Abbott v Clark

[2006] NSWSC 130

CITATION:	Abbott v Clark [2006] NSWSC 130
HEARING DATE(S):	23 February 2006
JUDGMENT DATE :	23 February 2006
JURISDICTION:	Equity
JUDGMENT OF:	Hamilton J
DECISION:	Resulting trust of property negatived where one third registered proprietor joined in borrowing only as guarantor.
CATCHWORDS:	EQUITY [99] – Trusts and trustees – Classification of trusts in general – Implied trusts – Resulting trusts – Where intention presumed – Rebuttal of implication – Intention to benefit – Evidence of common intention.
CASES CITED:	Abbott v Clark [2006] NSWSC 111 Calverley v Green (1984) 115 CLR 242
PARTIES:	Sylvia Abbott (P) Roy Clark (D)
FILE NUMBER(S):	SC 6464/05
COUNSEL:	K J Andronos (P) No appearance (D)
SOLICITORS:	MWA Lawyers (P) No appearance (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

HAMILTON J

THURSDAY, 23 FEBRUARY 2006

6464/02 SYLVIA ABBOTT v ROY CLARK

JUDGMENT

1 HIS HONOUR: This is an unusual case where the plaintiff, a widow, finds herself as joint tenant of a residential property (“the property”) with a man who, on the evidence, did her and her late husband a kindness by becoming involved with the property in order to provide a guarantee of the borrowing necessary for them to acquire it. They lost contact with him some 30 years ago and he cannot now be located either in Australia or in the United Kingdom, where it is more likely, on the evidence, that he lives, if still alive.

2 I have already delivered a judgment in which I dispensed with service of the summons in these proceedings on the defendant: Abbott v Clark [2006] NSWSC 111. I did that by reference to evidence of very extensive and thorough searches made by the plaintiff’s solicitor to attempt to trace the defendant. Further material has been brought to my attention by way of searches in the most up to date fashion, through the use of the Internet search engine, Google, to locate the defendant. All efforts, however, have proved futile.

3 The facts, which appear from the plaintiff’s evidence, are as follows:

(1) Mr and Mrs Abbott emigrated to Australia from the United Kingdom, arriving by ship in October 1972.

(2) On the journey from the United Kingdom, Mr and Mrs Abbott met and became friends with Mr and Mrs Clark, who were also emigrating to Australia.

(3) In the months following their arrival in Australia, Mr and Mrs Abbott looked for a home to buy and found the property. The property was part of a new estate developed by Stocks & Holdings (Design) Pty Limited (“the vendor”).

(4) Mr and Mrs Abbott unsuccessfully sought a home loan to fund the purchase of the property. A number of lenders refused to advance them the necessary loan moneys because they had not yet acquired a credit rating in Australia.

(5) Mr and Mrs Abbott informed the vendor of the difficulties they were experiencing in raising finance for the property. The vendor introduced Mr and Mrs Abbott to its solicitor, Mr Downey, who suggested they obtain a guarantor of their obligations under any loan agreement.

(6) Mr and Mrs Abbott informed Mr and Mrs Clark of their predicament. Unbidden, Mr Clark offered to act as Mr and Mrs Abbott’s guarantor.

(7) Mr and Mrs Abbott and Mr Clark attended a series of meetings with Mr Downey. In the course of the third and final meeting, on 20 July 1973, Mr and Mrs Abbott and Mr Clark executed a memorandum of mortgage and memorandum of transfer.

(8) The memorandum of transfer was to Mr and Mrs Abbott and Mr Clark as a joint tenants and all three became mortgagors of the property to secure the loan.

(9) Mr and Mrs Abbott paid:
(a) the whole of the deposit ($4,750) to the vendor;
(b) the whole of the stamp duty ($437.50) in respect of the purchase of the property.


(10) In about July 1973, Mr and Mrs Abbott moved into the property, where they lived and raised their family until, for reason of Mr Abbott’s ill health in 1994 (ie some 21 years later), they moved to Queensland.

(11) Shortly before Mr and Mrs Abbott moved into the property, Mr and Mrs Clark returned to the United Kingdom. The two couples corresponded until about 1976 when they lost contact. Notwithstanding some later attempts by Mr and Mrs Abbott to locate the Clarks, the two couples never got in touch again.

(12) From 1973 to 1996, Mr and Mrs Abbott paid:
(a) the whole of the repayments to the mortgagee;
(b) all outgoings, maintenance, upkeep and expenses in connection with the property.


(13) Mr Abbott died on 9 July 1996.

(14) After Mr Abbott’s death, Mrs Abbott continued to make repayments to the mortgagee, discharging the mortgage in September 1998.

(15) Subject to [5] below, Mr Clark has never paid any moneys, nor provided any services, in connection with the property.

(16) When Mr and Mrs Abbott moved to Queensland in 1994, their son occupied the property.

(17) Since Mr and Mrs Abbott’s son vacated the property, it has been tenanted from time to time and is tenanted at the present time. All rent has been paid to the Abbotts.

4 In the absence of evidence to the contrary, I make findings of fact in terms of the plaintiff’s evidence as set out above. In doing so, I bear in mind the following. First, the fact is that there is nothing inherently improbable about the version deposed to by the plaintiff. Secondly, on the evidence, the defendant has never re-appeared or taken any step for over 30 years to assert or make in any way any claim that he has a beneficial interest in the property.

5 Since the borrowing was made in the joint names of the plaintiff, her husband and the defendant and the borrowed funds were expended in payment for the property, it is not, of course, true to say that the defendant made no contribution to the purchase price. He did contribute with the borrowed funds to the purchase price and that, without more, would raise in his favour a resulting trust interest in the property concomitant with the funds he contributed, ie, somewhat less than one third. However, the resulting trust may be rebutted or qualified by evidence of a contrary intention common to the contributors of the purchase price: see per Mason and Brennan JJ (as their Honours then were) in Calverley v Green (1984) 115 CLR 242 at 261.

6 In my view, the correct conclusion from the facts that I have found is that it was the common intention of the parties that the defendant should not take any beneficial interest in the property and that the entire beneficial interest should vest in the plaintiff and her husband. Whilst this was not discussed in terms between them, the evidence indicates that the defendant volunteered to become a guarantor to enable them to receive a loan. One cannot find in the evidence a conversation concerning this subject matter beyond that. But that conversation, in combination with the other matters proved, in my view leads to the conclusion that it was agreed that the defendant was not to take a beneficial interest.

7 In those circumstances, in my view, the true situation is that the property, in the events which have happened, is held in trust by the plaintiff and the defendant for the plaintiff alone. In those circumstances it seems to me that a trust should be declared by the Court and appropriate ancillary orders should be made to effect the vesting of the whole of the legal title of the property in the plaintiff.

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