DISTRICT COURT OF QUEENSLAND

1. [1]
   The parties lived in a de facto relationship at No. 14 Bridge Street, Albion until September 1992, when the plaintiff Mrs Smith left, taking with her their son, who had been born in July 1985. The parties had continuing contact, not only to do with their son, but also through the plaintiff’s continuing to work in an upholstery and furniture business which traded as John Brown Design from 14 Bridge Street and (from a date in the first part of 1993) in a factory nearby in Hudson Street. About May 1993, that employment ended, perhaps in accordance with legal advice.

2. [2]
   The plaintiff began these proceedings by a Supreme Court writ issued 9^th January 1994 seeking declaration of a 50% beneficial interest in the house property mentioned and in “all of the goodwill, fixtures and fittings, plant and chattels, stock in trade, sundry debtors and other assets” of the business and ancillary relief, including appointment of a trustee or trustees on the statutory trust for sale under s. 38 and following sections of the Property Law Act 1974. In the circumstances, and given the time that has elapsed, the parties agreed it would be inappropriate to proceed directly to order sales in the event of the plaintiff’s success, and that any declarations made could appropriately be accompanied by an intimation from the Court of the sum of money Mr Ward might pay to acquire or extinguish Mrs Smith’s interests.

3. [3]
   By agreement of the parties, the action was transferred to the District Court in October 1998.

4. [4]
   About 1983, Miss Smith and Mr Ward met through an organisation which provided social support for people who found themselves without partners. She had four children, and it seemed all but the youngest daughter had left, or would shortly leave home, which was a rented Housing Commission residence at Enoggera. Mr Ward had a daughter who lived with her mother, but regularly came to stay with him. The plaintiff’s case is that she and the defendant, by the things they did, if not expressly, pooled their assets and income in a joint household in his house at 14 Bridge Street, that he always spoke of it as “ours”, rather than as his, more than once declared his determination to get the title transferred to joint names, and proposed marriage, even giving an engagement ring.

5. [5]
   Similar descriptions and declarations were said to have been forthcoming from him regarding the business. It had begun as a weekend and evening activity that Mr Ward conducted from home while he carried on employment as a storeman with Wattyl Paints. Somewhere along the line, he ceased that employment, in the expectation of exploiting his apparent talent as a furniture maker and upholsterer full time in other employment. When the prospective employer failed to “come good”, the decision was made (the plaintiff says at her suggestion and encouragement) to expand the business into a full-time activity. This was successful. Mr Ward was soon employing other men (and the plaintiff) in the business which he continued to run from home. It appeared to take some years before concerns about the legality of this led to the move to Hudson Street. Much earlier, the accountant (unidentified) insisted that the business should be conducted on a more regular basis, with proper records kept, and so on. This strong advice was implemented from 1^st July 1986, which is when the plaintiff says the business “started officially”. She was the bookkeeper, telephone answerer, caterer and tea lady to the employees, sole office staff, cleaner and the like. I accept her evidence regarding her contributions to the business, which extended to using her own money to provide an urn, and some of the consumables used in the business, such as tea and coffee, toilet paper and stationery, the tax deductions for which the business claimed, although it did not reimburse her on those occasions when she paid for such items. The business is no longer the defendant’s. He has sold it to a company, albeit one which he owns and controls, about 1996. It seems that not all of the assets formerly used in the business were transferred.

6. [6]
   It is convenient to note at this point the embarrassing lack of documentary material or corroborating evidence to support the parties’ evidence – embarrassing from the Court’s point of view in that findings have to be made on important factual issues based only on the opposed contentions of parties to a failed relationship who seem quite bitter towards each other and, in my opinion, who tended to see things from their own points of view to the extent of giving the Court a more or less distorted picture. One of the great contests was about the date and circumstances of the commencement of cohabitation. The plaintiff says cohabitation was suggested by Mr Ward, after there had already been intimacy on visits or outings, because he was sick of living a single person’s life, she being hesitant to abandon the security of her home, and its convenient location near her younger daughter’s school and the employment of another child. She says she moved, bringing all her furniture and effects, about the beginning of 1984.

7. [7]
   Mr Ward’s evidence was calculated to make his denials of the various declarations, promises and proposals mentioned above more believable by presenting a completely different picture. He says cohabitation of the parties at 14 Bridge Street commenced only six months (or less) before their son was born, when she suddenly announced she was three months pregnant, behind in her rent payments, in a word, desperate. In cross-examination of the plaintiff it was suggested to her she knew full well at the time that the defendant was romantically linked with another lady, who was named. As Mr Ward presented his case, he was acting charitably, to put a roof over the pregnant plaintiff’s head, and because he felt somewhat “guilty”. Ungallantly, more than once in his evidence, he placed the blame for what he said was the unwanted coming of a child on the plaintiff. For example, at page 88 he said he asked her to move in “because I felt guilty about the situation because I thought she had enough common sense to take tablets”. Mr Favell, cross-examining, went on to remind Mr Ward that his evidence in chief had been that the plaintiff asked to move in. So far as the other named lady is concerned, he watered down the impression previously given by asserting the only relationship was a shared interest in outings to which she would drive so that Mr Ward might be free to drink – in return for which service he would pay a few dollars for her entry fee, or on some such account.

8. [8]
   The evidence I accept suggests that both parties may have been struggling financially when cohabitation commenced. Mr Ward could not recall how much he was bringing home from Wattyl – it might have been as little as the $300 and something per week, which Mrs Smith suggested. At times he had trouble meeting the monthly mortgage payments to the Metropolitan Permanent Building Society of $160 – adding weight to the plaintiff’s claims to have met some of those payments from her own funds. Her contribution to the household income was a supporting parent’s benefit of something over $300 per fortnight, which she said she was advised by the Department she could continue to get for six months or so after moving in with Mr Ward, and did get. As well, she was in receipt of maintenance payments from her husband and board paid by her older daughter (whose plans to move to Adelaide were frustrated) and, I think, a working son. She brought in $3,000 in a bank account, which was wholly expended satisfying the needs of the common household. There being no particular need in Mr Ward’s house for the bulk of the furniture the plaintiff brought to it, this was sold off in dribs and drabs by Mr Ward to obtain funds to meet household expenses and in some instances (I find) needs of the business for stock. The parties differ as to whether the proceeds of sale were ever given over to Mrs Smith. In my view, the probabilities are that none ever were.

9. [9]
   It is not appropriate for the Court to be critical of parties whose resources are limited for failure to obtain and present the best evidence that might be available. I have felt acutely conscious that there are or may be documents about which would assist in resolution of some of he conflicts between the parties. I have in mind medical records relating to the pregnancy which might show the plaintiff’s address at relevant times, Housing Commission records which might show the same thing, and the plaintiff’s punctuality in paying her rent, Department of Social Security records which might show when payment of benefits ceased and what information the plaintiff gave the Department, bank statements which might corroborate the plaintiff’s claim to have paid seven or eight $160 mortgage instalments. The accountant whose advice led to the wise change in procedures of the business from 1^st July 1986 might well have been able to shed useful light on whether the plaintiff was then presented as a part owner of or partner in the business. Mr Ward asserted that the only discussions that occurred with Mrs Smith on the topic of the house being put into joint names arose when she asked him to attend to it, and he responded that she would get no such interest, he regarded the property as his daughter’s and their son’s and would make a will disposing of the property accordingly, with her having a right to reside in it at most; if such a will was ever made, the Court did not see a copy; Mr Ward said some things in his evidence rather suggesting that he saw the property as reserved for his daughter alone.

10. [10]
    In the absence of material of the kinds described in the preceding paragraph, having nothing but impressions of the parties to go on, I have preferred the plaintiff’s account as to the time and circumstances of commencement of cohabitation. Generally speaking, I prefer and accept her evidence. It is difficult not to feel she exaggerated in her claims of being taken to task by Mr Ward when she referred to property as his, to be met by his insistence it was theirs. I find it hard to imagine that many opportunities for such conversations would arise. I will accept that on occasions the house was referred to as “ours” and also that Mr Ward declared to Mrs Smith (and in front of her daughters) a determination to transfer the house into their joint names. I think it was her legitimate expectation that this would happen. She brought everything she had to the relationship, and to this point, has taken out very little. There has been no challenge to her account of the extent of her services in providing from her resources food and groceries for the household (Mr Ward always purchased the meat), doing the cooking, cleaning, washing and so on for the whole household. Mr Ward challenged her claim to have done gardening. She cared for Mr Ward as a wife, and for his daughter on the many occasions when she was there, likewise for his son. I was left with a troubling impression that Mr Ward did not acknowledge the very large role Mrs Smith has played in seeing that their joint responsibilities as parents of the boy were attended to.

11. [11]
    In my opinion, this case comes within the principle of Baumgartner v Baumgartner (1987) 164 CLR 137, and in particular what appears in the leading judgment of Mason CJ, Wilson J and Deane J at 149:

“The case is accordingly one in which the parties have pooled their earnings for the purposes of their joint relationship, one of the purposes of that relationship being to secure accommodation for themselves and their child. Their contributions, financial and otherwise, to the acquisition of the land, the building of the house, the purchase of furniture and the making of their home, were on the basis of, and for the purposes of, that joint relationship. In this situation the appellant’s assertion, after the relationship had failed, that the Leumeah property, which was financed in part through the pooled funds, is his sole property, is his property beneficially to the exclusion of any interest at all on the part of the respondent, amounts to unconscionable conduct which attracts the intervention of equity and the imposition of a constructive trust at the suit of the respondent.

It therefore becomes necessary to determine the terms of that constructive trust. The facts that the Leumeah property was acquired and developed as a home for the parties and that, at least indirectly, it was largely financed out of money drawn from the pool of their earnings, this being one of the purposes which the pool was to serve, combine to support an equality of beneficial ownership at least as a starting point. Equity favours equality and, in circumstances where the parties have lived together for years and have pooled their resources and their efforts to create a joint home, there is much to be said for the view that they should share the beneficial ownership equally as tenants in common, 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. The question which has caused us particular difficulty is whether any such adjustment is necessary in the circumstances of the present case to avoid any injustice which would otherwise result by reason of disparity between individual financial contributions. The conclusion to which we have come is that some such adjustment is necessary.

Although the present case is close to the borderline, we do not consider that it is possible to treat the respective financial contributions of the parties as being approximately equal. Even after crediting the respondent with the amount she would have earned during the period of three months during which the respondent was precluded from working by reason of having and caring for their child, it is agreed that the respective contributions were approximately 55 per cent as to the appellant and 45 per cent as to the respondent, that is to say, the appellant contributed almost a quarter more than the respondent. The court should, where possible, strive to give effect to the notion of practical equality, rather than pursue complicated factual inquiries which will result in relatively insignificant differences in contributions and consequential beneficial interest. We do not think, however, that the difference in the present case can be regarded as relatively insignificant. Nor has it 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. In these circumstances, though acknowledging that the case is close to the borderline, we consider that the constructive trust to be imposed should declare the beneficial interests of the parties in the proportions 55 per cent to the appellant and 45 per cent to the respondent.

There are, however, other adjustments which should be made in the interests of justice. Those adjustments are all in favour of the appellant. The appellant should be entitled to receive from the proceeds of any sale of the property repayment of the contributions effectively made by him before and after the period during which the parties were living together and pooling their resources. That is to say, the appellant should be entitled to be paid the net proceeds of the sale of his unit ($12,883.41) which were devoted to the purchase of the property less the amount of payments of instalments under the mortgage over the unit which were made from the pooled earnings during the period of cohabitation. The appellant should also be entitled to be repaid the instalments under the mortgage over the property which he has paid during the period since the termination of the relationship between the respondent and himself subject to an off-setting adjustment to reflect any benefit enjoyed by the appellant through use and occupation of the property during that period. The final adjustment which should be made in the appellant’s favour relates to the furniture which was taken by the respondent when her relationship with the appellant terminated.”

12. [12]
    Preceding passages in the judgment (144ff) make it clear that a constructive trust may be imposed independently of the parties’ actual or presumed agreement or intention. In the present case, the imposition of the constructive trust in respect of the house property which the plaintiff contends for is the right and equitable outcome. Such an outcome, in my view, does no violence to and does not frustrate the parties’ implied agreements or actual intentions throughout the period of their cohabitation. Baumgartner itself, like other authorities cited by Mr Page SC (who appeared for the defendant) shows that a departure from strict equality will often be appropriate. See Harmer v Pearson (1993) 16 Fam LR 596, Dunne v Turner BC 96-4833 (CA 196 of 1995, 20.8.96), Hibberson v George (1989) 12 Fam LR 725, Brown v Manuel (1996) DFC 95-170, Marks v Burles (1994) DFC 995-152; cf. Grant v Edwards (1986) 1 Ch 638; Mr Page also referred to Fuller v Meehan  BC 9900463 (Appeal) 1323 of 1998, 26.2.99) and Allen v Snyder (1977) 2 NSWLR 685.  However, Baumgartner points to equality being the starting point in contrast to the situation where property is dealt with under the Family Law Act 1975: see Mallet v Mallet (1984) 156 CLR 605.

13. [13]
    It will be noted that in Baumgartner a fairly precise measurement of the respective financial contributions of the parties was made and given effect to. That seems to me inappropriate in this case. The plaintiff had an income after she ceased to receive a supporting parent’s benefit, as an employee of the business. Once things became “official” from 1^st July 1986, her hours were recorded in books kept by her, which were in court (I thought), but did not become evidence. Predictably, the plaintiff said these records understated her hours, the defendant said they overstated her hours. He said, for example, she would stop work early, to go to collect their son from childcare or school.  She said (and it is corroborated by other evidence) that she was on duty seven days a week 24 hours a day, given that the business was conducted from home and that many of its customers found it convenient to call (in person or by phone) outside ordinary working hours; at least at times, the employees appear to have been there on Saturdays as well as through the week. The plaintiff was paid wages in accordance with the hours recorded. My impression is that hours were recorded (most likely understating the true situation) to justify payment to the plaintiff of the agreed sum which she needed for housekeeping, clothing and the like, in the parties’ view. The tenor of the plaintiff’s evidence is that everything she earned was consumed in general household expenses in that way and, at times, as she has said in purchasing items for the business, or meeting the occasional monthly payment due under the mortgage over the property. Just as the plaintiff, subject to her performing her obligations as a wife and mother, may be seen as engaged in the business all the time, so was Mr Ward. The evidence does not show what he earned from the business. In the unusual circumstances, I find it quite inappropriate, indeed impossible, to say that his contributions to the pooled income in the household outweighed hers, or that hers outweighed his. It must be remembered that the business was conducted in the house itself, where both of them were about. It was not just Mr Ward who carried out the upholstery, fabrication and repair works that were done in the business; the male employees, a few of whom were in Court (two gave evidence) obviously did much of the physical work. The plaintiff appears to have done a small amount as well, as well as representing the business at the “Home Show” and by way of seeking out possible customers – in one case, at least, securing a lucrative hotel client. Also, the plaintiff said she had the responsibility for fobbing off customers whose orders were not ready, and the like.  In my opinion, the plaintiff’s failure to obtain any equity in the business, notwithstanding her large direct and indirect contributions to its success, and the enrichment of Mr Ward (if only by his ownership of equipment and stock) is an additional factor pointing against a half interest in the house property being scaled back in his favour.

14. [14]
    The plaintiff’s case for a beneficial interest in the business is nothing like as strong as her claim in respect of the house property. She appears to have been actively involved with the accountant who advised putting things on a formal, properly documented basis. This involved setting up a system whereby she was paid wages (her share of a weekly overall cheque which she made out to wages for all employees of the business); there was no similar arrangement made for wages or salary to Mr Ward. The following passage of evidence at page 19 in Mrs Smith’s evidence in chief is enlightening:

“When he didn’t take drawings how would the family be supported and the expenses paid?—Well, everything he paid for he would pay by cheque and it was paid through the business. The electricity was paid by cheque through the business, everything was paid through the business. He even wrote a cheque for the meat. If he was buying meat he would write a cheque for the meat. He started, sort of, when he did take drawings he would start spending a lot on Endeavour Homes and RSL Homes, 2 or 300 dollars a month and then he started drawing for the casino and he would draw money out and gamble a lot of money. I remember one time he drew out $5,000. I didn’t stand there and see him gamble it at the table but I saw him put $100 notes over and I remember on the way home I had to shout him a milkshake because he had no money left and he took $5,000. I remember he took $5,000 with him so, yeah.

When the business was started or before the business was started, was there any discussion about who was to be the owners of the business?—Well, it, sort of, wasn’t discussed. It was just our business. It was, sort of, we just sort of worked together. We didn’t really think about putting anything on paper of anything. It was just work, work, work.

But was there any discussion about who were to be the owners of it –

MR PAGE: Well, the witness answered that question, in my submission. The question was asked and answered.

MR FAVELL:  She gave – she wasn’t responsive to the question. She gave a different answer. I seek to be persistent with it. She, in my submission, was talking about formalities, that is putting things into various names and the like. I am asking a different question and that is, “Was there any discussion about who were to be the owners?”

HIS HONOUR:  I will allow it but it is getting close to cross-examination.

MR FAVELL:  Was there any discussion about who was to be the owners of it?—No, it was just our business and he said he would fix everything up in both names, like, you know.”

15. [15]
    The entitlement of Mr Ward to treat the income of the business as he saw fit seems to have been accepted by Mrs Smith. In contrast to the positive evidence in her case as to beneficial ownership of the house property, and appropriate amendment of the registered title, she was not prepared to make similar claims in relation to the business, even in response to Mr Favell’s rather obvious request.

16. [16]
    There may be much to be said for the proposition that Mrs Smith’s contributions to the business were more extensive than the secretarial functions for which she received payment – in due course eaten up in household expenses, and even ploughed back into the business without reimbursement. She may well have been engaged “full time” in the business just as much as Mr Ward, so that it could be seen as the product of their joint wholehearted efforts. The tenor of her evidence is that she assumed she was a joint proprietor. This is far from establishing joint intentions of the parties, let alone agreement of the parties, that she be a joint owner. Ignoring those matters, I am unable to say it would be unconscionable for Mr Ward to successfully deny Mrs Smith a beneficial interest. On the evidence, the business was underway, although in a small way only, before cohabitation commenced. Thereafter, despite the extent of her contributions (for which she received substantial recompense from the business, whether or not it was full or proper recompense), there seems to be no factor whatever indicating joint proprietorship. She is not shown to have participated in management decisions. Presumably, profits or losses from the business were incorporated in his tax returns. Mrs Smith appears to have accepted this situation, again in contrast to the interest she pursued in obtaining a legal title to the house property.

17. [17]
    In that regard, Mr Ward had demonstrated willingness to admit his spouse to the status of registered co-owner. The history of the registered title is relatively incident-packed. According to Mr Ward, he agreed to purchase the property on some kind of instalment contract in 1969. He became the registered owner only on 11 June 1975, after things had somehow gone wrong with the original vendor, and he obtained a building society loan to pay it out. Subsequent to that, on 16 June 1976 the property became registered in the names of Mr Ward and his then spouse.

18. [18]
    The view taken above regarding Mrs Smith’s failure to establish an entitlement to an equity in the business makes it unnecessary to resolve an interesting conflict between Mr Wright, a business broker, who valued the business for the plaintiff, and Mr Feddema, a Chartered Accountant, who valued it for the defendant. I accept the expertise of each of them to offer an opinion on value at the time when the parties ceased cohabitation. So far as stock is concerned, their figures were within $50 of each other. It would seem a practical course to adopt the mean figure. The difference, so far as plant and equipment were concerned, was between $3,000 and $4,000. Mr Feddema’s approach was to adopt written down values from the depreciation schedule prepared for taxation purposes of the business, then continue such depreciation for the appropriate number of months. Mr Wright’s approach was to use the depreciation schedule simply to identify the plant and equipment (perhaps taking note of opening values) then apply to the items in the list values current at the time for such equipment, which were available in Mr Wright’s own extensive database as well as published sources such as the “Red Book” – the substantial items were all motor vehicles. Neither gentleman ever saw the items being valued, and so their condition (a matter going to value) was a matter of speculation. In case there should be any utility in the Court expressing a view on this issue, I indicate a preference for the approach of Mr Wright, which strongly showed there was an established market in such items, when businesses were sold, to which vendors and purchases could be expected to have regard. On the other issue of difference between the two “valuers”, for what it is worth, I prefer the approach of Mr Feddema. This issue boils down to whether valuing this business called for the inclusion of a goodwill component. Mr Wright, from his perspective of a business broker standing to earn commission from a vendor client willing to sell, thought there was goodwill. I think the probabilities are it could have been obtained, if he and Mr Ward cooperated willingly in seeking a buyer. The typical purchaser who might be interested would be one “buying a job”, although there might be other categories of purchaser, fortuitously, such as someone else already in the business with premises and staff, who could achieve economies of scale. Mr Feddema asserted there was no goodwill, because no-one could be found to purchase the business as an investment: there would be no return on capital, if goodwill had to be paid, because, on the performance of the business, Mr Ward was not even making wages: that is, if he had been able to find someone to employ him to manage the business in the way he did, such employer would have had to pay up to twice as much as Mr Ward was drawing from the business. Mr Feddema was convincing in saying that he would advise any client of his against such a proposition. He conceded that there would be clients who would not take his advice. I accept that in the current market there are purchasers of businesses who are “buying a job”, who may pay much more than a business is worth, to gain an occupation – and perhaps have something to sell in the future, which may be worth a lot more, if they do well. It was clear that Mr Wright’s approach would be feasible only if Mr Ward were prepared to agree to a restraint of trade, precluding any dealings whatever with his existing (or perhaps past) customers, and any activities in the relevant area of commerce within, say, 10km of the premises of the business or within three years of the sale. It is absurd to proceed on the basis that Mr Ward would have agreed to such a restraint, which would have left him with nothing to do, and only a very modest capital sum in return. The truth of it is that all he really had to sell was his “job” and the tangible items. Such considerations aside (it may be they have nothing to do with a valuation exercise), I prefer Mr Feddema’s opinion on this particular issue, and the justification offered for it, to Mr Wright’s.

19. [19]
    The plaintiff thus establishes an entitlement to a declaration along the lines of that sought by her in respect of the house property. She had no connection with or claim on the house until after 1983, and has had no connection with it for the last 7½ years. The parties agree it would be inappropriate in the circumstances for the Court to proceed directly from the declaration to an order requiring sale of the property. (Mr Worrell has provided an affidavit showing his consent to act as trustee.) Instead, it was common ground the Court ought to indicate the sum of money which appeared to represent Mrs Smith’s entitlement: with knowledge of that, the parties might be able to avoid a sale, or, indeed, any conveyancing–type procedures.

20. [20]
    The plaintiff’s claim is for half the increase in equity in the house from 1984 to 1992. She sought to add in the value of the business at the cut-off date (as to which the Court is against her), the value of certain purchases made for the house summarised in Exhibit 5 and amounts of $21,000 and $6,000 paid by Mr Ward to or on account of his ex-wife. The higher sum represented a property settlement, the smaller one the amount of certain business debts ultimately supported by a charge on the house property. In my opinion, both of those items ought to be regarded as part and parcel of the events that happened during the cohabitation; each may be seen as embodying a threat to the house property which it was in the interests of both parties to get rid of.

21. [21]
    So far as the “purchases for house” are concerned, they are items such as statuary to decorate the swimming pool the parties installed at 14 Bridge Street, a microwave oven and a barbecue – distinct from items listed by the plaintiff in another schedule designed to reveal expenditure on fixtures and maintenance and improvement of the house property itself, by painting, for example. These last are all subsumed in the agreed figure of $162,500. As to the others, there is force in Mr Page’s point that, as the case has been pleaded, Mrs Smith has made claims to an equity in identified assets, rather than a general claim to benefit in the overall enhancement of Mr Ward’s assets during the cohabitation. He referred to judgments delivered in the course of the pleadings battles in the matter of Stowe (1995) DPC 95-164, BC 9603304 (Owen J, Sup Ct of WA, 4..7.96) and BC 9703619 (5.8.97).  Nevertheless, given the way in which the trial was conducted, I think it can be said that Mr Ward conceded (by his Exhibit 8) expenditure of $2,510 on such purchases, of which he has had the enjoyment since 1992, to the exclusion of Mrs Smith; her claim amounts to one-half of the value. I do not think Exhibit 8 should be regarded as having the sole purpose of damaging the plaintiff’s credibility. In the circumstances, I propose to add the Exhibit 8 figure ($2,510) to the increase in value of the house property which happened during the cohabitation.

22. [22]
    The parties agreed to accept $162,500 as representing the value of the house property in 1992 when cohabitation ceased, this sum being the mean of their respective valuers’ opinions. I took it to be common ground the present value of the house was $200,000. I took it to be common ground that the plaintiff’s entitlement ought to be assessed at the time when cohabitation ceased, about September 1992. Mr Favell suggested alternative possibilities for compensating his client in respect of the delay, one that she receive half of the $37,500 increase in value since 1992, the other that she receive interest (10% per annum) on her notional entitlement in 1992. It would seem to me that fairness to Mr Ward dictates she ought to receive whichever is the lesser, given that the Court has had no explanation of the long delay that has occurred in this action coming to trial. (Fuller v Meehan, supra, contains a useful discussion of the appropriateness of compound interest.)

23. [23]
    It is also common ground that the plaintiff has to give credit to the defendant for his contribution by way of the value of the house when cohabitation commenced, less the mortgage debt secured on it at that time. Mr Stanaway, a valuer called by the defendant, estimated that value at $60,000. Although he agreed with Mr Favell in cross-examination that a fair valuation at that time might range as far down as $52,000, I do not think that concession justifies the Court’s declining to accept the opinion Mr Stanaway gave. He did, however, say that this opinion assumed the house had all the improvements he observed much later as of 1984. This was shown not to be the case in relation to a swimming pool, in particular, which Mr Stanaway said would add $5,000 to the value. On this basis I take $55,000 to be the 1984 value, and the indicator of Mr Ward’s contribution. It was common ground there ought to be a reduction reflecting the mortgage debt, as to which there is no precise evidence. The best estimate that can be made is $9,509, based on Exhibit 12, a notice of default dated 1^st December 1983 from Metropolitan Permanent Building Society which shows that as the mortgage debt on 17^th November 1983. An attached printout shows that the amount had been fluctuating around that figure for more than six months.

24. [24]
    There is a similar problem about identifying the mortgage debt in September 1992, which ought to come off the $162,500. The best estimate that can be made is $12,360.80 on the basis of Exhibit 10, a statement of account in respect of the housing loan as at 20 October 1994 and for the following four months issued by the ANZ Bank. In the course of that period, the balance reduced to $10,951.69, by dint fortnightly payments by Mr Ward of $200. During the trial I was attracted to the idea of projecting the four month history revealed by Exhibit 10 backwards to arrive at a figure which might have applied at an earlier date, such as the issue of the writ nine months before or the cessation of cohabitation about two years before. That would result in reduction of the $162,500 by more than $20,000. On reflection, I think it is Mr Ward who bears the onus of proof of establishing what sum ought to come off. The evidence does not justify the exercise just described. The only reduction the evidence does justify is the opening balance of Exhibit 10, which is the one adopted. Adapting Mr Favell’s setting out, one reaches the following:

Value of house in 1992 $162,500

Less mortgage debt   $13,361 

 $149,139

 Value of purchases for house     $2,510

 Total value  $151,649

 Less defendant’s equity in house in 1984 ($55,000 less $9,509)   $45,491

 Increase in value during cohabitation $106,158

 50% $  53,079

25. [25]
    Left to myself, I might not have been inclined to make the second subtraction: it is made in deference to the parties’ apparent agreement.

26. [26]
    The sum reached represents the Court’s best guess at what Mrs Smith might have recovered on a sale of the house property about the time of cessation of cohabitation, or commencement of the proceedings. She is entitled to some compensation for the delay she has suffered. Of Mr Favell’s alternatives I prefer awarding her half of the increase in value of the house property since 1992, that is $18,750. If a conventional interest payment were awarded, presumably from the date of the writ, I think it ought to represent what Mrs Smith might have earned by investing the money, rather than be a sum representing a quasi-penal rate applied to judgments in a more commercial context. I think the justice of the case is met by using the $18,750. The calculations made exonerate Mrs Smith from making any notional contribution to the costs of a sale; there was no evidence about such costs.

27. [27]
    In addition to making the declaration mentioned, the Court is willing to indicate its view that a sale of 14 Bridge Street could be avoided by the provision to Mrs Smith of the sum of $71,829.

28. [28]
    The parties will have the opportunity to make submissions to the Court as to what alternative or additional orders ought to be made after consideration of these reasons.