Commissioner of State Revenue v Caine
[2000] WASCA 314
•30 OCTOBER 2000
COMMISSIONER OF STATE REVENUE -v- CAINE & ANOR [2000] WASCA 314
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2000] WASCA 314 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:46/2000 | 4 OCTOBER 2000 | |
| Coram: | KENNEDY J IPP J MURRAY J | 30/10/00 | |
| 16 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| PDF Version |
| Parties: | COMMISSIONER OF STATE REVENUE CORRIN LINDSAY CAINE JOAN MIRIAM CRABTREE |
Catchwords: | Stamp duties Partition of property Whether de facto wife held an interest in property purchased with separate funds of de facto husband Acknowledgment of debt by de facto wife Admissibility of extrinsic evidence of intention of parties |
Legislation: | Stamp Act 1921, s 73AA(1)(b), s 73AA(1)(f), s 75AD |
Case References: | Associated Alloys Pty Ltd v ANC 001 452 106 Pty Ltd (2000) 74 ALJR 862 Bertei v Feher [2000] WASCA 165 Comptroller of Stamps v Christian [1991] 2 VR 129 Allders International Pty Ltd v Commissioner of State Revenue (Vict) (1996) 186 CLR 630 Australian National Airlines Commission v Commissioner of Stamp Duties (Qld) [1989] 1 Qd R 246 Calverley v Green (1984) 155 CLR 242 Campbells Hardware Pty Ltd v Commissioner of Stamp Duties (Qld) (1998) 40 ATR 1 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 Commissioner of Stamp Duties (NSW) v Pendal Nominees Pty Ltd (1989) 167 CLR 1 Commissioner of Stamp Duties (Qld) v Hopkins (1945) 71 CLR 351 Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1982) 149 CLR 431 Edwards Dunlop & Co Ltd v Harvey [1927] VLR 37 Foskett v McKeown [2000] 2 WLR 1299 Government Employees Superannuation Board v Martin (1997) 19 WAR 224 Ingram v Mohren (1993) 10 WAR 497 Ogilvie v Adams [1981] VR 1041 Scott v Scott (1963) 109 CLR 649 Shephard v Cartwright [1955] AC 431 Venture Management Ltd v Commissioner of State Taxation (1991) 4 WAR 283 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : COMMISSIONER OF STATE REVENUE -v- CAINE & ANOR [2000] WASCA 314 CORAM : KENNEDY J
- IPP J
MURRAY J
- Appellant
AND
CORRIN LINDSAY CAINE
JOAN MIRIAM CRABTREE
Respondents
Catchwords:
Stamp duties - Partition of property - Whether de facto wife held an interest in property purchased with separate funds of de facto husband - Acknowledgment of debt by de facto wife - Admissibility of extrinsic evidence of intention of parties
Legislation:
Stamp Act 1921, s 73AA(1)(b), s 73AA(1)(f), s 75AD
(Page 2)
Result:
Appeal dismissed
Representation:
Counsel:
Appellant : Mr J A Thomson
Respondents : Mr C L Caine
Solicitors:
Appellant : State Crown Solicitor
Respondents : Corrin Caine
Case(s) referred to in judgment(s):
Associated Alloys Pty Ltd v ANC 001 452 106 Pty Ltd (2000) 74 ALJR 862
Bertei v Feher [2000] WASCA 165
Comptroller of Stamps v Christian [1991] 2 VR 129
Case(s) also cited:
Allders International Pty Ltd v Commissioner of State Revenue (Vict) (1996) 186 CLR 630
Australian National Airlines Commission v Commissioner of Stamp Duties (Qld) [1989] 1 Qd R 246
Calverley v Green (1984) 155 CLR 242
Campbells Hardware Pty Ltd v Commissioner of Stamp Duties (Qld) (1998) 40 ATR 1
Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353
Commissioner of Stamp Duties (NSW) v Pendal Nominees Pty Ltd (1989) 167 CLR 1
Commissioner of Stamp Duties (Qld) v Hopkins (1945) 71 CLR 351
Commissioner of Stamps (SA) v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453
DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) (1982) 149 CLR 431
Edwards Dunlop & Co Ltd v Harvey [1927] VLR 37
(Page 3)
Foskett v McKeown [2000] 2 WLR 1299
Government Employees Superannuation Board v Martin (1997) 19 WAR 224
Ingram v Mohren (1993) 10 WAR 497
Ogilvie v Adams [1981] VR 1041
Scott v Scott (1963) 109 CLR 649
Shephard v Cartwright [1955] AC 431
Venture Management Ltd v Commissioner of State Taxation (1991) 4 WAR 283
Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669
(Page 4)
1 KENNEDY J: I have had the advantage of reading in draft the reasons to be published by Ipp J, with which I am in agreement. I desire only to make some brief observations of my own.
2 The respondents were registered as the proprietors as tenants in common in equal shares of the property at 30 Gallop Road, Dalkeith.
3 The instrument which the Commissioner of State Revenue was called upon to assess for stamp duty was the deed dated 10 October 1995. This deed contained in one of its recitals an acknowledgment by the second respondent that the first respondent had paid out of his separate funds the entire purchase price and associated expenses with respect to the acquisition of the Dalkeith property, and that she held her interest in that property in trust for the first respondent as the beneficial owner.
4 If the recital is accepted at face value, the deed should have been assessed upon the basis that the first respondent was the beneficial owner of the Dalkeith property and that, so far as this property was concerned, the deed did not result in its partition. The appellant, however, sought to rely upon an acknowledgment of debt prepared by the first respondent which, at his request, the second respondent had signed on 15 November 1990. Its relevant terms are set out in the reasons for judgment of Ipp J.
5 The acknowledgment of debt makes little sense. On any basis, it has been most ineptly drafted. It commences with the second respondent's acknowledgment that all the funds for the purchase of the Dalkeith property had been provided by the first respondent. But it then goes on to acknowledge not, as one might have expected in the circumstances, a debt owing by the second respondent amounting to one-half of the funds so expended, and so reflecting the respondents' legal interests in the property, but a debt amounting to the whole of the funds.
6 The explanation offered by the first respondent for the terms of this document was that the Dalkeith property had been purchased in the names of the respondents as tenants in common, but with the whole of the purchase price and other expenses of acquisition having been contributed by him. He claimed, however, that he "would always remain entitled to those funds" and he contended that all that the second respondent was to receive by way of her entitlement was an equal share in any increase in the value of the property over the course of the years during which their contemplated marriage was expected to subsist. There has been no indication that the property has been sold, and it was not suggested that there has in fact been any significant increase in the value of the property.
(Page 5)
7 It is apparent that, at the time when the contract for the purchase of the Dalkeith property had been executed, the respondents had not entered into any express oral or written agreement as to the basis upon which the second respondent was to become the registered proprietor of a half interest in the property. The acknowledgment of debt preceded the settlement of the purchase so that, at the time when the second respondent signed the acknowledgment, the first respondent had not in fact provided the funds for the purchase of the property. Before signing the acknowledgment, the second respondent said that she had been told by the first respondent that he expected her to repay to him half of the total purchase price of the property. She indicated that this had been a surprise to her, as it had not been mentioned previously, and she had understood that, as they were to get married and live in the property, she would not be expected to pay the first respondent anything for her half interest in the property.
8 It was contended for the appellant that the only available inference is that the funds used to purchase the Dalkeith property were the same funds which were lent to the second respondent, albeit they were derived from the sale of the first respondent's previous home. I am quite unable to accept this contention, which is in direct conflict with the terms of the acknowledgment, which states that all of the funds required to purchase the property had been provided by the first respondent and there is no evidence that they were provided by the first respondent by way of loan to the second respondent and that she then applied them in payment of the purchase price.
9 It was further contended for the appellant that, given the express terms of the acknowledgment, any reference to extrinsic evidence in order to contradict its legal operation should not be permitted, and the recent decision of the High Court in Associated Alloys Pty Ltd v ANC 001 452 106 Pty Ltd (2000) 74 ALJR 862, at 870, was relied upon for this purpose. However, in my opinion, this is one of the cases referred to by Gaudron, McHugh, Gummow and Hayne JJ, at par [34] of their reasons, "where the language employed by the parties for the transaction is inexplicit, so that the Court is left to infer the relevant intention from other language used by them, from the nature of the transaction and from the circumstances attending the relationship between the parties". Unquestionably, the language of the acknowledgment is ambiguous.
10 It is no doubt correct, as counsel for the appellant argued, that the first respondent had given inconsistent descriptions of his intentions in connection with the ownership of the property. These are largely to be
(Page 6)
- found in the correspondence which passed between the respondents in the course of their property disputes following the break-up of their relationship, at a time when claims and counterclaims were being made by each of them. The learned Judge at first instance was presented with a formidable task in circumstances where the appellant did not seek to cross-examine the respondents on their affidavits and he was left with a bundle of documents, which were far from being consistent with one another, in order to arrive at the respondents' intentions. Nevertheless, he accepted the explanation of the first respondent that the common intention had been that the Dalkeith property should be purchased with his funds in the joint names of the parties as tenants in common, and that he would be entitled to recoup the amount of his contribution before the second respondent would be entitled to share with the first respondent the proceeds from the ultimate sale of the property. His Honour also appears to have accepted that the property had been purchased in contemplation of a marriage between the respondents. That marriage not having been solemnised, if the first respondent had made a gift to the second respondent of a half interest in the Dalkeith property, there was either a resulting trust in favour of the first appellant, or a failure of the condition on which the gift had been made - see Bertei v Feher [2000] WASCA 165, at [13] - [14] and the authorities there cited. The first respondent was, therefore, on this basis, entitled to the whole of the beneficial interest in the property.
11 I am not persuaded that the learned Judge at first instance fell into error in characterising as he did the arrangement by the respondents for the beneficial ownership of the Dalkeith property.
12 I would dismiss the appeal.
13 IPP J: This is an appeal from a decision of Templeman J allowing an appeal against an assessment of stamp duty made by the Commissioner of State Taxation.
14 The instrument the subject of the appeal is a deed, dated 10 October 1995, entered into between the two respondents (to whom I shall individually refer as "Caine" and "Crabtree", respectively). The parties had cohabited from February 1986 to January 1995 as de facto husband and wife. In the course of their relationship they acquired three properties, including one known as "the Dalkeith property". Their relationship ended and legal proceedings followed. The dispute between them involved largely the ultimate disposal of the three properties. On 10 October 1995 they settled the disputes that had arisen and the deed
(Page 7)
- recorded the terms of settlement. By the deed, the three properties were dealt with.
15 The Commissioner took the view that Crabtree had a beneficial interest in the Dalkeith property, the deed effected a partition between all three properties, and therefore stamp duty is to be assessed under s 75AD of the Stamp Act 1921 on the basis that the full value of the Dalkeith property is taken into account. He assessed the duty payable accordingly.
16 The respondents appealed against this assessment. They contended that there was no partition in respect of the Dalkeith property. They said that, although each was registered as a tenant in common in respect of that property, Crabtree had no beneficial interest therein. On that basis, they contended, the Dalkeith property should have been regarded as a conveyance not passing a beneficial interest and the stamp duty applicable to that part of the deed should have been a nominal amount pursuant to s 73AA(1)(b) or (f) of the Act. The Commissioner did not dispute that, if Caine was the sole beneficial owner of the Dalkeith property, only a nominal amount of stamp duty would be payable. The appeal was heard by Templeman J, who upheld the contentions of the respondents, and the Commissioner appeals to this Court against his Honour's decision.
17 Recital F to the deed contained an acknowledgment by Crabtree that Caine had "paid the entire purchase price and associated expenses [for the Dalkeith property] from his separate funds and that she holds her interest in [that property] in trust for [Caine] as the beneficial owner". In contending that Crabtree had no beneficial interest in the Dalkeith property, the respondents rely on recital F and on the admitted fact that Caine paid the entire purchase price for the property.
18 The Commissioner on the other hand, relies on an acknowledgment of debt signed by Crabtree on 15 November 1990. Leaving out irrelevant parts the acknowledgment of debt is in the following terms:
"I, JOAN MIRIAM CRABTREE -
[H]ereby acknowledge that all of the funds required to purchase the [Dalkeith property] in our joint names, namely the purchase price of $310,000.00 and the stamp duty of $9,150 and the adjustment of rates of $588.50 and [other costs], were provided by my partner CORRIN LINDSAY CAINE out of the proceeds of the sale of his share in the property known as 17 Saunders Street Mosman Park, and I do hereby further acknowledge my debt to him in that sum."
(Page 8)
19 The Commissioner contended before Templeman J and before this Court that the acknowledgment of debt constitutes an acknowledgment by Crabtree that she borrowed the entire purchase price for the Dalkeith property from Caine and that, accordingly, she was the beneficial owner of the property because it was purchased, in effect, with her funds.
20 Templeman J did not accept this submission. His Honour described the acknowledgment debt as a "somewhat curious" document which, on its face, called for some explanation. The learned Judge accepted the explanation proffered by Caine in this connection. That explanation was as follows:
"[T]he intention of the document was that the Dalkeith property should be purchased in the joint names of the parties as tenants in common with his funds and that he would always remain entitled to those funds. However, as the parties were to be married, it was their intention, or certainly his intention, that they should share equally in any increase in value of the property over the years which their marriage was expected to subsist, by reason of inflation."
21 Templeman J observed that this explanation accorded with the objective facts. In particular, the funds provided for the Dalkeith property came from Caine and were paid by him directly to the vendors. Those funds were not channelled through Crabtree "as might have been expected had she borrowed the funds from him". His Honour observed:
"The deed of acknowledgment of debt is, in my view, entirely consistent with [Caine's] explanation. It would have had the effect that had the property been sold at some later stage, [Crabtree] would have acknowledged her indebtedness to [Caine] in the amount of the purchase price and other costs referred to, leaving the balance of the proceeds of sale to be divided between the [respondents] as tenants in common in equal shares in accordance with their interests as shown on the title."
22 On that basis, Templeman J upheld the respondents' appeal against the assessment made by the Commissioner. Having held that Caine was at the relevant time the sole beneficial holder of the Dalkeith property, Templeman J concluded that the property was not partitioned by the deed. His Honour put it as follows:
(Page 9)
- "My analysis of the situation is that because [Caine] paid the whole of the purchase price of the property and indeed paid an amount of some $100,000 in relation to the improvement of the property, he was the beneficial owner of that property, a matter which was acknowledged in the deed of 10 October 1995 which was presented for assessment by the Commissioner."
23 The Commissioner has appealed on the following grounds (which I set out in summary form):
(a) The learned Judge erred in having regard to Caine's evidence as to the meaning and effect of the acknowledgment of debt. It is said that Caine's intention should have been determined by reference to the terms of the acknowledgment of debt alone;
(b) The learned Judge erred in preferring one explanation contained in Caine's evidence, when he had given other inconsistent explanations;
(c) The learned Judge erred in failing to hold that the acknowledgment of debt reflected a loan by Caine to Crabtree; and
(d) The learned Judge erred in holding that Caine was the sole beneficial owner of the Dalkeith property.
24 I turn firstly to the first ground of appeal, this being the contention that his Honour erred in having regard to extrinsic evidence as to the meaning and effect of the acknowledgment of debt.
25 It is important to note from the outset that the instrument to be assessed was the deed and not the acknowledgment of debt. By s 26 of the Stamp Act all of the facts and circumstances affecting the liability of any instrument to duty or the amount of the duty with which the instrument is chargeable are to be fully and truly set forth in the instrument. In effect, pursuant to that section, the acknowledgment of debt together with other affidavit material was put before the Commissioner. His Honour relied, to some degree, on that material in making findings as to the meaning and effect of the acknowledgment of debt. The point to be made at this stage, however, is that the deed, by recital F, reflected in plain terms an acknowledgment by Crabtree that she held her interests in the Dalkeith property in trust for Caine. That acknowledgment was made by Crabtree in settling the litigation that was then current between her and Caine, and must be regarded as a declaration against interest on her part. It established, prima facie, that Caine was the sole beneficial owner of the Dalkeith property.
(Page 10)
26 I turn now to the acknowledgment of debt. It is to be noted that it is not termed an "agreement". While Crabtree thereby acknowledged her debt to Caine in the sum of $310,000, being the full purchase price of the Dalkeith property, the acknowledgment of debt also expressly records that the Dalkeith property was purchased in the joint names of Caine and Crabtree. The document contains no explanation as to why the property was to be put in their joint names when Caine provided the entire purchase price and Crabtree acknowledged her debt to him in that sum. Further, as Templeman J pointed out, had the intention been that the acknowledgment of debt should record that Crabtree was indebted to Caine in respect of a loan to her, it would not have been necessary for the document to have contained an acknowledgment by her that all of the funds required to purchase the Dalkeith property came from Caine.
27 In my opinion, the terms of the acknowledgment of debt do not indicate that it was intended to be a complete record of an agreement between Caine and Crabtree. Furthermore, there was evidence before Templeman J that indicated that the acknowledgment of debt, alone, did not indicate the real nature of the transaction. On both these bases the extrinsic evidence was admissible: see Cross on Evidence, 5th Aust ed, pars 39145 and 39185.
28 In an affidavit signed on 12 September 1995 (initially filed in connection with legal proceedings that were at that date current between Caine and Crabtree) which - apparently without objection - was before Templeman J, Caine testified that in February 1990 he and Crabtree agreed to be married at some time in the future. He purchased a wedding ring for her and gave it to her for safekeeping. In November 1990 he purchased the Dalkeith property for $310,000. He paid the purchase price and other expenses for that property out of his own funds. He said that he purchased the property in the names of himself and Crabtree as tenants in common "in equal shares in contemplation of our proposed marriage". He then testified:
"The arrangement I made with [Crabtree] was that the moneys I put into the property would remain mine but that as husband and wife we would share equally in any increase in the value of the property over the years."
29 According to Caine, the respondents intended that Crabtree should acknowledge that arrangement in the acknowledgment of debt.
(Page 11)
30 In a further affidavit dated 26 September 1995 (which was similarly before the learned Judge) Caine stated:
"The arrangement made with [Crabtree] before the purchase price was paid was that she would participate in any increase in the value of the property due to inflation but that she would never claim or become entitled to any part of my initial investment. The [acknowledgment of debt] was intended to evidence that arrangement. It was for that reason that the document refers to the entire purchase price of the property plus expenses ($319,910) and not just half that sum. The document makes no mention of repayment because none was contemplated at that time. We were to be married and saw no end to our relationship."
31 In my opinion the aforegoing evidence was properly held by Templeman J to be admissible. Firstly, it tended to establish the true relationship between the parties. Secondly, at least some of that evidence went to the contractual relationship pursuant to which the acknowledgment of debt was provided and was admissible on the ground either that the contract between the parties was orally arrived at and the acknowledgment of debt, having been given pursuant thereto, has to be construed against that background, or that the contract was partly oral and partly in writing, and the acknowledgment of debt consisted of the written part. I therefore do not accept the submissions made on behalf of the appellant to the contrary.
32 Templeman J relied on the aforegoing evidence in accepting that the acknowledgment of debt was "entirely consistent" with Caine's version of the transaction. His Honour pointed out that that version "accords with the objective facts that the funds provided for the property came from [Caine] and were paid directly to vendors. They were not, as it were, channelled through [Crabtree] as might have been expected had she borrowed the funds from him". I agree with these observations.
33 I agree also with Templeman J's additional comment that a further consistency between Caine's version and the acknowledgment of debt lies in the fact that "had the property been sold at some later stage, [Crabtree] would have acknowledged her indebtedness to [Caine] in the amount of the purchase price and other costs referred to, leaving the balance of the proceeds of sale to be divided between [Caine and Crabtree] as tenants in common in equal shares in accordance with their interests as shown on the title".
(Page 12)
34 Counsel for the respondent submitted that Caine's version as revealed in the affidavits is inconsistent with the testimony of Crabtree. In an affidavit which, in the same way as the other affidavits, was before the learned Judge, Crabtree gave somewhat confusing and inconsistent versions of the circumstances under which the Dalkeith property was purchased. For example, she asserted that on 15 November 1990 Caine informed her that he expected her to repay to him half of the total purchase price of the property. On the other hand, by the acknowledgment of debt, Crabtree acknowledged her indebtedness to Caine for the full purchase price of the property. Importantly, at the hearing before Templeman J, counsel for the Commissioner did not seek to cross-examine either Caine or Crabtree. In the circumstances his Honour was required to make factual findings based on the affidavit evidence of these two parties. The testimony of Caine was clearer and more convincing than that of Crabtree. It is further to be noted that, to a degree, Crabtree's testimony supported Caine's version. She stated that she: "[W]as not expected to pay [Caine] anything for my half interest in the property." That statement can readily be understood as being in reality a reference to her contractual right to share equally in the proceeds of the property, when sold, subject to Caine first being paid back the money that he had expended in buying it. In my opinion, for these reasons his Honour was entirely justified in relying on Caine's evidence.
35 Counsel for the appellant also referred to certain letters written by Caine to Crabtree in the course of the litigation in which Caine asserted that he had an interest in the property. True it is that these letters contained admissions against interest, but it has to be understood that they were written in the course of litigation while the parties were making their respective demands. In my view, the learned Judge was perfectly entitled to prefer the sworn testimony of Caine on which he was not cross-examined rather than the letters written in the circumstances that I have described. As Templeman J pointed out, that testimony was consistent with the objective facts and with recital F to the deed. In my view his Honour cannot be criticised for his approach to the evidentiary issues. This disposes of the second ground of appeal.
36 Once it is accepted that no proper challenge can be mounted against Templeman J's factual findings as to the true arrangement between the parties, the third and fourth grounds of appeal must also be dismissed. In the circumstances I would dismiss the appeal.
(Page 13)
37 MURRAY J: I have had the considerable advantage of reading in draft the reasons for decision published by Ipp J. I respectfully agree that the appeal should be dismissed. I wish to add only one or two brief observations to the reasons of Ipp J with which I generally agree.
38 The assessment of stamp duty against which the respondents appealed to Templeman J was made pursuant to the Stamp Act 1921 (WA) s 75AD. The deed of settlement to which Ipp J has referred was treated as an instrument effecting the partition of property. On that basis the instrument was chargeable with ad valorem duty on the basis that in respect of the Dalkeith property and otherwise the deed insufficiently provided for consideration for the partition to achieve equality on the partition occurring. Under s 75AD(2) ad valorem duty is chargeable on the amount of the insufficiency.
39 When the terms of the deed are perused it is certainly clear that Mr Caine provided no consideration to Ms Crabtree for her undertaking to transfer her legal interest as a tenant in common in equal shares with Mr Caine in the Dalkeith property. As Ipp J has noted Recital F to the deed acknowledged that Mr Caine had paid the entire purchase price and associated expenses upon the acquisition of the Dalkeith property from his separate funds and that Ms Crabtree held her legal interest in the property in trust for Mr Caine as the beneficial owner.
40 Although the deed provided the undertaking in effect that the tenants in common would transfer the property to Mr Caine absolutely, other pieces of land were dealt with in the deed and it is accepted that the deed effected the partition of property within the meaning of s 75AD. That view is supported by the decision in Comptroller of Stamps v Christian [1991] 2 VR 129. It is not necessary for the purpose of deciding this case to consider the correctness of that view.
41 As I understand the position the appellant accepts that the Dalkeith property is only to be taken into consideration in determining the extent of any insufficiency to achieve equality if the proper view is that the beneficial interests of the respondents in the property followed their legal interests as tenants in common having undivided half shares. If on the other hand the proper view is that expressed in Recital F and Ms Crabtree held her undivided half share in trust for Mr Caine it is accepted that no amount in respect of the Dalkeith property would be required to be considered to achieve equality of consideration overall in respect of the properties the partition of which it was said was effected by the deed of
(Page 14)
- settlement. That would achieve a considerable reduction in the sum upon which ad valorem duty would be chargeable.
42 It is apparent that the respondents rely upon the face of the deed, including Recital F, for their contention as to the effect of the instrument. On the other hand the appellant relies upon evidence which is extrinsic to the terms of the deed in the form of a document of acknowledgment signed by Ms Crabtree and dated 15 November 1990, the day before settlement of the contract by which the respondents acquired the Dalkeith property. The respondents do not contend that in the circumstances of this case such extrinsic evidence was unavailable to the appellant in respect of the task of making a proper assessment of the stamp duty payable. Their argument is that the true effect of the acknowledgment was in accord with the recitals in the deed.
43 Before Templeman J the respondents were permitted to adduce what to my mind is a confused body of evidence as to the background circumstances at the time of the signing of the acknowledgment and what in respect of the Dalkeith property they individually understood the arrangement between them to be. For my part, I think it to be unnecessary to have regard to the question of the admissibility of that material, which it appears was received in evidence without objection, the appellant arguing however, that regard could not be had to it to construe the meaning and effect of the acknowledgment, when the true question seems to me to have been whether the affidavit material was admissible to explain the true nature of the dutiable instrument, the deed.
44 The relevant terms of the document of acknowledgment are set out by Ipp J. The document is simply headed "To Whom It May Concern". It actually deals with two properties, the first being the Dalkeith property, in the terms set out by Ipp J, and the second being another "jointly owned" property in Mount Helena in respect of which again there is an acknowledgment that a sum of $38,000 owed to the National Australia Bank was paid by Mr Caine "out of his separate funds and that I am indebted to him in that sum also".
45 Templeman J described the document, as it self evidently is, as "a somewhat curious one". But his Honour held that its legal effect was not inconsistent with the position set forth in the recitals to the deed. In arriving at that view his Honour considered the affidavit evidence, relied upon the view of the transaction expressed by Mr Caine, and considered that that evidence explained in consistent terms the intended effect of the
(Page 15)
- acknowledgment which in turn his Honour took to be consistent with the recitals in the deed.
46 To my mind, to reach that conclusion it was unnecessary to have regard to the affidavit evidence at all. The appellant argues that the deed should be construed as a true acknowledgment of debt, although it is accepted that Mr Caine in fact paid the purchase price and associated costs upon the acquisition of the Dalkeith property. It is submitted that the proper conclusion is that:
" … the legal operation of the Acknowledgment shows that Caine lent the money used to purchase the Dalkeith Property to Crabtree. Therefore, Caine cannot say that he contributed the funds for this property, and cannot rely upon the equitable presumption that he beneficially owned the property to the extent of his contribution."
47 In my view, as in the view of Templeman J, that submission cannot be accepted because the acknowledgment self-evidently does not have the legal effect for which the appellant contends. The document starts from the position that the property was being purchased in the joint names of the respondents. Its primary function is to acknowledge that the purchase price, stamp duty and other costs of acquisition were all paid by Mr Caine. Its purpose in my view was to negate any presumption that the respondents' joint ownership in equal shares of the legal estate was in accord with their respective beneficial interests in the property. The document sought to make it clear that that was not the case, but that to the extent of the value of the contribution made by Mr Caine to the acquisition of the property it was implied that Ms Crabtree held her legal interest in trust for Mr Caine.
48 The document did not describe itself as an acknowledgment of debt and in truth in my opinion that was not its legal effect. The acknowledgment of indebtedness was clearly not based upon the fact that the funds to acquire the property had been borrowed by Ms Crabtree from Mr Caine and applied by her to complete the purchase. Properly understood the document did not express a contractual obligation to repay any such debt. Ms Crabtree was acknowledging a "debt" only in the sense that she was receiving a half share of the legal estate without herself contributing anything to the acquisition of the property.
49 Construed in that way the document of acknowledgment did not provide extrinsic evidence of the true nature of the deed of settlement
(Page 16)
- insofar as it effected (if that is what it did) the partition of the Dalkeith property.
50 For those reasons I agree that the appeal should be dismissed.
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