Evans, Sally Lee v Public Trustee (as Administrator of the Estate of the Late Bruno Sirgunas)
[1998] TASSC 159
•18 December 1998
159/1998
PARTIES: EVANS, Sally Lee
v
PUBLIC TRUSTEE (AS ADMINISTRATOR OF THE ESTATE OF THE LATE BRUNO SIRGUNAS)
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO: 150/1997
DELIVERED: 18 December 1998
HEARING DATE/S: 25 November 1998
JUDGMENT OF: Cox CJ
CATCHWORDS:
Equity - Trusts and trustees - Constitution and classification of trusts generally - Classification of trusts in general - Implied trusts - Constructive trusts independent of intention - General principles - Constructive trust as tenants in common over house and contents in equal shares.
Muschinski v Dodds (1985) 160 CLR 583; Baumgartner v Baumgartner (1987) 164 CLR 137, referred to.
Aust Dig Equity [102]
REPRESENTATION:
Counsel:
Applicant: P Barker
Respondent: B P McManus
Solicitors:
Applicant: Roberts & Partners
Respondent: Public Trustee
Judgment category classification:
Court Computer Code:
Judgment ID Number: 159/1998
Number of pages: 6
Serial No 159/1998
File No 150/1997
SALLY LEE EVANS v THE PUBLIC TRUSTEE
(AS ADMINISTRATOR OF THE ESTATE OF
THE LATE BRUNO SIRGUNAS)
REASONS FOR JUDGMENT COX CJ
16 December 1998
By originating application, the applicant seeks the following declaration, namely, that the applicant and Bruno Sirgunas ("the deceased") were at all material times until the death of the deceased joint tenants in equity of ¾
the property situate and known as 1 Akora Street, Mornington in Tasmania, more particularly described in Certificate of Title Volume 3018 Folio 72 and all of its contents, except for the clothes and personal effects of the deceased;
the property situate and known as Lot 3 High Street, Bothwell in Tasmania, more particularly described in Certificate of Title Volume 122995 Folio 3;
the Holden motor vehicle registration number CH-9744; and
the King box trailer registration number HT-3619.
In the alternative, the claim is for a declaration that she and the deceased were tenants in common in equal or some other shares pursuant to an express, implied or constructive trust in equity in respect of the above property.
By her affidavit, the applicant deposes that she first met the deceased in about 1978. She was then married to Kerry Evans, but they had separated. The deceased was living at 1 Akora Street, Mornington, a Housing Department home, which, by an agreement dated 9 September 1969, he had agreed to purchase from the Director of Housing for the sum of $9,400 payable by instalments. He did not pay a deposit, but paid instalments of $15.30 per week which covered rates, insurance and interest and a payment in reduction of the principal. At the time of their meeting, the deceased was employed as a panel beater, and she was receiving a supporting mother's pension as she had a 1½ year old son living with her at the time at a women's shelter. The deceased had three children, Barry, Debbie and Bruno, Jr, who at that stage were, according to the affidavit, 9, 8 and 7 years of age respectively. After an acquaintanceship of some four months, the applicant moved into the house at Akora Street and has continuously lived there since. At the time she moved in, the deceased was unemployed and she was receiving a supporting mother's pension. They shared all costs associated with the household and the four children equally, reimbursing each other exactly half of all costs and bills. She deposed that upon moving in, she assumed the duties of the deceased's children's mother for all practical purposes.
At the time of moving in, according to her affidavit, the contents of the home were old and unserviceable and the home had no floor coverings at all. Gradually the contents were replaced by newer items obtained by her on hire purchase. The deceased being unemployed, he was unable to obtain credit on hire purchase, but paid half of the applicant's hire purchase commitments. In due course, the goods procured on hire purchase were themselves replaced by new goods which were paid for in cash by the deceased and herself, each paying half of the cost. Since moving into the home at Akora Street, she claimed that both parties had provided labour where possible and equally shared the cost of effecting certain renovations including wall panelling all rooms except the bedrooms, wallpapering bedrooms, plastering ceilings, fitting carpets throughout, renovating the bathroom, painting inside and out, tiling the roof, paving and cementing all paths outside, erecting a double colourbond garage/workshop, excavating the back yard for a barbeque area, erecting a large barbeque and general maintenance.
In 1978, at the time the applicant moved in, the deceased owned an old Holden Kingswood which he later sold for about $200. This car was later replaced by the current motor vehicle which she said both paid for at a cost of approximately $5,000. Because she did not drive, the deceased registered the car in his name alone. In about 1980, the deceased was charged with an assault and absconded to Melbourne where he remained for about six months. During this time the applicant received extra pension money and met all costs solely from her income. Upon his return, the deceased was gaoled for six months but was released after four months and during his sojourn in gaol, the applicant met all costs solely from her income.
In about July 1989, they decided to pay off the outstanding principal on the home, the pay-out figure being $8,136.63 of which, according to her affidavit, the applicant contributed one-half. By this time the older children were leaving home. Debbie left home at approximately 15 years of age, Barry left at approximately 16 years of age and Bruno, Jr at approximately 14 years of age. Her own son, Todd, left home at approximately 19 years. In March 1986, the applicant gave birth to a daughter, Vanessa, the deceased being the father.
In or about 1995, the present car was purchased and the deceased received a gaol sentence for attempting to traffic in drugs and was gaoled for four months. During this time the applicant again paid all expenses solely from her income. In about May 1996, the deceased purchased the block of land at Bothwell for $8,500, legal fees and expenses adding a further $673 to the cost. She claimed that she contributed one-half of the sum of $9,173 required to complete. For the last eleven years prior to the deceased's death in 1997, the deceased and the applicant maintained a joint bank account at Island State Credit Union. Their incomes went into that account.
The applicant claimed that a happy relationship existed between her and the deceased, although there were one or two occasions when they parted for short periods of time, only to resume their relationship fully reconciled. At some time not disclosed by the evidence, the deceased destroyed a will, the contents of which were not revealed to me, and he failed to make any fresh will. According to her affidavit, both before and after an incident in 1991 as a result of which the deceased destroyed his will, the deceased assured the applicant that only she and her son, Todd, and their daughter, Vanessa, would benefit from his estate. On many occasions the deceased told her that he was dissatisfied with his three older children. The deceased frequently said, "What's mine is yours and what's yours is mine. We don't need a piece of paper to know who and where we are". According to her affidavit, the deceased "always led me to believe that we were life partners and everything we did was done jointly. Certainly we worked hard alongside each other to build our home and family and except for the fourteen months or so that Bruno was away when I paid all the expenses, we jointly paid equally for everything we have". At the time of his death in April 1997 the deceased was unemployed and receiving approximately $280 per fortnight.
In cross-examination, the applicant agreed that her relationship with the deceased's children had been difficult and had not been a loving one, one or more of them having been occasionally placed in foster care. Until some nine years after moving in with the deceased, he and the applicant had maintained separate bank accounts, the only joint account being one the creation of which was insisted upon by the Department of Social Services when their de facto relationship, which they had concealed from the department, was detected.
In relation to the land at Bothwell purchased in May 1996, when challenged about her claim to have paid half the cost of $9,173, she conceded that she had contributed only $3,500. This sum, she said, had been borrowed from a friend, Mrs Fitzpatrick, who had paid her by way of cheque. At first she said she paid it into her bank account. After being asked if she could produce documentation, she said the money had not been paid into her bank account, but had been given by her to the deceased. Although only receiving Social Security payments which went into a joint credit account, and child endowment which was paid into her own account, she claimed she had in the following eleven months until the death of the deceased paid back to Mrs Fitzpatrick all of the loan save $800. This was not paid by regular instalments but only when the applicant "had a little extra to spare". In addition, she claimed to have contributed half the cost of the car, which was acquired two years or a little less before the deceased's death. As to where the money for this came from, she said "we just saved and Bruno done odd jobs as well. It is the same principle". She also said, in relation to the car, that the deceased paid a little more than half. If she repaid Mrs Fitzpatrick $2,700 in the eleven months prior to the deceased's death and paid him nearly half the cost of the car in the two years prior to his death, this means that in a two year period she contributed over $5,000 from her child endowment.
As to the repayment of the balance owing on the house, she claimed she paid to the deceased her contribution of some $4,000 by paying over to him her child endowment of $160 per fortnight, these payments being drawn in cash from her bank account and handed to the deceased. Asked if she kept a record of how much she paid back, she said she did not think it was necessary at the time to do so, but then asked how she would have known when her share had been fully paid if she had not kept some sort of running tally, she said she wrote down a rough tally every fortnight on a piece of paper which had probably been thrown out.
The applicant called the sister of the deceased, Mrs Wells, with whom she has always been on good terms since the relationship began in 1978. Mrs Wells confirmed in her affidavit that the applicant, from the time of moving in with the deceased, had adopted the role of wife and stepmother to the deceased's children and that at that time the house was in a dilapidated state and the furniture in poor condition. Mrs Wells had observed that most of the renovations to the house had been carried out by both the applicant and the deceased, and claimed that the deceased had advised her on many occasions that the applicant had worked with him on improving the property. The deceased often said to her that whatever was his was that of the applicant because they did everything together and contributed equally.
A Mr Irwin claimed to have met the deceased in 1994 and to have become friends with him. They confided in each other and the deceased advised Mr Irwin that he and the applicant had been together for about twenty years and that they were very happy. He said that he had once had a will, but had destroyed it in a fit of temper following some misunderstanding. He said that one day he would get around to replacing it, but that it didn't really matter because the applicant and he owned everything jointly, had always paid half each for everything they owned and that nobody could touch anything of theirs without their joint consent. Mr Irwin advised the deceased to rewrite his will, but the deceased died before doing so. In about the middle of 1996, the deceased informed Mr Irwin that he and the applicant had jointly purchased a block of land somewhere in the country and that he and the applicant were thinking of building on it for their retirement.
In re-examination, the topic having been opened up in cross-examination, he said he had been taken into the confidence of the deceased about the latter's affairs because he himself had been experiencing a marriage breakdown and in the course of these confidences the deceased had told him that he and the applicant had jointly furnished the home and planned its renovation. Asked about his knowledge of any arrangement to pay off the balance purchase price, he said he understood that they were partners and had paid it off "collectively".
The respondent Public Trustee called Debbie Sirgunas, the daughter of the deceased, and read into evidence an affidavit sworn by her. In that affidavit she disputed some of the applicant's claims about the condition of the house and the relationship between the deceased's children and the applicant and a number of other relatively peripheral matters. As to matters of substance, she claimed to have been with her father when he bought the car and to have seen him paying $4,500 - $5,000 in cash for it, she denied that the applicant had contributed to paying off the balance purchase price of the house and said that the funds came from her father's earnings as a bricklayer's labourer and she claimed that her father had paid the entirety of the money required to purchase the land at Bothwell in 1996. Far from the relationship between him and the applicant being a very happy one, Miss Sirgunas claimed that they often argued, and on one occasion the deceased had said that he had made a will and that the applicant would get nothing.
In cross-examination, she claimed that both her father and the applicant were involved in drug trafficking and that they shared the profits. I make no finding against the applicant in respect of this claim, which was not even put to her in cross-examination. Ms Sirgunas conceded, however, that the applicant and the deceased operated a joint bank account to which they both had access from 1987 until his death, that they split equally such moneys as were received from drug trafficking, that the applicant paid half the payments due on the house from the time she moved in until it was paid off and that they shared equally all other forms of household domestic expense.
I can place little reliance on the applicant's evidence where it is not supported by other evidence. Her general credibility is somewhat marred by her admissions of deception in respect of certain Social Security payments she received, but quite apart from that, I find her claims to have contributed over $5,000 in irregular payments from child endowment in less than two years towards the acquisition of the car and the land at Bothwell lacking in credibility and I do not accept that that is the case. I accept that from her resources she made an equal contribution to the household expenses from the time of her moving in and that this included a share in the repayments to the Housing Department and hire purchase and similar commitments in respect of most of the furniture and fittings. I accept that when the deceased absconded and when he served sentences of imprisonment, the whole burden of running the establishment fell upon her. I accept that the deceased treated her as his wife and regarded the home and its contents as property belonging to them both. I also accept that while he did most of the physical work associated with any renovations, she made some contributions towards improving the home and also made a contribution by virtue of her services as a home-maker. I am not satisfied that the deceased had the same attitude which he had towards the home and its contents so far as the car or the land at Bothwell are concerned, and I disbelieve the applicant's claim that there was any agreement between them that she was to contribute an equal half share of the cost, let alone that she did so. Her claim to any equitable interest in the Bothwell land, the Holden motor vehicle and the King box trailer has not been made out.
The house and contents, however, fall into a different category. Although I am not satisfied that there was any express agreement between them as to how that property was to be held, the deceased so conducted his dealings in respect of it that it would be contrary to equitable principle that his estate should assert exclusive beneficial ownership of it. In Muschinski v Dodds (1985) 160 CLR 583, Deane J rejected the notion that a constructive trust will be imposed merely in accordance with idiosyncratic notions of what is just and fair. As the editors (Meagher and Gummow) of Jacobs' Law of Trusts in Australia, 6 ed, trenchantly say, at par[1351], his Honour held that "proprietary rights fall to be determined by principles of law and not by some mixture of judicial discretion, subjective views about which party ought to succeed, or the formless void of individual moral opinion". Deane J went on to say, at 616:
"That is not to say that general notions of fairness and justice have become irrelevant to the content and application of equity. They remain relevant to the traditional equitable notion of unconscionable conduct which persists as an operative component of some fundamental rules or principles of modern equity (cf, eg, Legione v Hateley (1983) 152 CLR 406, at p 444; Commercial Bank of Australia Ltd. v Amadio (1983) 151 CLR 447, at pp 460-464, 474-475)."
In Baumgartner v Baumgartner (1987) 164 CLR 137 at 148, Mason CJ, Wilson and Deane JJ affirmed the above dicta of Deane J and went on to hold on the facts of that case, which bear a strong resemblance to those in the present one, that a constructive trust in favour of the de facto wife (the respondent) had been made out in respect of property, the legal title to which was in the name of her male partner. At 148 - 149 they said:
"In the present case the parties pooled their earnings with a view to meeting all the expenses and outgoings arising from their living together as a family. The individual contributions of each party were not allocated to a particular category or particular categories of expenses and outgoings. The pool of earnings was used to pay outgoings associated with accommodation - mortgage instalments on the unit at Cabramatta and the property at Leumeah - as well as other living expenses. There was no suggestion that the respondent's contributions were paid and received by way of rent or a charge for use and occupation and for living expenses. Such a suggestion would be inconsistent with the relationship that came into existence between the appellant and the respondent, a family relationship which was for the most part until 1982 a long-term stable relationship in which marriage was under continuous contemplation. The land at Leumeah was acquired and the house on it was built in the context and for the purposes of that relationship. Together they planned the building of the house. Together they inspected it in the course of its construction. Together they moved out into it and made it their home after it was built.
In this situation it is proper to regard the arrangement for the pooling of earnings as one which was designed to ensure that their earnings would be expended for the purposes of their joint relationship and for their mutual security and benefit. To the extent which the pooled funds were the source of payment of mortgage instalments by the appellant, the pooled funds contributed not only to present accommodation expenses but also to the security of the parties' accommodation in the future. In this context it would be unreal and artificial to say that the respondent intended to make a gift to the appellant of so much of her earnings as were applied in payment or mortgage instalments. There is no evidence which would sustain a finding that the respondent intended to make a gift to the appellant in this way.
The case is accordingly one in which the parties have pooled their earnings for the purposes of their joint relationship, one of the purposes of that relationship being to secure accommodation for themselves and their child. Their contributions, financial and otherwise, to the acquisition of the land, the building of the house, the purchase of furniture and the making of their home, were on the basis of, and for the purposes of, that joint relationship. In this situation the appellant's assertion, after the relationship had failed, that the Leumeah property, which was financed in part through the pooled funds, is his sole property, is his property beneficially to the exclusion of any interest at all on the part of the respondent, amounts to unconscionable conduct which attracts the intervention of equity and the imposition of a constructive trust at the suit of the respondent."
In determining the terms of the constructive trust, their Honours said at 149 - 150:
"The facts that the Leumeah property was acquired and developed as a home for the parties and that, at least indirectly, it was largely financed out of money drawn from the pool of their earnings, this being one of the purposes which the pool was to serve, combine to support an equality of beneficial ownership at least as a starting point. Equity favours equality and, in circumstances where the parties have lived together for years and have pooled their resources and their efforts to create a joint home, there is much to be said for the view that they should share the beneficial ownership equally as tenants in common, subject to adjustment to avoid any injustice which would result if account were not taken of the disparity between the worth of their individual contributions either financially or in kind. The question which has caused us particular difficulty is whether any such adjustment is necessary in the circumstances of the present case to avoid any injustice which would otherwise result by reason of disparity between individual financial contributions. The conclusion to which we have come is that some such adjustment is necessary."
In the light of the agreed fact that the respective contributions of each were 55 per cent from the appellant and 45 per cent from the respondent, their Honours determined, although acknowledging that the case was borderline, that the constructive trust to be imposed should declare the beneficial interests in those proportions, after other adjustment had been made such as the value of the male partner's contribution of the balance purchase price of the Cabramatta property which he had acquired before they began living together and pooling their resources.
In the present case, although the deceased had entered into the contract to purchase the house in1969 and had probably made some reduction in the balance purchase price owing by the time the applicant and he began living together in 1978, he had paid no initial deposit and the value of that equity would appear to be quite small, as the original purchase price of $9,400 had only been reduced to $8,136 when the house was paid off in 1989. No adjustment is therefore necessary, in my view, to allow for any contributions made in respect of the house before the parties began to live together and pool their resources. From 1978 until 1989 their contributions towards the house should be regarded as equal by virtue of their equal contributions to all household expenses. As to the repayment of the balance purchase price in 1989, I find that the deceased made that payment from funds which were then in his possession and that the applicant did not have cash funds available to make any contribution then. Nevertheless, I accept that she continued to make some payments in cash to the deceased from her child endowment as reimbursement to him for his cash contribution and made a contribution in addition to the cost of running the home. Despite my reservations about her evidence of keeping a rough tally on a piece of paper which was eventually destroyed, I think her claim of equal contribution, at least in respect of the house, was corroborated by the deceased's sister, Mrs Wells, and by Mr Irwin and has been established.
In my opinion the ownership by the deceased of the house and contents, other than his personal effects, is impressed with a constructive trust in favour of himself and the applicant as tenants in common in equal shares. There will be a declaration accordingly.
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