Dearing v Dearing

[2009] NSWSC 1394

CITATION:	Dearing v Dearing [2009] NSWSC 1394
HEARING DATE(S):	14 - 16 October, 25 November 2009
JUDGMENT DATE :	11 December 2009
JURISDICTION:	Equity Division
JUDGMENT OF:	Rein J
DECISION:	Declaration made that the defendant holds the Bundeena property as trustee on resulting trust in favour of the plaintiff and consequential orders.
CATCHWORDS:	EQUITY – trusts and trustees – resulting trusts – where mother provided almost entire purchase price for property purchased in the name of her son – whether or not the presumption of advancement is rebutted – held that the presumption is rebutted - BAILMENTS – gratuitous bailment – where personal property placed with the defendant to be sold – failure to account for items sold – failure to return items not sold
CATEGORY:	Principal judgment
CASES CITED:	Calverley v Green (1984) 155 CLR 242 Commercial Union Assurance Co. of Australia v Ferrcom Pty Ltd (1991) 22 NSWLR 389 Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220 Lamshed v Lamshed (1963) 109 CLR 440 Morris v CW Martin & Sons Ltd [1966] 1 QB 716 Nelson v Nelson (1994) 33 NSWLR 740 Nelson v Nelson (1995) 184 CLR 538 Orr v Ford (1989) 167 CLR 316
TEXTS CITED:	Young, Croft and Smith, On Equity, (2009 Thomsons/Lawbook Co Meagher Gummow & Lehane’s Equity Doctrine & Remedies 4th edition (2002) Butterworths LexisNexis
PARTIES:	Kay Dearing (Plaintiff) Tyrone Errol Dearing (Defendant)
FILE NUMBER(S):	SC 3740/08
COUNSEL:	D Toomey (Plaintiff) S Wells (Defendant)
SOLICITORS:	Walkom Lawyers (Plaintiff) Conomos & Spinak (Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Rein J

Date of Hearing: 14 – 16 October, 25 November 2009
Date of Judgment: 11 December 2009

3740/08 Kay Dearing v Tyrone Errol Dearing

JUDGMENT

1 REIN J: The defendant is the registered owner of a property at Bundeena, New South Wales (“the Bundeena property”) and the property was transferred into his name following sale by the vendor in December 1997 at a price of $276,000.

2 The plaintiff, the defendant’s mother, who is now 71 years of age, claims that she is the beneficial owner of the property by reason of a resulting or constructive trust since she provided at least $269,000 of the purchase price for the Bundeena property following the sale of her home at Rockdale, New South Wales (“the Rockdale property”). The plaintiff also claims in respect of some items of furniture and other possessions which she entrusted to her son for sale and for which she has never been paid. The defendant is an antiques dealer by occupation. There is no dispute that the defendant organised the removal of all the furniture of the plaintiff from the Rockdale premises at the time of its sale but there is a dispute as to precisely what was taken. Some of the items were sold and some of the proceeds accounted for, but not all, as I shall detail.

3 Mr D Toomey of counsel appears for the plaintiff and Mr S Wells of counsel appears for the defendant.

4 Whilst there are some factual disputes, much of what transpired is not in dispute, namely:

(1) As at September 1997 the plaintiff had been served with a demolition order by Rockdale Council in respect of the Rockdale property. With the assistance of the defendant the plaintiff commenced looking for an alternative property. The conditions in the Rockdale property were quite unsatisfactory: see Exhibit A at p 10, and the defendant’s affidavit of 28 June 2009 at paragraphs 14, 15 and 20.


(2) The plaintiff engaged a local solicitor, Mr G Bryant, to act for her on the sale of the Rockdale property. The defendant offered to market the property for her and she accepted that assistance.


(3) On 10 October 1997 contracts for the Rockdale property were exchanged and the sale was completed on 11 November 1997.


(4) On 11 November 1997 the plaintiff executed an authority in the following terms:


“Please apply sale proceeds of [the Rockdale property] to settlement of purchase of [the Bundeena property] by Tyrone Dearing and stamp duty and costs on sale and purchase.” See Exhibit A at p 147.


(5) In late September or early October 1997, whilst on a driving outing, the defendant and the plaintiff saw the Bundeena property. That property was for sale and the plaintiff, having seen it, from the outside at least, liked its appearance and, with the defendant’s encouragement, decided to buy it. The circumstances of how the defendant came to drive her there are – in a limited sense – in dispute, but it appears that the defendant was able to advise his mother then or soon after of how much the vendor wanted, which was $276,000. At that point, no buyer had been obtained for the Rockdale property.


(6) It is clear that the defendant took the lead on the process of purchasing the Bundeena property, and there is no doubt that he instructed Mr Bryant on the purchase, either on behalf of his mother or later, on his own behalf.



(7) The deposit on the Bundeena purchase was $27,600.

(8) The stamp duty on the Bundeena purchase was $8,152.

(9) The legal costs on the sale of the Rockdale property and the purchase of the Bundeena property were $1,994.48.

(10) When received on exchange of contracts for the Rockdale property, the deposit was $26,900.

(11) The plaintiff moved into the Bundeena property, which she was very happy with. The defendant and his partner Sally Cooper, stayed at the property almost every weekend with their children: see T139.30. The defendant paid all of the rates and taxes on the Bundeena property and organised and paid for some repairs.


(12) In late 2006 there was an incident at the Bundeena property which involved the defendant and Ms Cooper moving books and magazines of the plaintiff and throwing out some of these. The plaintiff understood that this was part of a process of preparing the house for sale (without any prior discussion with her). She then sought legal advice about her position and discovered that the house had been the subject of a mortgage in favour of the National Australia Bank which was lodged in 2000. She then lodged a caveat on the title of the Bundeena property.


(13) The plaintiff has, in addition to the defendant, a daughter named Linda. Linda has three children. Linda lived in proximity to the Rockdale property and the plaintiff babysat for her daughter. Linda was not happy when she heard that her mother would be moving to Bundeena and screamed at her mother when she found out. There was a period of at least a few weeks when Linda did not communicate with her mother but by Christmas 1997 she was apparently reconciled as she joined the family for celebrations at that time at the Bundeena property.


(14) The Rockdale property was, in 1997, the plaintiff’s only substantial asset.

5 The precise circumstances of what occurred in the incident to which I have referred in [4(12)] are not important, but I should note that the defendant gave evidence, which was not disputed, that his mother had a history at the Rockdale property of hoarding items of little or no value. Whether a significant quantity of items was being retained in the Bundeena house or not, the defendant and Ms Cooper certainly were endeavouring to move material and throw items out: see for example T141.

6 The plaintiff’s evidence of how she came to direct that the proceeds of the Rockdale property be utilised on a purchase in her son’s name was as follows. After she had decided she would like to buy the Bundeena property and would utilise the proceeds of the sale of the Rockdale property that she believed would be sufficient to pay for the Bundeena property, she had a conversation with her son:

“[29] Shortly before contracts were exchanged to sell the Rockdale House I had a conversation with Tyrone in which words were said to the following effect:


Tyrone: ‘You can’t go to Bundeena. There’s $10,000 owing on the stamp duty that won’t be covered by the sale.’


I said: ‘You’ve got the furniture. Sell something.’


Tyrone: ‘I can’t. It’s locked into auction.’


[30] I became very upset and was crying. I had my heart set on the Bundeena House. Tyrone said to me:


‘I can fix it. I can borrow the money but the house would have to be in my name.’


I said: ‘Linda won’t like it. Let me think about it.’”
See paragraphs 29 and 30 of the plaintiff’s affidavit of 8 July 2008.

7 The plaintiff says she considered the matter for a day or two and was uncomfortable about the house being purchased in her son’s name but,

“I also accepted from him that, if he was contributing money towards the purchase, the house would have to be purchased in his name. I did not appreciate that it could be done in any other way”. See paragraph 31 of the plaintiff’s affidavit of 8 July 2008.

She subsequently rang her son and told him that it was okay and he could go ahead and purchase the Bundeena property in his name.

8 The defendant denied that the conversation which I have set out took place but he did not put forward any alternative version. He did say at one point that the bank manager had “suggested” that the property be purchased in his name: see T178.10, and that is all that he conveyed to his mother. At T164.3 he said that he told his mother “that my name would have to be on the deed having spoken to the bank manager”. He does not dispute that until he told his mother of his conversation with the bank manager there had been no discussion or consideration of the Bundeena property not being purchased in his mother’s name: see T162.34 – T163.20 and T165.25 - .33, so there is agreement that whatever he told his mother was the catalyst of her decision to permit him to purchase the Bundeena property in his name.

9 It is not disputed that the arrangement that the defendant made with the bank in 1997 is that he would be given a credit facility of $60,000 (although the defendant said it was more than he sought: see T178.45) and that pursuant to that agreement he was to provide a mortgage over the Bundeena property, although in fact, no mortgage was sought by the bank until 2000, by which time the credit facility was $60,000 plus a business loan of $50,000: see T192 – T193. The existence of the mortgage or agreement to give a mortgage was never expressly advised to the plaintiff by the defendant and the plaintiff was not told that the defendant had in 2000 sought a business loan of $50,000 utilising the Bundeena property as collateral. She said that she did not appreciate at the time of the conversation with the defendant referred to in [6] that the property would be used as security and that “[h]e was helping me, he was looking after things, I trusted him”: see T78.40. The facility was created on 30 September 1997 and $27,600 was transferred out on 1 October 1997 to pay the deposit on the Bundeena property.

10 It is an important part of the defendant’s case that on 11 November 1997, when the plaintiff executed the authority, he was present with his mother and that in the presence of Mr Bryant, on his version of events, she said:

“I want the money from Rockdale to go to Tyrone. It will be a gift. He’s putting the money towards buying Bundeena. Tyrone is buying the house at Bundeena. It will be in his name.” See paragraph 57 of the defendant’s affidavit of 28 January 2009.

11 The plaintiff denied that she had said to Mr Bryant in the presence of her son that she wanted to give the Rockdale proceeds to as a gift: see T70.9 - .12.

12 In the plaintiff’s case her affidavit of 8 July 2008 was read. In the defendant’s case two affidavits of the defendant of 28 January 2009 and 12 October 2009 were read, as was an affidavit of Ms Cooper of 15 October 2009 and an affidavit of Mr Bryant of 5 October 2009.

13 The plaintiff is of advanced years and she is endeavouring to recall events of some 12 years ago, but overall she impressed me as an honest and credible person.

14 I did not form a favourable impression of the defendant’s honesty and integrity as a witness. My reasons for that conclusion are based on a number of different matters, some of which themselves require some background.

15 I have mentioned that the defendant arranged to collect furniture and belongings of the plaintiff from the Rockdale property. He had decided that the Bundeena property would not be cluttered with all of the many items held at Rockdale. To that end the defendant arranged, with the plaintiff’s consent, for various items of value to be sold, those of no value to be thrown out and only the balance to be taken to Bundeena. Leaving aside, for the moment, the dispute about what was taken and what was not, the defendant did organise the sale of a number of items. He obtained a sum of $11,205, which he said in 2007 he held “in trust” for the plaintiff, but he did not ever account to the plaintiff for that money: see Exhibit A at p 240. The cross-examination on this point at T185 – T188 is an example of the style of the defendant in answering questions, including his explanation of why he had not paid her the money held “in trust” and ending in his asserting, as a reason for not setting out the true position in answer to a solicitor’s letter, that there was “a huge paper trail” and then admitting that the document at p 240 of Exhibit A did not involve a huge amount of work. The defendant retained four boxes of “lobby cards” that his mother had entrusted to him for sale and did not return them until the third day of the hearing. “Lobby cards” are small colourful promotional posters depicting scenes from particular movies and are regarded by collectors as being of value. He charged his mother a commission on the sale of items - claiming at one point that this was not his commission, but rather, it was the auction house’s commission, when in fact, the auction house’s commission had already been deducted.

16 The circumstances in which the plaintiff came to see the Bundeena property were that she was a passenger in the defendant’s car during an outing he had suggested occur. The trip was made at the suggestion of the defendant because he said his mother was somewhat stressed over the search for an alternative to the Rockdale property. The defendant (it is not disputed) had been assisting the plaintiff to find a property and had taken her to inspect a number of properties. On the defendant’s case he happened, whilst on a scenic drive around Bundeena, to venture into the cul de sac where the Bundeena property is located and which property happened to have a ‘for sale’ notice which came to his (or his mother’s) attention and following which they both got out of the car to look at the property (from the outside, it appears). Mr Toomey submitted that the defendant had engineered the ‘sighting’ of the property by his mother and that it was no coincidence at all, because the defendant has decided he would like a weekender at Bundeena which he could use as collateral.

17 On the date of settlement the plaintiff paid $7,000 to the defendant: see paragraph 38 of her affidavit of 8 July 2008. The plaintiff’s case is that the $7,000 was paid as it is the precise amount of the difference between the Rockdale property and the Bundeena property. The defendant asserted that the amount was reimbursement for expenses claimed to have been spent by him in the transport and storage of items which she had placed with him for sale. I do not accept his explanation, not only because of the considerable coincidence in the claimed figure for expenses, but also because of his general unreliability.

18 The defendant received $9,786.42 as the credit balance of proceeds on the sale from Mr Bryant. It was accepted by the defendant that he received this money from Mr Bryant, either directly or through his mother: see T207.30 – T208.5.

19 When the plaintiff sought the transfer of title in 2007, the defendant responded through solicitors. The letter dated 19 January 2007 (see Exhibit A at p 240) contained a number of statements (“the Matthews letter”).

20 The defendant exhibited to his first affidavit as “Exhibit TED” an ‘overview’ by which he purported to demonstrate how much he had spent on Bundeena from 1997 to the date of the affidavit. In it, he included an amount of the $27,600 for the deposit for the Bundeena property. As Exhibit D establishes, although $27,600 was paid by the defendant from money advanced by the bank, the net figure contributed by the defendant to the purchase after taking into account the adjustment on the sale of the Rockdale property and purchase of the Bundeena property, was $667.10 of the purchase price of the Bundeena property and the stamp duty and costs – a total together of $10,813.58 – a figure which I note is very close to that which the plaintiff says the defendant told her it would be.

21 The Matthews letter contains claims that the plaintiff submitted are shown to be incorrect, vis (quoting from the plaintiff’s submissions):

(1) The claim that no commission was charged by the defendant on the furniture sale through Christie’s and that the figure appearing in the remittance as “commission 10%” was in fact Christie’s commission.


(2) The assertion that the “shortfall” was $24,614.38, not the approximately $10,000 the defendant then knew it to be.

(3) The claim that the defendant did not take possession of any of the plaintiff’s items of personalty and that those that he did sell brought “little or no money” when, on the amounts now admitted by the defendant, they brought more than $11,000.


(4) The claim that the “better items went to Lawsons”, when no account is made of those items in documents produced in the course of these proceedings, and no admission is made by the defendant of a single sale through that auction house.


(5) No mention is made of the fact that the defendant continued to hold the four boxes of lobby cards ultimately produced by the defendant during the course of the trial.


(6) The claim as at 2007 that the mortgage over Bundeena secured a facility of only $60,000 when in fact it also secured business loans of, at that time, a further $50,000.

22 I accept the plaintiff’s contentions (1) – (6). I would add, in relation to [21(2)] that the Matthews letter asserted that

“In fact it proved to be essential that the property was purchased by our client because there was a shortfall of funds from the sale of the Rockdale property and the purchase of the Bundeena property. That shortfall was $24,614.38.”

23 There is material which points to the defendant having at a very early stage decided he wanted to buy the house: see letter of 9 September 1997 to the vendors’ solicitors at Exhibit A at pp 12 – 12A. The letter refers to his interest in purchasing the property and requesting that the contract be sent to his solicitors. The defendant said he did not want to mention in that letter that he was expressing interest on behalf of his mother because he wanted to appear ‘businesslike’: see T172 and T173, but see T172.42 - .47.

24 The defendant seems to have described the property as an investment property to the bank: see Exhibit A at p 225. The defendant denied that he had said that: see T177.30 - .38. It is clear, even in the defendant’s own evidence, that he did not tell his mother the full story of his discussions with the bank. There is no bank document which supports his contention that the bank was made aware that his mother wanted to buy the property and needed a small amount of money. The defendant asserted that Ms Cooper was with him at the bank but she gave no evidence corroborating his account even though she was called and gave evidence on other matters: see Commercial Union Assurance Co. of Australia v Ferrcom Pty Ltd (1991) 22 NSWLR 389 at 418 – 419 per Handley JA, leading to the inference that she could not support his version. Since the bank approved the facility on 30 September 1997 and the defendant had conceded that he had not discussed with the plaintiff the idea of the property being in his name until early October: see T163.30, and because he would not have known at that point what the differential was between the Rockdale property and the Bundeena property, and also because of the earlier correspondence with the vendor’s solicitors (see [23] above), it appears on the balance of probabilities that the defendant was proceeding with the idea of a purchase in his name before he discussed this with his mother. His evidence that he went to the bank to seek assistance for his mother does not ring true on a number of levels, because of the timing, the lack of documentation, the inability of Ms Cooper to corroborate his version of events and the unlikelihood that the bank would tell him that for a short term loan of $27,6000 (or a longer term loan of only $10,000) the property should be purchased in his name rather than at the very least, the property being purchased in joint names of the defendant and his mother, or more likely, his business assets be used to support a small loan: see T192.36. I do not accept his assertion at T193.42 that he “must have” asked the bank if it was willing to lend $10,000 to $15,000 to enable his mother to buy the Bundeena property.

25 The defendant was very vague on whether his mother went with him to inspect the house (other than from the street): see T204 – T205, and the plaintiff did not say and was not asked if she had. I found the defendant’s story of how the house came to be located as unconvincing, and I think that it is more likely he had become aware of that property prior to its being sighted on the drive. The importance of this is not to suggest that he foisted the property on the plaintiff against her wishes but rather that it points to a definite plan of his to have his mother buy the property for his benefit. It is not necessary to determine whether right from the start the defendant had in mind trying to obtain the proceeds from his mother and nor is it essential to determine whether that was the reason he told his mother what he did, but the evidence relating to the finding of the Bundeena property only reinforces my view that the defendant was advancing his own interests rather than his mother’s, and make it unlikely that he sought the bank’s assistance to help his mother.

26 It is significant that nowhere in the Matthews letter is it asserted that the plaintiff had declared that the Rockdale proceeds were given as a gift.

27 Rather significantly, since he was called in the defendant’s case, Mr Bryant does not support the defendant’s evidence that the plaintiff said in his presence that the proceeds were a gift. Indeed his evidence that he would have made a note of such a declaration is an indication that it was not said.

28 I agree with Mr Toomey’s submission that the defendant was shown to be an unreliable witness who on many occasions contradicted earlier or other evidence. One example of this is his evidence about the commission: see T219 – T223. Another example of his unreliability was his failure to tell his solicitors, for the purpose of the Matthews letter or to mention in his affidavit, the receipt of $9,762 from the plaintiff: see T217 – T218.

29 I accept the plaintiff’s evidence that she did not tell Mr Bryant (or the defendant) that she was making a gift of the proceeds.

30 The plaintiff relies on a presumption based upon the provision of all (or most) of the purchase price of the Bundeena property. In Calverley v Green (1984) 155 CLR 242 at 266 Deane J described the presumption in these terms:

“where a person pays the purchase price of property and causes it to be transferred to another or to another and himself jointly, the property is presumed to be held by the transferee or transferees upon trust for the person who provided the purchase money.”

31 The defendant relies on the “presumption of advancement” which is described thus in Calverley v Green at 267 per Deane J:

“The third "presumption", usually called the "presumption of advancement", is not, if viewed in isolation, strictly a presumption at all. It is simply that there are certain relationships in which equity infers that any benefit which was provided for one party at the cost of the other has been so provided by way of "advancement" with the result that the prima facie position remains that the equitable interest is presumed to follow the legal estate and to be at home with the legal title or, in the words of Dixon CJ, McTiernan, Fullagar and Windeyer JJ. in Martin v Martin that there is an "absence of any reason for assuming that a trust arose".”

32 In Nelson v Nelson (1994) 33 NSWLR 740 the New South Wales Court of Appeal held that the presumption of advancement can apply as between mother and adult child (i.e. that it is not restricted to fathers and children) and the High Court agreed with the approach: see Nelson v Nelson (1995) 184 CLR 538 at 548-9, 576, 585-6 and 601.

33 The presumption of advancement (whether correctly described as a presumption or not):

“may be rebutted by evidence of the actual intention of the purchaser at the time of the purchase: see Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 364 – 365. Where one person alone has provided the purchase money it is her or his intention alone that has to be ascertained”: see Calverley v Green per Gibbs CJ at 251.

34 The defendant’s submissions are that I should not accept the plaintiff’s evidence at paragraph 39 of her affidavit that “[a]t no time did I intend Tyrone to be the outright owner of the Bundeena House” because:

(a) it is the evidence of an interested witness;


(b) it is liable to observation which tends to diminish its weight – reliance is placed on the passage of 10 years before the affidavit was prepared;



(c) the plaintiff had a solicitor acting for her on the sale of the Rockdale property (Mr Bryant) and provided written instructions to him on 11 November 1997 to apply the sale proceeds of the Rockdale to the purchase of the Bundeena property by her son;

(d) there is nothing contained in the written instruction to suggest that the sale proceeds were not a gift;

(e) there is nothing contained in the written instruction to suggest that it was the intention of the plaintiff that the Bundeena property be held on trust for her or that she retain any interest in the Bundeena property;

(f) the plaintiff gave instructions to Mr Bryant to complete the purchase of the Bundeena property in the defendant's name;

(g) the plaintiff has acknowledged that she gave no instructions to Mr Bryant that she retain any interest in the Bundeena property or that the Bundeena property or any part of it be held on trust for her;

(h) the defendant had done a great deal of work on the Rockdale property in the months leading up to its sale;

(i) the plaintiff’s daughter gave no such assistance with respect to the Rockdale property;



(j) the plaintiff was very grateful for the work the defendant had done on the Rockdale property;

(k) the defendant also assisted the plaintiff to find an alternative property for her to live in;

(l) the plaintiff’s daughter gave no such assistance with finding another property for the plaintiff to live in;

(m) the plaintiff was very grateful for the help the defendant provided in finding another residence;

(n) the defendant not only provided a substantial amount of help renovating the Rockdale property for sale but also took on the task of selling the Rockdale property without an agent;

(o) prior to the completion of the Bundeena property, the plaintiff had a falling out with her daughter and her daughter ceased communicating with her. Despite being hurt by this it appears as though the plaintiff made no real effort to reconcile with her daughter and instead continued, with the assistance of the defendant, packing her belongings in readiness for the move from the Rockdale property. The plaintiff’s submissions dated 11 November 2009 at par 1(b), 7 and 12 concerning her relationship with Linda should not be accepted;

(p) the plaintiff has resided in the Bundeena property for 12 years yet over the whole of that time she has never paid council rates, water rates or insurance premiums in respect of the property. This is in contrast to the position in respect of the Rockdale property of which she was the legal owner and she did pay council rates and water rates;

(q) when the plaintiff and the defendant discussed the idea of purchasing the Bundeena property in the name of the defendant the plaintiff said, "Linda won't like it. Let me think about it”. This was said after the plaintiff and her daughter had fallen out. The reason the plaintiff thought her daughter would not like it was because it would mean that her daughter would miss out on a half share of the Bundeena property;

(r) the plaintiff does not deny that she may have said, "If I die, Linda would just force it to be sold up" but the plaintiff says she cannot recall when she may have said that. The Court should accept the defendant's evidence as to the timing of this statement or alternatively infer that the statement was made around the time contended by the defendant;



(s) the plaintiff did then think about the idea of the Bundeena property being in the defendant's name;

(t) it was then a couple of days later, after having thought about the idea of the Bundeena property being purchased by the defendant and discussing the idea with a number of friends, that the plaintiff called the defendant and said, "Okay, Go ahead”; and


(u) at the relevant time (October/November 1997) the plaintiff had a very strong and loving relationship with her son.

35 Dealing with the defendant’s contentions, although many of them are factually correct, I think they ignore the following matters:

(a) The only reason, even on the defendant’s case, that the plaintiff came to provide the proceeds was that the defendant had told her that the sale could not proceed due to a shortfall of funds.


(b) The plaintiff obtained no legal advice from Mr Bryant or anyone else as to the significance of what she was doing. It was not suggested that notions of trust or the nature of her interest were within her knowledge or contemplation. There was no suggestion made to her by her son or Mr Bryant that she should seek, obtain or be given relevant advice. The plaintiff had been a housewife and mother and there was no evidence that she had the benefit of higher education or that she had ever had any vocational training. The defendant described her as reclusive and resistant to change.


(c) The plaintiff was grateful to her son for his help and assistance but she was clearly someone who needed help and there was nothing to suggest that she was not deserving of the affection and assistance that might be expected from a son to his elderly mother.


(d) The plaintiff did consider that Linda would not like the property being in the defendant’s name. That might well have been the case and it demonstrates that the plaintiff has reservations about taking that course. I do not think that it was shown that by that recognition she understood that the house was irretrievably lost as an asset of her estate but assuming that it did this arose out of ignorance of the legal position.


(e) I accept that evidence from the plaintiff is not sufficient to negative intention to make a gift if the objective circumstances point to a different conclusion (see Young, Croft and Smith, On Equity, (2009) Thomsons/Lawbook Co at paragraph 6.260) but I think there are four overwhelmingly significant matters here that reinforce her evidence:


(1) until the defendant informed the plaintiff about the shortfall, and the need for the property to be in his name, the plaintiff intended to buy the property in her name;


(2) the reason for the change was solely a result of what the defendant told her and there was no suggestion that she would make a gift of the proceeds;


(3) the Rockdale property was her only real asset; and


(4) the plaintiff had another child – Linda – with whom the plaintiff had a relationship and to whose position she had regard. I accept Mr Toomey’s contention that any unpleasantness arising out of her decision to move to Bundeena ought not be viewed as a significant falling out whereby the plaintiff had decided, in effect, to cut Linda out of her estate.

36 In my view the presumption of advancement has here been rebutted. I am not persuaded that the plaintiff intended to make a gift of the proceeds of the sale of her only real asset and to divest herself of the beneficial interest in the property to be purchased from the proceeds. It follows that the plaintiff has made out her case for a resulting trust and it was agreed that if I were to so find, there would be no need to consider the plaintiff’s alternative contention that there ought be declared a constructive trust. There is, however, an issue as to the appropriate orders.

37 I accept that the defendant has provided funds for the rates and taxes of the Bundeena property and paid for renovations at Bundeena, although he has also had, with his family, considerable use out of it. I deal further with the amount of the defendant’s contribution below.

Laches

38 The defendant also raised a defence of laches, based on the fact that the plaintiff knew since 1997 that the property was in the name of her son and took no action.

39 It is well-recognised that a lack of due diligence on the part of a party may make it inequitable or unreasonable for the party to stand by and not pursue a claim: Lamshed v Lamshed (1963) 109 CLR 440, 453, Orr v Ford (1989) 167 CLR 316, 341. It is true that the plaintiff did nothing for over 10 years and that in that period the defendant expended some money on the property and undertook some work. Having regard however, to:

(1) the original circumstances of how the plaintiff had come to permit the Bundeena property to be purchased in her son’s name and the fact that the plaintiff’s reliance on her son that had led her to accept what he told her, notwithstanding some initial degree of discomfit about the property not being in her name, continued throughout the period;


(2) the fact that she only came to have concerns when she feared her son might sell the house and that she then discovered the existence of the mortgage;


(3) that the plaintiff acted promptly when she learnt of these matters;


(4) the fact that the defendant and his family had extensive use of the property as a weekender is relevant to the significance of the expenditure and any work on the house and the fact that the defendant can be compensated for the expenditures, which leads to the conclusion that the claimed detriment is very limited and capable of being reversed;

I do not think that the plaintiff’s conduct amounts to acquiescence in the sense this is used in this context: see Meagher Gummow & Lehane’s Equity Doctrine & Remedies 4th edition (2002) Butterworths LexisNexis at 36-010, or that it is inequitable or unreasonable for the plaintiff to be granted, as against the defendant, the relief she seeks. I raise below, however, the question of the bank’s position.

Personal Property

40 There are 24 items which the plaintiff claims the defendant received. Items 2, 5, 6, 7, 8, 9, 10, 12, 13, 15, 23, 24 have been sold (or now returned). The highest amount received was $8,125 for a 19th century walnut cupboard. The defendant admits that he received items 1, 11, 14, 17, 18 and 21 and by a schedule handed up in Court has indicated that he can return them. He disputes that he ever received items 3, 4, 16, 19 and 20, and he says he destroyed item 22 (a stag’s head). The defendant admitted at T249.15 that if the items claimed were at the Rockdale house he would have arranged for their removal. A significant portion of the lobby cards (item 24) were retained by him from 1997 until the third day of the hearing. I accept that on the balance of probabilities all of the items which are claimed were present in the Rockdale house in the few months leading up to its sale and were removed by the defendant or persons acting on his behalf and at his direction. He is therefore liable as a bailee in possession to account for the goods and in the absence of evidence by him which would exculpate him, he is liable to the plaintiff for their loss: see Hobbs v Petersham Transport Co Pty Ltd (1971) 124 CLR 220 and Morris v CW Martin & Sons Ltd [1966] 1 QB 716.

41 The only evidence that the plaintiff has been able to put before the Court of the worth of items missing or not returned is a Lawson’s valuation dated 14 December 1981 which was prepared for insurance purposes. Some of the items on that list were sold for far less than the valuation, others not.

42 Given that the plaintiff entrusted the defendant with items which he has not returned and cannot now obtain valuations, I think that I should regard the valuation as the best evidence but apply a discount. Given the extensive period that has elapsed, I think that provides a sufficient discount in itself. I allow then $8,700 for the five items which the defendant cannot return, other than the stag’s head which I shall treat as having no value. The defendant must return items 1, 11, 14, 17, 18 and 21. The plaintiff also seeks damages for the detention of these items, but there is no evidence of any request for these items over the 12 years and they were placed with the defendant for sale so I do not think any award of damages for detention is appropriate.

43 On the basis of these calculations the defendant owes the plaintiff $8,700 in addition to the $11,205, i.e. a total of $19,905. The amounts expended by the defendant on the move to Bundeena, the Bundeena renovations, water bills, council rates and insurance added up to $41,048.47 to which would need to be added moneys advanced of $3,424.76 and the $10,813.58 to which I have earlier referred – a total of $55,286.81. The difference then is $35,381.81.

Nature of orders to be made

44 There is however, a significant problem which has not been addressed by the parties. The defendant has mortgaged the Bundeena property to the bank. The bank is not a party to these proceedings. I do not know how much is currently owing to the bank. If a declaration is made that the defendant holds the property on resulting trust for the plaintiff, no ancillary order can be made which undermines the bank’s security.

45 Attention needs to be given to the form of orders, particularly in relation to the bank’s position and in relation to the $35,381.81referred to at [43]. On the basis that more than $35,381.81is owing by the defendant to the bank there can be no payment required of the plaintiff to the defendant at present, and a question arises as to how the amount due by the plaintiff to the defendant should be dealt with.

46 I will hear the parties on precisely what orders should be made and on the issue of costs.

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