Baumgartner v Baumgartner

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Citation: Baumgartner v Baumgartner (1987) 164 CLR 137.

This information can be found in the Textbook: Edgeworth et all, Sackville and Neave's Property Law Cases and Materials, 8th edition, Lexis Nexis, 2008, pp. 374-7 [4.109].

Contents

Background Facts

  • A de-facto couple moved onto land bought by the man in his own name.
  • The woman provided the man her pay packet, which the man pooled and used for household expenses including mortgage repayments.
  • The man contributed $51,000; the woman $38,000; for a total of $89,000.
  • Upon the breakdown of their relationship, the woman sought a declaration that that she had an equitable interest in the house.

Legal issues

Judgment

Mason, Wilson and Deane JJ:

  • In Allen v Snyder, Mahoney JA (and not Glass JA, quoted above) was correct in acknowledging that a constructive trust may be imposed irrespective of the parties’ intentions to create a trust.
  • The appropriate test to impose a trust is not whether it is ‘fair’ or ‘reasonable’, but whether it is unconscionable not to impose a trust in the circumstances.
    • The Court considered Muschinski v Dodds in coming to this conclusion. Note that the conclusion of this present case cancels out the 'joint endeavour' idea because trusts can now be imposed for any sort of unconscionability.
  • In this case, there was no basis for a common intention constructive trust.
  • However, a constructive trust should be imposed because of the unconscionable use of legal title.
    • The woman did not intend to make a gift to the man. Everything was done together by the man and woman for their relationship and to support them both in the present and in the future.
    • The man’s assertion that the joint property is his sole property (despite being financed through pooled funds) amounts to unconscionable conduct which attracts the intervention of equity and the imposition of a constructive trust.

Toohey J:

  • Agreed with the majority, but added that unjust enrichment was an alternate basis for the imposition of such a trust.

Gaudron J:

  • Agreed with the majority, stating that (a) it was unconscionable for the man to retain the woman’s contributions, and (b) it is necessary to consider non-financial domestic contributions by the woman – often unable to be given a financial value.

References

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