. The contributions that the respondent made operated to free Mr Subakti up to earn an income to put towards the purchase of the Glenwood Property and, subsequently, the mortgage. I consider that those contributions give rise to a constructive trust to the benefit of the respondent with respect to a quarter share in the Glenwood Property, or 25 per cent.

Relief

1. [112]

   For the reasons I have set out above, the appeal must be allowed with respect to the Seven Hills Property. I would allow the appeal with respect to the Glenwood Property in so far as it concerned the imposition of a constructive trust in the order of 50% of the interest in that Property.

2. [113]

   Notwithstanding that the appellant submitted that primary judge erred in taking the financial contributions after January 2010 into account for the purposes of determining whether a constructive trust existed, it accepted that an account must be made for the contributions that the appellant has made to the mortgage for the Glenwood Property for the last 11 years. The remedy as to those contributions does not lie, however, in a constructive trust, there being an appropriate equitable remedy which falls short of the imposition of a trust: Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10 at [10]. In my view, the appropriate remedy in relation to those payments would be an equitable charge, in respect of which there may need to be a set off with respect to the respondent’s occupation of the Glenwood Property with her children. On 21 May 2021, the Court made an order restraining the appellant from disposing of the Glenwood Property upon an undertaking from the respondent, to the extent her claim failed, to pay an occupation fee to be determined by the Court.

3. [114]

   On 3 March 2022, Sackar J made a series of orders which were consequential upon his Honour’s declaration of the constructive trusts, with some variations made to those orders on 22 March 2022. In relation to the Glenwood Property, those orders included (changing the title of the parties so as to be consistent with their roles in the appeal):

   1. (1)

      Order 7, which made provision for the payment of expenses, and then 50% of the balance, of the proceeds of sale of the Seven Hills Property (which, by a joint submission, the parties informed this Court had been sold in December 2021 and settled in February 2022) and the Glenwood Property.

   2. (2)

      Order 9 (as varied by order 1a of the orders made on 22 March 2022), that the parties, on or before 22 April 2022, negotiate in good faith, to determine, if possible, the price for which the respondent can purchase the appellant’s interest in the Glenwood Property.

   3. (3)

      Order 10 (as varied by order 1b of the orders made on 22 March 2022), that the sale of the Glenwood Property to any third party be stayed to permit the respondent, if possible, to enter into a contract for the purchase thereof, such stay to expire on 24 May 2022.

   4. (4)

      Order 15 (as varied by order 1c of the orders made on 22 March 2022), that in the event that the respondent could not proceed to purchase the Glenwood Property, the respondent give possession of the Glenwood Property to the appellant, as trustee, on and from 25 May 2022.

4. [115]

   On 28 March 2022, orders were made by consent in this Court to stay the operation of a number of the orders made by Sackar J; those orders were subsequently amended pursuant to the slip rule. Pursuant to those orders:

   1. (1)

      the operation of Order 7 was stayed, to the extent that it required payment of the proceeds of the sale of the Seven Hills Property to the respondent and the appellant, up to and including the date of delivery of judgment by the Court of Appeal;

   2. (2)

      the time stipulated in Order 1a of Sackar J’s orders of 22 March 2022 (which related to Order 9) was extended to 7 days after the date of delivery of judgment by the Court of Appeal;

   3. (3)

      the time stipulated in Order 1b of Sackar J’s orders of 22 March 2022 (which related to Order 10) was extended to 35 days after the date of delivery of judgment by the Court of Appeal; and

   4. (4)

      the time stipulated in Order 1c of Sackar J’s orders of 22 March 2022 (which related to Order 15) was extended to 42 days after the date of delivery of judgment by the Court of Appeal.

5. [116]

   In relation to the Glenwood Property, for the reasons I have outlined above there is a need to determine the amount of the equitable charge which arises with respect to the Glenwood Property. In circumstances where the amount of the charge may impact the formulation of the consequential orders, the appropriate course is to set aside all of his Honour’s orders (except orders 2 and 3, which related to the removal of caveats) and remit the matter to the Equity Division. Consequential orders, such as in relation to the sale of the Glenwood Property and vacation thereof, and the costs of the proceedings below, will also be necessary, should the parties not be able to agree them.

Conclusion

1. [117]

   Accordingly, I propose the following orders:

   1. (1)

      Appeal allowed in part.

   2. (2)

      Set aside the orders entered on 3 March 2022, as varied on 28 March 2022, other than orders 2 and 3 respectively.

   3. (3)

      Declare that the NSW Trustee and Guardian holds the land situated at XX Rothwell Circuit, Glenwood, NSW, also known as Folio Identifier XXX/XXXXXX (“the Glenwood Property”):

   4. (4)

      Remit the matter to the Equity Division for any further or consequential orders, if not agreed.

   5. (5)

      Order that the respondent pay 50 per cent of the appellant’s costs of the appeal.

   6. (6)

      Reserve liberty to apply within 14 days for a different order as to costs of the appeal.

2. [118]

   BASTEN AJA: Subject to the following considerations, I agree with the judgment and orders proposed by Mitchelmore JA.

3. [119]

   Although this case involves a dispute as to the beneficial ownership of two properties, title to which was registered in the name of Wayan Arya Subakti, it is sufficient to focus on the property referred to as “the Glenwood property”, as that was the residence occupied by Mr Subakti and the respondent, Ms Togias, from the time of its purchase in July 2003 until Mr Subakti was arrested and imprisoned on 29 January 2010. With respect to the other property, known as “the Seven Hills property”, which comprised commercial premises which have since been sold, I agree with Mitchelmore JA that Ms Togias has not made good her claim to an equitable interest. [1]

Background circumstances

1. [120]

   The background circumstances have been set out in detail by Mitchelmore JA and may be summarised for present purposes as follows. On 15 February 2010, the New South Wales Crime Commission commenced proceedings under the Criminal Assets Recovery Act 1990 (NSW) seeking, and obtaining, a restraining order with respect to Mr Subakti’s interests in the Glenwood property, the Seven Hills property and funds held in various accounts. In May 2014, his interests in the properties were forfeited to the Crown. The present dispute is therefore between the New South Wales Trustee and Guardian, in whom title to the forfeited properties vested, and Ms Togias, who claims an interest in the properties.

2. [121]

   The interests of Mr Subakti and Ms Togias must have crystallised no later than 15 February 2010. It is not necessary to consider why it has taken 12 years for the dispute to come before this Court, nor why it took six years since the forfeiture orders were made in May 2014 for the proceedings to be commenced in the Supreme Court.

3. [122]

   It is common ground that Ms Togias made no direct financial contribution to the purchase of either property, [2] each being purchased by Mr Subakti, with funds provided by him and a bank mortgage in relation to Glenwood. Ms Togias’ claim to an interest in the properties turned on her continuing relationship with Mr Subakti and the care of two children of the relationship, born in January 2001 and May 2005 respectively. The Glenwood property was the family home from July 2003 until January 2010, a period of some 6.5 years.

4. [123]

   Ms Togias needed to establish that, as at January 2010 it would have been unconscionable for Mr Subakti, holding the legal title to the Glenwood property, to deny Ms Togias any beneficial entitlement to a share in the property.

5. [124]

   The requirement to establish unconscionability to invoke the equitable jurisdiction of the court is an entirely different exercise from that which might be engaged by a claim under s 20 of the Property (Relationships) Act 1984 (NSW), or a claim under s 79 of the Family Law Act 1975 (Cth). For example, s 20 of the Property (Relationships) Act provides:

6. [125]

   Similar provision is made by s 79 of the Family Law Act, which confers on the court a discretionary power to make an order “altering the interests of the parties to the marriage in the property”, taking into account a similar range of circumstances. A power to “alter” or “adjust” interests is quite different from the power to declare interests as they exist at a particular time.

7. [126]

   Whether Ms Togias has a claim based on indirect non-financial contributions to a domestic relationship is unclear, as is the extent of any such interest. It is necessary first to identify the principles to be applied in answering that question.

Availability of a remedial constructive trust

1. [127]

   While the origins of the principle are conventionally traced to observations of Deane J in Muschinski v Dodds, [3] with whom Mason J agreed, the summary by Mason CJ, Wilson and Deane JJ in Baumgartner v Baumgartner [4] succinctly states the principle:

2. [128]

   Baumgartner is sometimes relied on as authority for the proposition that there is a presumption that property should be held equally. However, it is important to note the context in which that was stated. The joint reasons continued: [7]

3. [129]

   Gaudron J also addressed this issue in a concurring judgment, stating: [8]

4. [130]

   Baumgartner was primarily concerned with financial contributions; the earnings contributions of the parties were assessed, making allowance for the period when the respondent was on maternity leave. The adjustments were identified in the joint reasons as follows: [9]

5. [131]

   Apart from making a financial allowance for the period of maternity leave, there was no attempt to value indirect non-financial contributions by the respondent; it was certainly not a case where the only contributions of one party were non-financial. There is no reason to suppose the Court would have commenced from a position of equality in a case such as the present.

6. [132]

   In Austin v Hornby [10] Ward J, having discussed the principles established in Baumgartner and noted reference to other authorities, concluded her discussion in the following terms:

7. [133]

   There is a distinction between a constructive trust imposed to reflect a common intention of the parties as to how a property would be held and a remedial trust based on the unconscionability of allowing distribution only by reference to the legal interests. Intention is, nevertheless, not entirely irrelevant in the latter case. It is necessary to identify the scope and nature of the “joint endeavour” in relation to specific items of property. For example, the Full Court of the Supreme Court of Western Australia dismissed proceedings brought by a woman in a de facto relationship with a man who was seeking, indiscriminately, a share of all the property owned by him. [12] In the present case, for reasons given by Mitchelmore JA, I agree that there was no joint endeavour with respect to the business run from the Seven Hills property. For that reason, the claim to a share of that property failed.

8. [134]

   What is less clear, however, is whether the mere existence of a de facto domestic relationship permits the party who has contributed nothing financially to the acquisition or maintenance of the property to enjoy a proprietary interest in the residence in which the parties lived and raised children. In Baumgartner, although the respondent had made monetary contributions, the Court adjusted the amount by reference to wages forgone by the mother for a period of three months while having and caring for her child. [13] That particular exercise would be inutile in this case as Ms Togias did not receive wages during any relevant period, nor did she forgo social security payments while undertaking homemaking and child-caring responsibilities. Rather any claim must turn on the inference that, by assuming homemaking and caring responsibilities, Ms Togias indirectly assisted Mr Subakti to earn income, at least in part illegally, with which the Glenwood property was purchased.

9. [135]

   In almost every case in which such a claim has succeeded, there has either been a pooling of financial resources, to which each party has contributed in a material respect, or there has been some element of representation or conduct suggesting that it was part of the joint endeavour that there be a common ownership of property acquired in the course of the endeavour, regardless of the source of the funds deployed to acquire the property.

10. [136]

    The point may be illustrated by reference to three cases. In the first, Green v Green, [14] the plaintiff had been brought by Robert Green (deceased at the time of the proceedings) from Thailand as a prepubescent girl. He asked her to come to Australia with him (through an interpreter) promising to look after her, pay for her expenses and arrange for her education. [15] He accommodated her first in a property in Kirrawee and then at Blakehurst. In relation to the acquisition of the property at Kirrawee, Gleeson CJ noted what occurred: [16]

11. [137]

    Referring to the reasons of the trial judge, Gleeson CJ continued: [17]

12. [138]

    In applying the relevant principles, Gleeson CJ reasoned: [18]

13. [139]

    Gleeson CJ concluded: [19]

14. [140]

    The rarity of such cases may be explained in part by a matter of chronology noted by the Chief Justice in his opening observations, namely that the need to invoke equitable principles giving the respondent a proprietary interest in land arose from the fact that the deceased had died about a year before the enactment of the Family Provision Act 1982 (NSW) which, he noted, “would have given the Court discretionary power to make provision for the surviving party out of assets owned or controlled by the deceased.” [20]

15. [141]

    The second case was a decision of the Western Australian Full Court, Lloyd v Tedesco. [21] The appellant failed at trial because she had failed to prove a case, as explained by the trial judge, Miller J, in the following terms: [22]

16. [142]

    Without endorsing the need for an actual intention to pool resources, Murray J accepted the thrust of this reasoning, expressed as follows:

17. [143]

    A third case concerning a domestic relationship was West v Mead. [23] Although the facts of that case arose some years after the commencement of the Property (Relationships) Act, the domestic relationship involved two women and the Act was not amended until 1999 to cover domestic relationships between persons of the same sex.

18. [144]

    West v Mead involved a changing relationship at a point in which the parties began to pool their earnings. After referring to the principles stated in Muschinski and Baumgartner, Campbell J made the following observations as to the relevant principles:

Application of principles

1. [145]

   It may readily be accepted that Mr Subakti and Ms Togias were involved in a relevant “joint endeavour”, namely a domestic relationship which involved them living together and bringing up children. Although it might be said that the ending of the relationship was not without “attributable blame”, the attribution of blame is only relevant in circumstances where the blame is attributable to the party seeking to invoke equity. [24] In this case the blame lay with Mr Subakti and his involvement in criminal activities. It was accepted that the relationship terminated unexpectedly (at least from the point of view of Ms Togias) with the arrest and incarceration of Mr Subakti.

2. [146]

   Because the equitable principles developed as legislatures were conferring on courts powers of redistribution of property on the termination of domestic relationships, [25] either by reference to principles of fairness or what is just and equitable (“the family law principles”), the more limited equitable principles (which expressly eschewed those grounds) have not been fully developed. Thus, the cases suggest that while non-financial contributions are not sufficient to create an interest in property owned by the other partner to the relationship, they may affect the quantum of the interest in circumstances where it otherwise arises because of a representation or a pooling of financial resources.

3. [147]

   On one view, to allow the partner who raised the children and looked after the home to obtain an interest in the property owned by the other partner is to allow seepage of the family law principles into the equitable jurisdiction of the court, an approach expressly denied in Muschinski and Baumgartner and by this Court in Bryson v Bryant. [26] In the last case the majority accepted that the earlier decision in Hibberson v George [27] adopted similar reasoning, imposing a constructive trust based upon the financial contributions of the parties to the relationship. Perhaps the only modification of established principle in that case was the recognition that pooling of resources was not required in every case. McHugh JA observed: [28]

4. [148]

   On the other hand, the broader approach may now be legitimate on the basis that there has been a change in the scope of the concept of unconscionable conduct in relation to domestic relationships over the last 40 years. It may be that the widespread legislative adoption of the family law principles is partly responsible for that change.

5. [149]

   Although the appellant contended that any entitlement of Ms Togias would involve an unwarranted expansion of the equitable jurisdiction of the court, a position which is readily supportable on the basis of statements of principle discussed above, in my view a different approach is available and is to be preferred. That approach would accept that it may be unconscionable for a partner holding the legal title to property of the joint endeavour to deny any beneficial interest in the partner who contributed non-financial benefits alone. The basic rationale for the preferred approach is that there is nothing new in the willingness of equity to have regard to indirect and non-financial contributions to a joint endeavour involving a domestic relationship and home ownership. If it be unconscionable for the working partner to deny a proprietary interest in property devoted to the domestic relationship in circumstances where there has been a pooling of resources, and, in that circumstance, to take account of non-financial contributions, it is difficult to justify denying to the non-working partner, who brings no financial resources to the relationship, a proprietary interest based on non-financial benefits alone.

6. [150]

   In one sense, the partner with the least by way of financial resources has a stronger claim to equitable protection than the partner who has some financial resources, but is not the primary income-earner. While there were statements in the reasoning of the Chief Justice in Green v Green which might be seen as inconsistent with this approach, the success of the mother and homemaker in that case appears to have turned on expressions of intention by the deceased purchaser of the property: indeed, it has been treated as a case of proprietary estoppel. [29] Although not necessarily irrelevant, the role of intention in such a case is limited, as explained in Muschinski, Baumgartner and West v Mead. While the deceased’s intentions and representations may well have justified the extent of the interest conferred in Green v Green, their absence does not support the conclusion that without them Ms Green would have got nothing.

7. [151]

   Where a claim is based entirely upon non-financial contributions, the party asserting the equitable interest must establish the extent and value of the contributions in the context of the joint endeavour. I accept that Ms Togias was entitled to an equitable interest in the Glenwood property on the basis that it was the family home, that she contributed (i) to its maintenance, (ii) to the ability of the registered owner, Mr Subakti, to engage in whatever activities provided the finance for the family, and (iii) by way of raising the children, thereby relieving Mr Subakti of a potential financial burden. On Ms Togias’ evidence, which was neither challenged nor supported by Mr Subakti, she also contributed to his legitimate business relationships by assisting in dealing with third parties, because her English was better than his. (On the other hand, the absence of any established profitability of the business rendered that assistance of no proven financial value.) However, I do not accept that in such circumstances, there is scope for a presumption of equal interests. Further, as Sifris J held in Hill v Love, [30] the value of contributions to family welfare by way of domestic assistance should not be assessed by reference to the commercial value of those services.

8. [152]

   In what is an entirely impressionistic exercise of valuing her entitlement, it is appropriate to take into account the period of the relevant contributions. [31] Although the relationship predated the purchase of the Glenwood property, her contributions must relate to the interest in the Glenwood property and thus cover a period when she was responsible for maintaining the home and was the mother with responsibility for one, and then two, children. However, the total relevant period was 6.5 years, which is a moderate time, well short of a lifetime contribution or even a contribution extending throughout the primary school years of the children.

9. [153]

   Taking these factors into account, but accepting that the exercise of valuation is impressionistic, and having regard to the exercise undertaken by Cohen J in Miller v Sutherland, [32] a case where there was no pooling of funds, I would conclude that Ms Togias was entitled to a 25% interest in the Glenwood property. As noted above, I agree that she had no interest in the Seven Hills property.

10. [154]

    GRIFFITHS AJA: I have had the benefit of reading the draft reasons of Mitchelmore JA and Basten AJA. I agree with the orders proposed by Mitchelmore JA for the reasons given both by her Honour and the additional reasons of Basten AJA which helpfully elaborate on some important considerations but not in a way which is inconsistent with Mitchelmore JA’s reasons.