Friar and Friar and Anor
[2009] FamCA 295
•23 April 2009
FAMILY COURT OF AUSTRALIA
| FRIAR & FRIAR AND ANOR | [2009] FamCA 295 |
| FAMILY LAW – PROPERTY – SUMMARY DISMISSAL – The wife sought orders that she and the husband be declared the sole owners of the former matrimonial home, the registered owners of which are the husband and the wife’s sister-in-law – The wife’s sister-in-law seeks that the wife’s application be summarily dismissed – Whether the wife’s application is doomed to fail – Whether a constructive trust can be said to have existed |
| Family Law Act 1975 (Cth) |
| Greater Pacific Investments (in liquidation) v Australian National Industries (1996) 39 (NSWLR) 143 Beck v Beck (2004) FLC 93-181 Muschinski v Dodds (1985) 160 CLR 583 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 Young v Lalic [2006] NSWSC 18 The Commonwealth v Verwayen (1990) 170 CLR 394 Grant v Edwards [1986] Ch 638 Giumelli v Giumelli (1999) 196 CLR 101 |
| APPLICANT: | Ms W Friar |
| 1st RESPONDENT: | Ms R Friar |
| 2nd RESPONDENT: | Mr C Friar |
| FILE NUMBER: | SYC | 6808 | of | 2007 |
| DATE DELIVERED: | 23 April 2009 |
| PLACE DELIVERED: | Sydney |
| PLACE HEARD: | Sydney |
| JUDGMENT OF: | Justice Fowler |
| HEARING DATE: | 12 March 2009 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Foster |
| COUNSEL FOR THE RESPONDENT: | Ms Pentalow |
| 2ND RESPONDENT: | In person |
Orders
The application for Order 1 of the wife’s Initiating Application filed 28 September 2007, is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Friar and Friar is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT SYDNEY |
FILE NUMBER: SYC 6808 of 2007
| MS W FRIAR |
Applicant
And
| MS R FRIAR |
1st Respondent
And
| MR C FRIAR |
2nd Respondent
REASONS FOR JUDGMENT
Introduction
The proceedings before the Court are ones in which the second respondent in the substantive proceedings (hereinafter referred to as the husband’s sister) seeks
that the application of the wife in the substantive proceedings, seeking an order against her, be summarily dismissed.
The wife seeks a declaration pursuant to the provisions of s 78 of the Family Law Act 1975 (Cth) (“the Act”) that:
…the Respondent Husband and the Applicant Wife be declared the sole owners of 102 [property] being the whole of the land described as folio identifier…
The property in respect of which the declaration is sought is the former matrimonial home of the husband and the wife, which was their home for some 30 years. The registered proprietors of the property are the husband and the husband’s sister.
In order to procure some specificity with respect to the wife’s claim, points of claim were required from the wife in relation to the relief sought.
The wife provided a document setting out “points of claim” with respect to the relief sought against the husband’s sister in the following terms:
1.The applicant is the former wife of the first respondent and the former sister in law of the Second Respondent.
2.The applicant and first respondent were born in 1951 and the second respondent was born in 1955.
3.The respondents and [SR] are the children of [Mr Friar Snr] and [Mrs Friar Snr] his wife and the grandchildren of [E Friar].
4.In 1958 [Mr and Mrs Friar Snr] became the registered proprietors as joint tenants of land know (sic) as 102 [property], N.S.W. where they lived with their children.
6.The land know (sic) as 103 [property] is located across the street from 102 [property].
7.In 1967, [Mr Friar Snr] became the registered proprietor of
103 [property].8.[Mr Friar Snr] lived with his wife and children at 102 [property] and with his mother, [E Friar], at 103 [property].
9.In 1967 the applicant had a daughter, [K Friar] born
[…] November, 1967.10.In 1969 the applicant and the first respondent had their first child, [N Friar] born […]/2/69.
11.In about 1969 the applicant and the first respondent began living in a de facto relationship at 102 [property] with their children and the first respondent’s family.
12.In about 1976 [Mr and Mrs Friar Snr] sold 102 [property] to the respondents and purchased a property at [U] NSW when they resided with [E Friar].
PARTICULARS
(a)Prior to the sale the land was unencumbered by any mortgage.
(b)The land was sold to the respondents for $35,000.00.
(c)[Mr and Mrs Friar Snr] purchased a property known as [U property].
(d)In order to finance the purchase of 102 the respondents borrowed $18,000.00 from their parents using 102 as security.
(e)An unknown amount of money was also borrowed from the City Council Employees Credit Union Limited which amount was also secured against 102.
13.After [Mr and Mrs Friar Snr and E Friar] moved to [U] the applicant and respondents lived at 102 [property] with their de facto partners and 103 [property] was rented out.
14.[E Friar] died on […] February, 1979.
15.On a date unknown in about 1980 or 1981 [Mr Friar Snr] died.
16.By his will [Mr Friar Snr] devised 103 [property] equally to his wife and three (3) children as tenant (sic) in common in equal shares.
PARTICULARS
(a)At the date of the Transmission Application the land was unencumbered by any mortgage.
17.After the death of [Mr Friar Snr]:-
18.The two mortgages registered on the title to 102 [property] were discharged and the property was again unencumbered by a mortgage.
19.The second respondent and her de facto husband, [Mr D] began residing together at 103 [property].
20.The applicant and the first respondent continued to reside at
102 [property] with their children.21.[Mrs Friar Snr] continued to reside at [U].
PARTICULARS
(a)[N Friar] resided with his grandmother at [U].
22.On […] March, 1981 the applicant and first respondent were married.
23.After the death of [Mr Friar Snr] the applicant and respondents entered into an arrangement or understanding that the applicant and first respondent would be the beneficial owners of 102 and the second respondent either by herself or with [Mr D] would be the beneficial owner of 103.
PARTICULARS
(1)The applicant and her husband occupied and maintained 102 and paid rates, mortgage instalments and other expenses in respect of the property.
(2)The second respondent and [Mr D] occupied and maintained 103 and paid rates, mortgage instalments and other expenses in respect of the property.
(3)In 1989 the applicant won $71,000 from a poker machine jackpot. $10,000 of the proceeds were used to pay for a customized kitchen for 102 [property].
(4)The applicant paid mortgage instalments, solicitors fees and other expenses in respect of loans taken out on the security of 102 [property].
24.[Mrs Friar Snr] and the respondents represented to the applicant that she and her husband were the beneficial owners of 102 [property].
PARTICULARS
(a)During the early 1980s [Mrs Friar Snr] told the applicant that she and the first respondent should sell the property and move away as it was an evil place.
(b)During the 1980s the second respondent told the applicant that she and her husband should not sell 102 as it was an asset and would be worth more in years to come.
(c)During the 1980s the second respondent told the applicant that she did not have to worry because if anything happened to her husband she would still be the owner of 102 even though her name was not on the title deeds to the property.
25.In 1984 the second respondent purchased [SR’s] one quarter (1/4) interest in 103 [property] and became the registered proprietor of a one half interest in the property, [Mrs Friar Snr] and the first respondent each retaining their one quarter (1/4) interests.
26.From about 1984 loans that benefited the second respondent and [Mr D] were obtained and secured against the title to 103 [property] with the consent of [Mrs Friar Snr] and/or the first respondent.
PARTICULARS
(1)In 1984 an unknown amount was borrowed from the Westpac bank using 103 as security for the loan (“the Westpac loan”) – see mortgage dated 4/7/84. The second respondent and [Mr D] were described on the mortgage as “the debtors”.
(2)In September 2001 the amount of $240,000.00 was borrowed from the ANZ bank using 103 as security for the loan (“the ANZ loan”) – see mortgage dated 11/9/01. The second respondent and [Mr D] who were described on the mortgage as “the debtors”.
(3)In September 2002 a further $20,000.00 was borrowed from the ANZ bank using 103 as security for the loan (“the second ANZ loan” – see mortgage dated 16/9/02.
26. (sic)From about 2001, loans that benefited the first respondent
and or his son [G Friar] were obtained and secured
against the tile to 103 (sic) [property] with the consent
of the second respondent.27.In 2002 [Mrs Friar Snr’s] one quarter (1/4) interest in 103 [property] was transferred to the second respondent who became registered as proprietor of a three quarter (3/4) interest in the land, the first respondent retaining his one quarter (1/4) interest.
PARTICULARS
(a)[Mrs Friar Snr] suffered from dementia and on a date unknown she executed a power of attorney in favour of the second respondent. The second respondent signed the transfer for her mother (as transferor) and herself (as transferee).
(b)The consideration recorded on the transfer was $175,000.00.
28.The first respondent and [Mr D] are still residing at
103 [property].29.The applicant and first respondent resided together at
102 [property] for about 33 years from 1969 to September 2004 when the applicant went to live in [a] womens refuge at […].PARTICULARS
(a)The first respondent used to assault the applicant and she would leave the matrimonial home and live apart from him for periods. For example, in 1972 they separated for
11 months and in 2000 they separated for 5 months.30.The first respondent still resides at 102 [property].
31.In October 2006 the applicant and first respondent were divorced.
32.On 18 September 2007 the applicant commenced these property proceedings in the Family Court at Sydney.
33.In accordance with the abovementioned arrangement or understanding and/or induced by and encouraged by the respondents representations and in reliance on them the applicant did not insist on her beneficial interest being recorded on the title to the land, continued living with the first respondent and made direct and indirect contributions towards the acquisition, maintenance and improvement of the land.
34.In breach of the arrangement and representations the respondents deny that the applicant has any interest in or rights over the land.
35.By insisting on their legal title in order to defeat the applicant’s interest in the land the respondents have acted unconscionably towards the applicant.
36.The respondents are estopped from denying that they hold the land on trust for the applicant.
37.Further or in the alternative the applicant says that she contributed to the improvement, acquisition and maintenance of the property of a joint relationship or endeavour which has failed and that it would be unconscionable for the respondents to retain the benefits of her contributions.
BY WAY OF FINAL RELIEF
38.The applicant seeks:-
39.A declaration that the respondents hold the property known as
102 [property] in the state of NSW on trust for the applicant.40.Such further or other orders and directions as the Court deems appropriate.
41.Costs.
At the hearing counsel for the husband’s sister provided to counsel for the wife a statement of the outline of the case.
Upon receipt of that document it was put by counsel for the wife that the matter ought to be determined on the points of claim taking those points of claim at their highest. She objected to the Court considering material contained in the wife’s affidavits.
Counsel for the wife’s attention was specifically drawn to authorities and the practice of the Court, which is to consider cases upon the affidavits filed, the Court not being one of pleading in the common law sense of that word.
It was submitted by counsel for the wife that all the affidavits in support of her client’s claim might not yet have been filed and she insisted that the matter proceed on the points of claim, notwithstanding having been offered the opportunity of an adjournment to procure the filing of any additional necessary affidavit material. She declined that offer.
Counsel for the wife was asked whether she wanted to seek any amendment to the points of claim and she said that she did not.
In the circumstances, counsel for the husband’s sister was asked whether he was prepared to make his submissions on the points of claim alone taken at their highest and he indicated that that was a course to which he consented.
In the circumstances it was the wife’s claim as pleaded and particularised in her points of claim which was taken to be the foundation of her case for the order affecting the husband’s sister. It is in respect of that case that the application for an order for summary dismissal is made, which, if granted, would result in the dismissal of the claim of the wife made pursuant to Order 1 of the orders she seeks as set out above, in relation to the former matrimonial home.
Background Facts
The background facts for the purpose of this application given its nature are as set out in the points of claim.
The Law in relation to applications for Summary Dismissal
To procure an order for summary dismissal Mr Foster, counsel for the husband’s sister, submits in the following terms:
The principles to be applied by the Court in such an application have recently been visited by the Full Court in Beck (2004) FLC 93-181:
“It is well established that the following principles apply: (see Bigg v Suzi (1998) FLC 92-799 at 84,973-84,974) and also Pelerman and Pelerman (2000) FLC 93-037 at 87,582 and Beck (2004) FLC 93-181)):
(a) The power for summary dismissal is a discretionary one.
(b) Relief “is rarely and sparingly provided”.
(c) The parties seeking summary dismissal must show that the application is “doomed to fail” or as has been otherwise described "that the opponent lacked a reasonable cause of action or is advancing a claim that is clearly frivolous or vexatious".
(d) A weak case or one that is unlikely to succeed is not “sufficient to warrant termination”.
(e) “If there is a serious legal question to be determined, it should ordinarily be determined at a trial”.
(f)“If notwithstanding the defects of pleadings, it appears that a party may have a reasonable cause of action which it has failed to put in proper form, a Court will ordinarily allow that party to reframe its pleadings”.’
In determining an application of this nature the rule to be extracted from the authority is that if a version of the facts put forward by the respondent is not inherently incredible, then in the absence of any opportunity for cross-examination it is incumbent upon the court to proceed on the basis that the respondent's version will ultimately be accepted at the trial of the action (see Webster v Lampard (1993) 177 CLR 598 at 608.”
…
Further support for the proposition that an application for summary dismissal must be determined on the basis only of the material put forward by the respondent (to that application) is to be found in the passage from the judgment of Kirby J in Lindon v The Commonwealth (No 2) (1996) 70 ALJR 541 at 544-5 (which was quoted by the Full Court in its judgment in Bigg v Suzi) where his Honour said:
"...2. To secure such relief, the party seeking it must show that it is clear, on the face of the opponent's documents, that the opponent lacks a reasonable cause of action (Munnings v Australian Government Solicitor (1994) 68 ALJR 196 at 171f, per Dawson J) or in advancing a claim that is clearly frivolous or vexatious; (Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91.)"
With that submission I agree.
The Issue
The issue before the Court is whether the facts as pleaded and particularised in the points of claim when subject to the scrutiny of the Court considering them in the most favourable light are “doomed to fail”. Does the wife on those facts lack a reasonable cause of action for the remedy sought?
The remedy sought is neither the declaration of an express trust, nor the declaration of a resulting or implied trust but rather the declaration of a constructive trust.
The High Court in Muschinski v Dodds (1985) 160 CLR 583 (per Deane J at 614-615) said:
…the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual or presumed agreement or intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle.
…
The fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice.
His Honour goes on to say at 616 (footnotes omitted):
The mere fact that it would be unjust or unfair in a situation of discord for the owner of a legal estate to assert his ownership against another provides, of itself, no mandate for a judicial declaration that the ownership in whole or in part lies, in equity, in that other.
And, at 620 :
Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do.
Justice Brennan in Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387 said at 423:
The unconscionable conduct which it is the object of equity to prevent is the failure of a party, who has induced the adoption of the assumption or expectation and who knew or intended that it would be relied on, to fulfil the assumption or expectation or otherwise to avoid the detriment which that failure would occasion. The object of the equity is not to compel the party bound to fulfil the assumption or expectation; it is to avoid the detriment which, if the assumption or expectation goes unfilled, will be suffered by the party who has been induced to act or abstain from acting thereon.
Their Honours Mason CJ and Wilson J said at 404:
One may therefore discern in the cases a common thread which links them together, namely, the principle that equity will come to the relief of a plaintiff who has acted to his detriment on the basis of a basic assumption in relation to which the other party to the transaction has “played such a part in the adoption of the assumption that it would be unfair or unjust if he were left free to ignore it per Dixon J in Grundlt (1937) 59 CLR at 675…. Equity comes to the relief of such a plaintiff on the footing that it would be unconscionable conduct on the part of the other party to ignore the assumption.
Justice Brereton in Young v Lalic [2006] NSWSC 18 at 74 usefully summarises the elements required to establish an entitlement to relief by application of the equitable estoppel which attracts the intervention of equity. That analysis, which I respectfully adopt, is as follows:
—First, as to the conduct of the plaintiff: that the plaintiff acted (or abstained from acting) in reliance upon an assumption or expectation that a particular legal relationship existed or would exist between the plaintiff and the defendant, or that the plaintiff had or would acquire some interest in the defendant’s property;
—Secondly, as to the conduct of the defendant: that the defendant induced the plaintiff to adopt the assumption or expectation and encouraged the reliant activities of the plaintiff or at least failed to deny the assumption or expectation with knowledge that the plaintiff was relying on it to the plaintiff’s potential detriment and that it could be fulfilled only by transfer of the defendant’s property, a diminution of the defendant’s rights or an increase in the defendants obligations;
—Thirdly, as to the subject matter: that the assumption or expectation in respect of it was one that the defendant could lawfully satisfy.
In The Commonwealth v Verwayen (1990) 170 CLR 394 at 487 Gaudron J says that “…the substantive doctrine of estoppel permits a court to do what is required to avoid detriment and does not, in every case, require the making good of the assumption.”
Thus, the Court should consider whether there is an appropriate equitable remedy falling short of a constructive trust.
It seems, for example, that the Court could consider such remedies as a licence to reside or a charge over property in lieu of construing a trust as to ownership if the inequity or detriment could be thus remedied.
In considering the detriment which flowed to the party referred to above, counsel for the husband’s sister submits that the conduct must be referable to the promise or intention and this will ultimately depend upon the nature of the conduct and of the promise or intention. I am referred to Grant v Edwards [1986] Ch 638 and the comments at p 648 where Nourse LJ held that it must be conduct on which the claimant could not reasonably be expected to to embark unless he or she was to have an interest in the house.
It seems clear that the imposition of remedial constructive trusts is to be done carefully and sparingly. In Giumelli v Giumelli (1999) 196 CLR 101 the High Court said, at 112:
In these cases, the equity which founded the relief obtained was found in an assumption as to the future acquisition of ownership of property which had been induced by representations upon which there had been detrimental reliance by the plaintiff. This is a well recognised variety of estoppel as understood in equity and may found relief which requires the taking of active steps by the defendant.
The Court also said at 113 (footnotes omitted):
The present case fell within the category identified by the Privy Council in Primer v Mayor, &c, of Wellington where “the Court must look at the circumstances in each case to decide in what way the equity can be satisfied”. Before a constructive trust is imposed, the court should first decide whether, having regard to the issues in the litigation, there is an appropriate equitable remedy which falls short of the imposition of a trust.
Turning then to the facts in this case as asserted in the points of claim:
a)The lands in respect of which the order is sought have been held by the husband and husband’s sister since 1976 (paragraph 12 of the points of claim).
b)The wife has had the benefit of occupation without the payment of rent in so far as the interest of the husband’s sister is concerned for some 33 years.
c)It is not asserted that the husband’s sister has held out to the wife that she has any present interest in the subject lands. In paragraph 23 of the points of claim a general assertion is made which is particularised as there set out. No such assertion is made against the husband’s sister in this pleading.
d)In paragraph 24 of the points of claim the representation is asserted generally but the general claim is particularised as there set out, and it is notable that the first such representation is not one of the husband’s sister and that the second representation which is said to be of the husband’s sister is, in my view, not a representation as to ownership of land but merely advice as to the retention of the property. The suggestion as to its future worth is not a representation as to its present ownership. The representation particularised as to what might occur in the event of something happening to her present husband in the future is not a representation as to the present legal or equitable ownership of the property.
e)The matters asserted in paragraphs 25 to 27 of the points of claim do not sustain the claim of the wife. Each of the matters there raised could be referable to arrangements unrelated to the ownership of the property, and no reasonable inference can be drawn that they are facts upon which reliance could be placed as sustaining a representation or joint venture affecting ownership of the matrimonial home.
Paragraph 23 of the points of claim particularises the expenditure of monies by the parties on the home in which they resided and includes the installation of a kitchen, painting and the like. It is notable that on the dates provided it appears that the expenditure occurred prior to the assertions made as to representations. The expenditure of the money under this paragraph is to be balanced in any event against the benefit obtained by the wife by way of occupancy of the property. If there was a net benefit accruing to the interest of the husband’s sister and the husband, then that could be adjusted if properly proved by a remedy other than the remedy of declaration of a constructive trust. On the material I am obliged to consider, there is not a case to be made out that there has been an unconscionable benefit retained by the husband’s sister and, in my view, no detriment to the wife has been demonstrated.
In my view the application for the order numbered one in the application filed in these proceedings is upon all these considerations bound to fail, since there are no representations of the husband’s sister which can be reasonably taken to give effect to the claim of the wife, and there is no evidence of detriment such as would require the transfer of the husband’s sister’s beneficial ownership of the former matrimonial home by the construction of a trust. The application for that order is summarily dismissed.
I certify that the preceding twenty eight (28) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Fowler.
Associate:
Date: 23 April 2009
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