EQUITY - TRUSTS AND TRUSTEES - IMPLIED TRUSTS - CONSTRUCTIVE TRUSTS - DE FACTO RELATIONSHIP
EQUITY - TRUSTS AND TRUSTEES - IMPLIED TRUSTS - RESULTING TRUSTS - WHEN ARISING - JOINT PURCHASE OF LAND
FAMILY LAW AND CHILD WELFARE - DE FACTO AND OTHER RELATIONSHIPS UNDER STATE LEGISLATION - ADJUSTMENT OF PROPERTY INTERESTS
Competing claims by the parties arising out of the breakdown of the personal relationship between them. The dispute between them related primarily to their respective interests in various properties acquired during the course of that relationship.
The defendant claimed an interest greater than his legal interest in those properties under various alleged resulting and constructive trusts which were said to arise by reason of his greater financial contributions over time. In the alternative, he claimed that various financial contributions made by him were loans that the plaintiff was required to repay.
The plaintiff claimed an entitlement to a division of assets under the Family Law Act 1975 (Cth) or the Domestic Partners Property Act 1996 (SA). She also sought orders for the sale of a property referred to as the Medindie property under the Law of Property Act 1936 (SA).
Held (per Doyle J):
1. Consideration of the principles governing the imposition of resulting and constructive trusts in the respect of properties acquired during the course of a personal relationship.
2. The defendant has not made out any resulting or constructive trust in respect of any of the disputed properties.
3. The plaintiff has not established that the relationship between the parties during the period from October 2014 to September 2016 was either a de facto relationship for the purposes of the Family Law Act, or a close personal relationship for the purposes of the Domestic Partners Property Act, and is thus not entitled to a division of assets under either of those Acts.
4. As the 50 per cent owner of the Medindie property, the plaintiff is entitled to an order for the sale of the Medindie property under s 70 of the Law of Property Act.
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
DKL v LYK [2019] SASC 100
Case
[2019] SASC 100
Decision Date
CaseChat Overview and Summary
This case involves a dispute between DKL and LYK regarding their respective interests in various properties and financial contributions made during their relationship and subsequent separation. The case was heard and determined in a court of equity, focusing on issues of trusts, specifically implied and constructive trusts, and the implications of their de facto relationship. The primary legal issues were whether the parties were in a de facto relationship post-separation, the nature of their interests in jointly acquired properties, and the impact of financial contributions made by one party to the other.
The court examined the evidence and testimonies of both parties, as well as other documentary evidence, to determine the credibility and reliability of their accounts. The plaintiff was found to be generally truthful and reliable, albeit with some overstatement regarding the nature of their post-separation relationship. The defendant, however, was found to have provided inaccurate evidence on several key points, including the terms of their joint ownership of the Bowen Road property and the alleged agreement regarding financial contributions towards a future home in Australia. The court had greater difficulty accepting the defendant's evidence due to these inaccuracies.
The court concluded that the parties were not in a de facto relationship post-separation, despite the plaintiff's assertions to the contrary. It found that the financial contributions made by the defendant were not indicative of a de facto relationship but were instead made to support the plaintiff's business and living expenses. Regarding the jointly owned properties, the court determined their respective interests based on the evidence of ownership and contributions. It also considered the defendant's alleged agreement to contribute to a future home, finding it was not binding due to lack of clarity and formality.
The final orders of the court addressed the division of the properties and financial contributions, taking into account the evidence and the court's findings on the nature of the relationship and the terms of ownership and contributions.
Orders
Orders of the court
Full text does not contain this section.
Background
Background to the litigation
These proceedings involve competing claims by the parties arising out of the breakdown of the personal relationship between them. The dispute between them is primarily as to their respective interests in various properties acquired during the course of that relationship.An overview of the facts The plaintiff and the defendant were in a relationship from late 2003 until late 2006. Throughout that period they lived together in Hong Kong, initially in the plaintiff’s rented apartment, and then from early 2005 in an apartment they jointly purchased on Bowen Road (the Bowen Road property). They had a son together in October 2006. In December 2006, the defendant moved to China for work. The parties’ relationship deteriorated, and at some point in the first half of 2007 at least the romantic and sexual aspect of their relationship came to an end. For the next seven years or so, the parties continued to live in different cities, with the plaintiff living in the Bowen Road property in Hong Kong and having the primary care of their son in Hong Kong. In July 2014 the plaintiff was diagnosed with a brain tumour. She was originally from Adelaide, and returned to Australia for medical care and treatment, and so that she could have the support of her family. In August 2014, the defendant took over the primary care of their son. From October 2014, and while the plaintiff was continuing to recover from the surgery to remove her tumour, the plaintiff and the defendant resumed living together, with their son, in the Bowen Road property in Hong Kong. In September 2015, the plaintiff and the defendant sold the Bowen Road property and moved to Adelaide to live. They jointly purchased a property in Medindie (the Medindie property), and after some interim arrangements for a short period, commenced living there together with their son in December 2015. This arrangement came to an end in late September 2016 when, following a heated argument between the parties, the plaintiff and their son moved out of the Medindie property. The nature of the parties’ relationship throughout the period from their initial separation in the first half of 2007 through to September 2016, but in particular during the period from the resumption of their cohabitation in around October 2014, is a matter of contention in these proceedings. On the plaintiff’s case, by the time they moved to Australia to live in 2015 they were in a ‘de facto relationship’ or ‘domestic partnership’ within the meaning of the relevant legislation, albeit without any romantic or sexual dimension to the relationship. On the defendant’s case they were merely living together for the purposes of co-parenting their son. The parties have been unable to agree a division of their assets following the end of their relationship. They are in dispute as to the nature of their respective interests in the Bowen Road property in Hong Kong, and hence also their interests in the Medindie property that they purchased with the proceeds from the sale of that property. They are also in dispute about their interests in a property purchased by the plaintiff in February 2011 in Port Willunga in South Australia (the Port Willunga property), and a property purchased through the plaintiff’s interior design consultancy business (which she ran through a company referred to in these reasons as DG Company) on Pottinger Street in Hong Kong (the Pottinger Street property). They are also in dispute about the significance of various sums of money provided by the defendant to the plaintiff, most of which was provided during the period they were living separately and for the purpose of supporting the plaintiff’s art gallery and retail business (which she established in July 2011 through a company referred to in these reasons as DM Company).The parties’ claims
Evidence
Evidence Before The Court
However, before doing so, it is useful to commence by saying something about the trial, and the evidence relied upon by the parties. The trial and the evidence The trial proceeded over six days. Both the plaintiff and the defendant gave their evidence in chief predominantly in writing, but were then cross-examined at length. In my view, neither the plaintiff nor the defendant were entirely satisfactory witnesses. I accept that a large proportion of the evidence given by each as to the facts and circumstances relevant to their relationship and financial dealings was consistent with the evidence given by the other witnesses and the documentary evidence. I have thus had no difficulty in accepting the truthfulness and reliability of most of their evidence. However, in respect of various issues in dispute, I have had some difficulties in accepting the reliability of the evidence of both parties. That said, for the reasons I shall elaborate upon, it is fair to say that I have had greater difficulties in respect of the defendant’s evidence. So far as the plaintiff is concerned, I found her to be a generally satisfactory witness. In the main she gave her evidence in a careful and considered manner. I found her to be a truthful, and generally reliable, witness. The only significant concern that I had with the plaintiff’s evidence was in relation to her characterisation of the parties’ relationship from the point of their separation in the first half of 2007 onwards. I consider that in various respects, the plaintiff’s evidence did not fully acknowledge the change in their relationship. Overall, and in various respects, I have concluded that the plaintiff’s evidence overstated the significance of the personal relationship between them from their separation in early 2007 onwards. I accept that this may well have occurred subconsciously, without any intention to give untruthful or misleading evidence. However, I have ultimately reached my own views, based upon the evidence as a whole, as to these matters of characterisation. I have nevertheless generally accepted the reliability of the plaintiff’s evidence as to the detail of the parties’ personal and financial dealings, including in those areas where her evidence diverged from the defendant’s evidence. To the extent that there were some minor qualifications to this in respect of particular aspects of the communications between the parties, these matters have either been identified in my reasons or were not relevant to my determination of the issues that it has been necessary for me to decide. Turning to the defendant, I had some more significant concerns with his evidence. I have concluded, for reasons explained later, that the defendant’s evidence was inaccurate in some significant respects. This included his evidence in relation to the circumstances in which the parties came to hold the Bowen Road property as joint tenants (rather than tenants in common). It included his evidence in relation to the timing and circumstances of the breakdown in the parties’ relationship in the first half of 2007. It also included his evidence as to the agreement that he alleged the parties reached in August 2007 to the effect that he would contribute AUD 1 million towards a house for the plaintiff and their son when they returned to Australia to live.