Anderson v McPherson (No 2)
[2012] WASC 19
•25 JANUARY 2012
ANDERSON -v- McPHERSON [No 2] [2012] WASC 19
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2012] WASC 19 | |
| Case No: | CIV:2210/2007 | 3-6 OCTOBER & 24 NOVEMBER 2011 | |
| Coram: | EDELMAN J | 25/01/12 | |
| 55 | Judgment Part: | 1 of 1 | |
| Result: | Presumption of resulting trust rebutted Declarations of plaintiffs' contractual entitlement made First defendant's counterclaims dismissed First defendant's claim for contribution and indemnity dismissed Consequential relief to be the subject of further submissions | ||
| A | |||
| PDF Version |
| Parties: | BRUCE WILLIAM ANDERSON CAROLYN ANDERSON STEPHANNIE MARRIEE McPHERSON TROY KENNON ANDERSON |
Catchwords: | Trusts Resulting trusts 'Presumption of resulting trust' Fact which is 'presumed' in a presumption of resulting trust Fact which must be rebutted Whether first defendant has rebutted the 'presumption of resulting trust' Trusts Resulting trusts 'Presumption of advancement' Meaning of presumption of advancement Whether presumption of advancement requires the assumption of an obligation to provide or support Relationships to which the presumption of advancement applies Whether presumption of advancement applies to a daughter-in-law in a relationship with parents in law in loco parentis (in place of parents) Whether such a relationship existed Declarations Declaration as to contractual entitlement under agreement Form of declaration should not extend beyond the contractual right Restitution Failure of consideration Meaning of 'consideration' Objective basis or condition for payments by first defendant Requirement that restitutionary relief cannot be inconsistent with contractual rights Lack of evidentiary foundation for the restitution award sought Restitution Undue influence Requirements of undue influence Whether first defendant was subject to the dominance and ascendancy of the first plaintiff Lack of evidentiary foundation for the restitution award sought Restitution Unconscionable dealing Meaning of 'unconscionable' dealing Whether the first defendant had a special disadvantage or weakness Whether the first or second plaintiff exploited any special disadvantage or weakness Lack of evidentiary foundation for restitution award sought |
Legislation: | Nil |
Case References: | Air Jamaica Ltd v Charlton [1999] 1 WLR 1399 Allcard v Skinner (1887) 36 Ch D 145 Attorney-General of New South Wales v World Best Holdings Limited [2005] NSWCA 261; (2005) 63 NSWLR 557 Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18; (2003) 214 CLR 51 Bank of Credit & Commerce International SA v Aboody [1990] 1 QB 923 Beecher v Major (1865) 2 Drew & Sm 431; (1865) 62 ER 684 Bennet v Bennet (1879) 10 Ch D 474 Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060 Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362 Bridgeman v Green (1755) Wilm 58; (1755) 97 ER 22 Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457 Brown v Brown (1993) 31 NSWLR 582 Brown v The NSW Trustee & Guardian [2011] NSWSC 1203 Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 Calverley v Green [1984] HCA 81; (1984) 155 CLR 242 Campbells Cash & Carry Pty Ltd v Fostif Ltd [2006] HCA 41; (2006) 229 CLR 386 Charles Marshall Pty Ltd v Grimsley [1956] HCA 28; (1956) 95 CLR 353 Christodoulou v Christodoulou [2009] VSC 583 Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447 Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd [1994] HCA 61; (1994) 182 CLR 51 Commissioner of Taxation v Linter Textiles Australia Ltd (in liq) [2005] HCA 20; (2005) 220 CLR 592 Cook v Fountain (1676) 3 Swan 585; (1676) 36 ER 984 DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1982] HCA 14; (1982) 149 CLR 431 Dullow v Dullow (1985) 3 NSWLR 531 Dyer v Dyer (1788) 2 Cox Eq Cas 92; (1788) 30 ER 42 Elliot v Elliot (1677) 2 Cas in Ch 231; (1677) 22 ER 922 Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83; (2005) 63 NSWLR 203 Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395 Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101 Goldie v Getley [No 3] [2011] WASC 132 Gouriet v Union of Post Office Workers [1978] AC 435 Grey v Grey (1677) 2 Swan 594; (1677) 36 ER 742 Hammond v Osborn [2002] EWCA Civ 885 Johnson v Buttress [1936] HCA 41; (1936) 56 CLR 113 Johnson v Smith [2010] NSWCA 306 Kara Kar Holdings Pty Ltd v Knudsen [2001] NSWCA 276 Kerr v Baranow [2011] SCC 10; [2011] 1 SCR 269 Knudsen v Kara Kar Holdings Pty Ltd [2000] NSWSC 715 Lake v Craddock (1732) 3 P Wms 158; (1732) 24 ER 1011 Lake v Gibson (1729) 1 Eq Ca Abr 291; (1729) 21 ER 1052 Lloyd v Spillet (1740) 2 Atk 148; (1740) 26 ER 493 Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635 Mahoney v Purnell [1996] 3 All ER 61 Martin v Andrews (1856) 7 El & Bl 1; (1856) 119 ER 1148 Martin v Martin [1959] HCA 62; (1959) 110 CLR 297 Micarone v Perpetual Trustees Australia Ltd [1999] SASC 265; (1999) 75 SASR 1 Miller v Dudman [2002] WASC 99 Murless v Franklin (1818) 1 Swan 13; (1818) 36 ER 278 Napier v Public Trustee (WA) (1980) 32 ALR 153 Nelson v Nelson (1994) 33 NSWLR 740 Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538 Peldan v Anderson [2006] HCA 48; (2006) 227 CLR 471 Perum Building & Construction Pty Ltd v Tallenford Pty Ltd [2007] WASCA 245 Pilkington v Inland Revenue Commissioners [1964] AC 612 Re Vandervell's Trusts (No 2) [1974] Ch 269 Robb Evans of Robb Evans & Associates v European Bank Limited [2004] NSWCA 82; (2004) 61 NSWLR 75 Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516 Royal Bank of Scotland Plc v Etridge (No 2) [2002] 2 AC 773 Ryan v Dries [2002] NSWCA 3 Salvo v New Tel Limited [2005] NSWCA 281 Scott & Hansen v Pauly [1917] HCA 60; (1917) 24 CLR 274 Sempra Metals Ltd v Her Majesty's Commissioners of Inland Revenue [2007] UKHL 34; [2008] 1 AC 561 Sexton v Titiro Trustee Company Ltd [2008] NZHC 715 Soar v Foster (1858) 4 K & J 152; (1858) 70 ER 64 Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315 Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422 Taylor v O'Beirne [2010] QCA 188 The Citadel General Assurance Company v Lloyds Bank Canada [1997] 3 SCR 805 Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 Torrance v Bolton (1872) LR 8 Ch App 118 Tranchita v Retravision (WA) Pty Ltd [2001] WASCA 265 Tufton v Sperni [1952] 2 TLR 516 Union Fidelity Trustee Co of Australia Ltd v Gibson [1971] VR 573 Vandervell v Inland Revenue Commission [1967] 2 AC 291 Wirth v Wirth [1956] HCA 71; (1956) 98 CLR 228 Wray v Steele (1814) 2 Ves & B 388; (1814) 35 ER 366 Yard v Yardoo Pty Ltd [2006] VSC 109 Yard v Yardoo Pty Ltd [2007] VSCA 35 Yoshino v Niddrie [2003] NSWSC 57 Z v Z [2005] FamCA 996; (2005) 34 Fam L R 296 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- First Plaintiff
CAROLYN ANDERSON
Second Plaintiff
AND
STEPHANNIE MARRIEE McPHERSON
First Defendant
TROY KENNON ANDERSON
Second Defendant
Catchwords:
Trusts - Resulting trusts - 'Presumption of resulting trust' - Fact which is 'presumed' in a presumption of resulting trust - Fact which must be rebutted - Whether first defendant has rebutted the 'presumption of resulting trust'
Trusts - Resulting trusts - 'Presumption of advancement' - Meaning of presumption of advancement - Whether presumption of advancement requires the assumption of an obligation to provide or support - Relationships to which the presumption of advancement applies - Whether presumption of advancement applies to a daughter-in-law in a relationship with parents in law in loco parentis (in place of parents)- Whether such a relationship existed
(Page 2)
Declarations - Declaration as to contractual entitlement under agreement - Form of declaration should not extend beyond the contractual right
Restitution - Failure of consideration - Meaning of 'consideration' - Objective basis or condition for payments by first defendant - Requirement that restitutionary relief cannot be inconsistent with contractual rights - Lack of evidentiary foundation for the restitution award sought
Restitution - Undue influence - Requirements of undue influence - Whether first defendant was subject to the dominance and ascendancy of the first plaintiff - Lack of evidentiary foundation for the restitution award sought
Restitution - Unconscionable dealing - Meaning of 'unconscionable' dealing - Whether the first defendant had a special disadvantage or weakness - Whether the first or second plaintiff exploited any special disadvantage or weakness - Lack of evidentiary foundation for restitution award sought
Legislation:
Nil
Result:
Presumption of resulting trust rebutted
Declarations of plaintiffs' contractual entitlement made
First defendant's counterclaims dismissed
First defendant's claim for contribution and indemnity dismissed
Consequential relief to be the subject of further submissions
Category: A
Representation:
Counsel:
First Plaintiff : Mr A P Rumsley
Second Plaintiff : Mr A P Rumsley
First Defendant : Mr D J Morris
Second Defendant : No appearance
(Page 3)
Solicitors:
First Plaintiff : Alan Rumsley
Second Plaintiff : Alan Rumsley
First Defendant : Bruce Havilah & Associates
Second Defendant : No appearance
Case(s) referred to in judgment(s):
Air Jamaica Ltd v Charlton [1999] 1 WLR 1399
Allcard v Skinner (1887) 36 Ch D 145
Attorney-General of New South Wales v World Best Holdings Limited [2005] NSWCA 261; (2005) 63 NSWLR 557
Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18; (2003) 214 CLR 51
Bank of Credit & Commerce International SA v Aboody [1990] 1 QB 923
Beecher v Major (1865) 2 Drew & Sm 431; (1865) 62 ER 684
Bennet v Bennet (1879) 10 Ch D 474
Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060
Blomley v Ryan [1956] HCA 81; (1956) 99 CLR 362
Bridgeman v Green (1755) Wilm 58; (1755) 97 ER 22
Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457
Brown v Brown (1993) 31 NSWLR 582
Brown v The NSW Trustee & Guardian [2011] NSWSC 1203
Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253
Calverley v Green [1984] HCA 81; (1984) 155 CLR 242
Campbells Cash & Carry Pty Ltd v Fostif Ltd [2006] HCA 41; (2006) 229 CLR 386
Charles Marshall Pty Ltd v Grimsley [1956] HCA 28; (1956) 95 CLR 353
Christodoulou v Christodoulou [2009] VSC 583
Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; (1983) 151 CLR 447
Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd [1994] HCA 61; (1994) 182 CLR 51
Commissioner of Taxation v Linter Textiles Australia Ltd (in liq) [2005] HCA 20; (2005) 220 CLR 592
Cook v Fountain (1676) 3 Swan 585; (1676) 36 ER 984
DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1982] HCA 14; (1982) 149 CLR 431
Dullow v Dullow (1985) 3 NSWLR 531
(Page 4)
Dyer v Dyer (1788) 2 Cox Eq Cas 92; (1788) 30 ER 42
Elliot v Elliot (1677) 2 Cas in Ch 231; (1677) 22 ER 922
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32
Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83; (2005) 63 NSWLR 203
Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395
Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101
Goldie v Getley [No 3] [2011] WASC 132
Gouriet v Union of Post Office Workers [1978] AC 435
Grey v Grey (1677) 2 Swan 594; (1677) 36 ER 742
Hammond v Osborn [2002] EWCA Civ 885
Johnson v Buttress [1936] HCA 41; (1936) 56 CLR 113
Johnson v Smith [2010] NSWCA 306
Kara Kar Holdings Pty Ltd v Knudsen [2001] NSWCA 276
Kerr v Baranow [2011] SCC 10; [2011] 1 SCR 269
Knudsen v Kara Kar Holdings Pty Ltd [2000] NSWSC 715
Lake v Craddock (1732) 3 P Wms 158; (1732) 24 ER 1011
Lake v Gibson (1729) 1 Eq Ca Abr 291; (1729) 21 ER 1052
Lloyd v Spillet (1740) 2 Atk 148; (1740) 26 ER 493
Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635
Mahoney v Purnell [1996] 3 All ER 61
Martin v Andrews (1856) 7 El & Bl 1; (1856) 119 ER 1148
Martin v Martin [1959] HCA 62; (1959) 110 CLR 297
Micarone v Perpetual Trustees Australia Ltd [1999] SASC 265; (1999) 75 SASR 1
Miller v Dudman [2002] WASC 99
Murless v Franklin (1818) 1 Swan 13; (1818) 36 ER 278
Napier v Public Trustee (WA) (1980) 32 ALR 153
Nelson v Nelson (1994) 33 NSWLR 740
Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538
Peldan v Anderson [2006] HCA 48; (2006) 227 CLR 471
Perum Building & Construction Pty Ltd v Tallenford Pty Ltd [2007] WASCA 245
Pilkington v Inland Revenue Commissioners [1964] AC 612
Re Vandervell's Trusts (No 2) [1974] Ch 269
Robb Evans of Robb Evans & Associates v European Bank Limited [2004] NSWCA 82; (2004) 61 NSWLR 75
Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516
Royal Bank of Scotland Plc v Etridge (No 2) [2002] 2 AC 773
Ryan v Dries [2002] NSWCA 3
(Page 5)
Salvo v New Tel Limited [2005] NSWCA 281
Scott & Hansen v Pauly [1917] HCA 60; (1917) 24 CLR 274
Sempra Metals Ltd v Her Majesty's Commissioners of Inland Revenue [2007] UKHL 34; [2008] 1 AC 561
Sexton v Titiro Trustee Company Ltd [2008] NZHC 715
Soar v Foster (1858) 4 K & J 152; (1858) 70 ER 64
Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315
Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422
Taylor v O'Beirne [2010] QCA 188
The Citadel General Assurance Company v Lloyds Bank Canada [1997] 3 SCR 805
Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389
Torrance v Bolton (1872) LR 8 Ch App 118
Tranchita v Retravision (WA) Pty Ltd [2001] WASCA 265
Tufton v Sperni [1952] 2 TLR 516
Union Fidelity Trustee Co of Australia Ltd v Gibson [1971] VR 573
Vandervell v Inland Revenue Commission [1967] 2 AC 291
Wirth v Wirth [1956] HCA 71; (1956) 98 CLR 228
Wray v Steele (1814) 2 Ves & B 388; (1814) 35 ER 366
Yard v Yardoo Pty Ltd [2006] VSC 109
Yard v Yardoo Pty Ltd [2007] VSCA 35
Yoshino v Niddrie [2003] NSWSC 57
Z v Z [2005] FamCA 996; (2005) 34 Fam L R 296
(Page 6)
Table of Contents
Introduction and summary 7
Deficiencies in the evidence 8
General background 12
- The persons involved in the case 12
The Tamar Street property 12
The purchase and ownership of the Baal Street property 12
The purchase of the Anstey Road property 15
The Anstey Road Agreement 16
The separation of Troy and Stephannie and subsequent events 18
- Why does a resulting trust arise? 19
What is 'presumed' in the 'presumption of resulting trust'? 22
The 'presumption of resulting trust' as applied to this case 25
The 'presumption of advancement' does not apply 26
- The meaning and basis of the 'presumption of advancement' 26
The 'presumption of advancement' is not a genuine presumption 28
The relationships to which the presumption of advancement applies 29
The presumption of advancement does not apply to Stephannie 29
The counterclaims generally 39
- The pleading 39
Reasons why the counterclaims must fail generally 40
- (1) The 'counterclaims' were contingent and the contingency did not occur 40
(2) The Baal Street and Anstey Road Agreements prevent relief 41
(3) Evidentiary gaps prevent the relief counterclaimed 41
(4) No legal basis for the unpleaded claim for disgorgement of profits 44
The counterclaim for failure of consideration 46
The counterclaim for undue influence 48
The counterclaim for unconscionable dealing 50
The claim for contribution and indemnity 54
Conclusion 54
(Page 7)
- EDELMAN J:
Introduction and summary
1 On 15 April 1994, a sale of land in Anstey Road, Forrestdale was completed. The purchasers were the plaintiffs (joint tenants of a half share) as tenants in common with the defendants (joint tenants of the other half share).
2 In this judgment I refer to the parties by their first names. I mean no disrespect by this; it is simply for clarity and to avoid confusion. The defendants, Troy and Stephannie, are the son and daughter-in-law of the plaintiffs, Bruce and Carol. Troy and Stephannie have twins, Harly and Tayla.
3 Most of the purchase price for the Anstey Road property was contributed by Bruce and Carol. However, Bruce and Carol agreed that they would live at Anstey Road with Troy and Stephannie and Harly and Tayla. It was agreed that Troy and Stephannie would make all the mortgage repayments, including payments for a loan which was to be used to build a rear residence on the property where Bruce and Carol would live.
4 In May 2006, Troy and Stephannie separated. This claim was subsequently brought by Bruce and Carol. Their case was primarily that Troy and Stephannie held their title to the Anstey Road property on resulting trust for Bruce and Carol in proportion to the contributions made by Bruce and Carol.
5 Both counsel placed substantial reliance on presumptions in their arguments concerning the resulting trust. This requires some navigation of the procellous waters of the language of 'presumptions' involved with resulting trusts. Once the presumptions are explained, the ultimate resolution of this issue turns upon uncomplicated factual matters, some of which were not in dispute.
6 I conclude that Stephannie has proved that the objective circumstances establish that the half share in the title to the Anstey Road property was transferred to Stephannie and Troy for their own benefit. They did not hold their interest on trust for Bruce and Carol and the 'presumption of resulting trust' has been rebutted.
7 But the trial was not to be so simple. At the start of the trial, counsel for Stephannie amended her pleading to introduce counterclaims based
(Page 8)
- upon mistake, failure of consideration, undue influence, and unconscionable conduct. The evidence led on Stephannie's behalf did not support any of these claims. The claim based on mistake was later abandoned.
Deficiencies in the evidence
8 It is necessary to deal at the outset of these reasons with a submission made in closing by counsel for Stephannie. The submission was that the court should ignore any deficiencies in evidence led on her behalf. Counsel for Stephannie said that changes to the plaintiffs' case meant that 'I didn't know the case that I had to answer' (ts 261). This ignorance was said by counsel to be 'a very good reason to allow me to make one or two assumptions that just fill in the gaps that the evidence leaves' (ts 262 - 263).
9 There is no basis in law for a court to fill evidentiary gaps which arise due to deficiencies in evidence which could have been led by counsel for Stephannie.
10 Nor is there any basis in fact for the submission that the plaintiffs' conduct of their case was such that Stephannie's legal representatives could not reasonably have understood the case put against her. It is necessary to explain the context in which this submission was made to show why this is so.
11 In their writ, the plaintiffs made a simple claim that they held their interest in a property in proportion to the contributions which they and the defendants had made to the property.
12 On 18 February 2008 the plaintiffs filed their statement of claim in these proceedings. With one exception, their statement of claim remained unamended throughout these proceedings.
13 The statement of claim provided details of the contributions by the plaintiffs. In par 19 of the statement of claim, although not in the writ or the prayer for relief, the trust was described as a 'constructive trust'.
14 On 15 July 2009 Stephannie's substantive defence was filed. Stephannie pleaded numerous contributions that she had made to the property. Stephannie also pleaded that the plaintiffs were 'in loco parentis', and that a 'presumption of advancement' arose: defence par 24.
15 The case had all the hallmarks of a simple case concerning a resulting trust. For the plaintiffs it was a case based upon an assertion of a
(Page 9)
- resulting trust arising from the plaintiffs' contributions. Stephannie had defended the claim on that basis by pleading a 'presumption of advancement' due to the familial relations between the plaintiffs and her and she had relied upon her contributions to the property.
16 On 29 September 2011 the plaintiffs filed a written opening outline. Although the words 'resulting trust' were not used, the case was squarely put on the basis that 'the equitable presumption is that they hold the legal estate in trust for themselves as tenants in common in shares proportionate to their contributions unless their contributions are equal'. The plaintiffs relied upon a leading decision on resulting trusts, Calverley v Green [1984] HCA 81; (1984) 155 CLR 242.
17 The same day, counsel for Stephannie filed submissions containing an opening outline. Counsel made submissions denying that a common intention constructive trust had arisen. Submissions were also made denying that a resulting trust had arisen. The submissions recognised that both types of trust pleaded required the presence of a common intention: pars 6, 15, 20, 27.
18 On the morning of the trial counsel for Stephannie filed written submissions saying that if the plaintiffs sought to amend their pleadings to plead a resulting trust then Stephannie 'will submit that any such trust (if any arose, which is denied) was undermined by one or more of the vitiating factors mentioned in Byrnes v Kendle [2011] HCA 26; (2011) 243 CLR 253 [115]. The relevant factors in this case are: estoppel; undue influence and unconscionable dealing': par 15 supplementary submissions. In the history of the action, this was the first time that any of these claims had been mentioned.
19 At the start of the trial, on 3 October 2011, counsel for the plaintiffs applied to amend the plaintiffs' pleading. He was given leave to amend to strike out the adjective 'constructive' which qualified the reference to trust in par 19 of the statement of claim (ts 8 - 9). This removed any doubt that the plaintiffs' case was based on an assertion of a resulting trust. During opening, counsel also accepted that there was nothing pleaded which could justify the alternative relief of 'equitable compensation' which had been sought in the prayer for relief (ts 27).
20 Counsel for Stephannie then made an opening statement. He explained that he intended to rely upon unpleaded allegations of undue influence, unconscionable conduct and estoppel. He claimed that he had not realised that the trust pleaded was a resulting trust, although he said
(Page 10)
- that he 'thought something must be amiss because I couldn't see an element of unconscionability that would support the imposition of a remedial trust in the nature of a constructive trust' (ts 21). He did not explain why the defence had pleaded matters such as a 'presumption of advancement' which was an apparent response to a resulting trust. Nor did he explain why the alleged change by the plaintiffs from a plea of a common intention constructive trust to a resulting trust required a wholly new counterclaim based on undue influence, unconscionable conduct or estoppel.
21 Counsel for Stephannie also sought leave to rely on all these unpleaded allegations without amending Stephannie's defence. I declined to allow this course. The trial adjourned at lunch on the first day to allow counsel further time to consider these new amendments.
22 On the second day, 4 October 2011, counsel for Stephannie filed an amended pleading. No objection was taken to this course and leave was granted for the amendment, with costs consequences reserved. The amended pleading introduced a new counterclaim and contribution and indemnity notice. Estoppel was not included. New pleas of undue influence and unconscionable conduct were accompanied by pleas of failure of consideration and mistake.
23 After filing the amended pleading, counsel for Stephannie then sought an adjournment of the trial on the basis that he could not 'be satisfied that the evidence that is before the court is adequate to prove each and every of the additional allegations made in the amended pleadings' (ts 53). The application for an adjournment was not opposed. The trial was briefly adjourned.
24 On the third day, 5 October 2011, the court reconvened following communication from counsel. Counsel for Stephannie said that he was ready to proceed, subject to the possibility that he may apply to recall the plaintiff's only lay witness if the case were adjourned part-heard and if something new arose as a result of further instructions that he received (ts 57).
25 The trial proceeded. The evidence concluded on the fourth day, 6 October 2011. The parties agreed to file written closing submissions with brief oral closing submissions on 24 November 2011.
26 In oral closing submissions, counsel for Stephannie applied to make a further amendment to Stephannie's pleading. He said that he needed to amend his pleading because he had not addressed all the elements of a
(Page 11)
- mistake which can make a contract voidable (ts 227). The amendment sought was to include allegations that the plaintiffs knew of Stephannie's mistake, or alternatively induced that mistake. It became apparent that there was no evidentiary foundation for the amendment. Counsel for Stephannie abandoned the amendment and the claim for mistake (ts 258 - 259).
27 There is no legal foundation for the submission that a lack of clarity in a plaintiffs' case provides a reason for the court to 'fill in the gaps that the evidence leaves'. This brief summary of the manner in which the trial was conducted also shows that, in any event, the factual basis for the submission is misconceived. Stephannie had every reasonable opportunity to present her case. Four points should be emphasised.
28 First, it was apparent on the face of the writ and the pleading that the plaintiffs' case was based on a trust arising from contributions made by the plaintiffs. The only possible contrary indication was a single paragraph, par 19 of the statement of claim, which described the trust as 'constructive'.
29 Secondly, Stephannie had defended the matter on the basis that a resulting trust had been pleaded against her. She had pleaded her contributions; she had pleaded a relationship between the parties akin to parent-child and had sought to raise a 'presumption of advancement'.
30 Thirdly, even if the plaintiffs had changed their legal case from one based upon a common intention constructive trust to one based upon a presumed-intention resulting trust, the pleaded facts were entirely unchanged and the trust alleged was still one based upon intention. The amendment provided no basis for the submission by counsel for Stephannie that because an allegedly different trust was asserted (as a matter of law) new counterclaims needed to be pleaded for undue influence, mistake (which was later abandoned), failure of consideration, and unconscionable conduct.
31 Fourthly, some of the evidence in relation to which Stephannie sought to fill evidentiary gaps in her case was expert evidence concerning the quantification of the value of the property. Counsel for Stephannie had sought an adjournment, and one had been granted. When the trial recommenced, there was no suggestion by Stephannie's counsel that he needed a further adjournment to prepare cross-examination of the valuer called by the plaintiffs.
(Page 12)
General background
32 The primary evidence in this case was given by Bruce and Stephannie. Stephannie called evidence from a friend, Ms Annette Gallagher. Expert evidence was called by Bruce from Mr Ross Lambert, a valuer. My findings of fact below derive from that evidence and the exhibits as well as an agreed statement of facts provided by the parties prior to trial.
The persons involved in the case
33 The first and second plaintiffs in this trial were Mr Bruce Anderson and Ms Carolyn Anderson.
34 Bruce and Carolyn have three children. One of their children is Troy Anderson. Although Troy was the second defendant in these proceedings, he took no part and agreed to abide by the decision of the court.
35 On 16 November 1991, Troy married Stephannie McPherson. Stephannie is the first defendant.
36 Troy and Stephannie have twin children, Harly and Tayla.
The Tamar Street property
37 From 13 March 1978, Bruce and Carolyn were the owners and registered proprietors of a property at 77 Tamar Street, Palmyra (the Tamar Street property). The Tamar Street property was contained in certificate of title vol 1428, folio 405.
The purchase and ownership of the Baal Street property
38 On 14 December 1992, Bruce and Carolyn contracted to buy property at 25 Baal Street, Palmyra (the Baal Street property).
39 On 2 February 1993, title to the Baal Street property was transferred to Bruce and Carolyn as joint tenants. The property was registered as certificate of title vol 1163, folio 835 on that date.
40 The purchase price of the Baal Street property was $107,000.
41 Payment of the purchase price for the Baal Street property was funded by a loan from the ANZ Bank. The Baal Street ANZ bank loan was $110,000. It was made jointly to Bruce, Carolyn, Troy and Stephannie. Monthly repayments were approximately $1,062.
(Page 13)
42 The Baal Street ANZ bank loan was secured by mortgages over both Baal Street and Tamar Street.
43 There was dispute at trial concerning who made the repayments to ANZ. Bruce said that he and Carol paid $200 each month and that the balance was paid by Troy and Stephannie (ts 79).
44 Bruce said that Carol would come home having collected some of the cash for the payment from Troy and Stephannie, together with the bank payment book. He said that he gave the balance to Carol to make up the total. He said that the money was given by him in cash to Carol usually to be paid by Carol to the teller at the ANZ bank across the road from where Carol worked (ts 70, 80).
45 Carol did not give evidence, and although Stephannie disputed the manner in which these payments were made to the bank, she later accepted in re-examination that Carol did make some (at least) of the payments in to the bank (ts 214).
46 It is not necessary to determine how often the money was paid to the bank, and when it was paid by Carol or by Stephannie. This is because I am satisfied that whatever the manner in which the payments were made to the bank, Bruce's evidence is accurate concerning the contributions made to the payments. Bruce's evidence was that he and Carol contributed a total of $200 per month to the mortgage repayments, and the remainder was paid by Troy and Stephannie.
47 From about 2 February 1993 until about 15 April 1994, Troy and Stephannie lived at the Baal Street property. Bruce took a month off work to renovate the Baal Street property; painting, pruning, gardening, fencing, and building a cupboard (ts 86). He was assisted by Troy on weekends, although not much was paid for by Troy (ts 87).
48 A significant issue at trial was whether the title to the Baal Street property was held by Bruce and Carolyn on trust for a 50% interest for Troy and Stephannie. Counsel for Stephannie submitted that this trust was of the legal title to Baal Street held by Bruce and Carol.
49 It was common ground that Bruce told Stephannie that she and Troy would not be on the title for Baal Street (ts 205). Bruce's evidence on this matter, which I accept, was unequivocal. He said that he told Troy and Stephannie:
(Page 14)
- If we go ahead and purchase the property at 25 Baal Street, would you and Steph like the first opportunity to move in it as tenants and we will spend some money improving it and then when Carol and I were setting ourselves up for retirement, eventually you will have to buy your own house and we will sell that? (ts 77)
- Bruce also said that Troy and Stephannie's contribution to the mortgage was to be a form of rent (ts 76).
50 In contrast, Stephannie's evidence was that Bruce had told her that the reason why she was not on the title was because he and Carol were using Tamar Street as collateral but that Stephannie and Troy 'will … be in on the mortgage' (ts 212) and that 'because you will be on the mortgage papers that will be sufficient' (Stephannie's witness statement par 15, exhibit C).
51 On this issue I prefer the evidence of Bruce. I have referred below to his evidence of this Baal Street arrangement as the Baal Street Agreement.
52 Bruce's recollection was clearer, and his evidence was more convincing on this issue. I also consider that he and Carol would have put Troy and Stephannie's names on the certificate of title if they had intended that Troy and Stephannie should have an interest in the property other than as tenants.
53 Finally, although events which postdate the purchase of the Baal Street property cannot be evidence of any manifest intention to create a trust at the time of purchase, they can be used to show that no subsequent trust was declared. One relevant piece of evidence is that Bruce and Carolyn paid the capital gains tax on the capital gain in value of the Baal Street property following its sale. They both paid capital gains of $8,304 (exhibits 18 - 19).
54 Stephannie also referred to a statement made by Bruce to her and Troy, at the later time of the purchase of the Anstey Road property, that '[y]ou will have to sell Baal Street and we will have to sell Tamar Street' (Stephannie's witness statement par 4(bb)). I do not accept that the statement by Bruce was made in precisely these terms or in terms which would reasonably have suggested that Troy and Stephannie had an interest, other than as tenants, in the Baal Street property. In any event, this statement would not be sufficient to be a declaration of a trust over Baal Street property where, as I have found, none had previously existed.
(Page 15)
The purchase of the Anstey Road property
55 On 22 December 1993, Bruce, Carolyn, Troy and Stephannie submitted an offer to purchase a property at 44 Anstey Road, Forrestdale (the Anstey Road property). The Anstey Road property is contained in certificate of title vol 64, folio 39A. The offer was accepted.
56 The Anstey Road property had a front house with three bedrooms and one bathroom. A self-contained 'granny flat' was also part of the front house. The granny flat had a bedroom, lounge, kitchen, and separate front and rear doors. Apart from the front house, there was also a transportable house on the Anstey Road property.
57 On 5 January 1994, the ANZ Bank approved a loan facility to a maximum of $40,000 for the purchase of the Anstey Road property (the ANZ Anstey Road loan).
58 Settlement and registration of the Anstey Road purchase occurred on 15 April 1994. Title to the Anstey Road property was held by Bruce and Carol (as joint tenants of one half share) as tenants in common with Troy and Stephannie (as joint tenants of the other half share).
59 Bruce, Carol, Troy and Stephannie, and Troy and Stephannie's twin children Harly and Tayla, all moved in to the Anstey Road property. Bruce and Carol initially lived in the granny flat. The intention was to build a separate rear house on the Anstey Road property in which Bruce and Carol would live.
60 Bruce, Carol, Troy and Stephannie were jointly and severally liable to the ANZ Bank in relation to the ANZ Anstey Road loan.
61 The purchase price paid for the Anstey Road property, including duty and fees, was $223,455.45. That purchase price was paid by:
(a) the $40,000 ANZ Anstey Road loan secured by mortgage of the Anstey Road property;
(b) $24,751.03 from the proceeds of sale of the Baal Street property; and
(c) $158,704.42 which was the proceeds of sale of the Tamar Street property.
62 On about 31 July 1995, the ANZ Bank approved an increase to the ANZ Anstey Road loan. Repayments were $493.63 a fortnight
(Page 16)
- (exhibit 12). The purpose of that increase was for the construction of the rear house at Anstey Road where it was intended Bruce and Carol would live.
63 The Anstey Road loan facility was increased to a maximum of $120,000. This meant that up to $80,000 was available for the construction of the Anstey Road rear house.
64 Bruce, Carolyn, Troy and Stephannie remained jointly and severally liable to the ANZ Bank for repayments of amounts drawn from the $120,000 loan facility.
65 Around early 1996, the Anstey Road rear house was completed. Bruce and Carolyn had been living in a 'granny flat' attached to the front house. Following the completion of the rear house Bruce and Carolyn moved into that new house.
66 Improvements to the Anstey Road property were carried out by Bruce, Carolyn, Troy and Stephannie. The extent and nature of those improvements were disputed but it is clear that the majority of the improvements were carried out by Bruce and Troy.
67 The improvements also included the construction of aviaries for Bruce's hobby of breeding exotic parrots which occurred at the Anstey Road property (ts 91 - 92).
68 For reasons which I explain in more detail below, the extent and nature of the improvements to the Anstey Road property are irrelevant to Bruce and Carol's claim for a resulting trust. The existence of that trust, and the beneficial interest to which the parties are entitled under that trust, must be determined at the time of the purchase of Anstey Road or so immediately afterwards as to constitute part of the transaction. Subsequent improvements are not relevant to this determination.
The Anstey Road Agreement
69 At some time between 22 December 1993 and 24 January 1994, Bruce, Carolyn, Troy and Stephannie entered into an agreement (the Anstey Road Agreement). It is common ground that the following were terms of the Anstey Road Agreement.
(a) Bruce and Carolyn would build a second dwelling house at the rear of the Anstey Road property (the Anstey Road rear house).
(Page 17)
- (b) The cost of constructing the Anstey Road rear house would be paid by way of a building loan secured by mortgage against the Anstey Road property.
(c) $40,000 of the purchase price of the Anstey Road property would be paid by a loan from the ANZ Bank secured by a mortgage against the Anstey Road property.
(d) Troy and Stephannie would live in the existing house on the Anstey Road property.
(e) Bruce and Carolyn would live in a 'granny flat' which was annexed to the existing house on the Anstey Road property. When construction of the Anstey Road rear house was completed, Bruce and Carolyn would move from the existing granny flat to the new Anstey Road rear house.
(f) The cost of rates and services for the Anstey Road property would be shared equally between Bruce, Carolyn, Troy and Stephannie.
(g) Troy and Stephannie would make all principal and interest repayments for the building loan for construction of the Anstey Road rear house, and for the $40,000 loan which partly financed the purchase of the Anstey Road property.
70 The plaintiffs said that it had also been agreed in the Anstey Road Agreement that Bruce and Carol would pay $200 per month to assist Troy and Stephannie towards the repayments for the period until the rear house was completed.
71 It had been anticipated that the ANZ Anstey Road loan would be increased for the construction of the rear house. The plaintiffs pleaded that the agreement was that this contribution was to assist Troy and Stephannie towards the ANZ Anstey Road loan: statement of claim par 8.3.2. However, Stephannie pleaded that the agreement was that the contribution was to be towards living expenses: defence, par 11A(a)(ii).
72 I prefer the evidence of Bruce on this matter. His recollection of the details of the agreement on this point was more precise than that of Stephannie who, as I explain below, was concerned mainly with the fact that she would be a part owner of a property for the first time.
73 Bruce's evidence, which I accept, was that he and Carol agreed to be responsible for $200 of the monthly mortgage repayments until
(Page 18)
- completion of the rear house: Bruce's witness statement par 78 (exhibit A).
74 This contribution period was from 15 April 1994 until early 1996. The $200 monthly mortgage repayments were, therefore, Bruce and Carol's contribution to the monthly repayment.
75 There was evidence concerning the amount of monthly repayments. Copies (but not the originals which were apparently available) of the deposit book stubs were tendered (exhibit 22). Those copies showed repayments of $550 each fortnight from 27 April 1994. No objection was taken to the admissibility of the copies of these statements.
76 I am satisfied that at the relevant times the repayments made were approximately $1,062 a month (ts 195 - 196) and that this was the approximate repayment amount (and rate) which was expected by the parties (including for repayment of the loan for the rear building work) at the time of the Anstey Road Agreement.
77 Although the bank initially required repayment only of $354 per month, I accept Stephannie's evidence that the repayments were made fortnightly, and were in the amount of $500 a fortnight. The same payments continued after the bank increased the loan for the building of the rear house and required repayment of $493.63 a fortnight (exhibit 12).
78 There was also dispute concerning whether the $200 monthly payments by Bruce and Carol were actually made, as well as the manner in which the total payment was made to the bank on each occasion. The handwriting on many of the Anstey Road payment stubs was identified by Bruce as Carol's (ts 68 - 70).
79 Stephannie said that all the payments for the Anstey Road property were made by funds provided from her and Troy (ts 208). On this issue I prefer the evidence of Bruce that he contributed $200 each month to the mortgage repayments. It is consistent with his agreement to do so in the Anstey Road Agreement. I do not consider that Bruce would have promised to make these payments as part of the Anstey Road Agreement and then failed to do so.
The separation of Troy and Stephannie and subsequent events
80 Around May 2006, Troy and Stephannie separated. Troy moved out of the main house on the Anstey Road property. He has not returned to the main house.
(Page 19)
81 Stephannie remained living at Anstey Road with Bruce and Carol. Some time in 2006, Stephannie's relationship with Bruce and Carol also deteriorated (ts 209 - 210).
82 Around 27 July 2006, Stephannie drew $70,388.06 from the ANZ Anstey Road loan (exhibit 13). This increased the debit balance of the Anstey Road loan to $144,132.44.
83 In par 23 of the statement of agreed facts provided before trial it was an agreed fact that none of the $70,388.06 was paid to, or for the benefit of, Bruce or Carol.
84 There are also currently amounts owing by Stephannie in relation to Shire rates and Water Corporation charges.
85 As at 28 September 2011, a debit balance of $132,143.35 existed in respect of the ANZ Anstey Road loan.
The primary action for a declaration of resulting trust
86 The principal relief claimed by the plaintiffs was a declaration that Troy and Stephannie held their title to the Anstey Road property on resulting trust for Bruce and Carol. The plaintiffs also sought a declaration that Troy and Stephannie were liable to the ANZ Bank for the outstanding loan balance on that account and that Troy and Stephannie indemnify Bruce and Carol in relation to the ANZ Bank loan.
87 The plaintiffs relied upon the 'presumption' of resulting trust. Stephannie relied upon a presumption of advancement. The plaintiffs pleaded that the presumption of advancement did not arise; and they pointed to a lack of any assumption by them to provide for, or support, Stephannie.
Why does a resulting trust arise?
88 An important preliminary question is why a resulting trust arises. The answer to that question in this case dictates the facts which must be proved by a defendant to rebut the 'presumption of resulting trust'.
89 The Supreme Court of Canada has recently observed that 'there is not much one can say about resulting trusts without a well-grounded fear of contradiction. There is debate about how they should be classified and how they arise, let alone about many of the finer points': Kerr v Baranow [2011] SCC 10; [2011] 1 SCR 269 [16] (Cromwell J for the court).
(Page 20)
90 The view of Professor Chambers in Resulting Trusts (2007) 4, following the late Professor Birks, is that the label 'resulting trust', from the Latin resalire, invokes a metaphor of rights 'jumping back' to the settlor: see also J D Heydon and M J Leeming Jacobs' Law of Trusts (7th ed, 2006) 234 [1201].
91 The metaphor of jumping back is misleading. For instance, where a legal right of ownership of land is transferred and a resulting trust arises, a new equitable interest is created in favour of the settlor. The absolute owner in fee simple who transfers title did not previously hold both legal and equitable estates. He held only a legal estate; no equitable estate existed prior to the transfer which could 'jump back': DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW)[1982] HCA 14; (1982) 149 CLR 431, 463 (Aickin J); Commissioner of Taxation v Linter Textiles Australia Ltd (in liq) [2005] HCA 20; (2005) 220 CLR 592, 606 [30] (Gleeson CJ, Gummow, Hayne, Callinan & Heydon JJ); Peldan v Anderson [2006] HCA 48; (2006) 227 CLR 471, 485 [37] (Gummow ACJ, Kirby, Hayne, Callinan & Crennan JJ).
92 An alternative view which does not invoke this metaphor suggests that 'resulting' ought merely to be understood as 'resulting' from the circumstances of the case: Black Uhlans Inc v New South Wales Crime Commission[2002] NSWSC 1060 [131] (Campbell J, as his Honour was then).
93 If 'resulting' is understood as arising from the circumstances of the case then there is little difference, as a matter of labelling, between 'resulting' and 'constructive'. Quoting from Professor Scott, a joint judgment in the High Court of Australia has said that for a constructive trust, a court 'construes the circumstances in the sense that it explains or interprets them': Giumelli v Giumelli [1999] HCA 10; (1999) 196 CLR 101, 111 [2] (Gleeson CJ, McHugh, Gummow & Callinan JJ).
94 Indeed, the historically close association between resulting and constructive trusts meant that they were originally used interchangeably, particularly by Lord Nottingham LC. For instance, in Grey v Grey (1677) 2 Swan 594, 598; (1677) 36 ER 742, 743, Lord Nottingham LC spoke interchangeably of a use by implication (now, resulting trust) and a constructive trust; see also M McNair 'Coke v Fountaine (1676)' in C Mitchell and P Mitchell (eds) Landmark Cases in Equity (forthcoming) ch 2. Historical separation may have occurred with the epexegetical interpretation of the word 'construction' in the expression in the Statute of
(Page 21)
- Frauds 1677 'by the implication or construction of law': W Holdsworth, A History of English Law (1924) VI, 643.
95 Therefore, whether the label 'resulting trust' is concerned with a trust which 'jumps back' or 'results from the circumstances of the case', the label does not assist in understanding why the trust arises. However, two matters are well established for resulting trusts inter vivos (amongst the living). First, the resulting trust is a trust in favour of the settlor himself or herself. Secondly, resulting trusts are not mono-causal. In other words, resulting trusts arise for a number of different reasons.
96 For centuries, the most common instance in which resulting trusts have arisen has been where the settlor's objectively manifested intention is that the rights which the settlor transferred to another, or purchased in the name of another, should be held on trust for the settlor. If this intention is proved by evidence the trust is usually described as an express trust. But where the intention is proved by presumption the trust is described as a resulting or implied trust.
97 In this sense, resulting trusts have been described as 'intent enforcing' like express trusts: Black Uhlans Inc v New South Wales Crime Commission [133] (Campbell J). Campbell J's decision was described by Young CJ in Eq as 'the latest authoritative discussion' in Salvo v New Tel Limited [2005] NSWCA 281[92].
98 The intention to be discerned in a resulting trust is an objective, manifest intention; it is not an unexpressed subjective intention: Calverley v Green (261) (Mason & Brennan JJ), (270) (Deane J); Byrnes v Kendle (286 - 287) [105] - [106] (Heydon & Crennan JJ); Re Vandervell's Trusts (No 2) [1974] Ch 269, 294 (Megarry J).
99 But resulting trusts also arise for reasons other than (presumed) manifestations of intention to create a trust. There are numerous examples where a resulting trust has been imposed by law even despite clear and manifest evidence that the settlor did not intend that the rights be held on trust for him or her. Sometimes these resulting trusts which are imposed by law are described as 'automatic' resulting trusts.
100 A well recognised example of a resulting trust which is imposed by law is where an attempt to create an express trust fails: see the discussion in Knudsen v Kara Kar Holdings Pty Ltd [2000] NSWSC 715 [49] (Austin J); and Yard v Yardoo Pty Ltd [2006] VSC 109 [298] (Cummins J), discussion not considered on appeal in either Yard v Yardoo Pty Ltd [2007] VSCA 35 or Kara Kar Holdings Pty Ltd v Knudsen
(Page 22)
- [2001] NSWCA 276. See also J D Heydon and M J Leeming Jacobs' Law of Trusts (7th ed, 2006) 236 [1205].
101 Another example of a resulting trust imposed by law is where a transfer of legal title occurs 'about which the transferor was entirely unaware': Robb Evans of Robb Evans & Associates v European Bank Limited [2004] NSWCA 82; (2004) 61 NSWLR 75, 99 - 100 [111] - [113] (Spigelman CJ).
102 In these cases of resulting trusts imposed by law, the justification for the trust sometimes proceeds on the flawed basis (see [91] above) that the transferor held both a legal and equitable interest and divested only the legal interest: W Swadling 'Explaining Resulting Trusts' (2008) 124 LQR 72, 99 - 100 discussing Vandervell v Inland Revenue Commission [1967] 2 AC 291, 313 (Lord Upjohn), 329 (Lord Wilberforce).
103 A better explanation for the imposition of a resulting trust in these cases focuses upon the lack of intention, usually by the immediate transferor, to benefit the recipient: Robb Evans of Robb Evans & Associates v European Bank Limited (99 - 100) [111] - [113] (Spigelman CJ) citing R Chambers Resulting Trusts (1997); Air Jamaica Ltd v Charlton [1999] 1 WLR 1399, 1412 (Lord Millett).These resulting trusts are imposed as a legal response to prevent the recipient having the use and enjoyment of rights for his or her own benefit where that use and enjoyment was not intended.
104 In this case it is not necessary to consider the imposition of this type of resulting trust which is imposed by law, or its boundaries or scope. Counsel for the plaintiffs clarified that their case was brought solely on the basis of a resulting trust which arises as a result of a presumption of objectively manifested intention: closing submissions pars 2 - 3; (ts 244).
105 The focus of the claim for a resulting trust in this case is therefore only upon the presumed or manifested intention of Bruce and Carol in their purchase of the Anstey Road property.
What is 'presumed' in the 'presumption of resulting trust'?
106 In the class of 'intent enforcing' resulting trust cases, judgments almost invariably refer to a 'presumption of resulting trust'. I have generally followed this approach. But the reference to a 'presumption of resulting trust' is shorthand for a presumption of a declaration of trust; the rebuttable presumption is of the fact of a manifest declaration. The presumption is not of the legal institution of the trust itself (which is the
(Page 23)
- conclusion of law): W Swadling 'Explaining Resulting Trusts' (2008) 124 LQR 72, 79. Nor is there a presumption of the existence of the trust property conveyed, a matter which is essential to the trust, and which is proved by evidence.
107 In Cook v Fountain (1676) 3 Swan 585, 591; (1676) 36 ER 984, 987, the Lord Chancellor, Lord Nottingham, giving the opinion of himself and two Chief Justices, said of the presumption of a declaration of trust:
[E]xpress trusts are declared either by word or writing; and these declarations appear either by direct and manifest proof, or violent and necessary presumption. These last are commonly called presumptive trusts; and that is, when the Court, upon consideration of all circumstances presumes there was a declaration, either by word or writing, though the plain and direct proof thereof be not extant.
108 The presumption of a declaration of trust applied not merely to voluntary conveyances of title, or purchases in the name of another, but also in cases where the legal title was held in a proportion different from the contribution to the price: Lake v Gibson (1729) 1 Eq Ca Abr 291; (1729) 21 ER 1052; Lake v Craddock (1732) 3 P Wms 158; (1732) 24 ER 1011.
109 In Dyer v Dyer(1788) 2 Cox Eq Cas 92, 93; (1788) 30 ER 42, 43, Eyre CB said that the rule that the 'trust of a legal estate … results to the man who advances the purchase-money' developed by strict analogy from the rule which applied to the predecessor of the trust, the use. That rule was that where a feoffment was made without consideration, the use would result to the feoffor. The rule was extended to advances of part of the consideration by Sir Thomas Plumer in Wray v Steele (1814) 2 Ves & B 388; (1814) 35 ER 366.
110 The feoffment to uses, and later the trust, was extremely common from the fifteenth until the seventeenth centuries for a number of reasons. Lord Hardwicke LC explained two of the reasons for the popularity of the use or trust. These were to avoid wardship, and to avoid escheat and forfeiture to the Crown particularly during the Wars of the Roses: see Lloyd v Spillet(1740) 2 Atk 148, 150; (1740) 26 ER 493, 494 and the essay (as Sanders on Uses and Trusts was then) commended by Atkyns in his report, F Sanders An essay on the nature and laws of uses and trusts (1791) 109 - 110, 127 - 134.
111 It is easy to see why this presumption of a declaration of trust arose in historic circumstances where the only facts proved were that title to
(Page 24)
- land had been voluntarily conveyed from one person to another, or purchased in the name of another whose contribution to the purchase price did not correspond with his or her legal interest.
112 The obvious inference historically from those facts was that a trust had been declared since 'almost all the lands in England were conveyed to Uses' to evade 'the hardships of the feudal tenures ... [and] to secure estates from forfeitures for high treason': W Cruise An Essay on Uses (1795) 30; see also T Plucknett and J Barton St German's Doctor and Student (1523; ed 1974) page 222, ch 22, 'Howe uses of lande began and by what law and the cause why so moche lande is put in use'.
113 With almost all land conveyed to uses and in circumstances in which it was not usual to include words of trust on the conveyance, common experience suggested that a trust had been declared when there was a voluntary conveyance of land to another, or a purchase in the name of another whose contribution did not correspond with his or her legal interest: W Swadling 'Explaining Resulting Trusts' (2008) 124 LQR 72, 80.
114 It is more difficult today to justify why a declaration of trust should be presumed where land is voluntarily conveyed or where contributions to a joint title are not equal. The New South Wales Court of Appeal has remarked that it 'seems rather ridiculous that troubles in England at the end of the Middle Ages should be the basis, in the late twentieth century, for making findings of fact': Dullow v Dullow (1985) 3 NSWLR 531, 535 (Hope JA, Kirby P & McHugh JA agreeing). And in Calverley v Green (264), Murphy J said that the presumption should be discarded.
115 However anachronistic the presumption may be, Australian courts have said that it is a well-entrenched landmark in the law of property which cannot be disregarded by judicial decision: Calverley v Green (266) (Deane J); Brown v Brown (1993) 31 NSWLR 582, 588 (Gleeson CJ); see also Charles Marshall Pty Ltd v Grimsley [1956] HCA 28;(1956) 95 CLR 353, 364 (Dixon CJ, McTiernan, Williams, Fullagar & Taylor JJ) '[t]he law applicable to cases of this nature can ... no longer be the subject of argument'. Further, '[m]any disputes have been resolved and transactions effected on [the] foundation' of the presumption: Nelson v Nelson [1995] HCA 25; (1995) 184 CLR 538, 548 (Deane & Gummow JJ), see also 602 (McHugh J) 'the better course is to leave reform ... to the legislature' (Nelson v Nelson [1995]).
(Page 25)
116 As developed from these historical origins, the presumption of a declaration of trust which is relevant to this case means that 'a resulting trust arises in favour of the purchaser, or in favour of two purchasers in the proportions in which they contributed the purchase money ... subject to the exception created by the presumption of advancement': Calverley v Green (247) (Gibbs CJ), see also (258) (Mason & Brennan JJ), (269) (Deane J).
The 'presumption of resulting trust' as applied to this case
117 The total cost of purchase of the Anstey Road property was $223,455.45, including duty and fees. The stamp duty, fees and expenses of purchase are included in the purchase price for the purpose of considering the presumption of resulting trust: Ryan v Dries [2002] NSWCA 3 [52] - [53] (Hodgson JA).
118 I have set out above at [61] the sources of finance for the purchase of the Anstey Road property. $183,455.45 of the $223,455.45 cost of the purchase was provided by Bruce and Carol from the sale of their Baal Street and Tamar Street properties (see my discussion of the Baal Street property above at [38] - [54]). The remaining $40,000 was provided by a loan to which Bruce, Carol, Troy and Stephannie were all jointly and severally liable, although Troy and Stephannie made all the repayments on that loan, except $200 of the $1,062 a month during the construction of the rear house.
119 In Calverley v Green, Mr Calverley paid $9,250 towards the purchase of land. Ms Green and Mr Calverley jointly borrowed the remainder of the purchase price, $18,000, although repayments were made by Mr Calverley. The land was transferred to them as joint tenants. A majority of the High Court held that it was presumed that a trust had been declared in proportions representing a $9,250 contribution by Mr Calverley and equal contributions as to the balance.
120 In Calverley v Green,the majority emphasised that the trust, and the proportionate beneficial interests, must be determined at the time of purchase, or 'so immediately after it as to constitute a part of the transaction': Calverley v Green (262) (Mason & Brennan JJ), see also (252) (Gibbs CJ), (269) (Deane J). This point is well established: Charles Marshall Pty Ltd v Grimsley (365) (Dixon CJ, McTiernan, Williams, Fullagar & Taylor JJ).
121 At the time of purchase, Stephannie's proportionate contribution, jointly with Troy, to the purchase price of the Anstey Road property was
(Page 26)
- $20,000 of $223,455.45, or approximately 9%. However, she and Troy also took responsibility for repayment of the whole ANZ Anstey Road loan, with small initial contributions from Bruce and Carol.
The 'presumption of advancement' does not apply
122 One manner in which Stephannie sought to dispel the presumption of resulting trust was by relying upon a 'presumption of advancement'. Stephannie's argument requires a significant step to be taken in expanding the presumption of advancement. It should not be taken in this case. In order to explain why this is so it is necessary to set out the meaning of the presumption of advancement, the nature of the 'presumption', and the relationships to which it applies.
The meaning and basis of the 'presumption of advancement'
123 One difficulty with the language of 'presumption of advancement' is that it is not limited to advancement. Another difficulty, which I address below, is that it is not a presumption.
124 The word 'advancement' has been described as a legal expression which had 'a limited range of meaning, since it was thought to convey the idea of some step in life of permanent significance': Pilkington v Inland Revenue Commissioners [1964] AC 612, 634 (Viscount Radcliffe, giving examples of an apprenticeship, the purchase of a commission in the army or an interest in business).
125 Historically, the primary basis asserted for the presumption of advancement in circumstances such as a purchase by a person in the name of another was that the purchaser was 'under a species of natural obligation to provide for the nominee': Murless v Franklin (1818) 1 Swan 13, 17; (1818) 36 ER 278, 280 (Lord Eldon). A distinction was drawn between a father-child relationship to which the presumption of advancement applied and a mother-child relationship to which it did not, because there was 'no obligation according to the rules of equity - on a mother to provide for her child': Bennet v Bennet (1879) 10 Ch D 474, 478 (Sir George Jessel MR).
126 A distinction was also drawn between a son who had been married and provided for (advanced) and a son who was 'unprovided for': Elliot v Elliot (1677) 2 Cas in Ch 231, 232; (1677) 22 ER 922, 923 (Lord Nottingham LC). But this distinction disappeared in the late 18th Century after Dyer v Dyer, albeit against the strong views of Sir Edward Sugden, the later Lord St Leonards: J Glister 'The
(Page 27)
- presumption of advancement' in C Mitchell (ed) Constructive and Resulting Trusts (2010) 289, 299.
127 In Wirth v Wirth [1956] HCA 71; (1956) 98 CLR 228, 237, Dixon CJ argued that the presumption of advancement had moved to a different foundation. The Chief Justice said that in the course of growth of the presumption it 'obtained a foundation or justification in the greater prima facie probability of a beneficial interest being intended'. That view was endorsed by Gibbs CJ in Calverley v Green (249).
128 But this modern rationale proposed by Dixon CJ has not yet been accepted. In Nelson v Nelson [1995], Deane and Gummow JJ referred to the historical foundation of the presumption as the obligation to provide, but did not reject this historical foundation, saying only that the appeal should be approached on the basis that the presumption of advancement also extended to the relationship of mother and child (548 - 549). Dawson J thought that the presumption of advancement should apply to the relationship of mother and child whether its basis was moral obligation or the probability rationale of Dixon CJ (576). And Toohey J considered the probability rationale of Dixon CJ to 'have a question begging aspect' as evidenced by the fact that Gibbs CJ was the only judge in Calverley v Green to extend the presumption of advancement to a de facto relationship (586).
129 The state of the law, then, is that the presumption of advancement does not necessarily require either a relationship where advancement might be expected or one where a moral duty to provide was recognised in equity.
130 The presumption of advancement applies even between a parent and his or her adult children. For instance, in Nelson v Nelson[1995]the two children of Mrs Nelson who asserted a presumption of advancement were aged 33 and 37 at the time of the transaction (542). In this sense it might be better described as a 'presumption of gift': Nelson v Nelson [1995] (548) (Deane & Gummow JJ).
131 On the other hand, despite the suggestions of Dixon CJ, the presumption of advancement also does not extend to every relationship where the ties of love and affection might give rise to a probability, or expectation based upon common experience, that a gift was intended.
132 At this stage of development of the law in relation to the 'presumption of advancement', all that can be said is that it provides for a
(Page 28)
- list of relationships where the presumption of resulting trust does not apply.
The 'presumption of advancement' is not a genuine presumption
133 In Wirth v Wirth (237) Dixon CJ quoted from Sir William Page Wood VC to the effect that the presumption of advancement was 'to preclude a resulting trust from arising for the purchaser'.
134 In this sense, the presumption of advancement is not a presumption at all. It is simply a description of facts where the presumption of resulting trust (or, more accurately, the presumption of a declaration of trust) does not arise.
135 On the other hand, there have been suggestions in some cases, and by some judges, that the presumption of advancement is a genuine presumption of a manifest intention to make a gift. These suggestions presuppose a confused evidentiary process where the presumption of advancement would need to be rebutted by the transferor, which would then reinstate a presumption of a declaration of trust in favour of the transferor, which the recipient would then need to rebut. This was the view of Maitland and Holdsworth: see F W Maitland Equity: A Course of Lectures (1910) 79 - 80, also (1936, 2nd ed) 77 - 80; William Holdsworth, A History of English Law (1924) VI, 644. See also the discussion of some of the authorities to this effect in J Glister 'Is there a presumption of advancement?' (2011) 33 Sydney Law Rev 39.
136 The dominant Australian approach, however, is that of Dixon CJ: the 'presumption of advancement' is not a presumption but is simply a circumstance in which the 'presumption of resulting trust' does not arise. Thus, in Martin v Martin [1959] HCA 62; (1959) 110 CLR 297, the High Court (Dixon CJ, McTiernan, Fullagar & Windeyer JJ) explained that the presumption of resulting trust did not apply where a husband purchased land in the name of his wife: 'as she was his wife the fact that he found the purchase money for the land raised no presumption in his favour of a resulting trust as it would or might have done had she been a stranger' (303). The court explained that the presumption 'is called a presumption of advancement but it is rather the absence of any reason for assuming that a trust arose' (303).
137 Various of the judgments in Calverley v Green also reiterate this point: (247) (Gibbs CJ), (256) (Mason & Brennan JJ). The judgments of Deane J and Murphy J are the most explicit. Murphy J said that '[t]he presumption of advancement, supposed to be an exception to the
(Page 29)
- presumption of resulting trust, has always been a misuse of the term presumption, and is unnecessary' (265). Deane J said this:
[T]he 'presumption of advancement', is not, if viewed in isolation, strictly a presumption at all. It is simply that there are certain relationships in which equity infers that ... there is an 'absence of any reason for assuming [presuming] that a trust arose (267).
The relationships to which the presumption of advancement applies
139 In Wirth v Wirth (237 - 238), Dixon CJ explained, quoting from the Vice Chancellor, Sir William Page Wood VC (as Lord Hatheley was then) in Soar v Foster (1858) 4 K & J 152, 160 - 161; (1858) 70 ER 64, 67:
[The presumption of advancement] is applicable where the purchase was made in the name of a legitimate or illegitimate child, or in the name of a grandchild whose father is dead, or in the name of the wife of the purchaser. In all these cases the rule is definite and clear, that the purchase is prima facie to be taken as a provision or advancement for the person in whose name the purchase has been made.
140 I accept that the presumption of advancement now also applies in the case of a gift from mother to daughter. This is a recent development. In Bennet v Bennet, Sir George Jessel MR had held that there was no presumption of advancement from a mother to a daughter because equity recognised only an obligation on the father to provide for a child, not the mother. In Scott & Hansen v Pauly [1917] HCA 60; (1917) 24 CLR 274, 282, Isaacs J said that this point had not been 'judicially doubted'.
141 But there can be no basis today to distinguish between the relationship between a father and a child and the relationship between a mother and a child. This was accepted by the New South Wales Court of Appeal in Nelson v Nelson (1994) 33 NSWLR 740 (Nelson v Nelson (1994)). In the High Court, all judges approved this conclusion or assumed it to be correct: Nelson v Nelson [1995](548 - 549) (Deane & Gummow JJ), (574) (Dawson J), (586) (Toohey J), (601) (McHugh J).
The presumption of advancement does not apply to Stephannie
142 Troy is the son of Bruce and Carol. Like Carol, Troy also did not give evidence. In relation to Troy a presumption of advancement would apply to the contribution by Bruce and Carol to Troy's legal title.
(Page 30)
143 But the same is not true for Stephannie. Stephannie is not the child of Bruce and Carol. She is their daughter-in-law. This is not a recognised relationship for the purposes of the presumption of advancement: Z v Z [2005] FamCA 996; (2005) 34 Fam L R 296, 320 [145] (Coleman & Boland JJ); Yoshino v Niddrie [2003] NSWSC 57 [45] (Young CJ in Eq).
144 Stephannie asserted that her relationship with Bruce and Carol was one where they were in loco parentis. It has long been recognised that the 'presumption of advancement' can been extended beyond a situation of parent and child to instances where the relationship is akin to parent and child because one person acts in loco parentis (in place of a parent) to the other: Napier v Public Trustee (WA) (1980) 32 ALR 153, 158 (Aickin J, Stephen, Mason & Murphy JJ concurring).
145 In Beecher v Major (1865) 2 Drew & Sm 431, 435; (1865) 62 ER 684, 686, the Vice Chancellor, Sir Richard Kindersley, held that for a relationship in loco parentis to be established the case must be regarded as one of 'an adopted child'. This may state the matter too highly. The question is whether in all the circumstances the relationship between Stephannie and her parents-in-law Bruce and Carol, was of such a similar nature to that of an ordinary parent-child relationship that it could be treated in the same manner as a parent-child relationship for the purpose of the presumption of advancement.
146 Stephannie's argument that Bruce and Carol were in a relationship with her in which they were akin to her parents is not supported by the facts.
147 Bruce explained that the relationship between Stephannie and Carol was 'a normal mother-in-law, daughter-in-law relationship'. He said that Stephannie was treated in the 'correct' manner (ts 128). I accept this evidence.
148 Ms Gallagher, a friend of Stephannie's, said in her witness statement that she would 'often see Stephannie and Bruce joking and laughing together' (par 16). She also said that Carol and Stephannie never fought or upset each other in any way when Ms Gallagher was around and that whenever she came around she would see Stephannie and Carol cooking, organising and entertaining guests (pars 9, 14).
149 Although Bruce did not accept that Stephannie and Carol worked together to entertain guests, or that he had jokes and laughed with Stephannie (ts 128), I find that Bruce and Carol were warm and welcoming to Stephannie and that at the time of purchase of the Anstey
(Page 31)
- Road property the relationship between Stephannie and her parents-in-law was close.
150 I also accept Stephanie's evidence that Bruce and Carol often gave her gifts, hosted her engagement party, and made her feel very welcome: Stephannie's witness statement pars 31 - 34. There was also no suggestion of any apprehension about them all moving in together to live at the same property.
151 But the relationship between Stephannie and her parents in law, although close and warm, was not a parent-child relationship. Bruce and Carol were, and are, generous, warm and welcoming people. Ms Gallagher's evidence was that their kindness extended beyond Stephannie to other friends (ts 218 - 219). As she was their daughter-in-law, Stephannie was treated with even greater kindness and warmth. But even though Stephannie was partly estranged from her mother and father, Bruce and Carol did not take the place of her parents.
152 Stephannie also relied upon Bruce having 'given her away' at her wedding to Troy (ts 128) as evidence of their relationship being akin to parent and child. But in counsel's submissions he omitted to refer to all of the evidence of Bruce on this matter. Bruce said that he had not immediately agreed to walk Stephannie down the aisle. He asked why her father was not doing it. He asked why her brothers were not doing it. He only agreed when she explained that she did not want them to do it and that her father would not be at the wedding (it turned out that he was present) (ts 131).
153 A presumption of advancement does not apply in relation to Stephannie.
The 'presumption of resulting trust' has been rebutted
154 Since no 'presumption of advancement' applies in this case, the question is whether the 'presumption of resulting trust' has been rebutted.
155 The presumption of resulting trust can be rebutted by evidence which shows that the intention of Bruce and Carol at the time of the purchase of the Anstey Road property was that Troy and Stephannie would be entitled to the use and enjoyment of their legal title for their own benefit: Calverley v Green (251) (Gibbs CJ), (269) (Deane J).
156 The references to 'intention' in the paragraph above, and generally in this judgment, are references to objective, or manifest, intention. As I
(Page 32)
- have explained at [98], the intention is not a subjective, uncommunicated intention but it 'is to be inferred from what the parties do or say': Calverley v Green (261) (Mason & Brennan JJ), (270) (Deane J).
157 There are six reasons why the presumption of resulting trust has been rebutted in this case. Most of these reasons, on their own, would be sufficient to show that Bruce and Carol intended that Troy and Stephannie should enjoy the full benefit of their legal title to Anstey Road and to rebut the presumption that Troy and Stephannie held their legal title to the Anstey Road property on resulting trust for Bruce and Carol in proportion to the latter's contribution. In combination, these six reasons mean that the conclusion that no resulting trust was intended is irresistible.
158 First, the certificate of title to the Anstey Road property recorded that title to the property was held by Bruce and Carol (as joint tenants of one half share) as tenants in common with Troy and Stephannie (as joint tenants of one half share): exhibit 25.
159 The agreement to include, and the inclusion of, Troy and Stephannie on the certificate of title contrasts with the manner in which title to the property at Baal Street was held.
160 In relation to the Baal Street property, the full beneficial title was held by Bruce and Carol in circumstances in which Bruce and Carol intended, and explained to Troy and Stephannie, that Troy and Stephannie would be their tenants. Important family decisions were always discussed and made jointly (ts 73). Bruce's omission of Troy and Stephannie from the certificate of title to Baal Street was an intentional choice in which he had explained to them that they would only be tenants and that the transactions in relation to Baal Street were not Troy and Stephannie's transactions because their names were not on the certificate of title (ts 82). In these circumstances, the inclusion of Troy and Stephannie on the certificate of title for the Anstey Road property is strong evidence of an objective intention that Troy and Stephannie should enjoy the benefit of those rights.
161 In closing it was properly conceded by counsel for the plaintiffs that the plaintiffs' intent in relation to the Baal Street property (which counsel described as an intent to hold it as an 'investment') was 'entirely different' from the intent in respect of the Anstey Road property (ts 252). This concession was appropriate. I do not accept that anything was said to Troy or Stephannie by either Bruce or Carol which could reasonably have suggested to them that the arrangement at the Anstey Road property,
(Page 33)
- where all parties were to live together and where all would be on the title, was to be the same as that at the Baal Street property or that payments towards the mortgage by Troy and Stephannie were to be a form of rent (compare ts 84). Such a statement would have been contrary to the tenor of all the other conversations discussed in the paragraphs below; it would have been recalled by Stephannie, and her reaction to the purchase would not have been as ecstatic; and it would be contrary to the circumstances described at [173] - [185] below.
162 Secondly, there is Bruce's evidence concerning the circumstances in which the shares in the Anstey Road property had been agreed in the offer and acceptance in December 1993. This evidence also supports the rebuttal of the presumption of resulting trust.
163 Bruce gave evidence that the purchase occurred on the advice of his real estate agent, Mr John Johnson. Bruce said that this matter had been discussed by him with Mr Johnson in the presence of Carol, Troy and Stephannie. Mr Johnson had asked Bruce whether all the proceeds from the sale of Baal Street and Tamar Street would be used for the purchase of Anstey Road. Bruce answered 'yes'. Bruce had held a real estate agent's sales person's licence, although he had never acted as an agent (ts 88). In the presence of the others, he accepted the advice of Mr Johnson that the 'best way' to structure the purchase 'and for [the] long term' was as a purchase by Bruce, Carol, Troy and Stephannie as tenants in common in equal shares (ts 106).
164 The offer and acceptance document included Bruce, Carol, Troy and Stephannie as tenants in common in equal shares (exhibit 9, special condition 6). At settlement this was varied so that Bruce and Carol held as joint tenants as to one half share and Troy and Stephannie as joint tenants as to the other half share (exhibit 25).
165 Thirdly, I accept Stephannie's evidence that prior to signing the contract for purchase of Anstey Road, she and Troy had discussed this with Bruce and Carol and the effect of their discussion was reasonably construed by her as meaning that they were all together purchasing the Anstey Road property (ts 194).
166 This conclusion is supported by a number of matters. In his witness statement Bruce referred to conversations including statements by Troy that 'we are interested in buying it [Anstey Road] as you have said' (par 71). Stephannie also gave evidence that discussions occurred when the parties were looking for a property where they would all live together
(Page 34)
- (after an offer on a property by Troy and Stephannie had fallen though). In those discussions, Stephannie had told Bruce and Carol that she and Troy could not afford properties that they liked, and Bruce and Carol had responded to Stephannie to the effect that '[w]e want to help you and this is how we can help you': Stephannie's witness statement pars 4i, 4w.
167 Although Stephannie did not pay any further attention to the detail of the purchase and did not get 'bogged down in the details of the discussions' (ts 199) I accept that the importance of this conversation to her meant that she would have recalled it and its context. Bruce also accepted that he spoke words to this effect although he said that what he had meant was that the 'help' was 'to have a permanent place of residence because the property they were living in wasn't really suitable' (ts 85). I do not accept that, in the context of the discussions, the precise words which were used could reasonably have been understood by Stephannie other than as a suggestion that the ownership of a property would be shared.
168 Stephannie's evidence of these conversations, and their context, is also consistent with Bruce's evidence that when Stephannie heard that the offer for Anstey Road had been accepted Stephannie was ecstatic; Stephannie even offered to Bruce that she would drive all night to Meekatharra so that Bruce could sign the offer and acceptance document (ts 84). I do not consider that Stephannie would have had such a strong reaction simply to the prospect of moving to a larger property where she could run horses but where her title would be held for the benefit of Bruce and Carol (ie on trust). Stephannie's reaction demonstrates that the broad effect of the discussions and conversations which she had with Bruce had conveyed the impression, which I find was reasonably held, that she and Troy would have an interest in the Anstey Road property for their own benefit.
215 These difficulties, combined with the absence of any historical notional rent assessment for the Baal Street property would have made rescission and restitution of the benefits sought by Stephannie impossible.
(iv) The valuation of the Anstey Road property and the improvements
216 Even further evidential difficulties occur with Stephannie's claim for 'equitable damages' which were said to arise from the unconscionable dealing.
217 Substantial evidence was led at trial concerning the current valuation of the Anstey Road property. The valuation was conducted by an expert valuer, Mr Ross Lambert. The date of valuation was 1 September 2011 (exhibit 20).
218 Some evidence was also led concerning improvements made to the Anstey Road property by Bruce, and improvements made by Troy and Stephannie. Some of these improvements were very substantial. For instance Stephannie said that she and Troy made improvements to the Anstey Road property which included a full dressage arena with lights and reticulation and stables. In her pleaded defence these were alleged to have a value of $50,000.
219 For reasons I have explained above at [120], it is well established that the subsequent evidence of current value of the Anstey Road property, and the evidence of the improvements after purchase, is irrelevant to the question of whether there should be a 'presumption of resulting trust', or whether the presumption has been rebutted.
220 The evidence concerning the valuation of the Anstey Road property was also relied upon in support of Stephannie's claim for 'equitable damages' for unconscionable dealing. Stephannie produced an elaborate schedule in closing submissions (Schedule B) which purported to
(Page 44)
- establish the losses she had suffered. The schedule assumed the following:
(1) Stephannie had contributed half of the mortgage payments each month at Baal Street and Anstey Road. I have addressed above why this assumption was not supported by any evidence [208].
(2) Stephannie contributed $600 per month to the mortgage expenses at Anstey Road and Baal Street. I have explained above why this assumption is false. It assumes that Bruce and Carol made no contribution to the mortgage expenses.
(3) Stephannie would have been in a position to save that $600 per month if she had not paid it towards mortgage expenses. No evidence supported this assumption.
(4) Stephannie would have chosen to buy a property instead of renting and the time at which she would have purchased could be pinpointed by an examination of the changing value of the Anstey Road property. Again, no evidence was led from Stephannie on this matter, which might have required expert evidence.
Like the claim for restitution, the claim for 'equitable damages' lacked an evidentiary foundation.
(4) No legal basis for the unpleaded claim for disgorgement of profits
221 In closing submissions, Stephannie also produced a schedule (Schedule A) in support of relief which went beyond the pleaded restitution of the mortgage payments and Anstey Road rates and taxes paid by Stephannie. Schedule A went beyond the pleaded relief and sought disgorgement from the plaintiffs of 'capital growth of the property'.
222 Once again, there are serious evidentiary gaps in the facts concerning the proportion of capital growth which could be attributed to the property and the improvements made by the respective parties. Further, the unpleaded schedule seeking disgorgement is based upon a legal misapprehension.
223 Again, on the basis that a resulting trust had been established (contrary to these reasons) the submission was that Bruce and Carol should give up a proportion of the capital growth in the property because that would represent 'the benefit obtained at [Troy and Stephannie's expense]' (Schedule A).
(Page 45)
224 This submission in closing is contrary to the pleaded case that Stephannie should be entitled to restitution of the mortgage payments and rates and taxes that she had paid. No leave was sought for this significant change in pleading.
225 Even apart from the other legal and factual problems with the counterclaims, the measure of restitution for the pleaded unjust enrichment in par 32 would have been limited to the pleaded relief. It would not have included the capital growth in the Anstey Road property because that is not a benefit which was transferred from Stephannie to Bruce and Carol.
226 A personal claim for restitutionary relief does not require a defendant to account for and disgorge profits made, irrespective of source (such as a proportion of capital growth in the property). Instead, the personal award of restitution 'operates to restore to the plaintiff what has been transferred from the plaintiff to the defendant': Commissioner of State Revenue (Vic) v Royal Insurance Australia Ltd [1994] HCA 61; (1994) 182 CLR 51, 75 (Mason CJ); Roxborough v Rothmans of Pall Mall Australia Ltd [2001] HCA 68; (2001) 208 CLR 516, 529 [26] (Gleeson CJ, Gaudron & Hayne JJ). Hence, an account and disgorgement of a defendant's profits is not a restitutionary remedy. Unlike a restitutionary remedy, the profits need not be transferred from the plaintiff in the taking of an account. In the words of the Supreme Court of Canada, a personal award of restitution for unjust enrichment 'is concerned with giving back to someone [the equivalent value of] something that has been taken from them': The Citadel General Assurance Company v Lloyds Bank Canada [1997] 3 SCR 805 [30] (La Forest, Gonthier, Cory, McLachlin, Iacobucci and Major JJ). See also Sempra Metals Ltd v Her Majesty's Commissioners of Inland Revenue [2007] UKHL 34; [2008] 1 AC 561, 605 - 606 [116] - [117] (Lord Nicholls). Capital growth in the Anstey Road property was not value which was transferred from Stephannie to Bruce and Carol.
The counterclaim for mistake
227 This counter-claim was abandoned by Stephannie in closing submissions in the course of abandoning proposed amendments to this counterclaim. Counsel for Stephannie explained that he had 'decided to withdraw that particular cause of action' (ts 258) and that he no longer pressed any claim based upon mistake (ts 259).
228 The counterclaim for mistake was properly withdrawn. It was a plea of unilateral mistake by Stephannie in the making of the Baal Street
(Page 46)
- Agreement and the Anstey Road Agreement. Stephannie said that she was mistaken in her belief that she and Troy would jointly take the benefit of the whole of the proceeds from the sale of Baal Street as consideration for the mortgage repayments that she and Troy made (Defence and Counterclaim, par 32 particulars of mistake).
229 The basis for this counterclaim involved two erroneous understandings of the law. First, the pleaded unilateral mistake does not have the effect that either agreement is void. The objective theory of contract, which is 'in command of the field' means that the contract 'continues to be binding, unless and until it is avoided in accordance with equitable principles which take as their foundation a contract valid at common law but transform it so that it becomes voidable': Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422, 429 (Mason ACJ, Murphy & Deane JJ); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165, 179 - 180 [41] (Gleeson CJ, Gummow, Hayne, Callinan & Heydon JJ).
230 Secondly, the unilateral mistake would not permit rescission of either agreement in circumstances in which there was no evidence (and no pleading) to suggest that Bruce and Carol 'contributed to or knew of the mistake' or had engaged in any form of 'fraud, misrepresentation or sharp practice': Torrance v Bolton (1872) LR 8 Ch App 118, 124; Tranchita v Retravision (WA) Pty Ltd [2001] WASCA 265 [45] (Owen J); Taylor v Johnson.
231 While either agreement remains valid, the pleaded claim for unjust enrichment based upon mistake must fail. To award restitution for a unilateral mistake of this nature, despite the existence of a valid agreement, would undermine the objective theory of contract and would subvert the contractual agreement.
The counterclaim for failure of consideration
232 When restitution is sought for a 'failure of consideration', the word 'consideration' is used in a different sense from its modern contractual meaning. It 'embraces payment for a purpose which has failed as, for example, where a condition has not been fulfilled, or a contemplated state of affairs has disappeared': Roxborough v Rothmans of Pall Mall Australia Ltd (525) [16] (Gleeson CJ, Gaudron & Hayne JJ); see also (557) [104] (Gummow J).
233 A claim for restitution of unjust enrichment can arise in the absence of a contract, if a benefit is conferred on a condition or basis which fails:
(Page 47)
- Roxborough v Rothmans of Pall Mall Australia Ltd (525) [16] (Gleeson CJ, Gaudron & Hayne JJ), (555 - 556) [102] - [103] (Gummow J); Martin v Andrews (1856) 7 El & Bl 1, 4; (1856) 119 ER 1148, 1149 (Lord Campbell CJ).
234 But where the claim for failure of consideration arises in a contractual context, the claim does not rescind a contract ab initio (from the beginning). Instead, the success of the claim for restitution generally depends upon the failure of the conditional nature of the payment, as discerned from the terms of the contract: Roxborough v Rothmans of Pall Mall Australia Ltd (538 - 539) [58], [60] (Gummow J).
235 For this reason the doctrine of failure of consideration has been described as failure of 'condition'. Understood in this way, it signals a focus upon the conditional nature, or basis, upon which a payment is made or the benefit transferred: Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32, 65 (Lord Wright); F Wilmot-Smith 'Replacing risk-taking reasoning' (2011) 127 LQR 610, 618 - 619; C Mitchell, P Mitchell and S Watterson (eds) Goff and Jones The Law of Unjust Enrichment (8th ed, 2011) 363 [12-01].
236 In cases involving bilateral (or exchange) transactions, such as this case, the assessment of the condition or basis for a payment is objective; the focus is upon failure of an (objectively) manifested condition or basis: Fostif Pty Ltd v Campbells Cash & Carry Pty Ltd [2005] NSWCA 83; (2005) 63 NSWLR 203, 252 [239] - [240] (Mason P). The High Court of Australia did not consider this issue on appeal: Campbells Cash & Carry Pty Ltd v Fostif Ltd [2006] HCA 41; (2006) 229 CLR 386, 417 [39] (Gummow, Hayne & Crennan JJ).
237 The counterclaim for failure of consideration was based upon a pleading that Stephannie made repayments of the Baal Street and Anstey Road property mortgages with the expectation that she would, respectively, receive the benefit of the proceeds from the sale of the Baal Street property, and 'have and retain a joint beneficial interest in one half' of the Anstey Road property (par 32).
238 Apart from the general reasons explained above, the first reason why this counterclaim fails is because neither of those conditions or bases failed. As I have explained, the objective basis of the Baal Street Agreement was not that Stephannie would receive the benefit of the proceeds of its sale. Instead, the objective basis was that Stephannie would be a tenant. Nor did the objective basis for the Anstey Road
(Page 48)
- Agreement fail. That basis was that the parties would enter a joint family enterprise and have shared ownership of the Anstey Road property. That basis did not fail.
239 In any event, Stephannie's submission was based on the flawed premise that a payment made on a subjective condition or basis which is contrary to the terms of a contract could permit restitution. The premise is flawed because no cause of action for restitution of unjust enrichment can exist where the action is inconsistent with the express or implied terms of a contract; to allow that remedy despite the terms of the contract would 'redistribute risks for which provision has been made' by the contract: Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27; (2008) 232 CLR 635, 655 [47] (Gleeson CJ), 663 [79] (Gummow, Hayne, Crennan & Kiefel JJ); Perum Building & Construction Pty Ltd v Tallenford Pty Ltd [2007] WASCA 245.
The counterclaim for undue influence
240 It has been observed that undue influence 'is a much-used phrase, but its precise nature remains a matter for dispute. Some authorities tend to treat the doctrine as being concerned with "excessively impaired consent", but others treat it as involving the improper abuse or exploitation of those whose consent has been impaired': Sexton v Titiro Trustee Company Ltd [2008] NZHC 715 [56] (Heath J).
241 The latter view is prevalent in authorities which describe undue influence as involving 'a connotation of impropriety': Royal Bank of Scotland Plc v Etridge(No 2) [2002] 2 AC 773, 800 [32] (Lord Nicholls); compare Hammond v Osborn [2002] EWCA Civ 885 [32] (Sir Martin Nourse).
242 On the other hand, Australian authorities have generally focused upon the 'impairment of the judgment of the weaker party ... [as] the critical element' in a claim for undue influence: Bridgewater v Leahy [1998] HCA 66; (1998) 194 CLR 457, 478 [75] (Gaudron, Gummow & Kirby JJ quoting from Sir Anthony Mason); see also Christodoulou v Christodoulou [2009] VSC 583 [74] (Kaye J); Commercial Bank of Australia Ltd v Amadio[1983] HCA 14; (1983) 151 CLR 447, 474 (Deane J).
243 Historically, it has not been necessary for a court to make any finding about the behaviour or conduct of a defendant as a precondition to an award of restitution of a benefit transferred by undue influence. The source from which the influence arises might be a third party, or it might
(Page 49)
- simply be the result of a relationship of dominance to which the plaintiff is subject, independently of any positive action by the defendant.
244 In Bridgeman v Green (1757) Wilm 58, 65; (1757) 97 ER 22, 25, the Lord Commissioner (as the Chief Justice was then) said: 'Let the hand receiving it be ever so chaste, yet if it comes through a corrupt polluted channel, the obligation of restitution will follow it'. And in one of the most commonly cited authorities on undue influence, Allcard v Skinner (1887) 36 Ch D 145, Lindley LJ found that undue influence was present even though everything that Miss Allcard did was 'referable to her own willing submission to the vows she took and to the rules which she approved, and to her own enthusiastic devotion to the life and work of the sisterhood' (184).
245 It may be that an element of wrongful conduct by a defendant is necessary in a case where remedies are sought for undue influence other than the mere reversal of a transaction. For instance, if compensation for losses is available for undue influence there may be a requirement that the defendant's conduct involves an 'abuse of trust': Mahoney v Purnell [1996] 3 All ER 61, 90 - 91 (May J); discussed by J D Heydon 'Equitable compensation for undue influence' (1997) 113 LQR 8. There is little authority on this issue.
246 One matter is clear. However the requirements of undue influence are formulated, and whether or not the label 'undue influence' conceals two different doctrines, a core element of undue influence requires a relationship of sufficient influence. This was absent in this case.
247 The party seeking to set aside a transaction for undue influence must prove (by evidence or by presumption) a relationship going beyond mere confidence and influence. It must be a relationship involving dominion and ascendancy by one person over the will of the other, and correlative dependence by the other: Brown v The NSW Trustee & Guardian [2011] NSWSC 1203 [46] (Brereton J); Goldie v Getley [No 3] [2011] WASC 132 [140] (Simmonds J); Union Fidelity Trustee Co of Australia Ltd v Gibson[1971] VR 573, 575 - 579 (Gillard J); Johnson v Buttress[1936] HCA 41; (1936) 56 CLR 113, 119 (Latham CJ).
248 In cases where a person seeks to prove by evidence the existence of undue influence, the required dominance has been described as a position 'in which it could fairly be said that the plaintiff's mind was in effect a mere channel through which the will of the defendant operated': Tufton v Sperni [1952] 2 TLR 516, 530 (Jenkins LJ), 532 (Morris LJ); Bank of
(Page 50)
- Credit & Commerce International SA v Aboody [1990] 1 QB 923, 969 (Slade, Balcombe & Woolf LJJ).
249 In seeking to prove the existence of a sufficient degree of influence Stephannie did not rely upon the benefit of a presumption deriving from her status as daughter-in-law. Even a parent/child relationship does not necessarily raise a presumption of ascendancy in the instance of an emancipated adult: see especially Tillett v Varnell Holdings Pty Ltd [2009] NSWSC 1040 [80] (Brereton J). But even if it were available, for the reasons below it would have been rebutted. Stephannie's argument was simply that a relationship of undue influence existed between her and her father-in-law, Bruce, by his dominance and ascendancy which had caused her entry into the Baal Street Agreement and the Anstey Road Agreement.
250 There is simply no factual foundation for Stephannie's argument that her relationship with Bruce was one in which he exerted dominance and ascendancy over her will and in which she was, correspondingly, dependent upon him.
251 None of the matters of alleged 'dominance' submitted by Stephannie in her summary of evidence establish an ascendancy over her will. Some of these related to decisions by Bruce and Carol in relation to the Baal Street property which were made without discussion with Troy and Stephannie. Others related to trust placed in Bruce by Stephannie. None of these matters can establish a relationship of dominion and ascendancy necessary for proof of undue influence.
252 As I have explained above, at the time of the Baal Street Agreement and the Anstey Road Agreement, Stephannie enjoyed a warm and close relationship with Bruce and Carol. But she still made her own decisions. There was no evidence that Bruce had ascendancy over Stephannie's will. Until the move to Anstey Road she lived separately with Troy and the children; the decisions they made to enter the Anstey Road Agreement; to purchase Anstey Road with Bruce and Carol; and to live with them and Harly and Tayla there, were the product of the unconstrained free will of her and Troy.
253 The counterclaim based on undue influence should be rejected.
The counterclaim for unconscionable dealing
254 Counsel for Stephannie relied upon the label 'unconscionable' and formulated the claim for unconscionable dealing in a manner which, at
(Page 51)
- times, came close to a submission seeking the exercise of an idiosyncratic judicial discretion to unwind the two contracts. Stephannie's evidence included vituperative allegations against Bruce and Carol which postdated the Baal Street Agreement and Anstey Road Agreement in an attempt to establish unconscionable dealing and undue influence. The label 'unconscionable dealing' might be thought to give such a submission beguiling attraction. Such an approach is not correct.
255 As Spigelman CJ said in Attorney-General of New South Wales v World Best Holdings Limited [2005] NSWCA 261; (2005) 63 NSWLR 557 [122], some people, 'including legal practitioners, whose primary experience is the representation of the interests of particular parties, could well be seen as likely to approach the task of determining unconscionability by a principle of what is "fair" or "just" in all of the circumstances of the case'. However, it has been emphasised that there is a strong objection to equating the concept to what is unreasonable and unfair. The object of the doctrine is not to protect people from the consequences of their own mistakes: Micarone v Perpetual Trustees Australia Ltd [1999] SASC 265; (1999) 75 SASR 1, 127 - 128 [648] (Debelle & Wicks JJ quoting from Sir Anthony Mason).
256 For this reason, the label 'unconscionability' ought to be used with great care. It has been explained that 'the statement that enforcement of the transaction would be "unconscionable" is to characterise the result rather than to identify the reasoning that leads to the application of that description': Garcia v National Australia Bank Ltd [1998] HCA 48; (1998) 194 CLR 395, 409 [34] (Gaudron, McHugh, Gummow & Hayne JJ). Further, the broad use of terms like unconscionable and unconscientious 'may have masked rather than illuminated the underlying principles at stake': Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18; (2003) 214 CLR 51, 73 [43] (Gummow & Hayne JJ quoting from McGhee QC, the current editor of Snell's Equity). See also Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315, 325 - 326 [23] - [26] (Gleeson CJ, McHugh, Gummow, Hayne & Heydon JJ).
257 Without vigilance to ensure that conclusory references to 'unconscionability' are delineated then, as Professor Getzler presciently, and colourfully, observed, the term could be appropriated as a 'roving commission enabling an imperial judiciary to redistribute benefits and burdens between transacting individuals by decree': J Getzler 'Unconscionable Conduct and Unjust Enrichment as Grounds for Judicial Intervention' (1990) 16(2) Monash University Law Review 283, 322.
(Page 52)
258 A delineated description of the equitable doctrine of 'unconscionable dealing' was given by Kitto J in Blomley v Ryan[1956] HCA 81; (1956) 99 CLR 362, 415:
It applies whenever one party to a transaction is at a special disadvantage in dealing with the other party because illness, ignorance, inexperience, impaired faculties, financial need or other circumstances affect his ability to conserve his own interests, and the other party unconscientiously takes advantage of the opportunity thus placed in his hands.
259 If a person seeking relief for 'unconscionable dealing' establishes the elements of (1) special disadvantage or special weakness and (2) a taking advantage of that special weakness then the onus shifts to the other party to show that the transaction was, nevertheless, fair just and reasonable: Commercial Bank of Australia Ltd v Amadio (474) (Deane J); Johnson v Smith [2010] NSWCA 306 [5] (Allsop P).
260 The nature of element (1), a special weakness, requires the party asserting it to prove that the effect was that he or she was 'unable to judge for [himself or herself]' or 'unable to make a worthwhile judgment as to what is in [his or her] best interest': Blomley v Ryan (392) (McTiernan J); Commercial Bank of Australia Ltd v Amadio(461) (Mason J); Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd (64) [12] (Gleeson CJ), (74) [46], (77) [55] (Gummow & Hayne JJ).
261 The consequence, and importance, of element (2) above is that, unlike undue influence, the doctrine of 'unconscionable dealing' focuses 'more on the unconscientious conduct of the defendant': Bridgewater v Leahy (478) [75] (Gaudron, Gummow & Kirby JJ quoting from Sir Anthony Mason).
262 As to the first requirement of 'unconscionable dealing', I do not consider that Stephannie was unable to make a worthwhile judgment as to her best interests when entering into the Baal Street and Anstey Road Agreements. As a witness she impressed me as capable and intelligent. Although she said that she did not pay attention to the finer details of the transactions, she was aware of the nature of the transaction. In relation to the Anstey Road property, she was satisfied that it was in her best interests to enter an arrangement where the effect was that she would obtain a legal interest in the property for her own benefit.
263 As the opening paragraph of Stephannie's witness statement reveals, Stephannie is currently a social worker with the Department of Corrective
(Page 53)
- Services. She has a degree in Social Work from Curtin University, from which she graduated in 2004: Stephannie's witness statement par 43. She gave her evidence in a clear, intelligent manner. It is plain from all the circumstances surrounding the transaction that she was capable of making a judgment about her best interests in relation to the Anstey Road Agreement and Baal Street Agreement.
264 Counsel for Stephannie relied upon a number of matters concerning Stephannie's background and her relatively inferior bargaining position to Bruce. He referred, for example, to Stephannie's 'family history of abandonment and social isolation, which placed her in a position of relative disability, in relation to the Anderson family, which was a strong and cohesive family unit with good communal ties': see Stephannie's summary of evidence.
265 None of these factors establishes that Stephannie was incapable of making a judgment about her best interests at the time. It is clear that a person could be ill, or poor, or even 'affected by delusions' but still be perfectly capable of making a judgment as to his or her own best interests: Tillett v Varnell Holdings Pty Ltd [49] - [54] (Brereton J). Nor will a person even in a greatly inferior bargaining position necessarily lack capacity to make a judgment about that person's own best interests: Australian Competition & Consumer Commission v CG Berbatis Holdings Pty Ltd (77) [56] (Gummow & Hayne JJ).
266 The first requirement is not satisfied.
267 Nor is the second requirement of unconscionable dealing satisfied. This element of 'taking advantage of the special weakness' requires that Bruce and Carol were aware, or ought reasonably to have been aware, of some special disadvantage under which Stephannie laboured: Brown v The NSW Trustee & Guardian [36] (Brereton J). Even if Stephannie had been labouring under some special disadvantage, there is no evidence that Bruce or Carol were aware of it, or could reasonably have been aware of it. The relationship between the parties at the time of the Baal Street Agreement and the Anstey Road Agreement was warm and friendly. The parties trusted and cared for each other. There is no evidence of any awareness, or basis for an awareness, by Bruce of any special disadvantage suffered by Stephannie, which could prevent her from making a judgment about her own best interests.
268 In the context of statutory proscriptions against 'unconscionable conduct', which in part find their 'origin in the general law, equity' the
(Page 54)
- New South Wales Court of Appeal has said that ' the conduct must demonstrate a high level of moral obloquy on the part of the person said to have acted unconscionably': Tonto Home Loans Australia Pty Ltd v Tavares [2011] NSWCA 389 [289], [291] (Allsop P); see also Attorney General of New South Wales v World Best Holdings Ltd(583) [121] (Spigelman CJ). Neither Bruce nor Carol acted with any degree of moral obloquy.
269 The counterclaim based on unconscionable conduct should be rejected.
The claim for contribution and indemnity
270 In addition to the counterclaims, Stephannie claimed equitable contribution and indemnity for the amount by which the plaintiffs' liability to the ANZ Bank under the Purchase Loan and the Building Loan has been discharged by Stephannie, plus interest and costs.
271 No submissions were made by counsel for Stephannie in relation to this claim. It is directly inconsistent with the terms of the Anstey Road Agreement that Troy and Stephannie would make the payments for the Purchase Loan and the Building Loan.
272 This claim for contribution and indemnity must be rejected.
Conclusion
273 Until shortly before this trial began the issues were confined. The case concerned whether Stephannie held her rights to the Anstey Road property on resulting trust for Bruce and Carol, and whether a declaration sought by the plaintiffs concerning the ANZ Anstey Road loan should be made.
274 The declaration sought corresponded largely with admitted rights that the plaintiffs had under the Anstey Road Agreement. I will hear from the parties as to the terms in which the declaration should be made consistently with these reasons.
275 The parties disagreed about the operation of a 'presumption of resulting trust' and a 'presumption of advancement' which necessitated consideration of those concepts in these reasons. Although there is a presumption that a (resulting) trust was declared, ultimately the presumption of resulting trust is rebutted on the facts for a number of different reasons. Each of those reasons establishes that there was no manifested intention by Bruce and Carol that Stephannie should hold her
(Page 55)
- legal interest in the Anstey Road property on trust. The intention was that she should hold the interest which she and Troy jointly had in the Anstey Road property for their own benefit.
276 However, the trial was extended by counterclaims for mistake (abandoned in closing reply), failure of consideration, undue influence and unconscionable dealing. None of these claims was established on the evidence. And for several reasons of law each of these claims fails.
277 In closing submissions, both counsel sought to defer consideration, until after judgment, of the plaintiffs' prayer for relief seeking an order for sale of the Anstey Road property under s 126 of the Property Law Act 1969 (WA): see eg Miller v Dudman [2002] WASC 99. I will hear from counsel in relation to that relief sought and the appropriate orders to give effect to, and consequential upon, these reasons.
38
61
1