Counsel v The Estate of James Albert Counsel (Dec) - [2007] WASC 101

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: CAREY & ANOR -v- THE ESTATE OF JOSHUA ANTHONY CAREY (Dec) & ANOR [2007] WASC 101

CORAM: HASLUCK J

HEARD: 26 & 27 FEBRUARY 2007

DELIVERED : 4 MAY 2007

FILE NO/S: CIV 2193 of 2005

BETWEEN: CAITLIN CAREY
KOURTNEY CAREY (Infants) by their mother and next friend JULIE KENNEDY HAYES
Plaintiffs
AND
THE ESTATE OF JOSHUA ANTHONY CAREY (Dec)
First Defendant
CASSIDY LANGLEY
Second Defendant

Catchwords:

Trusts, equities and interests - Nature of an express trust - Issue as to whether deceased's estate included certain land - Land paid for by moneys drawn from daughters' bank accounts - Issue as to intention of deceased when moneys deposited in the accounts - Whether presumption of advancement sufficient to rebut presumption of resulting trust - Finding that moneys were held subject to an express trust - Finding that deceased in breach of fiduciary duty as trustee - Tracing doctrine - Finding that land held subject to daughters' entitlements in equity

Legislation:

Wills Act 1970 (WA), s 8, s 34

Result:

Judgment for plaintiffs

Category: A

Representation:

Counsel:

Plaintiffs:     Mr A P Hershowitz
First Defendant             :     Mr B W Ashdown
Second Defendant         :     Mr T Lampropoulos

Solicitors:

Plaintiffs:     Holborn Lenhoff Massey
First Defendant             :     Arvind C Pillay
Second Defendant         :     G A Lacerenza & Associates

Case(s) referred to in judgment(s):

Bahr v Nicolay (No 2) (1988) 164 CLR 604
Calverley v Green (1984) 155 CLR 242
Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353
Kauter v Hilton (1953) 90 CLR 86
Martin v Martin (1959) 110 CLR 297
Middleton v Pollock (1876) 2 Ch D 204
Muschinski v Dodds (1985) 160 CLR 583
Perpetual Trustees WA Ltd as Executor of the Will of Julian Bruce Goyder v Goyder, unreported; SCt of WA; (Commissioner W Martin QC); Library No 990138; 24 March 1999
Russell v Scott (1936) 55 CLR 440
Scott v Scott (1963) 109 CLR 649
Shephard v Cartwright [1955] AC 431

HASLUCK J:
The names and identifying details of all persons associated with, or concerned in, the proceedings have been changed.

Introduction

The plaintiffs in this action are the infant children of Joshua Anthony Carey who died on 8 May 2004. The plaintiffs sue by their mother and next friend Julie Kennedy Hayes. The plaintiffs seek principally a declaration that funds paid into certain bank accounts by the deceased prior to his death were held on trust for the plaintiffs.
The trial of this matter took place in conjunction with the trial of another matter, namely, CIV 1978 of 2005 in which the plaintiffs were named as the second defendants. In that action the plaintiffs were opposed to a claim that a document dated 8 May 2004, which purported to be the Will of the deceased, should be admitted to probate.
Counsel for the parties in the respective actions accepted that in the absence of any order for consolidation the two actions had to be dealt with separately. It follows that a separate judgment will be delivered in respect of each matter. For ease of reference, I will call the present action (CIV 2193/2005) the "trust action"; I will call the related action (CIV 1978/2005) the "probate action". In both judgments I will refer to the children of the deceased as "Caitlin" and "Kourtney" respectively and will call their mother "Julie Kennedy Hayes". I will call the other principal party "Ms Langley".
With a view to avoiding unnecessary repetition, I will describe the background to the respective actions in this judgment. This will be done with a view to defining the matters in issue between the parties in both actions.

Background narrative – first part

The deceased, Joshua Anthony Carey, was born on 16 September 1954. He married Julie Kennedy Hayes on 28 July 1990. There were two children of the marriage being Caitlin Carey who was born on 28 February 1992, and Kourtney Carey who was born on 2 December 1994.
The deceased and Julie Kennedy Hayes were divorced in early 1997. After the divorce, the deceased owned and lived in a house at 24 C Road, Suburb A. The deceased kept in touch with Caitlin and Kourtney.
The deceased's aunt, Vanessa Hall, resided at Lot 502 H Road, Suburb B, which was not far away from the deceased's Suburb A property. Vanessa Hall said in evidence at the trial that the girls were frequent visitors to her house prior to the deceased's death. She said in evidence that the deceased would bring the girls with him on weekends when he had access to them, and came over to visit her.
It seems that at some stage prior to 1 July 1999 the deceased had opened a bank account with Police & Nurses Credit Society in his own name. His membership number was [number A].
On 1 July 1999 the deceased opened a new bank account with the Credit Society in the name of "Joshua Anthony Carey Trust for Caitlin Carey" being Freedom Savings Account No [number B]. The opening statement for this account is to be found at page 93 of the Book of Documents marked as Exhibit A. That statement describes the account as a "Freedom Savings" account. I will call this "Caitlin's savings account".
On the same day (1 July 1999) the deceased opened a bank account with the Credit Society in the name of "Joshua Anthony Carey Trust for Kourtney Carey" being Freedom Savings Account No [number C]. The opening statement for this account is to be found at page 111 of the Book of Documents. This account also is described as a "Freedom Savings" account. I will call this "Kourtney's savings account", being number [number C].
It appears from the bank statements that as at 8 July 1999 the deceased had deposited $50 in each of the savings accounts. Two days later, on 10 July 1999, the deceased changed the account type in each case from a Freedom Savings Account to a Savings 2 (Special Purpose) Account and transferred $25 from his Freedom Savings Account No [number A]S1 to each of the accounts set up for his daughters. I will call these reconstituted bank accounts respectively "Caitlin's special purpose account" and "Kourtney's special purpose account".
The statements indicate that the accounts earned small amounts of interest. Some further payments in were made by transfer from the deceased's [number A] account from time to time. For example, on 8 January 2000 he transferred $50 into each account. On 6 July 2002 he transferred $100 into each account. The position was that as at 31 December 2002 each account had a credit balance in it of $235.20.

Background narrative – second part

Evidence was adduced at the trial that in late 2002 the deceased met Ms Langley. She had two adult children from a previous marriage. It was a matter of controversy at the trial as to the exact nature of the personal relationship between the deceased and Ms Langley as at the commencement of the year 2003. However, it is clear, having regard to various letters written by the deceased, that in due course he became attached to and declared his love for Ms Langley.
It is an undisputed fact that in late January 2003 the deceased entered into a contract to sell the Suburb A property registered in his name for $171,000. It appears from the transfer of land at page 3 of the Book of Documents that the deceased transferred the Suburb A property to the purchaser pursuant to a form of transfer dated 11 March 2003.
It appears from the bank statements pertaining to Caitlin's savings account and Kourtney's savings account that on 13 March 2003 the deceased changed the account type for both of these accounts from Savings 2 (Special Purpose) Account to the so‑called "Excel Account". I will call these respectively "Caitlin's account" and "Kourtney's account".
It was common ground at the trial of the action that the deceased deposited two cheques into Caitlin's account on 13 March 2003 amounting to $82,167.73. He deposited one cheque into Kourtney's account for $82,167.73 on the same date. These cheques were derived from the proceeds of the sale of the Suburb A property which had been completed on 11 March 2003.
This is confirmed by the bank statements. Thus, on 13 March 2003 entries show that cheques to the value of $82,167.73 were deposited in each account. When added to the previously accumulated savings this gave rise to a credit balance in each case of $82,402.93. I note in passing that in each case on 31 March 2003 interest was credited to the relevant account in the sum of $162.55 and on 30 April 2003 interest was credited to the relevant account in the sum of $208.12.
It was common ground at the trial that on 15 March 2003 the deceased made an offer to purchase in his own name as sole proprietor a property known as 47 B Road, Suburb C for the sum of $171,000. This offer was accepted by the vendor on 16 March 2003 with provision being made for the settlement to take place within a certain period after a grant of probate (which would permit the vendor to transfer title to the property).
On 19 March 2003 the deceased sent a written communication to Police & Nurses Settlements by fax in these terms (omitting the inessential parts):
"Good afternoon,
My membership no. is [number A], I currently have $2495.00 in the account. I have purchased a home for $171,000.00 and paid $1,000.00 deposit yesterday, so my balance is $2495.00. I am the trustee for my (2) daughters, Caitlin member no. [number B] and Kourtney, member no. [number C].
Each daughter, currently has $82,400.00 each invested in their accounts.
I am applying for a personal loan of $10,000.00 with Police & Nurses, which I will lodge a loan application late p.m. / 20‑3‑03 in Suburb G.
I have nominated Police & Nurses Settlements to handle the purchase of 47 B Rd, Suburb C.
I have sufficient funds to pay stamp duties, rates, settlement fees and the purchase of this home, once the loan application is approved. Please note, my current address is: 502 H Road, Suburb B, 6081.
Thank you and regards,
Josh Carey"
I will call this the "deceased's 19 March fax". I pause to note that the deceased spoke of being "the trustee" for his daughters. He said also that "each daughter, currently has $82,400.00 each invested in their accounts". However, it is clear from the figures in the fax that the deceased intended to use the funds deposited in his daughters' accounts in order to complete the purchase of the Suburb C Property at settlement. The proposed loan of $10,000 from the Credit Society would be added to those funds in order to cover the designated price of $171,000.
It was a central issue at the trial as to whether the funds derived from the Suburb A property, being the funds which the deceased paid into his daughters' accounts, were to be characterised as funds belonging to the deceased or as funds held on trust for his daughters.
More particularly, there was an issue as to whether the funds had been paid into the accounts in question by the deceased as a matter of convenience pending settlement, or whether they were to be characterised as part of the funds "each daughter, currently has" invested in the accounts; that is, funds held on trust by the deceased in each case as trustee of the relevant account but with the beneficial ownership of the funds in the account being vested in his daughters.
The case for Ms Langley at trial (being a case supported by the deceased's aunt Vanessa Hall) was that the deceased had deposited the subject funds in his daughters' accounts temporarily, so that his daughters would receive the benefit of any interest earned during the waiting period, but without intending to relinquish his ownership of the funds.
In other words, these funds were always intended and were in fact used by the accused to purchase the Suburb C property on his own behalf as a place to live. I will address these issues in due course.

Background narrative – third part

At the time the deceased wrote the 19 March fax, he was in a relationship with Ms Langley, although, as I have indicated, there was some controversy at the trial as to the details of the relationship. However, it was common ground at the hearing that, in the period between the sale of the Suburb A property and the date upon which the deceased moved into the Suburb C property, the deceased lived with his aunt, Vanessa Hall.
It is apparent from an offer and loan contract signed by the Credit Society's authorised officer that on 3 April 2003 the deceased obtained the loan of $10,000 he had applied for. The borrower is described as Joshua Anthony Carey whose membership number is [number A]. The loan account is described as [redacted].
The deceased executed a transfer of land dated 24 April 2003 in respect of the Suburb C land. He executed that document as transferee in the presence of his aunt, Vanessa Hall. The consideration is described as $171,000.
It is apparent from a settlement statement dated 24 April 2003 that the balance of the purchase price to be provided by the deceased prior to settlement was $169,584.11.
The bank statements pertaining to the daughters' accounts show that on 23 April 2003 the sum of $82,500 was removed from the account of each daughter (leaving in each case a credit balance of $65.48). These funds (amounting in total to $165,000) were transferred to the deceased's account so as to facilitate the drawing of a cheque for $169,584.11, being the amount due for settlement. A receipt issued by Police & Nurses Settlements dated 23 April 2003 acknowledges receipt of the amount in question from "Mr Carey, 47 B Road, Suburb C".
As at 30 April 2003, after further interest had been credited to each of the daughter's accounts, each daughter had a credit balance in the relevant account of $273.60. As appears from the settlement statement dated 24 April 2003 the total amount outlaid by the deceased with respect to the purchase of the Suburb C property was $177,115.76. Of that amount, $165,000 came from the daughters' accounts. $12,115.76 came from sources other than the daughters' accounts and can be regarded unequivocally as a contribution to the purchase price by the deceased from his own funds.

Background narrative – fourth part

It was common ground that after the settlement the deceased and Ms Langley lived together for a period at the Suburb C property.
Ms Langley gave evidence at the trial that she met the deceased in December 2002 when she was living at Suburb D. Most weekends he would stay at her place and sometimes Caitlin and Kourtney would come for the weekend. When the deceased was offered a new job, he talked about selling his house in Suburb A and in January 2003 they looked at a few properties in Suburb D. When the deceased sold the Suburb A property, he asked Ms Langley to move in with him as soon as he found the right house. In the meantime, Ms Langley helped the deceased move into the house of his aunt, Vanessa Hall, in Suburb B.
Ms Langley said in her witness statement (at par 10) that when the deceased got the money from the sale of his Suburb A property he told her that he had put the money in a trust account for the kids until he found the right house to buy, so that the money would earn interest for the kids to start their savings account.
According to Ms Langley, she and the deceased eventually found a house closer to his job and closer to their respective children at 47 B Road, Suburb C. She said in evidence that they moved in towards the end of April or beginning of May 2003.
It is apparent from various letters written by the deceased prior to his death that Ms Langley left the deceased in early May 2004. These letters and handwritten notes suggest that the deceased felt responsible for their separation and blamed himself for what had occurred. The deceased expressed and apparently continued to harbour a strong feeling of emotional attachment to Ms Langley and made it plain that he was deeply distressed by her departure.

Background narrative – fifth part

On 8 May 2004 the deceased completed a printed form which purported to be his last Will and Testament. At midday on the day in question he called upon Josie Mia Little who had been his next door neighbour at Suburb A. He signed the printed form Will in her presence and she added her signature as a witness.
The document was not signed by the deceased in the presence of two witnesses present at the same time in the manner required by the s 8 of the Wills Act 1970 (WA). It is for this reason that a question has to be determined in the probate action mentioned earlier as to whether the printed form Will can be admitted to probate and proved in solemn form as an informal Will pursuant to s 34 of the Wills Act.
The terms of the disputed Will are set out fully in the judgment concerning the probate action. In essence, the deceased purported to appoint Vanessa Hall as the executrix of his estate. He said at par 3 that he gave Ms Langley "my house and land at 47 B Road, Suburb C" to dispose of as she feels fit, to provide financial security to her and her daughters". The clause concluded as follows:
"My A.M.P. Flexible Lifetime Super Plan [redacted], which includes an extra Death Benefit nominates my daughters, Caitlin Carey and Kourtney Carey, as joint beneficiaries. In the event of my death, I bequeath the Chinese Silk Print to Ms. Julie Kennedy Hayes. I also request that all of the contents of my home and garage be disposed with to pay associated funeral expenses, my ashes to go to Mundaring Cemetary [sic]. I also bequeath Vanessa Hall, my savings in Police & Nurses Credit Society, member [number A] B.S.B. [redacted], A/c. No. [redacted]. The remaining personal loan of less than $5,000.00 for the purchase of this home is to be repaid by Cassidy Langley."
I note in passing that apart from benefits under the AMP policy, the disputed Will does not purport to make any provision for the daughters, Caitlin and Kourtney. The Will does not refer to the daughters' bank accounts or to any trust arrangements previously made by the deceased on their behalf.
The deceased conveyed to the witness, Ms Little, that he intended to have the Will signed by his aunt as a second witness. As it happened, the deceased went to his aunt's home, and spent a part of the afternoon with her, but he did not produce or arrange for his aunt to sign the disputed Will.
Later in the day the deceased took his life. There are two written communications signed by the deceased and dated 8 May 2004 which arguably cast light upon his state of mind. The communications include a lengthy letter to Ms Langley dated Saturday, 8 May 2004 which reads in part as follows:
"I saw Mum, Vanessa, Mavis and my former neighbour, Josie. I asked Josie today, to witness my will, one signature will suffice. I did not want to tell Mum, Vanessa, Mavis or Josie, how I felt, so I didn't. I did tell Josie, that I wanted to marry you, how kind you were to me and the girls and how much I loved you. I did not [sic] Josie that you had left. My will is my gift to you, Brad and Sally, to give you either a home to live in or sell it, pay off all of your debts, including the car, buy a unit and remember that I loved you more than you will ever know. Please give Brad, the watch, it is in the wardrobe."
The letter includes also a further passage to this effect:
"… There is goodness in all and every living thing is linked in this world by the same thing, we are one and the same. I will see you in heaven and my soul will look over you, my spirit will be with you, with goodness in every way. My gift to you, my home, is because somebody has to give Cassidy something, you deserve it, I felt so sorry for what had happened in the past. Treat future men differently, be more open with your feelings and dislikes, communication is everything. Love you, Josh."
The shorter of the two notes dated 8 May 2004 bearings the notation and reads as follows:
"I am sorry, Cassidy, I loved you, but, I am sorry for hurting you, for saying silly things, I still love you so much, I wish that we could have talked about our lack of real communication. I will see you in Heaven. Love, Josh."

For ease of reference, I will call the first of the two documents the "8 May letter"; the second document will be called the "8 May note".

Background narrative – sixth part

It was common ground at the trial that no Will of the deceased was found other than the disputed 8 May Will set out on the printed form completed by the deceased. The evidentiary materials before me include a record of investigation into death signed by the Deputy State Coroner.
The Deputy Coroner found that the deceased lived alone at 47 B Road, Suburb C. Her report said that late on the evening of Saturday 8 May 2004 the deceased's parents attended at the deceased's home to check his welfare after he had made a disturbing call to his former partner. After entering the house they found the deceased collapsed next to his bed. A search of the house located two notes written by the deceased, along with two empty medication bottles and an empty scotch bottle. The death arose by way of suicide.
The deceased's aunt, Vanessa Hall, has now applied for a grant of probate in respect of the disputed 8 May Will upon the basis that she is the person named as the executrix and trustee of the deceased's estate in that Will.
In support of her application, Vanessa Hall presented her own affidavit sworn 1 July 2004 which included a passage to the effect (at par 8) that the deceased died leaving an estate within Western Australia to a gross value of approximately $382,915 which included the Suburb C property ($180,000), an AMP Flexible Lifetime Super Plan Member No [redacted] ($200,000), Police & Nurses Credit Society Member No [number A] ($1600) and furniture and personal effects ($5000). There were said to be various debts amounting to $22,685.
I must now turn to the pleadings in the trust action.

The pleadings in the trust action

Caitlin and Kourtney say in their statement of claim in the trust action that the deceased was their father. It is said that on or about 13 March 2003 he deposited the sum of $82,167.73 in each of their bank accounts with the Credit Society such accounts being in the name of "Joshua Anthony Carey Trust for Caitlin Carey" (account [number B]) and "Joshua Anthony Carey Trust for Kourtney Carey" (account [number C]).
Caitlin and Kourtney plead that the accounts were from time to time credited with interest and transfer of funds from other accounts so that as at 31 March 2003 the balance in each account stood at $82,565.48. It is said that on or about 23 April 2003 the deceased withdrew the sum of $82,500 from each of the accounts. Further, on 28 April 2003 the deceased became the registered proprietor of the Suburb C land for a stated consideration of $171,000. It is said that the deceased purchased the Suburb C property using in part or in whole funds belonging to Caitlin and Kourtney.
It is alleged in par 12 of the statement of claim that by depositing the amounts mentioned earlier into the subject accounts the deceased gifted the moneys in question to Caitlin and Kourtney and created a trust whereby he held the beneficial interest therein on trust for his daughters. Further or alternatively, the transfer of the said moneys into the said accounts in the names of Caitlin and Kourtney was an advancement by the deceased to his daughters. It is said that by reason of these matters the deceased held the subject funds on trust for Caitlin and Kourtney.
Caitlin and Kourtney say also in par 15 of the claim that the deceased held the Suburb C property on trust for them. Further or alternatively, the deceased converted the subject moneys to his own use with the result that Caitlin and Kourtney have thereby suffered loss and damage equal to the amount of the moneys in question; that is, the two amounts of $82,500 withdrawn by the deceased from the subject accounts.
Finally, it is alleged, as a further plea in the alternative, that the deceased, as trustee, breached his fiduciary duty to Caitlin and Kourtney who have suffered loss equal to the amount of the subject moneys.
A declaration is sought that the deceased held the accounts on trust for his daughters; a declaration is sought that the deceased held and the estate of the deceased holds the Suburb C property on trust for Caitlin and Kourtney. The estate of the deceased is required to provide an account to Caitlin and Kourtney of all sums received by the deceased and being the subject funds.
Further, or alternatively, compensation is sought equal to the amount for which the estate of the deceased is unable to account. Claims are also made for payment of any amount found to be due, equitable compensation, damages for breach of duty and interest pursuant to s 32 of the Supreme Court Act 1935 (WA).

The Langley statement of defence

By her statement of defence Ms Langley admits the relationship between the deceased and the claimants. She put the claimants' to proof of certain of the other facts and matters alleged in the statement of claim. Importantly, she pleads at par 3 that the deceased purchased the Suburb C property with moneys which, at material times, were and/or belonged to the deceased.
It is said in par 4 of the statement of defence that the deceased at/or about 13 March 2003 informed the second defendant and other third parties that the property purchase was for himself; that the purchase of the Suburb C property was with his own moneys; that until the date of settlement and/or payment for the said property he would deposit the purchase money in his children's account temporarily pending the settlement thereof and would provide to his children the benefit of any bank interest the said moneys would have earned in those deposited accounts.
In response to a request for further and better particulars of the defence Ms Langley pleaded that at all material times the funds utilised were the funds previously received by the deceased from the sale of the Suburb A property.
It is said that the deceased informed Ms Langley and Vanessa Hall that from the receipt of the moneys from the sale of the Suburb A property that the deceased would place the sale proceeds in the bank account belonging to his children temporarily until the deceased found and purchased another property which he intended for himself. The deceased, at all material times, stated to Ms Langley that he was doing this so that any interest earned on the moneys deposited would be given by him to his children.
In response to a request as to when the deceased's alleged statements about his intentions were made Ms Langley asserted that to the best of her recollection the statements were made between the sale of the Suburb A property and the deposit of the funds in the children's accounts in/or about March 2003.
In response to a request that the precise words used by the deceased be stated, Ms Langley said that she could only recollect that the intention and stated aim of the deceased was to sell his Suburb A home and to temporarily deposit the funds he received from the sale into his children's account until he found and was able to purchase a subsequent home for himself, which he did at 47 B Road, Suburb C.

Initial findings

It is clear from the evidence before me, and I so find, that the funds utilised by the deceased to make the subject deposits of $82,167.73 into each daughter's account on 13 March 2003 formed part of the sale proceeds of the Suburb A property.
It is clear also (and I so find) that the subject deposits were paid into accounts with the Credit Society in the name of "Joshua Anthony Carey Trust for Caitlin Carey" and "Joshua Anthony Carey Trust for Kourtney Carey" respectively.
However, the crucial question concerns the intention of the deceased in making the subject deposits. This in turn gives rise to a number of evidentiary issues as to the use (if any) that can be made of statements made by the deceased. There are related issues as to the drawing of inferences bearing upon the intention of the deceased.
Further, if it be held that all of the funds deposited or accumulated in the daughters' bank accounts were held on trust, the pleadings raise questions as to whether Caitlin and Kourtney can claim a beneficial interest in the Suburb C property, or otherwise claim damages or compensation from the estate of the deceased.
It will therefore be useful to look at the legal principles bearing upon these issues.

Legal principles

There are four essential elements present in every form of trust, namely, the trustee, the trust property, the beneficiary, and the personal obligation annexed to property. It has been held that a trust may be created without communication to the beneficiary: Middleton v Pollock (1876) 2 Ch D 204 at 206.
Express trusts are trusts which arise when a person expresses the intention, either orally or in writing, to create a trust. The intention need not be couched in any formal language; it may even be inferred from conduct. But in whatever way it is expressed, it must make three things certain: first, that a trust is definitely intended; secondly, that ascertainable persons are to be benefited; and, thirdly, that specified property is to be bound by the trust.
These observations appear in Jacobs Law of Trusts in Australia (7th ed) at par 501:
"A court cannot hold that an express trust exists unless it is satisfied that there was the intention to create such a trust. The question will be whether there is language or conduct which shows a sufficiently clear intention to create such a trust. No formal or technical words are required; any apt expression of intention will do. The conclusion that the intention existed may be drawn as an inference from the available evidence. In order to infer intention the court may look to the nature of the transaction and the whole of the circumstances attending the relationship between the parties, including commercial necessity. If the inference to be drawn is that the parties intended to create or protect an interest in a third party, and the trust relationship is the appropriate means of creating or protecting that interest or of giving effect to the intention, then an intention to create a trust may be inferred. Such a trust is an express, not a constructive trust and the earlier reluctance to infer such a trust no longer obtains, at least in Australia.
The overall question is whether in the circumstances of the case, and on the true construction of what was said and written, a sufficient intention to create a trust has been manifested. It is not necessary that the creator of the trust should know that the particular relationship intended to be created is in law a trust. A trust will be created, whether or not the creator thereof is precisely aware that he is so doing, provided that in substance the creator intends that his or her actions should have the legal effect of creating the relationship which is known in law as a trust."
In Bahr v Nicolay (No 2) (1988) 164 CLR 604 Mason CJ and Dawson J noted that if the inference to be drawn is that the parties intended to create or protect an interest in a third party and the trust relationship is the appropriate means of creating or protecting that interest or of giving effect to the intention, then there is no reason why in a given case an intention to create a trust should not be inferred. In such a case, the trust is an express, not a constructive trust.
Constructive trusts, unlike express trusts, do not depend on an express intention to create a trust, and, unlike resulting trusts, do not depend on an implied intention to do so. Constructive trusts arise by operation of law independently of the intentions of the parties and sometimes contrary to such intentions. They arise because it is regarded as desirable in certain circumstances to impose on a person in relation to particular property the duties of a trustee. These principles are reflected in the reasoning of Dean J in Muschinski v Dodds (1985) 160 CLR 583 at 613.
A resulting or implied trust can arise where a person transfers property to another without intending that person to have the beneficial interest in the property. Thus, in Calverley v Green (1984) 155 CLR 242 Gibbs CJ observed at 246 that where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement (that is, a presumption that the purchaser intended to give the other a beneficial interest), it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption there arises a resulting trust in favour of the purchaser.
It emerges, then, that a resulting trust can arise because the Court presumes, in the absence of evidence to the contrary, that the person providing the subject funds intended to obtain the beneficial interest in the property. However, where a property is purchased or funds are provided to a person that the provider of the funds is under an obligation to support, such as a wife or child, there is no presumption of a resulting trust in favour of the provider of the funds; there is, on the contrary, a presumption that the funds were provided as a gift or as an advancement.
In Russell v Scott (1936) 55 CLR 440 an elderly lady and her nephew opened a joint account in the Commonwealth Savings Bank by the transfer of a large sum from an account in the lady's name. The nephew, who assisted his aunt in all her matters of business, did not contribute to the account, which was kept in funds by payments from the aunt's investments. The account was used solely for the purpose of supplying the aunt's needs. However, when the account was opened, the aunt told the nephew and others that any balance remaining in the account at her death would belong to the nephew. It was found as a fact that the aunt intended her nephew to take beneficially whatever balance stood to the credit of the account at her death.
The High Court held that the presumption of resulting trust in favour of the aunt and her estate was rebutted; the nephew's legal right by survivorship to the balance of the account prevailed and was not the subject of any resulting trust.
The decided cases suggest that the mere opening of an account by one person in trust for another is not necessarily sufficient to make that person the trustee for the other person. All the relevant circumstances must be examined in order to determine whether the depositor really intended to create a trust.
In Kauter v Hilton (1953) 90 CLR 86 it was held by the High Court that where a person not only opens an account but hands the passbook to the purported beneficiary and thereafter consults that beneficiary on the basis that the latter is the beneficial owner of the money or of some interest in them, the evidence tends strongly towards establishing that the depositor intended to create an immediate trust in favour of that other person. The fact that the depositor reserved a right to revoke the trust would not prevent an immediate trust arising and if the trust was not revoked by the depositor in his lifetime the beneficiary would be just as much entitled to the money as a beneficiary under an irrevocable trust.
In Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 a father allotted shares in a company to his daughters and informed them that they would be paid a yearly dividend for the shares when possible. However, by his Will the father bequeathed all his shares in the company to the defendants. They found the share certificates amongst his property in separate envelopes each bearing on the outside in the father's writing a statement indicating that the shares belonged to the respective daughters, and each containing a document signed by the father stating that the shares belonged not to him but to the daughter named on the envelope.
One of the defendants gave evidence that the father had made it clear to all his daughters that the shares were not really theirs at all, but her evidence was not believed by the trial Judge.
The High Court held that the presumption of advancement in favour of the daughters had not been rebutted and they were entitled to the shares. It said that the presumption of advancement can be rebutted or qualified by evidence manifesting a contrary intention, but apart from subsequent acts and declarations as against the parties doing or making them and the general circumstances, the acts and declarations of the parties before or at the time of the purchase (in this case at the time of the acquisition of the shares by allotment), or so immediately thereafter as to constitute a part of the transaction, formed the relevant and admissible evidence.
The High Court referred at 363 to the familiar problem that arises whenever a person purchases and pays for property which is transferred by his direction into the name of another person. It was said that if that person is a stranger the presumption of a resulting trust arises and he holds the property on trust for the purchaser. But if the purchaser is the father of or a person in loco parentis to the legal owner, the presumption arises from the relationship of the parties that the father intended to purchase the property to advance his child and to make the child not only the legal but also the beneficial owner of the property.
However, the presumption of advancement, like the presumption of resulting trust, may be rebutted by evidence that at the time of the transfer no gift was intended by the transferor. The burden of rebutting the presumption of advancement lies upon the person asserting the existence of a trust: Martin v Martin (1959) 110 CLR 297.
In Calverley v Green (supra) Gibbs CJ observed at 252 that the extent of the beneficial interests of the respective parties must be determined at the time when the property was purchased and the trust created. The fact that the mortgage debt in that case was repaid by the appellant was therefore not relevant in determining the extent of the interests of the parties in the land, although it might be relevant on an equitable accounting between the parties.
Mason and Brennan JJ observed at 262 that the evidentiary material from which the Court might have drawn an inference as to the intention of the parties included their acts and declarations before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction. Evidence of those acts and declarations were admissible either for or against the party who did the act or made the declaration, but any subsequent declarations would have been admissible only as admissions against interest. See also Shephard v Cartwright [1955] AC 431 at 445; Charles Marshall Pty Ltd v Grimsley (supra).
Deane J observed at 269 that evidence of the relationship – both legal and factual – between the parties will always be admissible.
The ambit of the evidence that may be received to rebut the presumption of advancement was considered by Commissioner W Martin QC (as he then was) in Perpetual Trustees WA Ltd as Executor of the Will of Julian Bruce Goyder v Goyder, unreported; SCt of WA; (Commissioner W Martin QC); Library No 990138; 24 March 1999.
The learned Commissioner referred to the observations made by the High Court in Charles Marshall Pty Ltd v Grimsley (supra) and Shephard v Cartwright (supra) which indicated that the acts and declarations of the parties before or at the time of a purchase which might arguably be subject to the presumption of advancement, or so immediately after it as to constitute a part of the transaction, are admissible in evidence either for or against the party who did the act or made the declaration, but subsequent declarations are admissible as evidence only against the party who made them, and not in his favour.

Commissioner Martin then went on to make these observations in the Goyder case at 10:
"In Shephard v Cartwright, the House of Lords expressed the view that evidence as to the dealings of the deceased with other items of property and evidence as to the manner in which the deceased had provided for one or other of his children was inadmissible. Such an approach would appear consistent with the views expressed by the High Court in Charles Marshall Pty Ltd v Grimsley (supra). However, in Calverley v Green (1984) 155 CLR 242, Deane J cautioned against adoption of the view that the passage from Charles Marshall Pty Ltd v Grimsley to which I have referred should be construed as prescriptive of the ambit of evidence admissible on the topic of whether or not a presumption of resulting trust or a presumption of advancement has been rebutted. Whilst his Honour considered that the passage provided a guide as to the evidence properly admissible:
'The passage should not, however, be accepted as good law to the extent that it purports to lay down that no evidence other than that mentioned will ever be admissible.' (At 269)
I propose to approach the evidence adduced in this case on the basis suggested by Deane J in Calverley v Green (supra); namely, that the passage from Charles Marshall v Grimsley to which I have referred provides a guide, but not a prescriptive declaration of the evidence that is admissible for the purposes of ascertaining the intention of the parties. I consider that any evidence which does not go to acts or declarations of the parties to the transaction at or about the time of the transaction, or which cannot be characterised as an admission against interest, should be approached with caution, as it provides a significantly less reliable guide to the actual intentions of the parties."
I pause to say that I consider that the learned Commissioner has provided a useful summary of the effect of the previously decided cases and I am persuaded that I should adopt the same approach in the present case.
The learned Commissioner went on to make some further observations in the Goyder case that are of assistance to me in the present case, for in the present case, as in the case before the Commissioner, the terms of a Will made by the deceased were said to be relevant. Thus, in the Goyder case, the terms of the deceased's Will arguably had a bearing upon the question of whether an advance made by the deceased to his son (the second defendant) during the deceased's lifetime to assist the son with a business venture should be characterised as a loan or as a gift.
The learned Commissioner made these observations about that aspect of the matter at 10:
"An example of the need for caution is provided by the terms of the Will in the present case. Counsel for the second defendant submitted that the terms of the Will, whereby the second defendant was made the primary beneficiary, provide support for an inference that it was the intention of the Deceased to accelerate the testamentary bequest to a disposition inter vivos. However, I consider that an equally strong inference to the contrary might also be drawn from the terms of the Will, given that specific bequests were made therein to the third and fourth defendants, which bequests cannot be met unless the sum advanced to the second defendant is found to be a loan. In the result, in my opinion, the terms of the Will are not of assistance in the resolution of the factual issue pertaining to the intention of the Deceased and the second defendant at the time of the advance. The attempt to draw inferences from the terms of the Will provides, in my view, an illustration of the dangers that arise the further one departs from direct evidence of the acts and statements of the parties to the transaction at or about its time and any subsequent admissions against interest. In approaching the evidence in this case, I have, therefore, given primary weight and attention to the evidence that falls within that ambit. Evidence that falls outside that ambit will often involve the Court in an unacceptable degree of speculation and conjecture as to the likely intention of a person who is not available to give direct evidence of that fact, such as the Deceased in the present case. The best evidence of intention is the contemporaneous acts and statements of the parties to the transaction, augmented by any subsequent declarations or admissions against interest."
In the present case , the "transaction" can be regarded as the steps taken by the deceased on or about 13 March 2003 to divide what remained of the proceeds of the sale of the Suburb A property into two equal portions, each of $82,167.73, and deposit the amounts in question into Caitlin's and Kourtney's bank accounts. The decided cases suggest that the best evidence of intention will be the contemporaneous acts and statements of the deceased at that time, augmented by any subsequent declarations or admissions against interest. However, in seeking to arrive at findings bearing upon his intention, I must obviously give weight to the undisputed fact that in each case the account into which the payment was made had been named as a trust account.
Let me now return to the circumstances of the present case.

Evidentiary issues

Julie Kennedy Hayes gave evidence at the trial of the action. She said that she was married to the deceased on 28 July 1990 and is the mother of Caitlin and Kourtney. She said that after the birth of their children, the deceased changed his Will to include them as beneficiaries. In late 1995 she separated from her husband and they divorced in February 1997. The deceased told her, sometime after the divorce, and after he had purchased the Suburb A property, that he had changed his Will so that he left everything to the children.
Julie Kennedy Hayes said that when Caitlin was about 7 years old the deceased starting giving both children some pocket money for their savings. In about December 2002 the deceased told Julie Kennedy Hayes that he was selling his house in Suburb A because he was changing his job and wanted to move closer to his work. She said that in early 2003, on one occasion when the deceased came to pick up the children, she and the deceased started talking about the sale of both their houses and the areas where they would like to move to. The deceased said that he wanted to buy a house in the children's name. He did not tell Julie Kennedy Hayes why he wanted to do this and she did not ask.
According to Julie Kennedy Hayes, on another occasion while picking up the children, the deceased told her that he could not put the new house in the children's names as well as his own name because the children were minors and it would make it difficult to deal with the house. He then assured Julie Kennedy Hayes that even though he could not put the new house in the children's names they would always be well provided for.
Julie Kennedy Hayes said that on another occasion when the deceased called upon her he seemed reluctant to leave her house. He said that he loved his children very much and that she was a good mother. He then said that everything he had would one day belong to the children.
After the deceased's death, Julie Kennedy Hayes requested a copy of his Will from Vanessa Hall's solicitor. She received the copy Will on 1 June 2004 (being three weeks after the deceased's death). That evening, after dinner, she showed Caitlin and Kourtney the copy of the Will because they had asked about what was to happen to their father's property. It was then that both Caitlin and Kourtney told her that their father told them that they would have the house when they grew up. They both said to their mother that the house could not be given to Ms Langley because the deceased had told them that it would be theirs.
Julie Kennedy Hayes said further that on another occasion, in June 2004, when she was talking to her children, they both told her that they had lots of money in their bank accounts. This prompted her to enquire about whether the deceased had kept bank accounts for the children. Vanessa Hall said that she did not know about such matters. It was only through her solicitors that Julie Kennedy Hayes was finally told in December 2004 that there were two accounts in the names of the children. She was provided with the most recent bank statements which showed the balance to be only about $274 for each account. These statements showed that the accounts were in the deceased's name as trustee for the children.

Cross-examination of Julie Kennedy Hayes

Under cross‑examination Julie Kennedy Hayes was asked to be more specific about her conversation with the deceased concerning the sale of both their houses. She said that this occurred in January 2003 when the deceased was selling his house and she was ready to put her house on the market with a view to moving to the zone for Suburb J Senior High School. It was at about this time that the deceased told her that he wanted to buy a house in the children's names. He did not say when he wanted to do this and she did not ask him because it was his private decision. It was not a matter she wanted to think about. She assumed that the children were well provided for in his Will.
When the deceased later said that he could not put the new house in the children's names because it would be difficult to deal with the house, she made no comment upon what he had said. She knew that he had just met a new girlfriend and was seeing her.
Julie Kennedy Hayes was pressed about a further conversation with the deceased in February 2004 when he asked if he could move back in with her. Julie Kennedy Hayes said that she did not take his comment seriously. He seemed very happy, and was happy that she had moved into Suburb E being the suburb next to his suburb of Suburb C.
The cross‑examiner took Julie Kennedy Hayes to the occasion when she showed her children the deceased's Will. According to her, it was then that the children started to tell her that the house was theirs because he had told them it would be theirs one day. Neither of the children had told her before June 2004 that there were bank accounts in their names. That came as a shock to her, and she started making enquiries. They had told her about their father taking them to the Police & Nurses office in Suburb F and that they saw a piece of paper referring to a lot of money which had their names upon it. They did not know how much money there was but could only say that it was a lot.
According to Julie Kennedy Hayes, the deceased had never said anything to her about the bank accounts. She had understood from what he had said that he was going to leave everything to the children in his Will. It was not until December 2004 that she received confirmation that there were bank accounts in the names of the children.

Evidence of the children

Caitlin Carey gave evidence at the trial. She said that she was the eldest daughter of the deceased and Julie Kennedy Hayes. She spoke of having a bank account with Police & Nurses Credit Society which her father had opened for her. She did not know when he opened it and she was not sure if she had put any money into the account or not.
Caitlin recalled that one weekend her father took her and her sister to the Police & Nurses Credit Society in Suburb F Shopping Centre in Suburb G. He showed them a receipt showing how much they had in their accounts. This was around the time when their father was boarding at Vanessa Hall's place after he had sold the Suburb A house.
Caitlin said that she could not remember the amount that was in the account but it was a lot. Her father said that he had given them the money. Her father said that he had obtained the money from the house in Suburb A and that he was going to use the money to buy the Suburb C house. He said that he would give the money back to them one day. He said also that when they were older they could have the house in Suburb C.

Cross‑examination of Caitlin

Under cross‑examination Caitlin denied that her mother had helped her to construct her witness statement. She said that she knew her father had opened an account because sometimes he went there and deposited some of the money she and her sister had kept in money boxes. He was living at Suburb A when they had the money boxes. She said that she was shown a receipt on one occasion only concerning the bank accounts. She was about 11 years of age at the time. She could not remember whether her father was living in Suburb A, or living with Aunty Vanessa, or living in Suburb C.
According to Caitlin, her father said that he had sold the Suburb A house and put the money into the accounts of she and her sister. He was going to use it to buy a new house and that he would give them back the money one day. She could not recall whether he had selected the Suburb C house at that time. He spoke not of the Suburb C house but simply of buying "a new house". He said it would be in his name but one day they could go and live with him and share the house.
When pressed, Caitlin acknowledged that she had discussed the whole matter with her mother and with her sister "a little bit". The discussion with her mother was about what her father had said concerning the accounts. It was about three years after the date on which her father showed her the receipts that she was first asked to recall what he had said. She denied that she had been reminded of what the conversations were by her mother. She thought that they went to the Suburb F Police & Nurses Credit Society on a Saturday. There were tellers behind the counter but she did not know whether they spoke to a teller.

Kourtney's evidence

Kourtney Carey gave evidence at the trial to much the same effect as her sister. She could not remember when her bank account was opened or if she had put any pocket money into the account. She could remember that one day her father took her sister and her to the Police & Nurses Credit Society and showed them a receipt showing how much they had in their accounts. He said that the money on the receipt was given to them by him.
According to Kourtney, her father told her sister and herself that the money was from the Suburb A house and that he was going to use it to buy the Suburb C house. He said that he would give the money back to them one day. She could remember him saying also that when they were older the house would be for her sister and herself. She could not remember if he said anything else about their bank accounts.
Under cross‑examination she said that she was not really sure how old she was when she was shown the receipt, but she thought she was 8 years old at the time. She denied having discussions about the matter with her mother or her sister. The witness statement she had signed was prepared as a consequence of her mother's solicitor asking she and her sister what they remembered. Those present were the solicitor, her mother and herself. She was not sure who went first in speaking to the solicitor. She agreed that she sat there and listened while the others said what they recalled about the discussion.
She was pretty sure that it was a Saturday that they went into the bank with their father. There was no discussion about interest on the bank accounts.
She could not recall the colour of the receipt or whether it had any heading on it. She did not really understand what was going on, and it was not of much interest to her. She only came to understand what was going on when she was a bit older. She was not sure how she came to be interested in it.
Kourtney said that she did not really know the exact words used by her father but he did tell them that he had put the money into their accounts and that it was theirs, but he would take it out to go and buy a new house and then he would give it back to them. She was not sure what the words were but she knew that that is what he meant.

Further evidence

Lisa Penelope Manning was presented as a witness in support of the plaintiffs' case. She said that she had known Ms Langley for 25 years because she knew her former husband. She met the deceased for the first time in December 2002 when Ms Langley brought him to Ms Manning's house in Suburb H.
The deceased told Ms Manning that he lived in Suburb A but his house was on the market. He said that he was in the course of selling the house because it was too far away from where his daughters were living. He said that his daughters went to very good schools. He said that he knew that their education was secure and that what he had got was theirs.
Ms Manning said that in July 2003 she moved to Suburb I. In December 2003 the deceased and his girls came to visit her in Suburb I and spent an afternoon with her. At that time he said that he was having ups and downs with Ms Langley and that they were not really getting along. The deceased made some comments which suggested that he had opened bank accounts for the girls and regarded their future as being secure because what he had was theirs. It was then that he added that the girls were the love of his life. That was the last time Ms Manning ever saw him.
Under cross‑examination Ms Manning said that the first time she was asked to recall discussions that she had had with the deceased was in late January 2007. She said that the discussions with the deceased she remembered was always about the girls and their education. She reiterated that at Suburb I he had said that their education was secure and that what he had was theirs.

The evidence of Vanessa Hall

Vanessa Hall said in her witness statement that she lived in Suburb B. The deceased was her nephew maternally and she had close contact with him throughout her life, being four years older than him. She said that she had close contact with the deceased's daughters who were frequent visitors at her house. Before his death he would bring them with him on weekends when he had access to them.
Ms Hall said that in or about February 2003 the deceased stayed with her for about three months. During this period of time he sold his Suburb A property and was staying with her while he looked for another house to purchase. On occasions his daughters and Ms Langley would stay overnight also. The deceased and Ms Langley were actively house hunting as a couple.
Ms Hall said that at about this time she could recall a conversation one evening with the deceased concerning the sale of his Suburb A property. He said that he had put the proceeds of the sale, namely, $165,000 into two accounts with the Police & Nurses Credit Society. The accounts were in the names of his daughters. He said that he had done this to give the girls the interest which would accrue until he found a new home to purchase.
Ms Hall went on to say that in the conversation in question the deceased said that the next house would be in his name only even though he was buying a house for himself and Ms Langley. He said that he was seeking a property which would be closer to his place of employment and closer to Ms Langley's work.
According to Ms Hall, there was another conversation she had with the deceased when he discussed the funds held in two bank accounts. This conversation was during the house hunting period also. The deceased had brought the two girls into Ms Hall's home one afternoon. She could recall Caitlin saying "But Dad it's our money". The deceased then explained to both the girls that he was giving them the interest in the accounts. Ms Hall recalled this conversation because Caitlin became upset and started to cry.
According to Ms Hall, she intervened and told the deceased not to discuss it any further as the girls were too little to understand the complexity of the matter. After several weeks of house hunting the deceased told her that he and Ms Langley had found a suitable house that they liked at 47 B Road, Suburb C. They would be moving in as soon as settlement could be effected.

The cross‑examination of Vanessa Hall

Under cross‑examination Vanessa Hall agreed that her witness statement had been prepared by Ms Langley's lawyer. The statement was signed two weeks prior to the trial but at that stage she had not seen the statements made by the deceased's daughters. She agreed that she was the nominated executrix under the deceased's disputed 8 May Will and received a benefit under the Will. She was aware that her evidence supported Ms Langley's position.
Vanessa Hall agreed that she first saw the disputed 8 May Will on the morning after the deceased's death; that is, the morning of 9 May 2004. She was pressed as to whether she was surprised to learn that in the Will the deceased had purported to give his house to Ms Langley, bearing in mind that by then they had separated. She said that she was not surprised because the deceased had a strong sense of fairness in many matters. He was quite an honourable person in his own way.
Vanessa Hall said that on her understanding the deceased had nominated the girls as beneficiaries of the AMP policy in his Will. However, advice was later received from AMP in a letter dated 20 May 2004 addressed to her that there was no valid nomination of a beneficiary prior to death with the result that benefits under the policy had to be paid to the estate in accordance with the trust deed.
The cross‑examiner took Vanessa Hall to an affidavit sworn by her on 1 July 2004 with a view to proving the disputed Will in the probate jurisdiction of the Supreme Court. The affidavit contained an assertion by her at par 6 that the deceased was divorced from his wife, he did not remarry, but lived in a de facto relationship with Ms Langley from April 2003. She agreed that at the time she swore the affidavit she knew that the relationship between the deceased and Ms Langley had ended. She agreed that, strictly speaking, her assertion in the affidavit was not correct. She should have put in "but had been living" as opposed to "but lived". She agreed that what she had said was slightly misleading, because it implied that the relationship between the deceased and Ms Langley was still on foot, but this way of putting it was due to a mistake.
Vanessa Hall was cross‑examined also about a selling agency agreement signed by her on 19 December 2004 in which she purported to give instructions for the sale of the Suburb C property at a listing price of between $215,000 to $240,000. She agreed that there had been a mediation conference by the parties in November 2004 and thus, as at December 2004, she knew that Julie Kennedy Hayes and the children were contesting the validity of the disputed 8 May Will. Nonetheless, on the advice of solicitors, she went ahead and purported to sell the Suburb C property upon the basis that she was entitled to sell it.
She agreed that on 6 January 2005 she signed a contract purporting to sell the Suburb C property to a Mr Baker with a nominated settlement date of 10 February 2005. She said that she understood that the transaction was subject to probate being granted. I note in passing that the Baker contract of sale appears at page 65 of the Exhibit 1 Book of Documents. The purchase price is described as: "$197,000 ‑ $221,000".
Ms Hall acknowledged that the purchaser of the property had put a caveat on the property and had indicated that he wished to enforce the sale of the property. She was aware that if the trust action brought by the children succeeded, with the result that the Suburb C house went to them, she might not be in a position to complete the transaction with Mr Baker. This could expose her to liability.
It was against this background that the cross‑examiner took Vanessa Hall to certain of the matters addressed in her witness statement.
As to the conversation with the deceased, which took place about February or March 2003, Vanessa Hall said that this took place one evening in her lounge room with only she and the deceased being present. She could not clearly recall whether he said that he was putting the proceeds from the sale of the Suburb A property into the two accounts or had put them into the two accounts. She could remember the intent but could not remember the exact words. She could not swear which words he used. Thus, at the time she had the conversation, she was not sure whether he had done what he had said about putting the money in the trust accounts or whether he was still going to do it.
She said that she was fairly confident the deceased told her the house had sold for $165,000 and he was putting the money in the girls' accounts. When pressed, she agreed that it was sold for $171,000 not $165,000. He said that he was purchasing a new house in his name.
According to Vanessa Hall, the deceased was telling her where he was keeping the money until he could put it into a new property. His intention was that the children could earn a little bit of interest before he put the money into the new property. She agreed that the funds did not in fact raise much by way of interest but she assumed that the deceased thought that the funds would raise more interest than they in fact did.
Vanessa Hall agreed that the deceased only moved in with her after the settlement in respect of the Suburb A property had taken place. The conversation would have happened after the settlement and after he had got the moneys for the property.
She was cross‑examined about the conversation when "Josh" came to her home with the girls. She recalled hearing Caitlin say "But Dad it's our money". She said that the gist of the conversation was that there was money in the bank but the deceased was giving the interest to the girls. She was challenged about this conversation bearing in mind that the girls were about 9 and 11 years of age at the time. She continued to assert that the conversation occurred. She did not know which accounts the deceased was referring to but it was to do with the purchase of a house. She denied that her story was a fabrication. She said that she had passed on what she knew about the matter to Ms Langley about 18 months ago. She indicated that the deceased had referred to the girls having the interest only. She denied that she had refused any request made by Julie Kennedy Hayes for the Will.
Vanessa Hall was asked whether it might be that what the deceased had in mind, having regard to a conversation that he had allegedly had with Julie Kennedy Hayes, was that the new house was being put in his name only because in fact in could not put it in the children's name. Vanessa Hall said that he did not provide any elaboration to that effect. According to her, he simply said that the house would be in his name.
Under re‑examination Vanessa Hall's attention was directed to a letter from solicitors for the estate dated 14 December 2004. The letter referred to a conference held on 8 December 2004 at which a certain course of conduct was agreed upon, namely, that she was to put the property on the market. This was a letter from Mr Pillay to Ms Hall which became Exhibit D.

The evidence of Cassidy Langley

I described the evidence‑in‑chief of Ms Langley in earlier discussion. Put shortly, she said that she met the deceased in December 2002, they formed a relationship, and after he sold his Suburb A property in February or March 2003, she helped him move into Vanessa Hall's house in Suburb B. He lived there while they were looking for a house to live in.
According to Ms Langley, when the deceased got the money from the sale of his Suburb A property he told her that he had put the money in a trust account for the kids until he found the right house to buy, so that the money would earn interest for the kids to start their savings account. She and the deceased moved into the Suburb C property at the end of April or beginning of May 2003.
She gave further evidence at the trial to the effect that eventually there was a breakdown in her relationship with the deceased. She moved out of the Suburb C property in April 2004. She formed a relationship with another man after she moved out of the house.
Under cross‑examination Ms Langley agreed that she formed the new relationship a few weeks after separating from the deceased. She said that she wanted to get out of the relationship with the deceased because he made nasty remarks of a personal kind. Nonetheless, she kept in contact with him by phone. She worried about him not eating properly and she had a concern for his welfare.
Ms Langley said that she first saw the disputed 8 May Will a few weeks after the deceased died. It surprised her to learn that she was to get the Suburb C property. When the deceased bought the property he had told her: "This is our home Cassidy." However, when she left the house she did not expect to get it. She did not expect to be left anything in the deceased's Will because the relationship had ended. It would not have surprised her if the daughters got the house because he loved his kids and had their interests at heart. She said that at the time they were looking for a house the intention was that they would be together but it was never going to be registered in her name.
Ms Langley was pressed about the conversation concerning the trust account and the notion that the funds from the sale of his house would be used to earn interest for the kids. She said that this conversation occurred in Suburb D at S Road where she lived. The conversation occurred in about February 2003. He did not tell her how much money he got on the sale of the Suburb A property. He said that he would put the money in a trust account. She asked him about that and "he said it's because the kids are too young to have their own accounts so he is a trustee for that account" (TS 144). She was sure that he said it was to earn interest for them to start their savings accounts.
Ms Langley was challenged about this in view of the fact that exhibits before the Court established that the accounts had been in existence for a number of years already. However, she stuck by her account of what he had said about putting money in the accounts so that it could earn interest. She agreed that he never said anything to the effect that the money was still his. She was sure that the conversation took place in February. He said that he had the money from the sale of the house and that the settlement would be next month.
When it was put to Ms Langley that the deposit of funds into the accounts did not occur until 13 March, she said that she might have got mixed up about the dates. She said that the conversation certainly occurred before the settlement; that is, before he got the money for the house.
Ms Langley agreed that Vanessa Hall had informed her that as the person authorised by the 8 May Will, she (Vanessa Hall as the executrix named in the Will) was going to sell the Suburb C property. It was not the case that she was going to give Vanessa Hall something if that was done. She had not been asked to repay the sum of $5000 referred to in the disputed Will. She agreed that as at May 2004 she did have financial problems, being something touched on in the deceased's letters. However, she had no expectation that he would leave her anything in his Will. She said that she signed her witness statement in December 2006 being the first time she had been asked to make a statement in regard to the trust action. Nonetheless, she could recall events that happened in early 2003.
I must now stand back and look at the evidence as a whole in the light of the legal principles mentioned earlier. The central issue is whether the funds from the sale of the Suburb A property were paid into the daughters' accounts by the deceased as a gift with the intention that they be held in trust for the daughters. A finding to that effect would lead to the conclusion that an express trust was established. If no such finding is made it would be open to me to hold that the funds used by the deceased belonged to him throughout, with the result that the Suburb C property can be regarded as an asset of the estate to be dealt with in accordance with the provisions of the 8 May Will.

Further discussion

In a case of this kind I must obviously begin by giving consideration to the nature of the relationships between the deceased and those with an interest in the matter.
I have little difficulty in finding that prior to the sale of the Suburb A property and up to and including the date of his death the deceased was on good terms with his daughters and felt love and a sense of responsibility for them. No suggestion to the contrary was put before me. The evidence of Julie Kennedy Hayes, Vanessa Hall and the daughters themselves establishes that this was so. There is nothing in the nature of the relationship which weighs against a finding being made that the deceased intended to confer financial benefits upon them.
I give weight to that part of the evidence of Julie Kennedy Hayes in which she referred to statements made by the deceased that he had made provision for his daughters. This is corroborated to some extent by the evidence of Lisa Manning who referred to an occasion in December 2003 when the deceased said that the education of his daughters was secure because what he had was theirs.
The deceased's relationship with Ms Langley was more complicated. As at 13 March 2003 when the funds from the sale of the Suburb A property were deposited in the daughters' accounts, the relationship between the deceased and Ms Langley was still at an early stage. I am prepared to accept that they had in mind to live together but there is nothing in the evidence of Ms Langley or otherwise which establishes that she was to have a proprietary interest in the Suburb C property. I am of the view that any statements made by the deceased in the presence of Vanessa Hall and Ms Langley about a house being bought to be their home meant only that it could be a place for them to live together. It is clear from the evidence of Ms Langley that she did not understand from what the deceased said that she was being given a proprietary or beneficial interest in the land. The Suburb C property was transferred into the name of the deceased in due course. Ms Langley acknowledged under cross‑examination that it was never going to be registered in her name.
Put shortly, I am prepared to accept that the statements were made, but they are of little weight in determining what the intention of the deceased was in paying the proceeds from the sale of the Suburb A property into his daughters' trust accounts.
I find (as Ms Langley herself acknowledged) that Ms Langley was no longer living with the deceased as at May 2004 and had no expectation that any benefit would be conferred upon her. Nonetheless, having regard to what was said about the relationship by Vanessa Hall and by the deceased himself in his 8 May letter and the 8 May note, I feel compelled to find (and do so) that, for whatever reason, be it love or guilt about what he had said to her, or a mixture of both, the deceased still felt strongly attached to Ms Langley as at the date of his death. He was minded to confer financial benefits upon her. Reasoning of this kind has played some part in my finding in the related probate action that the disputed 8 May Will can be admitted to probate as an informal Will. In that Will he purported to give "my house and land" at Suburb C to Ms Langley, and this intention is reflected in the 8 May letter.
At a first glance, this finding and the documents in question might be thought to be decisive. The deceased acted as if the Suburb C property belonged to him, and was his to give away to the lady who meant so much to him. This in turn might suggest that he saw it as his property because the money used to acquire the property belonged to him; that is, he looked upon the money deposited into his daughters' accounts on 13 March 2003, after the settlement of the Suburb A property, as being his money. He did not intend to hold the funds on trust for his daughters.
However, to approach the matter in this way would be to ignore the reasoning in the decided cases. It emerges from my review of the legal principles that the best evidence of an intention to create an express trust in respect of property is the contemporaneous acts and statements of the parties to the transaction, augmented by any subsequent declarations or admissions against interest. The attempt to draw inferences from the terms of a subsequently executed Will (as in the present case), albeit permissible, must be viewed with caution, because it marks a departure from the basic rule. The terms of a hastily executed Will may be due to some momentary whim or misconception on the part of the testator as to what he owned or what he was entitled to do.
Thus, in the present case, for much the same reasons as were given by Commissioner Martin in Goyder's case, I am not inclined to give much weight to what was said by the deceased in the disputed 8 May Will or in his 8 May letter. These documents arguably give rise to an inference that he treated the Suburb C property as being his to give away because it had been paid for with his money. On the other hand, in a case of death by suicide after a period of extreme emotional stress (characterised by the deceased's professions of continuing love for the woman he had been living with) the surrounding circumstantial evidence is open to another interpretation: that the deceased was not thinking clearly (which is not to say that he lacked the capacity to make a Will), and was arguably more interested in dramatic acts and utterances than in abiding by decisions made twelve months earlier or in determining what exactly was his to give away.
It follows from all of this that I must focus principally upon what was said and done close to 13 March 2003 when the sum of $82,167.73 was paid into the account of each daughter, being funds derived from the sale of the Suburb A property. These funds undeniably belonged to the deceased prior to being deposited in the daughters' bank accounts. The crucial question is whether the character or status of the funds was altered as a consequence of the deceased's intention at that time in depositing the subject funds in the accounts in question.
Having regard to the decided cases, I consider that I am entitled to receive as admissible evidence statements allegedly made by the deceased at about this time which bear upon the transaction. Further, and in any event, the statements attributed to the deceased are admissible as declarations against interest, for in the various conversations he is said to have been making concessions against his interest about his entitlement to either capital or interest. However, it is for me to assess by reference to the credibility of the witnesses and related matters, whether the various statements attributed to him were in fact made, and to determine what weight, if any, is to be given to them.

Conclusion

The decided cases establish that an express trust arises when a person expresses an intention to create a trust. The intention need not be the subject of formal language; it may even be inferred from conduct. A trust may be created without communication to the beneficiary.
Further, the mere opening of an account in trust for another is not necessarily sufficient to make the person who opens the account trustee for the other person. This means, in the present case, that it is not necessarily decisive of the central issue that the deceased paid the money into an account described as a trust account. All the circumstances of the case have to be investigated.
Nonetheless, to my mind, it is a matter of significance that the deceased deposited the funds in question into previously established trust accounts, thereby mixing the funds with other funds which were undeniably held in trust for the deceased's daughters. It is apparent from the 19 March fax that the deceased deposited the subject funds knowingly and on the basis that he was "the trustee for my (2) daughters". Further, he did so in the context of an ongoing relationship in which he harboured benevolent feelings towards his daughters and was minded to make provision for their future (as I found in earlier discussion).

I therefore have little difficulty in finding that the deceased intended to confer benefits upon his daughters. However, the central issue is whether his benevolence was limited to an entitlement in respect of interest only as contended by Ms Langley or whether his intention was to create a trust in respect of the entirety paid into and held in each account.
It is put against the plaintiffs that in circumstances where the deceased continued to treat the funds as his own in order to purchase another property, as evidenced by the 19 March fax, it cannot be inferred that he intended to relinquish his own claim to the money. It is said that the deceased paid the money into his daughters' accounts as a temporary expedient and to confer a benefit by way of interest only. Ms Langley places reliance upon statements that are said to have been made by the deceased to that effect both to her and to Vanessa Hall.
I am conscious that the statements allegedly made to Ms Langley and Vanessa Hall, albeit admissible, have to be viewed with caution. Both had a strong incentive to oppose the plaintiffs' claim with a view to securing benefits under the disputed Will, and, in the case of Vanessa Hall, with a view to avoiding liability under a contract for the sale of the Suburb C property. I have to say also that, to my mind, the evidence that both of them gave about this matter was not convincing, because it was not specific. Neither of them was familiar with the deceased's affairs, or with the undisputed fact that he had previously established trust accounts for his daughters.
I have reservations also about the testimony of Julie Kennedy Hayes and the two daughters. Each of them had an interest in the outcome of the litigation. In addition, the daughters were very young at the time of their visit to the premises of the Credit Society. Nonetheless, I am prepared to give some weight to the evidence they gave about that matter and the deceased's assertion that he would use the money obtained from the Suburb A property to buy the Suburb C property but would give it back to them one day. I give some weight also to Julie Kennedy Hayes's evidence of a statement made by the deceased that he could not put the house in the children's names.
In the end, I consider that I must be guided principally by drawing together various factors emerging from the objective evidence.
As at 13 March 2003 the deceased was fond of and was clearly minded to benefit his daughters. The deceased knowingly paid the funds into accounts described as trust accounts. Within a few days, in the crucial 19 March fax, he described himself as a trustee of the funds invested on their behalf. There is no independent evidence that the payment in was for the benefit of earning interest only, and I am inclined to give little weight to the testimony of Vanessa Hall and Ms Langley which was adduced with a view to substantiating that point. In addition, the terms of the 19 March fax suggest that, as a trustee, the deceased saw himself as being at liberty to use the funds as he saw fit, which tends to explain why he immediately purchased another property in his own name.
For the reasons given in earlier discussion, I am of the view that all these considerations taken together displace what was said by the deceased in the 8 May letter and disputed Will. They permit me to infer, as I do, that the deceased intended to create a trust for the benefit of his daughters by paying the funds into the accounts in question. In breach of the fiduciary duty he owed to each daughter as a trustee, he then used the trust funds to buy a new house at Suburb C for himself in the mistaken belief that it was permissible for a trustee to act in this manner, provided the funds were repaid eventually or the house itself was given to the daughters in due course.
I pause to say that the evidence I have just described gives rise to a presumption of advancement and is sufficient to rebut any presumption of resulting trust that might be relied on with a view to establishing that the deceased was both the legal and beneficial owner of the Suburb C property. Further, the conclusion I have arrived at requires me to make a declaration of the kind sought by the plaintiffs in their statement of claim that the deceased held all the moneys paid into the subject accounts on trust for his daughters. I must then determine if any further relief is available to the plaintiffs.
The decided cases establish that where trust funds have been used to purchase a property, the property itself might be held in trust for the beneficiaries.
The position is put this way in Jacobs' Law of Trusts (supra) at par 2701:
"…
Loss occasioned to the beneficiary by a breach of trust may be recouped by a personal right of action against the trustee. In addition, the beneficiary, in certain circumstances, has a personal claim against a co‑beneficiary or a third party who is sufficiently implicated in the breach of trust. Where one of the parties is insolvent, or where the trust property or its proceeds has increased in value, a proprietary claim will assume heightened importance. In certain circumstances the beneficiary will have a proprietary claim, that is to say, the beneficiary may trace the trust property from one hand to another and from one form to another into the hands of the person who holds the property or that which represents it.
Tracing is a doctrine whereby, in certain circumstances, the owner of property which has been converted into a different form is treated as being the owner of the new form. …"
The learned authors of the same text make these further observations at par 2704:
"It is a clear principle of equity that where trust property has been converted by a trustee to the trustee's own use a beneficiary has the right to follow it into the hands of the trustee even although the trustee has changed its nature so long as in its changed form it can be identified. In Brady v Stapleton (1952) 88 CLR 322 it was held that, where a trustee held shares of a company, some of which were his own and some of which were held on trust, the fact that precise identification of the trust shares was not possible did not preclude the making of an order for a transfer of the trust shares by the trustee to the beneficiary.
The trustee may have wrongfully disposed of trust property and applied the proceeds in an unauthorised investment. In that case the beneficial owner has a right to elect either to take the property purchased, or to hold it as a security for the amount of the trust money laid out in the purchase. This means the beneficiary may assert beneficial ownership in the property or, elect to have a charge or lien on it for the amount of the trust money, which will be exercisable by a sale order."
These principles can be illustrated by reference to the decision of the High Court in Scott v Scott (1963) 109 CLR 649 which bears some resemblance to the present case. The headnote reads in part as follows:
"A trustee of a deceased estate in breach of trust applied trust moneys together with his own in the purchase of a property in which he lived till his death. Shortly prior to his death he repaid to the estate the amount of trust moneys used by him in its purchase. After its purchase the property had increased substantially in value.
Held: (1) That the estate was entitled to share in the increase in value in the same proportion to the total increase as the amount of trust moneys employed in the purchase bore to the total purchase price, there being no claim by the estate for any greater amount, and was entitled to a charge upon the property to secure payment of its share."
McTiernan, Taylor and Owen JJ observed that, without expressing any concluded view, there is much to be said for the proposition that where trust moneys are mixed with moneys of the trustee and the mixed fund is used in acquiring another property which is not "specifically severable", the trust estate is nevertheless entitled to claim a proportionate interest in such property. They made these observations at 658:
"… But whatever the cause was the fact remains that by improperly using trust funds together with moneys of his own W. H. Scott purchased a dwelling in 1942 for £1,700 and at the date of the commencement of the suit it was worth £5,450. The trust funds were improperly applied in the purchase, it was the duty of the trustee to remedy the breach of trust and, unless the repayment of the sum of £1,014 in 1959 constituted a remedying of the breach, he had failed to do so before his death. But if all that the remainderman were entitled to was repayment to the estate of the amount misapplied then the effect of the remedy that would have been available against W. H. Scott in his lifetime would have been merely to confirm the misapplication of that sum and to condone the breach of trust. This would mean, in effect, that the trustee was, in 1942, at liberty to use trust moneys in conjunction with moneys of his own in purchasing the property subject only to a liability to account for the trust moneys so used and to keep for himself the whole of the profit made upon any resale of the property. The proposition has only to be stated not only to realize its injustice but also to show that it is completely inconsistent with the proposition that has been consistently stated on so many occasions over the last two centuries and which was reformulated comparatively recently in Regal (Hastings) Ltd. v. Gulliver. In that case Lord Porter said that: 'The legal proposition may ... be broadly stated by saying that one occupying a position of trust must not make a profit which he can acquire only by use of his fiduciary position, or, if he does he must account for the profit so made'."
In the present case the deceased paid the subject trust funds into his own account and added to them $10,000 borrowed from the Credit Society in order to make up the total amount due in respect of the purchase of the Suburb C property; that is, $177,115.76. However, it is clear that the greater part of the purchase price came from the daughters' accounts in equal shares.
Having regard to the reasoning in Scott's case (supra), I am of the view that a declaration of trust in respect of the Suburb C property should be made in favour of Caitlin and Kourtney with a view to establishing that the property is held in trust by Vanessa Hall as the executrix of the deceased's estate (as a consequence of my finding to that effect in the probate action) upon the basis that the beneficial interest in the property is held by Caitlin and Kourtney and the estate itself in the proportions in which the deceased and his daughters contributed to the purchase price and related expenses; that is, Caitlin $82,500, Kourtney $82,500, the deceased $12,115.76.
I will hear from the parties as to the orders or directions required to give effect to this ruling. Any such orders will need to be considered in conjunction with orders made in the probate action.
It may be that by the consent of all parties, orders can be made which will allow for the Baker sale to proceed to the intent that the proceeds of the sale will be applied in the manner envisaged by the proposed declaration of trust in favour of the plaintiffs and the deceased's estate. In other words, after the costs of the sale have been attended to the nett proceeds will be divided between the plaintiffs and the estate in the proportions mentioned earlier which represent the beneficial interests of the parties in the Suburb C property. Ms Langley would be entitled to that portion of the proceeds which equated to the proportion of the Suburb C property owned beneficially by the deceased as at the date of his death subject to her obligation to discharge the balance of the personal loan mentioned in the deceased's Will. The consequence of the ruling in this action and the probate action is that the executrix of the estate would be entitled to administer the estate accordingly.

Summary

There will be judgment for the plaintiffs. I will hear from the parties as to the orders and directions to be made having regard to the observations in this judgment.