Clark v Madsen
[1998] QDC 58
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- Unreported Judgment
- Clark v Madsen[1998] QDC 58
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Clark v Madsen[1998] QDC 58
Clark v Madsen[1998] QDC 58
IN THE DISTRICT COURT HELD AT GYMPIE QUEENSLAND | Plaint No 25 of 1296 |
[Before McMurdo M A, DCJ]
[M Clark v R Madsen]
BETWEEN:
MARGARET CLARK | Plaintiff |
AND:
REDGE OTTO MADSEN | Defendant |
JUDGMENT
Judgment delivered: | 7 April 1998 |
Catchwords: | Constructive trust – 2½ – 3 year de facto relationship Muschinski v. Dodds (1984-85) 160 CLR 583, Baumgartner v. Baumgartner (1987) 164 CLR 137 and Dunne v. Turner (unreported) Qld C.A. 196 of 1995 judgment delivered 28 August 1996, followed – the interests are apportioned 90 – 10 in favour of the defendant |
Counsel: | Mr Heyworth-Smith for the Plaintiff Mr Bourke for the Defendant |
Solicitors: | Trilby Misso & Co for the Plaintiff Justin F O'Sullivan & Edgar for the Defendant |
Hearing Date(s): | 18 February 1998 19 February 1998 20 February 1998 |
IN THE DISTRICT COURT HELD AT GYMPIE QUEENSLAND | Plaint No 25 of 1996 |
BETWEEN:
MARGARET CLARK | Plaintiff |
AND:
REDGE OTTO MADSEN | Defendant |
REASONS FOR JUDGMENT - McMURDO D.C.J.
Delivered the 7th day of April 1998
The plaintiff claims that in about October 1988 she formed a de facto relationship with the defendant. During this relationship the defendant sold his farm near Dalby and purchased the Golden Trevally Caravan Park, Tin Can Bay. The plaintiff and defendant lived at and ran the caravan park from February 1989 until their separation in August 1991. The plaintiff claims to be entitled to a declaration that the defendant holds his legal estate in the caravan park as trustee upon trust for the plaintiff and himself as co-owners, and consequential orders and directions. The defendant denies a de facto relationship existed, claiming that the plaintiff resided at the caravan park while she was without employment, refusing to accept wages from the defendant for assistance rendered by her. In August 1991 the plaintiff accepted a sum of $20,000 from the defendant. The defendant denies the property is held on trust for the plaintiff.
Although the value of the caravan park exceeds the jurisdiction of this court, counsel have undertaken to file all necessary documents waiving excess of jurisdiction.
The Law
In Muschinski v Dodds (1984-1985) 160 CLR 583 Deane J (with whom Mason J agreed) notes in his discussion of the history of constructive trusts at 614:
“Viewed in its modern context, the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual or presumed agreement or intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle.”
He further notes at 615:
“There is no place in the law of this country for the notion of ‘a constructive trust of a new model’ which ‘[b]y what ever name it is described, ... is ... imposed by law whenever justice and good conscience’ (in the sense of ‘fairness’ or what ‘was fair’) require it: per Lord Denning M R, Eves v. Eves [1975] 1 WLR 1338 at pp 1341, 1342 and Hussey v Palmer [1972] 1 W.L.R. 1286 at pp 1289-90. Under the law of this country ... proprietary rights fall to be governed by principles of law and not by some mix of judicial discretion (cf Wirth v. Wirth [1956] 98 CLR at pp 232, 247), subjective views about which party ‘ought to win’ ... The mere fact that it would be unjust or unfair in a situation of discord for the owner of a legal estate to assert his ownership against another provides, of itself, no mandate for a judicial discretion that the ownership in whole or in part lies in equity in that other: cf Hepworth v. Hepworth (1963) 110 CLR 309 at pp 317-318. Such equitable relief by way of constructive trust will only 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. That is not to say that general notions of fairness and justice have become irrelevant to the content and application of equity. They remain 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 621 he added:
“Notions of what is fair and just are relevant but only in the confined context of determining whether conduct should, by reference to legitimate processes of legal reasoning, be characterised 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.”
These comments were approved by Mason CJ, Wilson J and Deane J in Baumgartner v Baumgartner (1987) 164 CLR 137 at 148.
In Dunne v. Turner (unreported) Qld CA 196 of 1995, judgment delivered 28 August 1996, Pincus JA cites Baumgartner (supra) as confirming the 3 following propositions:
“1. A constructive trust may be imposed even though the person held to be trustee had no intention to create a trust or to hold property on trust.
- An intention to create a trust may be imputed where it is necessary to do so in good faith and conscience.
- A principle which may be applied is that which restores to a party contributions made to a joint endeavour which falls, when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them.”
Pincus JA then concludes, after reviewing Muschinski v. Dodds (supra); Baumgartner (supra) and the comments of [Kirby P (as he then was)] in Bryson v. Bryant (1992) 29 NSWLR 188 at 201, that contributions financial and otherwise to the purposes of a joint relationship are relevant for this purpose.
In a separate judgment in Dunne v. Turner (supra) McPherson JA notes:
“Recent decisions of the High Court have established that when an enduring joint relationship between a man and a woman comes to an end, their respective rights in and to property do not, or do not necessarily, fall to be determined according to strict legal entitlement. Ownership at law may be qualified by the equitable remedy of a constructive trust which may be imposed regardless of actual or presumed agreement or intention on the part of those concerned. See Baumgartner v. Baumgartner (1987) 164 CLR 137 at 148 (Mason CJ, Wilson and Deane JJ).
The criterion for imposing an equitable constructive trust is, to my mind, somewhat less easy to determine.”
After discussing Muschinski v. Dodds (supra) his Honour noted that he did not consider a “pooling of earnings” was indispensable to relief. His Honour then in discussing with approval the judgment of Deane J with whom Mason J agreed in Muschinski v. Dodds adds:
“Their Honours in that case went on (at 149) to speak of ‘contributions’ being made ‘on the basis of, and for the purpose of, that joint relationship’... In determining the extent or value of the respondents beneficial interest, it was also proper for her Honour to take account of contributions that were not pecuniary.”
THE EVIDENCE
The plaintiff's evidence
The plaintiff is a divorced woman currently working as a cleaner. She has 2 adult children. She separated from her husband in early 1986. She jointly owned a block of flats with her husband. She borrowed money to pay out her husband's interest in the flats and subsequently sold them leaving her with $32,000 cash. She owned her car but had no other assets of significance. She worked as lift driver at Waltons until February 1987 when she worked as a housekeeper for an elderly couple earning $250 per week.
She met the defendant when her children were young and she and her husband were living in Dalby. During this period the defendant's marriage broke up. She left Dalby in the 1970's but occasionally saw the defendant because her mother lived nearby in Jandowae.
In September 1986, when the plaintiff was 47 years old, she phoned the defendant to tell him of her changed marital situation and he invited her to dinner at the Waterloo Hotel. He took her to her home and stayed the night. The relationship blossomed. He would visit her in Brisbane when he visited his daughter and she would spend weekends on his farm near Dalby, driving out Friday afternoon and returning Sunday. On their first outing they told each other they loved each other. She believed this was genuine and not just a casual relationship. During weekends at the farm the defendant would pay all expenses and would put petrol in her car for the trip home. The relationship was sexual, and she would cook his meals, wash clothes and leave food in the freezer for him. They would often go to dinner on Saturday night at the local hotel. They exchanged gifts. At times she spent the night with the defendant at his daughter's home in Brisbane
Her next employment was seasonal work at the Golden Circle cannery. She continued to spend weekends with the defendant. In 1988 the defendant was suffering from asthma and was concerned the chemicals and dust from the farm were responsible. She was sick of the 3½ hour drive to the farm. They discussed a move to Brisbane but the defendant wanted to work and “have something that was his own”. She suggested caravan parks as it was “something that we could both do”. The defendant was interested in selling his farm to purchase a caravan park and they both looked in newspapers for parks for sale. They jointly inspected caravan parks, staying in them overnight and were both impressed with a park at Childers. During inspections she would look at the books of the park. The farm was put up for auction but was not sold. They then inspected the subject caravan park at Tin Can Bay. The farm was sold for $330,000, with the defendant permitted to remain on the form to harvest a crop and sell it and his machinery. They both discussed which caravan park was the best for them and decided on Tin Can Bay as it would not have so much late night passing traffic.
She ceased her employment in 1988 and on the defendant's invitation moved in with him, as she understood it, permanently. Some items from the flats were in storage at Redcliffe. All her personal items and possessions such as fridge, deep freeze, TV, linen etc. were taken to the farm. The defendant paid for living expenses but she paid for her clothes, personal items and medical expenses. She did not look for employment. She assisted the defendant working with him side by side in loading rubbish on to the trucks for removal and cleaning machinery to prepare it for sale, and cleaning the house, including washing the walls. The caravan park was purchased for $405,000 by the defendant with the proceeds from the sale of the farm and a short term loan until he sold his machinery.
They moved into the caravan park on 17 March 1989. In the interim, after leaving the farm, they stayed at the plaintiff's daughter's place at Deception Bay.
To make the most of the Easter trade they decided to buy 5 additional vans on which the plaintiff paid a $10,000 deposit from her savings. Her stored items at Redcliffe were collected for use in the caravan park. Her son assisted in moving these goods and other items from the farm. The vans were delivered whilst the defendant was away and she paid with her own cheque the remaining $11,000, approximately. The $21,000 was a loan from her to the defendant. It was always intended the vans be his property. Half the loan was repaid within 12 months and the balance six months later. The vans were partially depreciated that financial year by the defendant. She and the defendant shopped for items needed in the caravans, like crockery and linen. She purchased those items and was subsequently repaid by the defendant.
She handled the book work at the caravan park taking bookings, giving receipts, preparing statistics, preparing rebates for pensioner tenants on their electricity and writing out cheques for suppliers. The defendant alone signed the cheques. Tendered books of account show an average of four receipts per day. She also ran the caravan park shop without the defendant's assistance until he learnt how to use the till after less than 12 months. She cleaned the caravans, attended to mail, and looked after the gardens. She made souvenir-shirts which were sold in the shop. Both she and the defendant worked very hard and long in the caravan park, agreeing to do so for a couple of years, and then planning to retire when the defendant was about 65 to travel, perhaps to Kakadu. She had no holidays and no time off.
They increased the number of sites on the park from 14 to 40. Extensive improvements were made to the caravan park including signage, electricity, roads and a kitchen in the owners flat. Old trees were removed and new trees planted. She painted four or five concrete slabs, and mowed the land around the vans and the nature strip. The defendant also worked hard maintaining and improving the caravan park with the assistance of a casual worker and tradesmen. The park was fully booked over Easter, during winter and on average half the year.
Improvements were financed from takings from the park. The gross takings doubled in the first year. The shop operated daily from 7am to 10am and 4pm to 7pm and catered mainly for park users, with some external customers. Living expenses were met out of takings from the shop and not accounted for: she could take money from the till as required for her needs, including medical expenses. Causal employees' wages were paid out of the shop's takings and not accounted for. Therefore, shop trading figures were not accurate.
She denied the defendant discussed paying her wages, nor was there any income-splitting arrangement. She saw herself as with the defendant forever. Prior to moving in with the defendant when earning a wage, she had little savings, after paying expenses, although she lived comfortably.
The defendant maintained an interest in a seed grading business in Dalby and was sometimes away from the park for a few days at a time when she ran the park on her own. The seed grading business was sold for $90,000 and the defendant used the proceeds to repay the bank and pay his 1988/89 tax bill ($89,000).
When they moved to the caravan park she owned a station wagon which was too small for use on the park. In mid 1990, they saw a van more suitable and she traded her car for it paying the extra $7,000 to make up the $ 12,000 purchase price. After receiving tax advice, the defendant bought the van from her for $12,000 in July 1991 as he could not claim it as a tax deduction whilst it was in her name. Her bank statements show a deposit in July 1989 of $3,000: she has no recollection of what this deposit was but does not believe it came from the defendant.
She lived with the defendant in a one bedroom flat sharing a bed and a sexual relationship and doing his washing, sewing and knitting. The defendant did not refer to her or introduce her as his wife. They went everywhere together as a couple, including weddings, christenings and family Christmases. They went out socially in Tin Can Bay on only a few occasions as they were busy with the park. They were affectionate to each other. The defendant was bitter about the breakdown of his marriage in about 1970, and neither of them wished to marry again after their divorces: marriage was not discussed because of this understanding. She never used the term “Mrs Madsen”, always using her name “Clark”. An insurance company representative filled out an insurance policy application for the caravan park in the name of Mr & Mrs Madsen. An Ambulance subscription was taken out in joint names by the parties.
She did not discuss her own financial affairs with the defendant although he knew how much she had in the bank. There was never any discussion with the defendant about her having any share in the caravan park. She did not believe she was entitled to a share or was part-owner as she thought she would be with the defendant forever: she thought she would “get something out of it” because of her contribution. There was no pooling of monies to buy the caravan park, nor at any stage of the relationship.
In mid 1991 the defendant began for the first time to take an interest in the books. Their relationship, sexual and otherwise, continued as before. On 29 August 1991, without any indication the defendant told her he wanted her to leave by the end of the week. He refused to discuss this or give reasons. She remained for 3 days until her daughter could help her pack and move her furniture. As she was about to leave, the defendant gave her a $20,000 cheque saying “Margie I know you won't do anything stupid.” She had no idea what this cheque represented and took it to a solicitor who advised her to bank it. There were discussions with the defendant about him giving her a further $10,000. Although he agreed to do so, it was never forthcoming. By this time, the hard work of improving in the park was easing: it was more a matter of maintenance.
The Defendant's Evidence
The defendant is the owner/operator of the Golden Trevally Caravan Park, Tin Can Bay. He separated from his wife in 1970 and decided he would never marry again. From 1973 he owned and worked a form near Dalby. He has two adult children.
He has known the plaintiff and her husband from the mid ‘60s. In 1986 she phoned him to say she was in Brisbane and next time he was down to get in touch with her, making no mention of her husband. He presumed they were together. He phoned her and arranged to meet her, expecting her husband as well. She then told him of the separation. A sexual relationship commenced. He has no recollection of ever telling her that he loved her. She regularly visited his farm on weekends and he, on rare occasions, came to Brisbane. On weekends she would do his washing and hers. He provided all meals and put petrol in her car for the return trip. She contributed nothing financially. In October 1988 she finished her job and as she had nowhere to go, he invited her to come out to the farm. No time frame was discussed. She looked for employment around Dalby but was not successful.
He had been suffering from asthma, was considering selling the farm and suggested a caravan park as a good investment alternative. The farm was sold towards the end of 1988, a few weeks after it being passed in at auction. When he was looking at caravan parks the plaintiff accompanied him for companionship. She had no real input into inquiries made by him. He was not interested in the books of caravan parks unless he was genuinely interested in that particular caravan park. Only when he was genuinely interested would he look at the books. His decision to buy the caravan park was his alone and purchased in his name only. During his marriage, he owned property with his wife as joint tenants. The funds from the sale of the farm were not sufficient to purchase the caravan park, so he borrowed money until the clearance sale of machinery from the farm enabled him to repay it.
As the plaintiff did not have a job, he told her she could come to Tin Can Bay with him where there was a job for her. They moved to Tin Can Bay in early 1989. He decided to purchase more vans and the plaintiff offered to lend him the funds until his money became available from the machinery sale. He repaid $3,000 shortly afterwards from the sale of some machinery. It was not put to him in cross-examination that this was false. In March 1990 he repaid $12,000 and in August 1990 $13,000. A motivation in repaying the money spent by the plaintiff on the caravans was so that he could depreciate them for tax purposes.
The plaintiff cleaned the vans, worked in the shop and did a lot of the book work. He soon learnt to operate the till and assist her in the shop. With the assistance of paid workers and tradesmen, he built new roads, new sites, and carried out maintenance and repairs.
Before leaving the farm he discussed with the plaintiff drawing a wage although it was not decided how much she should be paid. He raised this with her on many occasions but she always replied “it will be right we will fix it up later.” There were disagreements over her not telling him what she wanted for wages resulting in him asking her to leave some months before the final separation. On the advice of his accountant he offered to pay her $100 a week, as over 52 weeks that would be just below the tax free threshold: the plaintiff did not wish to pay tax and he could get a tax deduction. She worked a full day starting early in the morning and finishing well into the evening. There were times during the day when she was not working. When the plaintiff left the caravan park he discussed with her what he owed and she would not say. He then gave her the $20,000 cheque. The separation occurred as a result of an argument with the plaintiff over money: he wanted to pay her wages which she would not accept and refused to tell him what she wanted by way of wages.
They lived in a single bedroom flat with a double bed and enjoyed a sexual relationship. Finances were kept absolutely separate: he had no idea of the plaintiff's finances.
He did not show affection in public to the plaintiff by holding hands or putting his arm around her. There was never any discussion of marriage: neither wished to remarry. He did not consider the relationship to be permanent. It was a relationship of companionship. There was never any suggestion from either of them that she had any claim to an interest in the park. He did not discuss nor plan to retire at 65.
The defendant's accountant wrote to the defendant's solicitor on 23 March 1993:
“My journal shows these entries:
17.03.89 | 5 caravans |
| 21,750.00 |
|
| Loan Margaret |
|
30.6.89 | Purchases |
| 1,902.23 |
|
| Loan Margaret |
|
29.03.90 | Cheque 489 repaid Margaret | 12,000.00 | |
6.8.90 | Repaid Margaret |
| 13,000.00 |
Balance of $1344.77 was classified as private expense.”
Other Witnesses
A number of witnesses were called who knew the parties from 1989 to 1991. They formed the view that the parties were an affectionate happily married couple who did everything together. The parties shared a one bedroom flat with a double bed.
They confirmed the plaintiff worked hard running the caravan park 7 days a week, cleaning the vans, running the shop, sometimes cleaning the toilets and amenities block, making clothes for herself and for the defendant, planting trees and mowing. About half way through the plaintiff's period in the caravan park the defendant then took on some office work.
In the time the plaintiff lived and worked in the caravan park there were many improvements: new sites, vans and concrete slabs. Since that time, these improvements have been maintained rather than extended. The defendant now employs several people to do the work done by the plaintiff.
The plaintiff's daughter, Debbie Sutton, confirmed that the parties shared a room at the farm in Dalby and at the caravan park. They went out together socially and to family functions like weddings and christenings, where they danced and acted “like a normal couple”. The plaintiff did most of the domestic cooking and made promotional t-shirts for the caravan park.
Shirley Merrylees, the daughter of the defendant, recalled the parties popped in on 3 or 4 occasions to visit her at her Bulimba home but did not stay together overnight.
On an occasion before the final breakup the parties had separated and the plaintiff said to her: “Your father thinks I am after his money, but I'm not, I love him.” The parties then reconciled before the final separation 2 or 3 months later. Unfortunately this was not correctly put by counsel to the plaintiff and she had no proper opportunity to comment.
The Valuation Evidence
Registered valuer Gregory Jorgensen values the Golden Trevally Caravan Park Tin Can Bay as at August 1991 (the date of separation) at $405,000 with the land at $200,000 and improvements at $205,000, and as at November 1997 at between $635,000 and $730,000. No valuation was given for the time of purchase by the defendant of the caravan park, although the purchase price is some evidence of its value. The real estate market was slow in the period following 1989 as it was the start of a recession. Values did not change a great deal. The level of income obtained from the caravan park does not fully justify the original purchase price of $405,000 in 1989. The current higher valuation reflects the lower interest rates obtainable from very safe investments such as banks.
His opinion is based upon what the plaintiff told him and on a site inspection during which he was not permitted to inspect the interior of any buildings or structures other than the amenities building. His report shows the defendant's wages bill increased from zero in 1990-91 to $4,947 in 1992; $6,633 in 1993; $5,840 in 1994; $6,985 in 1995 and $39,131 in 1996.
Evidence of Industrial Award Rates
Towards the end of the second day, the plaintiff tendered, without objection, a copy of “Part 11, Award Compliance and Union Related Matters”, together with copies of Queensland Government Industrial Gazettes from September 1989 to November 1991. Those documents were headed by a fax title page from the Australian Liquor, Hospitality and Miscellaneous Workers Union, which inter alia noted
“Ordinary Hours of Work 6 a.m. - 6 p.m. Mon - Sun
Saturday | Ord. hours × 1½ |
Sunday | Ord hours × 1½ |
Overtime × ½ 1st 3 hours × 2 thereafter
Annual leave 4 weeks + 17½% loading
Reasonable costs follow”. (Exhibit 11)
The gazette of 26 May 1990 showed a base wage of $324.70 per week for a caretaker. The exhibit was evidence that a caretaker was also entitled to live-in accommodation, overtime, allowances for outside work and cleaning toilets and four weeks annual leave plus holiday loading.
The exhibit was tendered without objection and at the end of the day was released into the custody of counsel for the plaintiff for copying. Counsels' addresses proceeded the following day. No objection was taken during addresses to the exhibit and counsel for the plaintiff referred to the exhibit as evidence supporting the proposition that had the plaintiff been paid a wage she would have been entitled to $324.70 per week plus accommodation, overtime and loadings, justifying a wage of $400 - $500 per week.
On 3 April 1998 the parties' lawyers were notified of my intention to give judgment in this matter on 7 April 1998. On 6 April 1998 I received submissions from counsel for the defendant objecting to the tender of Exhibit 11 as he had not seen a copy of it prior to its tender. He has now seen a copy and objects to its tender as:
- the fax title page is hearsay
- the award is not in its entirety and there is no evidence the award would apply to the work done by the plaintiff.
Counsel for the defendant did not inform the court that a copy of Exhibit 11 was not given to him prior to addresses. He took no objection to it on the third and final day of trial. As a result the plaintiff has relied on the document in her case when she could quite easily have called evidence by telephone link. No objection having been taken at the relevant time, it would be unfair to the plaintiff to exclude the evidence now. Such evidence is regularly tendered in this form by consent, for example, in personal injuries cases. In these circumstances, Exhibit 11 is some evidence of the matters I have stated. The matters raised by counsel for the defendant are, however, self-evidently relevant to the weight to be attached to the exhibit.
Was There A De Facto Relationship?
It is surprising the defendant claims there was no de facto relationship with the plaintiff and does him no credit. It is clear from the defendant's own evidence and certainly from that of the plaintiff and the witnesses called by her, whose evidence was not challenged, that the parties lived in a de facto relationship throughout the plaintiff's stay at the Tin Can Bay caravan park from March 1989 until August 1991.
I also accept that the parties lived in a de facto relationship from the time the plaintiff moved to the defendant's farm near Dalby in about October 1988.
The defendant had lived alone for many years and from 1986 enjoyed the companionship of the plaintiff in their developing relationship. He invited her to live with him on the farm in about October 1988 and she understood by so doing she was undertaking a long term permanent relationship, although not marriage. It seems that was not the defendants understanding, however I accept he did not communicate his understanding that the relationship could be terminated at will, to the plaintiff. Had he done so, she probably would not have stayed with him. At the farm, they shared the same bedroom and a sexual relationship and she cooked, washed and looking after the house for them both. I accept the de facto relationship continued until she was asked to leave the caravan park in August 1991. Apparently there had been a brief separation 2 or 3 months earlier. This was not canvassed in evidence but it seems this did not affect the length of the relationship.
I find the defendant's claim, that the plaintiff was only offered accommodation at the farm and caravan park until she obtained another position and that he saw her as a paid worker, as fanciful. He may well have mentioned wages in an effort to improve his own taxation position but certainly did not pay them. I accept the plaintiff found the mention of wages distasteful because she believed she was in a relationship with a man whom she loved and with whom she was prepared to work hard for the comfort and benefit of them both. Whilst the defendant was not entirely comfortable with this at times, he was nevertheless prepared to accept the benefits of her unpaid services until August 1991 when he requested her to leave. Everyone who knew them saw them as a couple. They had a joint ambulance subscription. Their insurance agent when filling out their insurance policies took them to be man and wife.
Is the Plaintiff Entitled to Declaration that the Defendant Holds His Legal Estate in the Property as Trustee Upon a Constructive Trust for the Plaintiff and Himself as Co-owners? The question as to whether the defendant has acted unconscionably such that a constructive trust should be imposed is, in this case, difficult and border-line. The relationship was not of great length: just under 3 years. The plaintiff has made no direct financial contribution to the subject property. It was not the intention of either of the parties that she should receive a share in the property at the time it was purchased. Indeed the defendant, because of his bitterness about his earlier marriage breakdown and property settlement was very keen that this not happen. The plaintiff believed she would get something out of her contribution to the caravan park business and the relationship with the defendant.
The law recognises there is no need for the parties to form a common intention in order for a constructive trust to exist. The law also recognises that contributions, financial and otherwise, to a relationship can be taken into account. See Dunne v. Turner (supra).
The plaintiff was certainly a hard worker. She assisted the defendant in cleaning the farmhouse after its sale and in loading rubbish for removal from the form to meet the requirements of the purchaser. She therefore made some very small contribution to the successful finalisation of the farm sale. She further assisted him in cleaning machinery for sale, although he did the bulk of the work. The proceeds from the sale of the machinery were put towards the purchase price of the property and she contributed, again in a small way to this. They stayed in the short interim period between farm and caravan park with the plaintiff's daughter, a convenient arrangement organised by the plaintiff. The plaintiff and her son assisted in moving chattels from the farm and from storage at Redcliffe for use on the caravan park. Some of her chattels were used in the caravan park, saving the defendant expense and assisting in earning income, some of which went to improving the property. She assisted the defendant in deciding to purchase a caravan park and this particular caravan park, although it was clearly his decision as he had the necessary capital to purchase it and she did not.
Having moved to the caravan park she undoubtedly worked very hard in the business, not only doing the bulk of the work of caring for the domestic needs of the parties but also looking after all the books (single handedly for some months), taking care of bookings, running the shop, cleaning the vans, gardening, mowing and planting trees, and so on, as described in her evidence. She ran the park single handedly in the absence of the defendant when he attended to his seed grading business which was subsequently profitably sold.
There is no doubt the defendant worked equally hard.
The plaintiff had $32,000 from the sale of her flats and she used about $21,000 of this to buy some new vans in March 1989. This was repaid by the defendant who partially depreciated them in the 1989 financial year. In addition, the plaintiff used her money to help the defendant buy crockery, linen and other items needed for the caravan park. The defendant claims to have repaid $3,000 in July 1989. A deposit for this amount is shown in the plaintiff's bank statements. She cannot recall the defendant paying her this sum and can give no explanation, other than a number of smaller cheques which may have been banked together. She was somewhat vague as to details regarding her financial matters which were not as important to her as to the defendant's financial affairs were to him. Nevertheless the defendant has no independent proof this payment was made to her. He was not frank in his tax returns in that money was taken from the shop till and not accounted for. In these circumstances, I accept the independent evidence of the letter from the defendant's accountants to his solicitors that loans for the caravans and other purchases totalling $23,655.23 were repaid on 28.3.90, with $12,000 and on 6.8.90 with $13,000, the balance of $1,344.77 being classified as a private expense. I find this was probably as the plaintiff did not want to pay tax on interest. I am not satisfied the defendant repaid $3,000 in July 1989.
The plaintiff traded in her car and purchased with a further $7,000 of her funds a van for $12,500 which was used for 12 months by them personally and in the caravan park business. The defendant maintained the vehicle and then purchased it for $12,000, 12 months later.
The substantial improvements made to the park were financed out of the income to the business to which the plaintiff made a very significant contribution. Labour used for maintenance and improvements was paid from the shop takings to which the plaintiff had contributed very significantly.
Tendered award rates suggest the plaintiff may have been entitled for her work to a wage of $324.70 plus live in accommodation, overtime plus allowances for outside work and cleaning toilets and holiday loadings. She worked 7 days a week from early morning until mid evening, although there was some free time during these hours. Had she been paid a weekly wage, $450 would have been reasonable. She would also have been entitled to annual holidays and loading which were never taken.
I am satisfied the plaintiff would not have worked such long hard hours in the caravan park or provided this financial assistance had she not believed that the relationship with the defendant was permanent, although neither party was interested in marriage because of their failed marriages.
The plaintiff, in deciding to lend her money in this way to the defendant and to work jointly with him in this business venture, was giving up her right to another working and personal life elsewhere, an opportunity to spend more time with her daughter and grandchildren who lived in Redcliffe, and the chance to obtain higher interest rates more securely on her money. She has acted to her detriment. She thought she was contributing to a permanent relationship and she thought “I was getting something out of it”.
On the other hand, the plaintiff received free board and keep and with the defendant's knowledge was able to take money from the till of the shop as required. There is no suggestion she lived highly. Indeed, she made her own clothes and clothes for the defendant. The defendant gave the plaintiff $20,000 when she left the caravan park, apparently in recognition of her efforts. The plaintiff's financial records suggest that she was not able to accumulate large amounts of capital from her wages prior to her relationship with the defendant, although she lived comfortably.
Despite the $20,000 payment made by the defendant at the end of the relationship, I am finally satisfied that it is unconscionable that the defendant should now assert the entire beneficial interest in the caravan park as his, bearing in mind the substantial contributions made by the plaintiff during the relationship. Were it otherwise, the defendant would gain the benefit from the plaintiff's many contributions and efforts to maintain and improve the property, which were considerably beyond the value of $20,000 plus keep, in all the circumstances. It would be inequitable to permit the defendant to profit from those contributions over almost three years of the relationship. Whilst the payment of $20,000 recognised that contribution in part, it is not sufficient, in my view, to avoid a finding of unconscionability on the part of the defendant.
The plaintiff is entitled to a declaration that the defendant holds his legal estate in the property as trustee upon a constructive trust for the plaintiff and himself as co-owners.
The next consideration is the terms of that constructive trust. The general equitable principle is that equity favours equality. Here however the relationship was a comparatively short one. The property could not have been purchased but for the defendants financial contribution to the purchase price. The plaintiff made no direct financial contribution. In those circumstances a very significant adjustment should be made to avoid any injustice which would result if account were not taken of the disparity between the individual contributions of the parties, both financially and in kind. It is my view that the beneficial interest in the caravan park should be apportioned in favour of the defendant on a 90/10 basis. At the time of separation the caravan park was valued at $405,000.
Both parties have requested that if the plaintiff be entitled to such a declaration, the orders be for a sum of money rather than an actual declaration of constructive trust and consequent orders. Ten per cent of $405,000 is $40,500. The defendant has already paid $20,000 to the plaintiff. The amount outstanding then is $20,500.
I will hear argument as to the orders sought consistent with this judgment.