- Frances and Leo Baumgartner pooled wages to buy a property in Campbelltown, NSW.
- The property was only registered in the husband’s name.
- Leo had contributed $50,981 to the property while Frances had contributed $38,206.64.
- When the couple separated, Mrs Baumgartner sought a declaration of an equitable interest in the property.
- The High Court majority (Mason CJ, Willson and Deane JJ) said that it would be unconscionable for one party to keep the property, therefore attracting equity’s intervention.
- A constructive trust was imposed over approximately half of the property representing the other half.
- There was no intention for the property to be a gift to Leo by Frances.
- Leo’s assertion that the jointly owned property was a solely owned property (despite the pooled funds) was unconscionable.
- Toohey J added that unjust enrichment could be used as a basis for the imposition of a constructive trust.
- The constructive trust was imposed on a 55/45 basis – reflecting the shares that the respective parties had pooled into the property.
“…a constructive trust may be imposed, even though the person on whom the trust is imposed had no intention to create a trust or to hold the property on trust. His Honour observed that in such situations an intention may be imputed in circumstances where the imputation is necessary ‘in good faith and in conscience’…”
(Mason CJ,Wilson and Deane JJ at pages 146 & 147, citing Allen v Snyder  NSWLR 685)
The full text is available here: https://jade.io/summary/mnc/1987/HCA/59
-- Download Baumgartner v Baumgartner (1987) 164 CLR 137 as PDF --
Save this case