Bartrop v Nilant - [2003] FMCA 23

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BARTROP v NILANT & ANOR

[2003] FMCA 23

BANKRUPTCY – Trustees refusal to acknowledge proprietary rights alleged by tenant in common of bankrupt estate – not subject to mortgage – guarantee – whether surety or principal debtor– whether equitable exoneration applies – presumption of advancement – rebuttal by evidence of contrary intention or agreement – declaration of trustee as sole beneficial owner of property – no basis to review trustees decision pursuant to s.178 of the Bankruptcy Act – transfer by deceased declared void pursuant to s.120 of Bankruptcy Act.

Bankruptcy Act 1966, ss.120, 178

Phillip Morris v Adam P Brown Male Fashions Pty Ltd

Marley Ex Parte (1976) 1 WLR 952
Parsons v McBain (2001) 109 FCR 120
Wood v Wood (1956) VLR 478
Conlan v Registrar of Titles (2001) 24 WAR 299
Napier v Public Trustee (1980) 32 ALR 153
Nelson v Nelson (1995) 184 CLR 538
Blinkco v Blinkco (1964) 5 FLR 40

Applicant:

MARIANNE ELIZABETH BARTROP

Respondent:

CHARLES PHILLIPE LOUIS NILANT and OREN ZOHAR

File No:

WZ 103 of 2002

Delivered on:

7 February 2003

Delivered at:

Perth

Hearing Dates:

28, 29 and 31 October 2002

Judgment of:

McInnis FM

REPRESENTATION

Solicitor for the Applicant:

Mr A Atkinson

Solicitors for the Applicant:

Solomon Brothers

Counsel for the Respondent:

Mr A Aristei

Solicitors for the Respondent:

Carles Solicitors

ORDERS

The Application filed on 21 May 2002 is dismissed.
That the land at 1A Alston Avenue, Como, being the land comprised in certificate of title volume 2104 folio 833, (the land) be sold by private treaty or, alternatively, by public auction free from the encumbrances if any of such of the encumbrances as shall consent to the sale and subject to the encumbrances of them as shall not consent.
The land be sold subject to the Law Society of Western Australia's General Conditions for the sale of land.
The reserve price for any sale or auction of the land be set at a price to be fixed by the real estate agent or auctioneer appointed by the respondents.
The respondents shall have the conduct of the sale and be authorised to instruct a real estate and/or auctioneer for that purpose.
The remuneration of any auctioneer or real estate agent be fixed in accordance with the scale of charges of the Real Estate Institute of Western Australia Incorporated.
The applicant has liberty to make an offer and/or bid at the sale or auction of the land.
The applicant shall use her best endeavours to assist the respondents to conduct the sale or auction of the land in a timely and efficient manner for a reasonable price.
The applicant shall deliver up possession of the land to the respondents or their servants or agents no less than 14 days prior to the settlement of the sale of the land.
The net proceeds of sale or auction after payment of what shall be due to any encumbrance or encumbrances according to their priorities and of all other proper costs, charges and expenses of the sale or auction be paid to the respondents.
At the time of payment of the net proceeds of sale or auction an affidavit by the auctioneer or real estate agent be filed annexing a statement certifying the result of the sale and the expenses incurred in connection therewith.
It is declared that the transaction whereby the late Anthony William Bartrop, the bankrupt, transferred the land to the applicant by way of a one-half interest in the land registered in the name of the applicant on 17 November, 1998 is void against the respondents as trustee of the bankrupt estate of the bankrupt pursuant to section 120 of the Bankruptcy Act 1966 in the Act.
It is further declared that the respondents are the sole beneficial owners of the land by reason of the bankrupt having advanced all of the money used for the purchase of the land.
The respondent's costs, including any reserved costs of the application filed 21 May 2002 and the cross-application filed 2 July 2002 and notice of motion filed 5 December 2002 be taxed in default of agreement pursuant to order 62 of the Federal Court Rules upon the Federal Court scale with such costs to be paid on a party-party basis.
The amount of $750 payable by the respondents to the National Australia Bank be part of the costs payable by the applicant to the respondents as ordered herein.
The parties have liberty to apply and specifically liberty to apply is granted to the respondents in relation to the issue of indemnity costs to be sought on and from 30 August 2002.
I direct that the respondent shall file and serve any submissions and affidavits in support of an application for indemnity costs on or before 14 February 2003.
The applicant shall file and serve any submissions in reply and/or affidavits in response on or before 21 February 2003.
Unless otherwise ordered the issue of indemnity costs shall be determined upon the written submissions and affidavits without the requirement for further oral hearing.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
PERTH

WZ 103 of 2002

MARIANNE ELIZABETH BARTROP

Applicant

And

CHARLES PHILLIPE LOUIS NILANT and OREN ZOHAR

Respondents

REASONS FOR JUDGMENT

Introduction

MARIANNE ELIZABETH BARTROP (the Applicant) by Application filed 21 May 2002 seeks orders against CHARLES PHILLIPE LOUIS NILANT and OREN ZOHAR (the Respondents) in their capacity as trustees of the Bankrupt Estate of the late William Anthony Bartrop (the deceased).
The deceased passed away on 28 November 1998. At the time of his death he had four adult children of his previous marriage aged 30, 28 and twins aged 23 years. The deceased was 58 years of age at the date of his death.
In the application the applicant seeks the following orders:
“1.The property known as 1A Alston Avenue Como more particularly described as Lot 1 on Strata plan 32789 the whole of land in Certificate of Title Volume 2104 Folio 833 be sold by private treaty by the parties on terms and conditions to be agreed by the parties and if not sold within six months the said property be auctioned by the parties.
2.The loan advanced by the National Australia Bank to the late Anthony William Bartrop and secured by Mortgage G953101 registered against the property described above shall be repaid from the proceeds of sale (after the deduction of rates and taxes, agents commission and settlement fees) of the estate of the late Anthony William Bartrop’s interest in the said property.
3.The Respondents do pay the Applicant’s costs of and incidental to this application”.
The Respondents filed a Notice of Intention to Oppose the application and further relied upon a cross application with both documents being filed on 2 July 2002. It is appropriate to refer to the background facts in this matter before setting out the grounds of the Notice of Intention to Oppose the application and the details of the claim in the cross application. Points of claim and defence were also filed by the parties.

Background

The deceased estate was declared bankrupt on 11 September 2001 and it was at that time that the Respondents were appointed trustees of the Bankrupt Estate.
The Applicant and the deceased were married on 30 October 1994. Prior to their marriage both the Applicant and the deceased had been the sole proprietors of property. The Applicant had purchased a property at 68 Ryrie Avenue Como (the Ryrie property). On 6 April 1994 the deceased had purchased a property at 128 Labouchere Road South Perth (the Labouchere Road property).
It is common ground that both the Applicant and the deceased purchased the properties to which I have referred prior to their marriage on 30 October 1994. Each property was acquired by the respective parties from their own funds and neither contributed to the other’s acquisition of those properties.
The deceased was the sole owner of a retail liquor business known as the “Como Liquor Store” (the Como Liquor Store).
The deceased had purchased that business prior to the date of marriage. On 1 August 1996 the deceased had executed a loan agreement with the National Australia Bank (the NAB) for $170,000 in relation to the Como Liquor Store (the NAB loan). Security for that loan by way of a mortgage was provided against the Labouchere Road property in or about August 1996.
It is common ground that a written agreement dated 12 November 1998 (the guarantee) was executed between the Applicant and the NAB. In the guarantee the Applicant had agreed to guarantee that the deceased would pay to the NAB all the amounts which the deceased owed to the NAB at any time and to indemnify the NAB up to a maximum liability against any loss the NAB may suffer if for any reason the deceased did not pay the NAB any amounts which he owed to the NAB. Under the terms of the guarantee it is said that the Applicant’s maximum liability included the sum of $170,000 under the NAB loan.
Under the guarantee the Applicant’s liability further included interest accrued and not paid by the deceased when the NAB serves a demand to pay on the Applicant up to the amount of interest payable for the 12 months ending on the date of its demand and any bank fees, costs, charges, expenses and taxes accrued and not paid by the deceased when the NAB serves a demand to pay on the Applicant up to the amounts payable for the 12 months ending on the date of its demand.
On 17 November 1998 the deceased sold the Labouchere Road property for $425,000. On the same date the deceased and the Applicant as tenants in common in equal shares purchased a property at 1A Alston Avenue Como (the Alston Avenue property). It is common ground that the purchase of this property was funded, save for the deposit of $5,000, entirely from the proceeds of sale of the Labouchere Road property. It is noted that prior to the purchase of the Alston Avenue property and indeed in anticipation of that purchase a mortgage dated 12 November 1998 had been duly executed and that mortgage over the Alston Avenue property provided security for the NAB loan. The Applicant claims that that mortgage was entered into by the deceased’s principal debtor in respect of the loan with the Applicant entering into the mortgage simply as a surety in respect of that loan. Those allegations are in dispute with the Respondents asserting that a mortgage was not entered into or executed on that basis at all.
It is also common ground that the income generated by the Como Liquor Store business was used for the living expenses of the Applicant and the deceased during their relationship and marriage. Apart from the financial year ending 1997 there does not appear to be any evidence before the Court to suggest that the Applicant had received a salary for work performed at the Como liquor Store. I accept for the purposes of this application that the Como Liquor Store was operated by the deceased primarily with the assistance of his son Craig Bartrop and that apart from the financial year ending 1997 the Applicant contributed very little to that business by way of direct labour. Principally this was due to the fact that the deceased and his son were already operating the business together with the assistance of casual staff and that the Applicant herself had suffered a back injury which limited her ability to perform the tasks required in running a liquor store. For the financial year ending 1997 the records of the business show that wages were paid to the Applicant in the sum of $10,800. I accept from both the documents before me and other evidence to which I shall refer presently that save for one financial year the Como Liquor Store operated at a loss. It is noted that a significant expense in the operation of the Como Liquor Store was servicing the NAB loan. I note from the trading profit and loss statement for the year ending 30 June 1997 which has been exhibited to an Affidavit that for the financial year ending 1996 interest was paid by the business of $25,755 which I assume at least in part to service the NAB loan whilst in 1997 interest paid is recorded as $17,965. In 1996 the business operated at a net loss of $12,874 whilst in 1997 it operated at a net loss of $23,592.

Applicant’s Points of Claim

The Applicant in Points of Claim filed pursuant to Order of the Court recited in part the details concerning the purchase of the Alston Avenue property, the guarantee and the NAB loan to which I have referred together with assertions in relation to characterising the role that the deceased and the Applicant played in the execution of the mortgage dated 12 November 1998.
Reference was made to the demand being made for payment by the NAB dated 3 August 2001 claiming the amount of $170,000 for the loan together with interest thereafter and a certain amount for costs and expenses. In the Points of Claim the Applicant asserted that in equity she is entitled to have the loan and any interest, costs and expenses as indicated paid from the proceeds of sale of the deceased’s interest in the Alston Avenue property. It was further asserted that the Respondents have refused to acknowledge and accept the Applicant’s rights and that she is affected by an act, omission or decision of the Respondents and therefore in the claim the Applicant seeks the following:
(a)A declaration pursuant to s.178 of the Bankruptcy Act 1966 that, upon the sale of the land, the Applicant is entitled to be exonerated by the loan and any interests, costs, expenses, taxes, bank fees and charges accrued thereon being paid from the proceeds of the sale of the husband’s interest in the land.
(b)An order pursuant to s 178 of the Bankruptcy Act 1966 and s.126 of the Property Law Act 1969 (WA) requiring the parties to sell the land by private treaty on terms and conditions to be agreed on by the parties and in the event that the land is not sold within 6 months, requiring the parties to sell the land by auction on terms and conditions to be agreed on by the parties, with liberty to apply generally.

Respondents’ Notice of Intention to Oppose

The Respondents relied upon a Notice of Intention to Oppose the Application and had initially asserted that the Applicant had no standing to make any application under s.178 of the Bankruptcy Act. It was asserted that no decision had been made by the trustee that can be reviewed by the Court under that section.
It was further claimed in the Notice of Intention to Oppose that the equitable doctrine of exoneration as claimed by the Applicant in relation to the NAB mortgage secured against the Alston Avenue property does not apply as the purchase of that property was funded entirely by the deceased with the result that there has been a void transaction under s.120 of the Bankruptcy Act in respect of the half interest in the property which was registered in the name of the Applicant, that the deceased was the sole beneficial owner of the property and in the alternative that the deceased and the Applicant were the beneficial owners of the property in equal share with the burden of the mortgage to be borne by them equally.
In the notice the Respondents in the alternative claim that the equitable doctrine of exoneration relied upon by the Applicant is not applicable or should not be invoked because the Applicant has not mortgaged her property to secure the debt owed by the deceased estate, that the Applicant did not have a beneficial interest in the Labouchere Road property or any consequential beneficial interest in the Alston Avenue property, that the Applicant received a direct or indirect financial benefit in the NAB loan by the payment of her living expenses from the Como Liquor Store from 30 October 1994 until the death of the deceased and that the doctrine should not be exercised in favour of the Applicant as she failed to disclose all facts and documents pertaining to the basis of her claim including failure to disclose the existence of her Ryrie property in her then affidavit material sworn 20 May 2002.

The Cross Application

The Respondents also rely upon a cross application which seek orders and declarations providing for the sale of the Alston Avenue property by public auction with the net proceeds of sale after payment of what is due to any encumbrance or encumbrances according to priorities be paid into Court to abide by further order. Further orders in terms of the method of sale and the provision by auctioneers of certification statements are referred to in the cross application. In the alternative a declaration is sought that the transaction whereby the deceased transferred property to the Applicant for purchase of one half interest in the Alston Avenue property is void as against the Respondents as trustee in the bankruptcy pursuant to s.120 of the Bankruptcy Act. An order is sought that the Applicant pay to the Respondents the sum of $186,500 or such other sum as the Court thinks fit together with interest on that sum from the date of bankruptcy namely 11 September 2001 till payment or judgment at such rate as the Court thinks fit pursuant to s.51A of the Federal Court of Australia Act. In the alternative a declaration is sought that the Respondents are the sole beneficial owners of the Alston Avenue property by reason of the bankrupt having advanced all of the money used for the purchase of that property. A further alternative declaration is sought that the Respondents are the beneficial owners of the Alston Avenue property as tenants in common with the Applicant in equal shares and the burden of the NAB mortgage should be borne by the parties equally. Usual orders are sought in relation to costs.

Points of Defence

In the Points of Defence filed in accordance with the Court order the Respondents recite the chronology to which I have already referred and in particular refer to the agreement alleged to have been made between the deceased and the Applicant on or about 15 October 1998. It was asserted that the terms of that agreement were, apart from the deceased and the Applicant becoming tenants in common in equal shares of the Alston Avenue property, the deceased would pay the entire purchase price of that property substantially from the net proceeds of the Labouchere Road property. The NAB loan would be encumbered against the Alston Avenue property and the Applicant would sell her interest in the Ryrie property as soon as reasonably practicable and then apply the net proceeds of sale of that property towards the reduction or discharge of the NAB loan pending payment by the Applicant. The Applicant would remain as guarantor for the loan and the loan would remain encumbered against the Alston Avenue property.
The Respondents in their Points of Defence assert that in part performance of that agreement the Applicant and the deceased agreed to purchase the Alston Avenue property. The Applicant authorised a real estate agent to sell her Ryrie property on 15 October 1998. The guarantee and the mortgage were executed as described earlier on

12 November 1998. The deceased sold his interest in the Labouchere Road property on 17 November 1998 and the deceased and the Applicant became registered as joint proprietors of the Alston Avenue property that same day.
The Respondents assert that the Applicant sold her interest in the Ryrie property on or about 16 January 1999 and despite the existence of the agreement it was claimed that the Applicant failed to apply the proceeds of sale of that property towards the reduction or discharge of the NAB loan. The mortgage therefore it was claimed remains an encumbrance upon the Alston Avenue property securing the loan. In the capacity as trustees of the deceased’s bankrupt estate the Respondents claim to have become entitled to the deceased’s interest in the Alston Avenue property on and from 11 September 2001.
It is claimed the Applicant failed or refused to perform her obligations under the agreement or in the alternative failed to furnish any valuable consideration for her interest in the Alston Avenue property and that accordingly she is not entitled to remain registered as a joint proprietor of that property either as a matter of law or in equity.

Significantly the Respondents claim in their Points of Claim that the Applicant has failed to contribute towards any part of the purchase price of the Alston Avenue property and accordingly holds her interest upon a resulting or in the alternative constructive trust for the benefit of the Respondents as trustees of the deceased’s bankrupt estate.
As indicated earlier the Respondents denied the mortgage was executed on the basis of the deceased being the principal debtor with the Applicant being the mere surety. The Applicant’s claim otherwise to any relief is denied and as an alternative if the Applicant is entitled to remain as a tenant in equal shares in the Alston Avenue property then the Applicant and Respondents are bound to bear the burden of the mortgage registered against the Alston Avenue property equally. A costs order sought in the cross application is claimed on the basis that the Respondents’ costs be paid upon taxation out of any share of the Applicant in the proceeds of sale of the Alston Avenue property.

The evidence

In this matter the Applicant gave evidence and adopted a number of Affidavits sworn by her in support of her application.
The Affidavit evidence of the Applicant confirmed a great deal of the background material which as I have indicated is not really in dispute in this matter. During the course of her evidence under cross-examination the Applicant agreed that to purchase the Alston Avenue property it was a condition that the mortgage would then be transferred from the Labouchere Road property to the Alston Avenue property. She further agreed that it was a condition of the mortgage that that loan would be transferred to the Alston Avenue property. She agreed with that condition and it is appropriate to set out what appears at Condition 8 of the Contract of Sale of the Alston Avenue property which provides:-
“This offer is subject to the purchasers satisfying themselves with the National Australia Bank that existing mortgage on 128 Labouchere Road South Perth is transferable to the purchase of 1A Alston Avenue Como. This condition to be ratified within five working days from acceptance. Should written notice not be received from the purchasers within this period then it shall be agreed that this clause is waived.”
Whilst the Applicant agreed that the balance of the purchase price for the Alston Avenue property came from the deceased’s sale of the Labouchere Road property, she also asserted that she had worked approximately 20 hours per week in the Como Liquor Store and to that extent contributed to the joint account from which the $5,000 deposit was paid for the purchase of the Alston Avenue property.
In her Affidavit material the Applicant asserted that any debt to the NAB is a debt owed from the deceased’s estate and that her share as a tenant in common in the Alston Avenue property should not be affected.
The Applicant referred to Supreme Court of Western Australia proceedings commenced by her against the daughter and son of the deceased and noted that shortly after that proceeding was entered for trial on or about 2 June 2000 the Public Trustee was appointed as administrator of the deceased’s estate. Then on 11 September 2001 the

Respondents were appointed as trustees of the deceased’s bankrupt estate. The Supreme Court proceedings according to the Affidavit have not been resolved.
The Applicant strongly denies the existence of any agreement between herself and the deceased of the kind now alleged by the Respondents. In addition to the Affidavit evidence the Applicant further gave evidence concerning the extent and nature of her duties as home maker and wife. The decision to sell the Labouchere Road property was made in or about August 1998 and the Applicant confirmed that then tragically in October 1998 the deceased was diagnosed with cancer. Prior to that the Applicant and the deceased had considered the purchase of a new house and the Applicant claimed the intention was that the new house would be in both names. The Applicant confirmed that the deceased died on 28 November 1998 which is approximately six weeks after being diagnosed with cancer. The settlement of the Alston Avenue property therefore took place approximately 11 days prior to the death of the deceased.
The Applicant made reference to two Wills of the deceased, the first being a Will where the Applicant claimed the intention was that she should have exclusive right to reside at the Alston Avenue property until death upon certain conditions. The second Will it was asserted provided the intention by the deceased that the Applicant would obtain the deceased’s interest in the Alston Avenue property. That second Will was the subject of dispute by the children of the deceased and the subject of litigation.
Whenever discussions took place between the deceased and other persons and in particular Mr Brooks, the Applicant indicated that she was not aware of the nature of those discussions and strongly denied that any agreement was made or discussed in her presence of the kind now relied upon by the Respondents. The Applicant specifically denied that there was any agreement whereby she would apply the proceeds of sale of the Ryrie property to extinguish the debt of the Como Liquor Store. She claimed that she had put the Ryrie property on the market in April 1998 and referred to a selling agency agreement in respect of that property dated 1 May 1998. It is noted that in that exhibit the Applicant granted to the agent exclusive selling rights for a period of 90 days from 1 May 1998. The Applicant did not dispute that upon the expiration of that period she made no further effort to sell the Ryrie property until entering into a contract in November 1998 with settlement occurring on 18 January 1999.
Other details were then provided by the Applicant both in her affidavit and as indicated oral evidence concerning her contribution to the purchase of the Alston Avenue property which included some part time employment in the Como Liquor Store and other unrelated employment together with the home duties. She acknowledged from the accounts of the Como Liquor Store the only amount which indicates payment to her for work was an amount of $10,800 which appears in the financial statements for the year ending 30 June 1998. She notes that the Como Liquor Store ceased operating on or about 30 March 2001 and since the death of the deceased claims that she has not worked in that business and nor had she received any income from it despite there being a claimed provision for that in the second Will of the deceased.
Of significance is the reference in an affidavit relied upon by a witness called by the Respondents namely Mr Kent William Murphy an estate agent. During her evidence the Applicant was referred to an affidavit by Mr Murphy which was sworn 4 June 1999 and filed in Supreme Court of Western Australia proceedings number 2156 of 1996 (the Murphy affidavit). It is useful at this point to set out paragraph 11 of that affidavit which provides:-
“11.On or about 15 October 1998 Tony and the Applicant discussed in my presence their financial arrangements. They agreed as follows:
11.1Tony owed an amount to National Australia Bank being a business loan for the Como Liquor Store which was secured by a mortgage against Labouchere Road (‘the mortgage’);
11.2Tony and the Applicant would make an offer to purchase Alston Avenue for an amount of $373,000 and that the proceeds from the sale of Labouchere Road would be used for such purchase;
11.3The mortgage would be transferred to Alston Avenue;
11.4Ryrie Avenue would be sold;
11.5The proceeds of the sale of Ryrie Avenue would be used to repay or substantially reduce the loan to National Australia Bank.”
When that paragraph was referred to the Applicant she agreed with parts 11.1, 11.2 and 11.3 and asserted that in relation to 11.4 that in any event she already had the Ryrie property on the market since

1 May 1998. In relation to the suggestion that the proceeds of sale of the Ryrie property would be used to repay or substantially reduce the loan to the National Australia Bank the Applicant stated that “she did not recall” that and then went on to say “So its no”. The Applicant claimed to not know whether the deceased had consulted his lawyer indicating he wished to hold the Alston Avenue property as a tenant in common with the Applicant. She otherwise disagreed with further extracts from the Murphy Affidavit suggesting that the proceeds of sale of the Ryrie property would substantially reduce the loan to the NAB though she did agree with the assertion of that witness that the Alston Avenue proprety would become unencumbered with the Applicant being able to live in that property for the rest of her life and for her to receive some form of income from the Como Liquor Store to support her in her daily needs (paragraph 23 of the Murphy affidavit).
The Applicant was referred to an affidavit sworn by Michael Allan Brooks sworn 3 July 2002. Mr Brooks was the Bank Manager employed by the National Australia Bank and he deposed to attending the home of the Applicant and the deceased on or shortly before

1 November 1998 and produced a memo of that attendance which confirmed the arrangements of the deceased and the Applicant to purchase the Alston Avenue property with the proceeds of the sale from the Labouchere Road property with the loan to the NAB then being secured not by the Labouchere Road property but the Alston Avenue property. It is significant to note that the memo from Mr Brooks provides the following notation:-
“Mrs Bartrop owns a duplex in Ryrie Avenue Como which is also on the market. When this property sells our debt will be cleared in full from proceeds (customer value $160K+)”.
As I understood her evidence the Applicant denied that this was conveyed to the Bank Manager.
Substantially the evidence of the Applicant was that she never reached any specific agreement with the deceased as to how they would spend the proceeds of sale of the Ryrie property.
During cross examination the Applicant was referred to the Affidavit sworn by Brian Alfred Bartrop on 24 October 2002. Mr Brian Bartrop is the brother of the deceased and deposed as to the following:
“In front of the Applicant my brother told me that the Applicant had agreed to sell her house and repay the bank the mortgage held over my brother’s business the Como Street Liquor Store”.
Mr Brian Bartrop further deposed the following:-
“In front of the Applicant my brother told me and I believe that when the Applicant paid the proceeds of the sale of her property to the loan the reduction in interest payments on the loan meant that they would then have a small allowance of $300 to live on.”
The Applicant asserted that she would never have discussed private business in front of the deceased’s brother. It appeared to be common evidence that the deceased and his brother had been estranged for some period of time and that appeared to be in part the basis upon which it was asserted by the Applicant that a discussion of the private business arrangements would not have occurred. When it was specifically put to her that the proceeds of sale of the property would be applied to the loan to reduce interest payments the Applicant said, “I think he has made that up too”.
As indicated the Respondents relied upon the evidence of Brian Bartrop, Mr Murphy and Mr Brooks.
Mr Murphy was called to give evidence and adopted his affidavit. It is not necessary to refer to further details of that evidence save to say that in his evidence in chief he referred to the deceased as being very precise in planning the arrangements. He confirmed in cross examination the deceased had told him that he wanted half the Alston Avenue property to go to his children and half to the Applicant.
During the course of cross examination it became clear that Mr Murphy was somewhat vague about the chronology of events. He did however indicate that he was very clear about those events at the time he had sworn his affidavit in the Supreme Court proceedings to which I have referred. It is noted that affidavit was sworn on 4 June 1999 and related to significant events which had occurred in the previous year. To that extent the Court is persuaded that it should rely upon the almost contemporaneous affidavit sworn by Mr Murphy and in particular paragraph 11, which has previously been recited.
During the course of cross examination Mr Murphy denied strongly that the Applicant was not present during the conversation which he referred to in paragraph 11 of his Affidavit which had occurred on or about 15 October 1998. He was clear and confident in that evidence and specifically indicated that his clear understanding was with the transfer of the old loan secured on the Labouchere Road property to the Alston Avenue property that an integral part of the whole transaction would be the sale and application of the proceeds of that sale of the Ryrie property.
It is not necessary to state in further detail the evidence of Mr Brooks save that he adopted the file note to which I have already referred. Whilst agreeing under cross-examination that the Applicant may have made coffee in the kitchen he was satisfied that the Applicant was close by and that she was always included in the discussion at the meeting.
Brian Alfred Bartrop was called on behalf of the Respondents and adopted the affidavit to which I have referred. Under cross examination he indicated that when he had the conversation with his brother it was not expected then that his brother’s condition would decline so rapidly. He confirmed that the Applicant was present during the course of the discussions. He rejected any suggestion he may have been confused about the discussion which occurred.
Other evidence was called by the Respondents including evidence from Tracy Leanth Harris the daughter of the deceased. She had deposed in an affidavit sworn 29 August 2002 that her late father had told her approximately 4-6 weeks before he died the following:-
“We are purchasing a property in Alston Avenue and we had to take a loan out against Como Liquor Store until Marianne sells her house and can pay her share. Once Marianne has sold her house the proceeds will go towards paying her share of the house and the loan will be paid out.”
Some attack was made upon the recollection of Tracy Harris and other issues concerning the contribution made by the Applicant explored. She denied that she had made up the conversation with her father. By way of an attack on her credit it was suggested she had sold half her own house to her husband in order to avoid the possibility of that property being used in the event of unsuccessful litigation. She asserted it was a legitimate transaction.
Mr Kimberley Allen Harris the husband of Tracy Leanth Harris was also called to give evidence and adopted an affidavit sworn by him on 29 August 2002 and essentially sought to corroborate the substance of what had been asserted by his wife as to her late father’s conversation regarding property. In his affidavit Mr Harris stated that a conversation had occurred approximately two weeks after the deceased had been diagnosed with cancer and suggested that the deceased had stated the following:
“Marianne wants to buy a new place, so I will sell this place and she will sell her place and we will get something smaller together … somewhere close Marianne (the Applicant) has been looking, I think she may have found a place she likes but I have not seen it, I don’t really care”.
Under cross examination it was clear that Mr Harris conceded that part of the reason for the transfer of the property from joint names with his wife to his own name was to deal with an issue arising out of the administration of the estate.
In general terms it was clear from the evidence of both Mr and Mrs Harris that their evidence given against the backdrop of a family dispute over an estate and to that extent its value diminished though the self interest of both Mr and Mrs Harris likewise could be said to exist in relation to the Applicant. Mr Harris however reiterated the substance of the conversation that he claims he had with the deceased.
Bryan Charles Bartrop, a son of the deceased, also gave evidence and adopted an affidavit sworn by him on 9 September 2002 wherein he referred to a conversation with the deceased. The significant element of that conversation was the deceased had allegedly said that the “Applicant would contribute to the new property by selling her house to pay off the loan at the bottle shop”. He maintained this evidence under cross-examination.
Craig William Bartrop another son of the deceased gave evidence and adopted an affidavit sworn by him on 6 September 2002. Again, the substance of his affidavit was that the Applicant would sell her Ryrie property and the proceeds of sale used to pay the deceased for the Applicant’s half share in the Alston Avenue property. He further deposed that when he asked the deceased what would happen if the Applicant did not pay moneys she received from her property towards the loan that the deceased replied that if she did not pay off the loan then she would remain liable on the guarantee signed in relation to the loan. He asserted there was an agreement to this effect.
He was cross examined extensively in relation to the agreement and alleged statements of the deceased. He agreed in an affidavit sworn by him on 8 June 1999 in the Supreme Court proceedings to which I have referred earlier he had deposed to making a comment in the context of the proposed claim by the Applicant that “If the Applicant intended to take over the business then I might as well not work as hard as I had been and allow the business to run down as my efforts would not be rewarded”. He indicated in clear terms however that when the business was finally terminated he was still owed money for recreation leave and other payments.
In general terms whilst it is clear that there was a desire to assert the existence of an agreement, I formed the impression that Craig Bartrop had a somewhat flippant approach to evidence and when confronted with a discrepancy between dates when he was told of the agreement, that is on the one hand 17 October 1998 and then being confronted with a reference in a caveat to an oral agreement being made on

28 October 1998 he said, when confronted with a statutory declaration declared by him and his sister on 19 October 1999 which referred to

28 October 1998 and a reference elsewhere to a date 30 October 1999, “Take an average of 29^th …how does that grab you?”.
I gained the impression with Mr Craig Bartrop that he did not have a clear recollection of the events and as I have indicated in one extract adopted a somewhat flippant approach to evidence. I found his evidence unhelpful and to a lesser extent also the evidence of his sister and her husband, that is Mr and Mrs Harris.
Other affidavit material was relied upon by the Respondents including an affidavit by the First Respondent sworn 2 July 2002, an affidavit by Joan Catherine Lawrence sworn 15 August 2002 in relation to the NAB details. It is not necessary to recite further details in relation to those affidavits.

Submissions and discussion

Both parties provided written submissions in this matter. The Applicant had asserted that in general terms despite the common law exceptions and indeed exceptions under the Evidence Act1995 (Cth) to the hearsay rule in relation to alleged statements of a deceased that at the very least the Court should be hesitant to place much reliance upon the evidence in this case.
In support of the application pursuant to s.178 of the Bankruptcy Act 1966 it was submitted that the decision by the trustees to refuse to acknowledge and accept the Applicant’s right to have the bankrupt estate’s half interest in the Alston Avenue property applied for payment of the debt to the NAB amounts to a “decision, act or omission” of the trustees within the meaning of s.178 of the Bankruptcy Act.

The Court was invited to in any event apply the principles of accrued jurisdiction and deal with the entire matter or dispute between the parties so long as the federal jurisdiction is made out. (See Phillip Morris v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457).
It was clear that although the Respondents had significant reservations about the Applicant’s ability to bring an application pursuant to s.178 for the purpose of the application it seemed to me that there was no real issue taken that I could not determine the dispute between the parties in particular having regard to the cross application to which I have already referred. To the extent that it is required I am prepared to accept solely for the purpose of the present application that the Applicant is entitled to rely upon the failure of the Respondents to acknowledge the Applicant’s claim that the deceased’s estate half interest in the Alston Avenue property should be applied to repay the NAB loan. In the circumstances of the present case I am satisfied this may amount to a “decision, act or omission”.
In brief terms the Applicant denied the existence of any oral agreement otherwise relied upon a presumption of advancement in favour of the Applicant and referred to numerous authorities in relation to that issue. It was submitted that nothing short of an intention to retain some defined and legally recognisable estate or interest would suffice to rebut the presumption of advancement (See Wood v Wood (1956) VLR 478 per Smith J at 486).
The Court was invited to conclude there was no contract or agreement between the deceased and the Applicant. The evidence of the children of the deceased it was submitted should be rejected. The confirmation that the presumption of advancement is correct is further strengthened by the fact that there was evidence from Mr Murphy that the deceased wanted half of the Alston Avenue property to go to the children and half to go to the Applicant and of course the property was registered in the name of the Applicant and the deceased as tenants in common. They are objective facts which the Court could rely upon. In contrast the Court should not accept the evidence of Mr Murphy in particular who was someone vague during cross examination. Had the deceased wished to purchase the Alston Avenue property upon condition that the proceeds of the sale from the Ryrie property be applied to reduce the loan to the NAB then that could have been specified in documents. The absence of any documentary evidence assists in suggesting that there is any evidence which may be regarded as either evidence or agreement or evidence of an intention which would rebut the presumption of advancement in the present case. Reliance was also placed on the absence of any agreement between the deceased and the Applicant in relation to payment of the debts of the Como Liquor Store from the proceeds of sale of the Ryrie property. It was submitted that the present case involves the signing of a guarantee which is no more than a charging by the Applicant of her interest in the property as surety with the deceased being the principal debtor. In the circumstances reliance was placed upon the decision of Marley Ex Parte (1976) 1 WLR 952 said to be a case of similar circumstances to the present application and further reliance was placed upon the equity of exoneration which is said to operate. I was referred to Parsons v McBain (2001) 109 FCR 120. As I understood it applying the cases to which I have referred it is suggested that the responsibility for the NAB debt in the present case should be that visited upon what it is submitted is the principal debtor namely the deceased rather than the Applicant in the circumstances.
During the course of his submissions Counsel for the Applicant identified as a significant issue the presumption of advancement to which I have referred and whether or not that presumption has been rebutted on the facts. A second issue is the issue of the equity of exoneration and whether that applies. They were the two crucial issues relied upon. As Counsel submitted the issue is whether the Applicant holds her half interest in the Alston Avenue property in trust for the benefit of the estate. It was further submitted that in the circumstances in any event the Applicant remains a tenant in common. There is no resulting trust and/or constructive trust which can apply on the facts of the present case according to the submissions on behalf of the Applicant.
Counsel referred to the decision of Selby J in Blinkco v Blinkco (1964) 5 FLR 40 and in particular the following passage –
“Mr Meagher, of Counsel for the Petitioner, relied at first on the submission that no presumption of advancement arises until there has been a conveyance of the subject land … I am satisfied that on the signing of the contract there arose a presumption of advancement in favour of the Respondent: see Wirth v Wirth (1956) 98 CLR 228. The onus lies on the husband to rebut this presumption if he maintains that it was intended that his wife should hold her interest in trust for him: Martin v Martin (1959) 33 ALJR 362 at pp 365, 366; but he has adduced no evidence as to his intention at the time he entered into the contract. The subsequent dissolution of the marriage would not affect the gift which is presumed to have been made to the wife: Dunbar v Dunbar (1909) 2Ch 639. Although the parties have no interest in the land other than a right to enforce the contract, the vendor could not refuse to convey the land to both parties as provided in the contract.”
In the context of that quotation it was submitted that there is clear authority that the Court needs to look at the purposes of intent and the rebuttal of the presumption at the time the contract was entered into. It was submitted that Mr Murphy’s evidence was consistent with the Applicant’s evidence and enforces the fact that the property was to be bought for the benefit of the Applicant. The Applicant was to receive half of the Alston Avenue property and if there was any intent that that be a conditional arrangement then some memorandum or other document in writing could have been created, it was submitted, to support that conclusion. Hence there was no intention to impose such a condition which the Court could rely upon.
The Applicant relied upon the indefeasibility of title and referred in particular to the decision of Owen J in Conlan v Registrar of Titles (2001) 24 WAR 299. It was submitted that applying that authority any claims that the Applicant holds on interest in the Alston Avenue property in trust for the benefit of the Respondents because she did not provide any or any valuable consideration should fail. Ultimately it was submitted that there is no evidence upon which the Court can rely that the intent at the time of signing the contract was that the Applicant was not to have the beneficial interest in the property. The evidence of family members involves a great deal of hearsay evidence and the Court was invited to accept the evidence of the Applicant that she was not privy to conversations between the deceased and the children or indeed the deceased’s brother. Essentially it was argued that there was no evidence of any agreement that the proceeds of the Ryrie property were to be applied in return for a share of the Alston Avenue property going to the Applicant.
It was submitted on behalf of the Respondents that the Applicant holds an interest in the Alston Avenue property upon a resulting trust for the benefit of the bankrupt estate (See Napier v Public Trustee (1980) 32 ALR 153 at 158) where the Court stated the following:-
“The law with respect to the resulting trust is not in doubt. Where property is transferred by one person into the name of another without consideration, and where a purchaser pays the vendor and directs him to transfer the property into the name of another person without consideration passing from that person, there is a presumption that the transferee holds the property upon trust for the transferor or the purchaser as the case may be.”
It was submitted in the present case the evidence is clear that the Applicant did not provide any consideration in the present case and the acquisition of the Alston Avenue property occurred due to the application of the funds from the sale of Labouchere Road property.
During the course of submissions it is noted further at page 158 of the Napier decision that, “It is also clear that a resulting trust need not necessarily relate to the entire interest in the property”.
It was submitted in light of the Napier decision that with any registered indefeasible title the doctrine of resulting trust can still apply.
In relation to the presumption of advancement it was submitted that the presumption would apply in the present case as between a husband and wife. That can be subject to rebuttal upon the evidence which in the present case it was submitted indicates that the transfer was not one intended to be simply by way of a gift but that the evidence showed a contrary intention namely that the Applicant would contribute the proceeds of sale of the Ryrie property. It is not necessary it is submitted for the Respondents to assert a particular agreement or contract but rather that there is evidence of an intent which is contradictory or inconsistent with an intent to gift by way of advancement. Reference was made to the High Court Decision in Nelson v Nelson (1995) 184 CLR 538 at 547 where in referring to presumption the Court states the following:-
“The presumptions operate to place the burden of proof, if there be a paucity of evidence bearing upon such a relevant matter, as the intention of the party who provided the funds for the purchase … The other presumption, that of advancement, is perhaps not strictly a presumption at all. Rather the position is that there are certain relationships from which equity infers that any benefit for one party at the cost of the other has been provided by way of ‘advancement’. The consequence is that the equitable estate follows the legal estate and is at home with the legal title: there is an absence of any reason for assuming that a trust arose.
The operation of presumption of advancement may be rebutted by evidence of the actual intention, at the time of purchase, of the parent or other person who provided the purchase money.”
In the present case it was submitted on the evidence in relation to what had been said by the deceased to various witnesses and having regard to the fact that all the funds used to acquire the Alston Avenue property that the deceased did not intend to simply gift a half interest of that property to the Applicant without there being any further contribution, namely the proceeds of the Ryrie property.
Reference was then made further to the High Court Decision in Nelson where the Court states again at p 547 the following:-
“Where the presumption of advancement is rebutted, the trust which then is enforced is a resulting trust, not an express trust. The trust thus is outside the operation of the requirement for writing in s 7 of the Statute of Frauds 1677 (Eng) and its modern Australian equivalents.”
In support of the submissions on the part of the Respondents, reliance was placed upon the evidence of Mr Murphy and Mr. Brooks. Both are said to be independent witnesses who can be relied upon together with the evidence of the Applicant’s brother. The Applicant’s evidence it was said was equivocal and on a number of occasions she was unable to recall matters rather than simply saying those matters did not occur. It was agreed that it is not necessary to be critical of the Applicant in relation to her evidence and the Court should simply prefer to rely upon the evidence of Mr Murphy and Mr Brooks that statements were made in the presence of the Applicant referred to earlier in this judgment.
Further submissions were made in relation to the Applicant’s evidence concerning contributions made by her during the course of the marriage and in particular her contribution to the joint account from which the $5,000 deposit was drawn. That joint account should be looked at it was submitted as a matter of equity and the Court is entitled to take into account all contributions of a non financial nature including benefits to the Applicant of the joint account and/or otherwise funds from the Como Liquor Store save for the one year ending 30 June 1997 when a reference is made to payment to the Applicant of $10,800 for work at the Como Liquor Store, the Court should be reluctant to place much weight on any other evidence of financial contribution by her towards the joint account. It was submitted that I should not find that there should be any money paid to the Applicant arising from the deposit and the appropriate finding is that there be sole and beneficial ownership declared in relation to the Respondents. In the alternative it was submitted that applying equitable principles 50% of the joint account deposit should be charged over any declaration of beneficial interest so that the Respondents would not receive their beneficial interest until they had paid the sum of $2,500 in return for the 50% found to have been contributed to the deposit by the Applicant.
The main thrust of the submissions on behalf of the Respondents was that it would be unconscionable in the present circumstances for the Applicant to retain her interest as a tenant in common and in equal shares of the Alston Avenue property where there is clear evidence that it was specifically intended she should enjoy that legal title and that it was always the intent in equity that the Applicant would only gain a legal title upon her contributing the proceeds of the Ryrie property. There is therefore a resulting trust and there is clear evidence that it was never intended that the Applicant was to receive her interest in the Alston Avenue property as an unconditional gift. On the evidence the intention was that the deceased and the Applicant would have an unencumbered property and effectively be able to enjoy a small income from the Como Liquor Store.
It was submitted that in the present case the guarantee signed by the Applicant could not be regarded as a surety and that the equitable principles of the doctrine of exoneration should not apply as the mortgage was entered into and guarantee signed in order to transfer the security of the loan to the new property with the intent that that debt be extinguished upon application of the proceeds of sale of the Ryrie property.

Findings and reasoning

On the material before me I am not satisfied that there is necessarily a basis upon which the Applicant can bring an application pursuant to

s.178 of the Bankruptcy Act. However as indicated earlier I am prepared to act upon the alleged omission and the circumstances having regard to the evidence concerning the acquisition of the Alston Avenue property. The decision by the Respondents to refuse to acknowledge the Applicant’s assertion that the payment of the debt to NAB should be applied from the bankrupt estate’s half interest in that property is not a decision, act or omission which would justify intervention by the Court.
The substantive issues in my view in the present case are in fact raised in the cross application.
In considering the cross application and/or the Points of Defence and Counterclaim it is appropriate that I indicate the findings of fact and review of the evidence. During the course of this judgment I have made an assessment of the evidence of various witnesses where appropriate which I now adopt.
In general terms it is my view that where there is conflicting evidence between the Applicant and the witnesses called for and on behalf of the Respondents, namely Mr Murphy and Mr Brooks, it is the evidence of the Respondents’ witnesses which I prefer. In the case of Mr Murphy I accept the evidence set out in the affidavit which he adopted and which had been sworn on 4 June 1999 (filed in Supreme Court proceedings) as being a reasonably contemporaneous account of what had occurred as recently as 15 October 1998. I accept each and every one of the terms of the agreement set out in that paragraph despite the fact that there is a dispute raised in relation to those matters by the Applicant. I further accept that those discussions occurred in the presence of the Applicant and I reject her evidence that she was not present during the time those matters were discussed. I further accept the evidence of Mr Brooks who in my view was simply relying upon a routine business memorandum which recorded the discussion which he had with the deceased and the Applicant on 1 November 1998.
It is significant as indicated earlier in this judgment that during the course of that discussion it is noted under the heading “Debt Servicing” that “full repayment likely from sale of property in the short term”.

I am satisfied in the present case that it was the intention of the Applicant and the deceased that having both introduced properties acquired prior to the marriage that they would then purchase a tenants in common a new property whereby proceeds would be applied from the respective properties held by each of them and acquired prior to marriage. It is clear to me that further support for the finding that the evidence of both Brooks and Murphy is accurate is found in the contract of sale for the Alston Avenue property and in particular Condition 8 thereof which was recited earlier in this judgment. The structure of the financial arrangements and property dealings of both the Applicant and the deceased particularly in circumstances of a short marriage combined with the evidence of the agreement and/or discussions as set out by both the witnesses Brooks and Murphy lead me to conclude that there was either an agreement or at the very least an intention clearly evinced by the deceased that the Alston Avenue property would be purchased from funds and proceeds of the Labouchere Road property and that the new property would be substitute security for the loan to NAB. I am further satisfied on the evidence that the loan to NAB was to be eliminated and/or reduced to the point where interest payments to be made on that loan would be either eliminated or so significantly reduced as to permit an income to be derived from the business which would support both the Applicant and the deceased. On the evidence before me I am satisfied that it was the intention of the deceased that both he and the Applicant would be tenants in common provided they both disposed of the properties which they had previously acquired and applied those funds to the acquisition of the new property and extinguishment of the current debt to the benefit of both in terms of providing a source of income and accommodation.
I am further strengthened in this conclusion by the evidence of the deceased’s brother Bryan Alfred Bartrop. I accept his evidence both in the affidavit which he adopted and before the Court as to the substance of the arrangement which he had heard from his brother, the deceased.
In my view on the evidence before me it is clear that a resulting trust in relation to the Alston Avenue property has been established in accordance with the principles referred to by Counsel for the Applicant. Those principles are set out in the cases to which reference has been made namely the decisions of the High Court in the Napier case and in the decision of Nelson.
I am satisfied that equitable principles can apply in circumstances where despite the principles of indefeasibility of title where that title reveals owners as tenants in common, the Court is entitled to consider the circumstances in relation to the creation of that right and after making due allowance for the presumption of advancement may then further consider whether that presumption is rebutted. I am satisfied in the present case that the presumption has been rebutted and satisfied that either an agreement has been reached between the Applicant and the deceased of the kind described and set out in the affidavit of Mr Murphy and/or at the very least the terms of what is said to be an agreement shows a contrary intention sufficient to rebut the presumption of advancement. I am satisfied that at all material times it was clear that the Applicant would contribute the proceeds of sale of the Ryrie property to repay or substantially reduce the loan to the NAB. As indicated this conclusion is strengthened by the special condition in the contract to which I have referred and as a matter of logic it is clear that there would be a mutual benefit to both the Applicant and the deceased in the reduction of the debt owed to NAB so that in turn there would be the prospect of removing entirely the mortgage which was security for the loan and reducing the interest payments payable by the Como Liquor Store which then would provide an opportunity for that business to generate a modest income for the benefit of both parties. I find further that the reference by Mr Brooks to full repayment being likely from the sale of property in the short term is a clear reference to that payment being generated from the sale of the Ryrie property. Until that occurs there is no doubt in my mind that the mortgage and guarantee would stand as a debt for both the deceased and the Applicant and I reject the submission that the Applicant was merely acting as a surety with the deceased being the principal debtor. There is a clear benefit to both parties and this is not a situation where the guarantor has simply providing a surety of the nature described by Counsel for the Applicant. The Applicant is clearly aware of the nature of the loan to the NAB and the security required and further aware as I have found given she was present during the discussions to which I have referred with the deceased of the need to extinguish and/or eliminate that loan from the proceeds of sale of the Ryrie property. Until that occurs she is fully exposed to liability under the guarantee as a principal debtor rather than a surety. This is not a case similar to the Marley decision where the father has simply allowed property to be registered in joint names to assist a son and to act as a mere surety. In the present case the chronology clearly and cogently provides evidence in my view of two parties entering into a marriage with pre-existing property which they then decided to apply for the purchase of one property and extinguishment of debt over a business from which both then potentially would receive a modest income.

I should add for the sake of completeness that I am satisfied on the evidence before me that whilst the Applicant had placed the Ryrie property on the market as a consequence of the agents retainer on

1 May 1998, that upon the expiration of 90 days under that agreement no further action was taken by her until the subsequent agreement was reached between her and the deceased and/or the deceased evinced an intention that the Ryrie property should be sold with the proceeds applied as described earlier.
In relation to the $5,000 deposit I am satisfied that that deposit came from a joint account which was primarily contributed to by the business conducted by the deceased. To the extent that there may be other contributions by the Applicant in relation to home making or otherwise I am satisfied that other benefits she received as occupant of the property and the financial benefits received from the business leads me to the conclusion that I should not make any adjustment for contributions during the marriage relationship and should regard the $5,000 deposit as being provided solely from the resources of the deceased. No allowance should be made out of that amount in my view for the benefit of the Applicant as her contributions as described in evidence are easily outweighed or counter balanced by the other matters to which I have referred.
I accept the submission by counsel for the Respondents that it would be in the present case as a matter of equity unconscionable for the Applicant to retain her interest as tenant in common in equal shares in the Alston Avenue property where as I have found that was not specifically intended and certainly on the findings I have made the intent in equity was that she would only gain legal title upon contribution of the proceeds of sale of the Ryrie property. I accept that it was never intended as an unconditional gift.
On the material before me whilst the registration of the interests of the deceased and the Applicant as tenants in common is a factor to take into account it is only one factor against the background of the evidence I have accepted primarily from the witnesses Brooks and Murphy concerning the agreement and/or intention of the deceased in registering the property in that way. Otherwise the contributions made by the Applicant to the business were minimal apart from the one financial year when she received an income of $10,800.
In making my findings which have led to the conclusions in this judgment I have not relied particularly on the evidence of Mr and Mrs Harris or Mr Craig Bartrop nor the other son Bryan Charles Bartrop. The evidence of all those witnesses in my view whilst providing some degree of corroboration to the evidence of Murphy and Brooks is not as reliable as that evidence and I do not in the present circumstances believe it is necessary for me to place much reliance on that evidence in order to reach the conclusions set out in this judgment.
If one analyses the material further and in particular considers the logical consequences to flow from the Applicant’s submissions then the result would be at the very least unlikely. The position would be that the deceased being fully aware that the Applicant had acquired prior to the marriage the Ryrie property would get the entire benefit of the proceeds of sale of that property plus not be exposed to any contribution to extinguish the debt to the NAB which would simply be a recurring debt to the already struggling business and in the event of the death of the deceased his interest as a tenant in common after deduction of the $170,000 to the NAB would leave very little if any benefit to the children of his former marriage. The Applicant would therefore be in a position where she received a half interest as tenant in common in the Alston Avenue property without making any contribution at all of a direct financial nature to its acquisition, would then retain the proceeds of sale of her Ryrie property which she acquired before marriage and continue to receive whatever might at least be part of the income generated by the family business. That result in my view is improbable and having regard to that practical consequence makes it more likely that the findings which I have made based upon the evidence primarily of Brooks and Murphy as to the intention and/or agreement referred to in their evidence are correct.
I therefore find that there was an agreement and/or intention evinced in terms similar to those set out by Mr Murphy in his affidavit evidence to which I have referred and corroborated by the evidence of Mr Brooks.
The conclusions I have reached are not weakened by the fact that ultimately the Alston Avenue property was registered in the names of both the Applicant and the deceased as tenants in common without any further documentation. I am satisfied that there is sufficient evidence as indicated of an agreement or at the very least an intention sufficient to rebut the presumption of advancement and/or otherwise support the conclusions I have reached in this matter.
It is not for this Court to resolve any outstanding issues which may arise from the disputed Wills of the deceased. It is clear that those Wills may provide some support to both parties but in the circumstances I am entitled to make the findings of fact and apply the law that I have been invited to apply by counsel for the Respondents without being required to undertake a detailed analysis of other issues concerning the Will and Testament of the deceased which will no doubt be the subject of proceedings in the appropriate Court.
It would follow in this case therefore that it is appropriate that I make a declaration of a kind sought by the Respondents that the Respondents are the sole beneficial owners of the Alston Avenue property based upon the resulting trust which in turn relies upon both the finding of the agreement and/or intention consistent with the agreement together with the undisputed fact that the deceased advanced all the money used for the purchase of the property. Based on my findings of fact I am satisfied that the requirements of s.120 of the Bankruptcy Act have been met in that the transfer which resulted in the Applicant and the deceased becoming tenants in common was a transfer whereby no consideration was given by the Applicant and to that extent it should be declared void as against the trustee. It further follows that I should make an order that the property be sold at public auction. I will hear submissions in relation to the precise orders to be made including declarations and orders if any under the Bankruptcy Act.
Arising out of the judgment I have delivered this day I now make the following orders:
(1)The Application filed on 21 May 2002 is dismissed.
(2)That the land at 1A Alston Avenue, Como, being the land comprised in certificate of title volume 2104 folio 833, (the land) be sold by private treaty or, alternatively, by public auction free from the encumbrances if any of such of the encumbrances as shall consent to the sale and subject to the encumbrances of them as shall not consent.
(3)The land be sold subject to the Law Society of Western Australia's General Conditions for the sale of land.
(4)The reserve price for any sale or auction of the land be set at a price to be fixed by the real estate agent or auctioneer appointed by the respondents.
(5)The respondents shall have the conduct of the sale and be authorised to instruct a real estate and/or auctioneer for that purpose.
(6)The remuneration of any auctioneer or real estate agent be fixed in accordance with the scale of charges of the Real Estate Institute of Western Australia Incorporated.
(7)The applicant has liberty to make an offer and/or bid at the sale or auction of the land.
(8)The applicant shall use her best endeavours to assist the respondents to conduct the sale or auction of the land in a timely and efficient manner for a reasonable price.
(9)The applicant shall deliver up possession of the land to the respondents or their servants or agents no less than 14 days prior to the settlement of the sale of the land.
(10)The net proceeds of sale or auction after payment of what shall be due to any encumbrance or encumbrances according to their priorities and of all other proper costs, charges and expenses of the sale or auction be paid to the respondents.
(11)At the time of payment of the net proceeds of sale or auction an affidavit by the auctioneer or real estate agent be filed annexing a statement certifying the result of the sale and the expenses incurred in connection therewith.
(12)It is declared that the transaction whereby the late Anthony William Bartrop, the bankrupt, transferred the land to the applicant by way of a one-half interest in the land registered in the name of the applicant on 17 November, 1998 is void against the respondents as trustee of the bankrupt estate of the bankrupt pursuant to section 120 of the Bankruptcy Act 1966 in the Act.
(13)It is further declared that the respondents are the sole beneficial owners of the land by reason of the bankrupt having advanced all of the money used for the purchase of the land.
(14)The respondents’ costs, including any reserved costs of the application filed 21 May 2002 and the cross-application filed
2 July 2002 and notice of motion filed 5 December 2002 be taxed in default of agreement pursuant to order 62 of the Federal Court Rules upon the Federal Court scale with such costs to be paid on a party-party basis.
(15)The amount of $750 payable by the respondents to the National Australia Bank be part of the costs payable by the applicant to the respondents as ordered herein.
(16)The parties have liberty to apply and specifically liberty to apply is granted to the respondents in relation to the issue of indemnity costs to be sought on and from 30 August 2002.
(17)I direct that the respondent shall file and serve any submissions and affidavits in support of an application for indemnity costs on or before 14 February 2003.
(18)The applicant shall file and serve any submissions in reply and/or affidavits in response on or before 21 February 2003.
(19)Unless otherwise ordered the issue of indemnity costs shall be determined upon the written submissions and affidavits without the requirement for further oral hearing.

I certify that the preceding ninety-nine (99) paragraphs are a true copy of the reasons for judgment of McInnis FM.

Associate:

Date: 7 February 2003