Fernandez v Fernandez
[2020] WASC 356
•13 OCTOBER 2020
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: FERNANDEZ -v- FERNANDEZ [2020] WASC 356
CORAM: MASTER SANDERSON
HEARD: 7 & 8 SEPTEMBER 2020
DELIVERED : 13 OCTOBER 2020
PUBLISHED : 13 OCTOBER 2020
FILE NO/S: CIV 2715 of 2019
BETWEEN: SOLOMON THOMAS FERNANDEZ
Plaintiff
AND
DENISE ANN FERNANDEZ
Defendant
Catchwords:
Property law - Purchase of property by father for 'family' - Presumption of advancement - Turns on own facts
Legislation:
Nil
Result:
Application dismissed
Category: B
Representation:
Counsel:
| Plaintiff | : | S Standing |
| Defendant | : | MGS Crowley |
Solicitors:
| Plaintiff | : | Friedman Lurie Singh & D'Angelo |
| Defendant | : | Kott Gunning |
Case(s) referred to in decision(s):
Anderson v McPherson [No 2] [2012] WASC 19
MASTER SANDERSON:
By amended originating summons dated 20 March 2020 the plaintiff seeks a declaration he is the beneficial owner of a house in Tate Street, South Perth. He says he provided the entirety of the funds for the purchase of the house and he intended at the time of purchase to retain sole beneficial ownership. He says the defendant holds the house on a resulting trust for him. The issue in the case is whether the plaintiff intended to retain beneficial ownership of the house.
The plaintiff is married to Audrey Gomez. There are three children of the marriage. Nicole Ann Fernandez was born on 22 April 1986. Denise Ann Fernandez was born on 18 January 1988. Natalie Ann Fernandez was born on 19 December 1996. The plaintiff has affirmed a number of affidavits in these proceedings. At the hearing this matter proceeded on the basis of oral evidence‑in‑chief followed by cross‑examination. But the plaintiff's first affidavit affirmed 27 September 2019 succinctly sets out relevant and uncontroversial facts which ground the dispute. Relevantly that affidavit reads as follows:
9.I am normally resident in Singapore.
10.In early 2016, I made the decision to purchase a house in Perth for me and my family members to stay in whenever we were there. At that time my 1st and 2nd daughters were already residing there and my 3rd daughter was planning to go to University in Perth. My wife and I frequently travelled to Perth to visit our children and grandchildren. I therefore felt that it would be convenient and practical to purchase a property there. I had also hoped that my youngest daughter could stay in the house while attending University there which would avoid the additional expense for her accommodation.
11.At the material time, my eldest daughter had separated from her then husband and had moved out with her children. I had rented an apartment for her during this separation while she was undergoing divorce proceedings. I had also intended for her to move into the house so that I need not rent a separate apartment for her.
12.I had therefore looked around for a suitable house in Perth and in April 2016 decided to purchase the Property.
13.As matter of convenience I decided to purchase the Property in my second daughter's name. I discussed this with her and she agreed to do so and further agreed that she would hold it on my behalf. The Property was never intended to be gifted to Denise.
14.I paid the entire purchase price of AUD1,600,000.00. I did not take out a mortgage loan in relation to it. I was able to make full payment of the purchase price as I had sold my shares in a Singapore incorporated company known as Pestbusters Asia Pacific Pte Ltd.
15.After I had completed the purchase, I had the house renovated and purchased furnishing for the same. I spent a further sum of about AUD300,000.00 doing so.
It is convenient at this point to say something about the law. Where a person purchases a property in the name of another, the law presumes that the legal title holder who has provided the purchase money holds the legal estate on a resulting trust for the purchaser. The legal title holder will only obtain a beneficial interest in the property where that is the intention of the purchaser. However, that presumption is subject to the exception that in the case of a transfer to a wife or child there is a presumption of advancement so that the beneficial as well as the legal interest passes. Both presumptions are evidentiary presumptions. They operate to place the burden of proof on one party or the other. The presumptions cannot prevail over the actual intention of the party as established by the evidence. The plaintiff in this case accepted first, that the presumption of resulting trust arising from the plaintiff's purchase of the property gave way to the presumption of advancement. Second, the plaintiff accepted it was necessary for him to establish on the balance of probabilities, he did not intend to relinquish a legal as well as beneficial interest in the property.
As there was a large measure of agreement between the plaintiff and the defendant as to the applicable law it is not really necessary for me to discuss either presumption in detail. However, it is instructive to note the discussion of both concepts by Edelman J in Anderson v McPherson [No 2] [2012] WASC 19. At [88] to [116] his Honour considers why a resulting trust arises and places it in its historical context. At [123] to [138] his Honour considers the presumption of advancement. I would incorporate, without repeating, all his Honour has to say.
In support of his position the plaintiff relies on a number of statements he made during his evidence‑in‑chief. In advance of purchasing the house he asked the defendant to hold it on trust on his behalf. For her part, the defendant denied any such request was made by the plaintiff. Taking into account the evidence given by the plaintiff, the evidence of her mother Audrey and the evidence of Denise Fernandez, I am not satisfied any such request was made.
It is clear, that at least until recently, the plaintiff was an extremely generous and doting husband and father. He paid to have his children educated in Australia and he met all of their living expenses while they were studying. He bought each of his daughters a motor vehicle. He paid for lavish and expensive weddings for both of his two elder daughters. He clearly wanted to establish a base in Perth where he and his wife could stay when they were visiting the city. He also wanted to provide accommodation for Denise Fernandez who had separated from her husband. It was for this reason he conceived the idea of purchasing the property.
The evidence of the defendant, Denise Fernandez and Audrey Gomez is all to the same effect. While the plaintiff talked about a family home, what he really meant was a house for his children. Neither he nor any of the other family members really engaged in any discussion about ownership. The house was put into the name of the defendant as a matter of convenience. It could not go into the plaintiff's name because he was a non‑resident and would run into difficulties with the Foreign Investment Review Board. It could not go into the name of Denise Fernandez because she was in the process of divorcing her husband and dividing the matrimonial property. To have the house in her name would have complicated matters. Natalie Fernandez was thought by all members of the family to be too young. The obvious person to be the registered proprietor of the property was the defendant. But really she was chosen as a matter of convenience. Within the family it was of no consequence who was the registered proprietor.
During the course of her evidence, the defendant made it plain she never really gave any thought to selling the property. She regarded it as belonging to her and her sisters. Counsel for the plaintiff attempted to draw the defendant into saying that she held the property on trust for herself and her sisters. That may be right. But it is irrelevant to this application. The plaintiff says the property is his and he is entitled to have it transferred into his name. Whatever may be the relationship between the defendant and her sisters in relation to the property is of no real interest to the plaintiff.
In a family situation such as this, it becomes readily apparent why the presumption of advancement operates. The prime question is this - why did the plaintiff buy the property? The answer, based on the presumption of advancement, is that he purchased it for the defendant and her sisters. Really the evidence bears that out. During the course of his evidence the plaintiff was at pains to insert wherever he could a statement he had purchased the property on his own behalf. That evidence was somewhat glib. I do not accept that he at any stage told either his wife or his children he regarded himself as the owner of the property and it was he alone who could decide what to do with it. Rather, I am satisfied he purchased the property for the benefit of his children always intending that it would be theirs for as long as they wanted to retain it and he would have no say in what the children might eventually do with the property. Of course he understood, and they understood, it would be held for the foreseeable future. It was not purchased with an eye to a quick sale for a profit. It was purchased for the long term good of the family.
Prior to the plaintiff giving evidence, his counsel indicated he would seek to tender a document identified as the plaintiff's will. A copy of the document appeared as document 14 in the trial bundle. Counsel for the defendant objected to this document being tendered. After hearing argument I indicated I would not allow the will into evidence. I gave brief reasons for my decision during the course of the hearing and I indicated I would provide more detailed reasons at a later date. It is convenient at this point to more fully allow the will into evidence.
The will is by Australian standards a curious document. In particular, cl 6 and cl 7 of the will is in the following terms:
6.I have fully paid for a house in Perth, Western Australia located at No. 4 Tate Street, South Perth, WA 6151. This property is registered under my daughter DENISE ANN FERNANDEZ's name. I hereby direct that this property shall be a family home and will not be sold as long as I and my wife are alive.
7.In the event that both my wife and I have passed away, I hereby direct that this property is to be sold and the sale proceeds be divided equally between my 3 daughters.
In Australia a will speaks from the date of death of the deceased. On that basis it is difficult to make sense of these clauses. Moreover, cl 6 does not seem to suggest the plaintiff treats the property as if he owns it. There is simply a direction about the fate of the property prior to the plaintiff's death. Clause 6 appears to be meaningless.
As I understand the plaintiff's position, it was intended to rely on the will as evidence the plaintiff always adopted the position the property was his to dispose of as he chose. There are a number of difficulties with that proposition. A will speaks from death and can be revoked at any time. Until probate is granted of the will it is of no force and effect. Really it is a self‑serving statement. If the plaintiff had made a note to himself to the effect he claimed ownership of the property and signed it, it would carry no weight at all. That is effectively what this will was doing.
That is not to say it was not open to the plaintiff to give evidence he had made a will and in that will he had purported to deal with the property. In fact that is precisely the evidence the plaintiff gave. But really it is of no probative value. It was an attempt by the plaintiff to pull himself up by his boot straps.
There were a number of other matters relied upon by the plaintiff. After the house was purchased the plaintiff paid for extensive renovations. These renovations were organised by the defendant's husband, Benjamin Kane. Mr Kane told the plaintiff in correspondence in July 2016 that the renovations were to get the house up to where it should be '… suitable for your guests, Nicole and the babies'. In April 2017 Nicole, then living in the house, told the plaintiff in correspondence 'its your house'. The plaintiff stayed in the house on a number of occasions and on at least one occasion brought friends to stay.
None of these matters advances the plaintiff's case. Perhaps the strongest point relates to the statement by Nicole referring to the property being 'your house'. But the context makes it plain, a grateful daughter was simply acknowledging her father's generosity and in the family context acknowledging his contribution. Furthermore, the acknowledgement was given by Nicole Fernandez not the defendant. But even if that statement can be in some way attributed to the defendant it is not decisive when placed against all of the other evidence.
Counsel for the plaintiff placed some store on the evidence of Audrey Gomez that the plaintiff told her he wanted to invest in a property for the family and when the parents passed away the children would be able to use the property as collateral. As I understand counsel's submission, it was to the effect this indicated the plaintiff believed during his life he could deal with the property as he saw fit and it was not until he died that it would pass to the children. In my view that is not an interpretation of the evidence which is open. I have already dealt with the way in which the plaintiff related to his children and the way that they all viewed the property. I need not repeat what I have said. Even on the most favourable view of this evidence (so far as the plaintiff is concerned) it does not advance the plaintiff's case.
There are three other matters which deserve attention. The first has to do with insurance of the property. The defendant took out cover which is described as 'landlord and tenant'. Counsel for the plaintiff made the point that Nicole Fernandez was not a tenant in the property - she did not pay rent and she was not subject to a lease agreement. It was submitted this was indicative of a belief within the family the property was in fact owned by the plaintiff. Having heard the defendant give evidence on this point, I am satisfied what she did was simply take out insurance she thought was appropriate. She did not turn her mind to questions of ownership when deciding on the form of insurance. The form of insurance says nothing about ownership of the property.
Second, it is clear in Family Court proceedings, Nicole Fernandez did not declare she had an interest in the property. If indeed she does have an interest it is an equitable interest which she may or may not be able to enforce against the defendant. Once again, having heard Nicole Fernandez's evidence, it is clear she did not turn her mind to this issue. She simply regarded the property as belonging to the family. She did not see herself having a particular interest in the property which could be quantified. Thus she saw no need to refer to it in Family Court proceedings. Her position is entirely understandable and says nothing about the plaintiff's ownership of the property.
The final point has to do with the Foreign Investment Review Board restraints and the plaintiff's considered position to avoid any difficulty with that legislation by putting the property in the defendant's name. He now seeks the assistance of equity to have the property transferred to his name. It must be open to question whether the plaintiff comes to the court with clean hands. This was not a point pressed with any vigour by the defendant and it is therefore inappropriate for me to develop the point any further. There is no question counsel for the defendant could have made more of this point than he did.
The presumption of advancement in this case has not been displaced. There is no basis for making the orders sought by the plaintiff. The originating summons will be dismissed. Subject to hearing further from counsel, the plaintiff should pay the defendant's costs of the action including reserved costs.
Parties ought confer as to the form of orders as to costs. If agreement cannot be reached, parties ought file competing minutes of proposed orders and short submissions within seven (7) days.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CB
Associate to Master Sanderson13 OCTOBER 2020
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