Gabini & Gabini
[2014] FamCAFC 18
FAMILY COURT OF AUSTRALIA
| GABINI & GABINI | [2014] FamCAFC 18 |
| FAMILY LAW – APPEAL – PROPERTY SETTLEMENT – Where the trial judge found there was sufficient evidence to rebut the presumption of advancement – Where the trial judge found the wife was holding a beneficial interest in two properties by way of common intention constructive trust – Whether the trial judge failed to give adequate weight to certain evidence – Whether reasons for judgment were adequate – No error found in the trial judge’s assessment of the evidence – Appeal dismissed. |
Family Law Act 1975 (Cth)
Bennett and Bennett (1991) FLC 92-191
Calverley v Green (1984) 155 CLR 242
Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353
Cummins v Cummins (2006) 227 CLR 278
Damberg v Damberg & Ors [2001] NSWCA 87
Gissing v Gissing [1971] AC 886
Napier v Public Trustee (WA) (1980) 32 ALR 153
Pettitt v Pettitt [1970] AC 777
Soulemezis v Dudley Holdings Pty Ltd (1987) 10 NSWLR 247
| APPELLANT: | Mr Gabini |
| RESPONDENT: | Ms Gabini |
| FILE NUMBER: | PTW | 1769 | of | 2009 |
| APPEAL NUMBER: | WA | 29 | of | 2012 |
DATE DELIVERED: | 17 February 2014 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Perth |
| JUDGMENT OF: | Bryant CJ, Finn and Crisford JJ |
| HEARING DATE: | 12 April 2013 and by way of written submissions (last submissions filed 26 June 2013) |
| LOWER COURT JURISDICTION: | Family Court of Western Australia |
| LOWER COURT JUDGMENT DATE: | 14 November 2012 |
| LOWER COURT MNC: | [2012] FCWA 106 |
REPRESENTATION
| COUNSEL FOR THE APPELLANT: | Mr Smith |
| SOLICITOR FOR THE APPELLANT: | O’Sullivan Davies |
| COUNSEL FOR THE RESPONDENT: | Mr Rynne |
| SOLICITOR FOR THE RESPONDENT: | Leach Legal |
Orders
The appeal be dismissed.
The husband pay the wife’s costs of and incidental to the appeal as agreed and in default of agreement, as assessed.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Gabini & Gabini has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
| THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT PERTH |
Appeal Number: WA 29 of 2012
File Number: PTW 1769 of 2009
| Mr Gabini |
Appellant
And
| Ms Gabini |
Respondent
REASONS FOR JUDGMENT
Introduction
By his Notice of Appeal filed 12 December 2012 Mr Gabini (“the husband”) appeals against order 1(c) of the property orders made by Crooks J on 14 November 2012.
In proceedings for alteration of property interests under s 79 of the Family Law Act 1975 (Cth) (“the Act”) between the husband and Ms Gabini (“the wife”), the trial judge was required, inter alia, to determine whether, in relation to two properties in which the wife had legal ownership, she held her interest on trust for herself and other family members as she contended:
a)in relation to real estate at suburb B (“the B property”), which was registered in the wife’s sole name, whether the wife held her interest on trust for herself and her mother as to one half each; and
b)in relation to a unit at suburb K (“the K property”) in which the wife had a one quarter share, whether the wife held her interest in trust for her parents.
The trial judge determined these issues in favour of the wife. On the basis that the wife had a one half interest in the B property and no interest in the K property, his Honour made orders in relation to the property of the parties having regard to the matters under s 79(2), the contributions of the parties under s 79(4) and the relevant matters under s 75(2). In his reasons for judgment his Honour found that the net value of the parties’ assets (including their superannuation interests) was just over $1,175,000.
The order appealed against is the order that provides:
1. Simultaneously and within 90 days:
(a) …
(b) …
(c) the husband pay to the wife $462,726;
…
The nub of the appeal is whether the trial judge correctly identified the wife’s interest in the B and K properties.
In order to correct an arithmetic error in the calculation of the amount in paragraph (c) of the orders, which was conceded at the outset of the appeal hearing, an order was made by consent at the hearing of the appeal on 12 April 2013 which provides:
(1)By consent and pursuant to Rule 17.02, Order 1(c) of the orders of Justice Crooks made 14 November 2012 be varied to provide that the respondent pay to the applicant $437,468.
It is contended by the husband that as a consequence of his Honour failing to have regard to the wife’s legal (and on his case beneficial) ownership of the properties, he was required to pay more to the wife than would otherwise have been the result.
The wife seeks the appeal be dismissed.
The parties agreed that in the event the appeal was successful this Court would re-exercise the discretion. To address this possibility, each party filed written submissions subsequent to the hearing of the appeal. The husband’s submissions were received on 10 May 2013 and the wife’s submissions on 26 June 2013.
Most of the history of the parties’ relationship is uncontentious and can be stated briefly.
The parties commenced living together in late 1995. They married in November 1996 and separated in June 2008. There is one child of their union, A, born in 2004.
The Issues Raised in the Appeal
The appeal is of narrow compass, although it is not without its complexity.
As already indicated the overarching issue relates to the acquisition and ownership of the B property and the K property. The ownership of the property informs what proportion of the value of each, if any, should be included as the property of the parties available for distribution between them.
The Respective Assertions of the Parties at Trial
The B Property
After the death of their father, Mr C, in 1992, the wife’s mother, Ms R, her aunt, Ms M and her uncle, Mr C Jnr, inherited the B property in equal shares.
The wife’s aunt and uncle each wanted to sell their one third shares in the B property. Based on the estimated value of the entire property being $77,800, each sought $25,933. In January 1993 the Estate of Mr C transferred the B property into the wife’s sole name. The wife borrowed $53,000 from Bank E, which registered a mortgage over the property. The wife paid her aunt and uncle $25,933 each. The balance of the borrowed money was used to pay for any costs associated with the transfer. The wife’s mother’s share was transferred into the wife’s name with no apparent cash adjustment, meaning that the wife was the sole legal title holder of the B property.
At the start of the parties’ cohabitation in late 1995 an amount of approximately $48,000 was still outstanding on the mortgage. The value of the property at that time was estimated to be about $100,000.
During the period of cohabitation the wife paid the instalments due and owing on the mortgage registered on the B property. This was repaid in full in October 2001. The property is unencumbered.
On 8 June 2011 the B property had an agreed value of $295,000.
Those facts are not in contest.
The wife asserts she agreed to purchase the shares of the mother’s two siblings on the basis that that she and her mother would hold an equal share in the
B property.
The husband relies upon the registered title of the B property. He contends the wife purchased two thirds of the property from her aunt and uncle and holds the remaining one third interest, originally that of her mother, by virtue of the presumption of advancement. On this basis he contends the full value of the
B property should have been included in the pool of assets of the parties and not simply the half share the trial judge included.
The wife accepts she has a half interest in the B property, but says the remaining half interest, albeit held by her legally, is beneficially held on her mother’s behalf.
The wife says her sole name is on the title as a matter of convenience. She asserts her mother was unable to obtain finance to assist in the payment of the purchase of her siblings’ shares. The wife’s mother was unable to demonstrate any capacity to repay a loan and given the wife’s longstanding employment with a lending institution, her ability to obtain finance was the sole basis for the borrowings.
The wife says that there was an informal agreement that her mother would repay her $13,500 plus interest on the loan to increase her inherited one third share to a one half share in accordance with the arrangement described above. After about three years with her parents having paid her approximately $5000, the agreement changed to the mother paying all the outgoings and the wife paying the balance of the mortgage.
The K Property
In early January 1994 the K property was acquired by the wife, her sister,
Ms D, her mother and her father, Mr R, as tenants in common in equal shares. The purchase price was $174,500. The parents contributed $35,000 and the balance was borrowed from the Commonwealth Bank in the name of all four parties.
At the date of trial the K property had an agreed value of $500,000. There was a mortgage registered over it of $250,000. This included an increase of $100,000 which was negotiated in October 2008.
The husband says that the wife’s one quarter share is her property because she is the registered proprietor of that share. In the alternative, it is presumed to belong to her by way of advancement with the beneficial interest aligning with the legal title. He contends that the value of her quarter share should be included in the asset pool. The trial judge excluded any part of the K property from the asset pool.
The wife says any legal interest she has in relation to the K property is held by her on behalf of her parents, who hold the beneficial interest.
Again, the wife says her name was placed on the title of the K property as a financial convenience. She was a party with her parents and sister to an application for a mortgage to finance the purchase. Her income from Bank E where she worked, coupled with her registered ownership of the B property, assisted in securing borrowings for the bulk of the purchase price from the bank for the K property. She asserts she has made no financial contribution to the property and her parents, who lived in the property, made all payments.
The Decision at First Instance
The trial judge commenced his reasons for judgment by identifying the manner of proceeding in the determination of a dispute about property settlement under the Act. Relevantly for the purposes of this appeal, he identified the need:
· to identify and value the property, financial resources and liabilities of each party;
· to assess the contributions made by the parties to the acquisition, conservation and improvement of the property;
…
His Honour then identified a need to ascertain the wife’s interest in both the
B property and the K property at the time the parties began living together and at trial. He identified a need to determine whether the B property was held as to one half for the wife’s mother and whether the K property was held on trust for her mother and father.
His Honour then noted:
6.I will consider first questions relating to the beneficial ownership by the wife of property at the outset of cohabitation and to the present assets, which is also relevant to the assessment of the wife’s contributions.
He then proceeded to deal with these issues under the heading “Contributions”.
His Honour noted the common ground between the parties that the relationship between parent and child gives rise to a presumption of advancement which may be rebutted by the evidence. He noted that counsel for the wife had based his case on a “Common intention constructive trust” and that there was ultimately agreement as to the elements needed to establish such a trust.
His Honour canvassed the affidavit evidence of the parties and also the wife’s witnesses. He dealt with the evidence in relation to each of the properties as contained in that material.
His Honour went on to identify at [24] that “[t]he shortcomings (but not necessarily the truthfulness) of this evidence appeared in cross-examination”. He concluded at [25] that neither party “tried in any planned way to mislead the Court”.
The trial judge noted that one thing that became clear from the evidence was the wife’s father took charge of the various property transactions. He noted at [24] “that it was the wife’s father who was the initiator of the ideas and, as between he and the wife’s mother, was the communicator with the wife.”
In relation to the B property, his Honour identified that the history of the transfer to the wife’s sole name was uncontentious. Her mother had acquired a one third interest in the property upon the death of her father and the wife had paid the money to acquire the balance of the interest in the property. However, the intentions of the wife and her mother were disputed.
The trial judge noted his acceptance of the evidence of the wife and her parents and, on that basis, found a common intention that the wife would hold one half of the B property for the benefit of the mother.
In addition to this, his Honour stated that “in any event” he would infer that intention from the evidence of surrounding circumstances.
The trial judge identified what he saw as a difficulty with the wife’s case, being that counsel had failed to adequately overcome the fact that the mother had at least a one third interest due to her inheritance.
He then further identified the wife’s representation to banks and other institutions about her ownership of the B property and her taking advantage for her own ends of the legal title being in her name. His Honour indicated at [48] his satisfaction that the wife’s mother had acted “to her detriment in reliance on the common intention (e.g. making payments as recorded), and that it would be fraudulent were the wife to now deny the mother’s half-interest”.
In relation to the K property, his Honour noted that at a practical level there was no evidence that the wife or her sister had acted as if they held any beneficial entitlement to the property. They were not involved in decision making or payment of outgoings in respect of it. The wife’s financial involvement went no further than her being a party to the original application for finance. It would be fraudulent if the wife were to deny the interest of her parents in the one quarter legal title in her name, given they had suffered detriment by meeting all outgoings, expenses and costs of maintenance and improvement of the property.
The trial judge concluded that:
·in relation to the [B] property the wife and her mother had a common intention that the wife held one half of the [B] property for her mother’s benefit; and
·
in relation to the [K] property there was a common intention between the wife and her parents that the wife had no beneficial interest in the
[K] property.
Grounds of Appeal
The Notice of Appeal filed 12 December 2012 and the summary of argument filed by the appellant 26 March 2013 directed to the Notice of Appeal were, unfortunately, not aligned in any meaningful way.
After a winnowing of the content of those documents and assisted by the oral submissions of the appellant’s counsel, the main complaints can be distilled to:
·
his Honour’s error in finding there was sufficient evidence to rebut the presumption of advancement in relation to the B property and the
K property (Grounds 2 and 3);
·his Honour’s error in finding there was sufficient evidence to support the wife holding the beneficial interest in the B property and the K property on behalf of her mother and her parents by way of a common intention trust (Grounds 6 and 7);
·the failure to give adequate weight to certain evidence (Ground 8); and
·the failure of his Honour to give adequate reasons for his decision (Grounds 5 and 10).
The appellant abandoned Grounds 4 and 9. Ground 1 related to an arithmetic error and was conceded by the wife, and was thus the subject of the slip rule order referred to in the introduction to these reasons. The balance of the grounds were grouped together in oral submissions and this is how we will address them.
Discussion
We will initially deal with each property separately. We are of the view that both the facts and the law applicable to the two properties require separate consideration.
The B Property
In 1992 the wife’s mother inherited a one third share of the B property and the wife purchased the remaining two thirds of that property from her aunt and uncle.
It is common ground that:
·The wife held the legal title to the B property from the date of purchase from her grandfather’s estate in 1993. She, alone, borrowed the money to fund the purchase of the shares of her aunt and uncle.
·
In an Interview Record for an application for Income Protection Insurance made on or about 19 February 2004 the wife included the
B property as her asset.
·In July 2005 the wife provided Bank E with a Statement of Position dated 3 June 2005, which included the B property as her asset.
·In February 2007 prior to separation the wife executed a will dealing with the B property in a manner which was inconsistent with her position at trial. She devolved the entire property.
·In the wife’s financial statement sworn 8 April 2009 and filed 14 April 2009 she deposes that she owns a 100 per cent interest in the B property.
·The wife utilised her interest in the property to secure loans.
The wife asserted at trial that the true situation was completely different. She disputes the legal title of the B property is at one with the beneficial interest in that property.
She asserted that although the title was registered in her name, and she was responsible for the mortgage to pay out the two thirds interest of her mother’s siblings, there was agreement that her mother would increase her one third share to a half interest. The payment for this was identified as being $13,500 and was to be met by the mother making the mortgage payments on the property (at [25] of the wife’s trial affidavit and set out in his Honour’s reasons at [16]).
The trial judge was faced with the question of whether the circumstances disclosed by the evidence supplied sufficient reason for concluding that the beneficial interest in the B property was not at one with the legal title. This involves an interplay of a number of presumptions.
There was no dispute before his Honour as to the law to be applied. His Honour stated at [11]: “It is common ground between the parties that the relationship between parent and child gives rise to presumptions of advancement, but that those presumptions may be rebutted by the evidence.”
It was his Honour’s task to determine what legal conclusion should be drawn from the evidence. On the husband’s case the presumption of advancement applied; the wife had purchased the interests of her mother’s siblings but had been gifted her mother’s one third interest. On the wife’s case, the facts supported rebuttal of that presumption and the imposition of a common intention constructive trust (see Pettitt v Pettitt [1970] AC 777 and Gissing v Gissing [1971] AC 886). Another possible conclusion was the rebuttal of the presumption of advancement but failure to establish the elements of a constructive trust leading to a resulting trust in favour of the wife’s mother as to a one third interest rather than a half. However, as noted by his Honour at [43], “[t]hat is not the husband’s case”.
So too, although counsel for the husband raised the question of a resulting trust being relevant to the circumstances here, the wife’s counsel made it clear that the argument he used to ground the wife’s mother’s interest in the property was based solely on a constructive trust.
Where the presumption of advancement arises, an onus rests on the person seeking to rebut it (Calverley v Green (1984) 155 CLR 242). The wife bore the onus of providing evidence of a contrary intention.
The presumption of advancement will be rebutted where there is admissible evidence that the transferor did not intend to gift the property or part of it. In Cummins v Cummins (2006) 227 CLR 278 the High Court held at [65]:
… whilst evidence of subsequent statements of intention, not being admissions against interest, are inadmissible, evidence of facts as to subsequent dealings and of surrounding circumstances of the transaction may be received.
(footnote omitted)
The evidence by which any intention might be established is likely to vary from case to case. The High Court held in Calverley v Green (supra) that the correct time to determine beneficial interests in a property is at the time of acquisition. This is to be ascertained by drawing upon evidence of the acts and declarations before and at the time of purchase or so immediately after it as to constitute a part of the transaction. Subsequent declarations could be received in evidence only if against interest.
Finally, the particular trust relied upon by the wife, described as a common intention constructive trust, was considered generally by the House of Lords in both Gissing and Pettitt (supra).
The trial judge and both counsel here agreed the elements of such a trust necessary to found the wife’s claim as being:
·a common intention between the wife and her mother that at the time of the purchase of the property in the wife’s name she held one half of that property for her mother’s benefit;
·that her mother, as holder of the beneficial interest, had acted to her detriment; and
·it would be fraudulent for the wife to deny that beneficial interest.
The Evidence in Relation to the B Property
Given the main thrust of the appeal relates to the trial judge’s treatment of the evidence, it is relevant to consider what that evidence was.
The trial judge quoted extensively from and relied upon the trial affidavit material of the parties, the wife’s sister and her parents in his judgment. That evidence is set out by his Honour at [16]–[22] of the reasons for judgment and bears repetition:
16. The wife says in her trial affidavit, filed in March 2011:
15.At the commencement of cohabitation I owned a half share of … [the [B] property].
16.The [B] property had been inherited by my mother, [Ms R] (“my mother”), her sister, [Ms M] … , and her brother, [Mr C Jnr] … in equal shares after my grandfather, [Mr C], had died [in March 1992].
As at … March 1992 the [B] property was estimated to have a value of $77,800. Annexed hereto and marked “B” is a copy of a letter dated … April 1992 from the estate in relation to probate of my grandfather’s Will.17.[Ms M] and [Mr C Jnr] wanted to sell their shares in the [B] property and my parents suggested to me that I should purchase a share in the [B] property.
18.On the basis of value of the property being $77,800,
[Ms M] and [Mr C Jnr] agreed to sell their one third shares in the [B] property for about $25,933 each to my mother and me. My mother and I agreed that we would purchase [Ms M] and [Mr C Jnr’s] interest in the property in a manner that would result in my mother and I having equal half shares in the [B] property. It was intended that my mother would increase her share from a one-third share to a half-share, and I would receive a half share.19.However, my mother was unable to obtain finance to purchase a further one sixth share as she was a self-employed … and unable to demonstrate sufficient capital to repay the loan.
20.At this time I was employed full time as a bank teller with [Bank E], who had been my employer since May 1989.
21.It was convenient for the loan to be obtained in my name through [Bank E] as I had been a long term employee of the bank, and was eligible for a discounted rate of interest on a loan.
22.As a consequence my mother and I decided that the
[B] property and the home loan from [Bank E] would be placed in my sole name, which they were.23.I borrowed $53,000 from [Bank E], to pay the total of $51,867 due to [Ms M] and [Mr C Jnr], plus the stamp duty, settlement and registration fees.
24.By an agreement dated … December 1992 and transfer registered [in] January 1993, the property was transferred into my sole name.
25.I estimate that the total value of the [B] property plus the other costs of purchase was about $79,000. Of this I had contributed $53,000 by way of the monies borrowed from [Bank E]. It was agreed between my parents and I that my mother would pay an additional $13,500 to increase her share to a half share. It was agreed that my parents would contribute this amount to the loan, plus interest incurred, to repay the additional monies that I had contributed to the purchase.
26.Approximately three years after this arrangement, and after I had moved to [an area outside of Perth], managing the costs of outgoings and loan repayments, had become quite complicated and time consuming. My parents and I agreed that they would pay all the rates, lawn mowing, utilities and other outgoings associated with the property and I would repay the balance of the loan. By this time my parents had contributed approximately $5,000 to repayments of the
[B property] loan. We calculated that the average outgoings were equivalent to their portion of the loan repayments.27.In the 18 years that I have owned the property I have never once paid any rates, maintenance or other costs, aside from repayments towards the [B property] loan. These costs have all been met by my parents. All correspondence regarding the property is sent to my parents’ address.
28.As a result of this arrangement my mother and I have made an equal contribution to purchasing and maintaining the [B] property and we each have a half share in the property. When the property is sold, my mother and I will each receive an equal amount of the proceeds of sale.
29.I estimate that the [B] property was worth about $100,000 at the commencement of my cohabitation with [Mr Gabini] in December 1995, and that my share was worth about $50,000. There was approximately $48,000 still owing on the loan from [Bank E] secured against the property, of which my parents were responsible for approximately $10,000.
I therefore had equity in the [B] property of about $12,000 at the commencement of cohabitation.17.At the time cohabitation between husband and wife began, the wife also legally held a one-quarter interest in a unit property at [suburb K]. She claims that she had no beneficial interest in that property and says:
31.In January 1994 my parents had purchased the [K] property ‘off the plan’. My parents, my sister [Ms D] moved into the property in about April 1994.
32.The [K] property was purchased in my parents’, [my sister’s] and my names in equal one quarter shares.
33.My parents were self-employed in their own … business and, again, found it difficult to demonstrate a sufficient income to meet the repayments of the loan. At this time I had been working full time at [Bank E] for about five years and was able to demonstrate a good income. I was also the sole registered proprietor of the [B] property, both of which factors assisted in my being eligible for finance.
34.My father also believed that [my sister] and I would eventually inherit the property when my parents died and having our names on the title would make the transfer to us easier.
35.Neither [my sister] nor I have ever contributed to the purchase or maintenance of the property.
36.In my previous and current Will I have left one half of the [B] property to my parents or, in the event they predecease me, three quarters to [A] (and any further children that I may have) and one quarter to [my sister’s] child (and any further children that I [sic] may have). Annexed hereto and marked “C” are copies of my current and former Wills.
18.The husband does not accept the wife’s claims. He points to admissions and assertions to the contrary. In his trial affidavit, he deposes:
241.The ownership of the [K] property and the [B] property were initially raised in letter from my former solicitors to [Ms Gabini] on 1 August 2008. Exhibit “16” is a copy of that letter.
242.In a letter from [Ms Gabini’s] former Solicitors dated
22 August 2008 a home loan of $39,250 in respect of the [K] property is included in the parties joint liabilities. The letter also raises that [Ms Gabini] only has a half interest in the [B] property. Exhibit “17” is a copy of that letter.243.[Ms Gabini’s] former Solicitors advised in a letter dated
17 October 2008 that a market appraisal of the [K] property is being obtained. Exhibit “18” is a copy of that letter.244.On the 7 November 2008 my former Solicitors requested disclosure in regards to the interest of the [B] property being held on trust.
245.My former Solicitors sought an appraisal of the [K] property on both 12 November and 1 December 2008. [Ms Gabini’s] Solicitors respond on the 23 December 2008 advising that [Ms Gabini] agreed to provide market appraisals for the
[K property].246.My former Solicitors again sought an appraisal of the
[K] property on 28 January and 25 March 2009.247.In her Financial Statement, sworn 8 April 2009 and filed 14 April 2009 [Ms Gabini] deposes at Part I, number 36 that she owns:
(a)a 100% share of the [B] Property; and
(b)a 25 interest in the [K] property.
248.On the 17 April 2009 [Ms Gabini’s] Solicitors wrote to my former Solicitors advising that [Ms Gabini’s] quarter share of the [K] property should be $125,000 and not $62,500 and that it was an error in her financial statement. Exhibit “19” is a copy of that letter.
249.The letter also states that [Ms Gabini] at the time did not intend to re swear her financial position but that her Solicitor was happy for the letter to be produced.
250.On the 15 June 2009 [Ms Gabini’s] Solicitors wrote to my former solicitors and advised that [Ms Gabini] did not have a beneficial interest in the [K] property. Exhibit “20” is a copy of that letter.
251.In the same letter it was put forward that [Ms Gabini’s] mother had a half interest in the [B] property.
252. They claimed:
(a) The [B] property was worth $90,000;
(b) [Ms Gabini] obtained a loan for $60,000;
(c) [Ms Gabini’s] mother paid $30,000; and
(d)[Ms Gabini’s] mother paid $15,000 to make their share equal.
253.From the 1 August 2008 to the 15 June 2009 neither
[Ms Gabini] nor her Solicitors raised the issue that
[Ms Gabini] did not have a beneficial interest in the
[K] property.254.On the 17 June 2009 [Ms Gabini’s] Solicitors wrote to my previous solicitors seeking an agreement that the values of the [K] Property and the [B] Property be based on an average of three appraisals. Exhibit “21” is a copy of that letter.
255.On the 10 December 2009 my previous Solicitors wrote to [Ms Gabini’s] solicitors requesting disclosure in regards to the purchase of the [K] Property. Exhibit “22” is a copy of that letter.
256.On the 14 September 2010 my Solicitors wrote to
[Ms Gabini’s] Solicitors requesting that disclosure be given to support [Ms Gabini’s] position in relation to her interest in the [K] and [B] Properties. Exhibit “23” is a copy of that letter.257.My Solicitors wrote to [Ms Gabini’s] Solicitors again on
18 January 2011 requesting disclosure to support
[Ms Gabini’s] position in relation to her interest in the
[K] and [B] Properties. Exhibit “6” is a copy of that letter.258.At the time of swearing this affidavit I am advised that no such disclosure has been given.
259.[Ms Gabini] told me throughout the marriage that the
[B] Property was hers. It was my understanding that she owned the whole of the property. She has never told me that her mother had a half interest in the property.260.Since separation I have found bank statements for the
[B] Property home loan from 20 January 1995 to 31 October 2001. From reviewing the statements it appears that [Bank E] deposited a portion of [Ms Gabini’s] salary directly to the [B] Property home loan.…
262.[Ms Gabini] applied joint funds from the marriage to pay the home loan on the [B] Property.
263.I have found a copy of a letter from [a real estate agency] dated 19 February 2004 enclosing, amongst other documents, a copy of an Interview Record for an application for Income Protection Insurance.
264.On Page 7 of that Interview Records under the Assets section [Ms Gabini] completed the form and has included under the [B] Property as “Residential Invest. Property $150,000”. Exhibit “24” is a copy of that Interview Record.
265.I have found a facsimile dated 7 June 2005 from [Ms Gabini] to [Mr F] at [Bank E] enclosing amongst other documents a Statement of Position, dated 3 June 2005.
266.On that Statement of Position [Ms Gabini] has included the [B] property at a value of $180,000. Exhibit “25” is a copy of that Statement of Position.
267.In regards to the [K] property the statements for the [K] property home loan are addressed to [Ms Gabini]. It is my understanding that [Ms Gabini] is jointly and severally liable for the [K] property home loan.
19. The wife’s younger sister, [Ms D] deposed:
3.In November 1993, in an effort to downsize, my parents sold their property at [P] to buy a townhouse in [suburb K] at … [the [K] property]. At the time [Ms Gabini] was working in the [Bank E] and I was a student at university.
4.I do not have any clear memories of the discussions that were had regarding the purchase of the [K] property. However, I recall that my parents were having difficulties in obtaining a loan on their own due to the fact that they were self employed. It was therefore put to me that both [Ms Gabini] and I put our names on the loan application in order to increase my parents’ borrowing power.
5.It was made very clear to both [Ms Gabini] and I that we had no beneficial interest in the property and that we would not be expected to make any repayments or any other financial contribution towards the acquisition or the maintenance of the property.
6.In any event, being a student, I would not have been in a position to make any contribution towards repayments or any other financial contribution at the time.
7.My father told me that, were the property to be sold we would not receive any financial benefit from that sale and that the only time we would benefit financially from the property was upon the death of both my parents.
8.I have never considered that I have an interest in the property.
9.On occasion I have been asked to sign further documents in relation to the refinancing of the property. I signed the documents on the basis that, in doing so, I will not be required to make any financial contribution to the loan.
20.The wife’s father supported the wife’s evidence about the [B] property, adding:
10.The agreement between [Ms Gabini], [my wife] and I was that, if the property were sold, the net proceeds of sale would be divided equally between [Ms Gabini] and us. However, it was and remains clearly understood between us that if [my wife] and I die, our one-half share will be divided equally between [Ms Gabini] and [her sister, Ms D] so that [Ms Gabini] retains a three-quarter interest in the [B] property and [Ms D] a one-quarter interest.
…
12.The [B] property has been used by the family as a holiday home since we have had it. On occasion we have considered renting it out to the public but have never done so.
21.As to the [K] property, the wife’s father deposed in terms of the wife’s evidence and added:
20.In October 2008, [my wife] and I refinanced the [K property] loan and increased the mortgage to $250,000. I was not working at the time and used the money to pay for daily living expenses, a holiday for [my wife] and me and to meet expenses in relation to a property that I had recently inherited.
…
22.The current balance of the loan is still about $250,000.
22. The wife’s mother also supported the wife’s version about the properties at [B] and [K], adding:
18.The [B] property has been used by the family as a holiday home since we have had it. Our youngest daughter [Ms D] … also lived there without payment of rent for a period of time.
We note that whilst the affidavit material of the wife and her parents conveyed a common approach as to the reasons why, and the manner in which, the
B property was acquired, this approach was not so united in cross-examination. There were distinct areas of uncertainty and dispute and the husband asserts they are fatal to the wife’s claim and that the trial judge failed to deal adequately with that evidence and thus his findings of fact do not withstand scrutiny.
Under cross-examination it also became obvious that the wife could not remember what the agreement in relation to ownership was with any particularity. The wife accepted there was a certain amount of piecing together of the arrangement after the event:
SMITH, MR: Right. So this is important, so can you - I know it’s a long time ago, but it is an important issue in this trial - your mother came to you with this arrangement, you say, and she came to you because - and correct me if I’m wrong - she came to you because your uncle and auntie wanted to be out of it, wanted to be bought out?
[MS GABINI]: Yes.
SMITH, MR: Right, and so it was their instigation that did this, was it, they wanted to buy it? But wasn’t it just sold?
[MS GABINI]: I would say my mother was attached to it because my grandad had had it for a long time and my mum used to go down there when she was a child and have holidays down there, and then my grandparents retired there, so it's always been part of her family.
HIS HONOUR: Tell me, when you answer it like that, I’m not sure whether that’s what you think makes sense or whether that’s what actually was said to you ‑ ‑ ‑?
[MS GABINI]: Yes - well - no that wasn’t what’s said - but you asked me why I thought that it stayed in the family and wasn’t sold.
SMITH, MR: I'm asking you, why wasn’t - was it ever put - you say, [Ms M] and [Mr C Jnr] - you understood that [Ms M] and [Mr C Jnr], your uncle and auntie wanted to get out of it?
[MS GABINI]: Yes.
SMITH, MR: Right. Was there any discussions about it being sold?
[MS GABINI]: Not that I know of.
SMITH, MR: [S]o your mother presents it to you - let's get this right - your mother comes to you and says, “I want to keep it.” Correct me if I’m wrong. “I want to keep the home but I can't afford to buy it myself”?
[MS GABINI]: I don't think she said – I’m sorry, I don’t think she would have said to me, “I want to keep it.”
SMITH, MR: What did she say to you?
[MS GABINI]: She - from what I think happened was that she said, “It would a good investment for you to buy into this.”
SMITH, MR: Your recollection of that was, and you would buy into it, and you must have then sat down at some stage and worked out the mechanics of it, who was going to pay for it, how you were going to pay for it, what the arrangements were?
[MS GABINI]: Yes.
SMITH, MR: What were those discussions? Were they at your parents' home or - you were living with your parents at the time?
[MS GABINI]: Well, I was living with my parents.
SMITH, MR: What were the arrangements. You sat down at the kitchen table - because this is your first major purchase wasn’t it?
[MS GABINI]: Yes.
SMITH, MR: You’re going to have to go to a bank and borrow 53,000 or whatever amount of money, because - you must have a reasonable recollection of these events. So you sat down with your mum and your dad?
[MS GABINI]: Yes, my dad would have been present. I would have sat down with mum and dad because I was living with them.
SMITH, MR: Yes, all right. We're running the same problem. If just don't recall ‑ ‑ ‑?
[MS GABINI]: Sorry, I don’t remember.
SMITH, MR: If you can’t recall, it’s easy to say, “I don't know, I can’t recall”?
[MS GABINI]: I just don’t - my grandfather just passed away. I don’t remember. I’d just turned 21. It was just all - I honestly do not remember.
SMITH, MR: Right. But you’ve gone to the bank and borrowed the amount to buy out their interest and the entirety of the property is transferred to you?
[MS GABINI]: Mm’hm.
(Trial transcript, 13 June 2011, pp 81–82)
On her own admission, under cross-examination, the wife’s mother had a limited recollection about the circumstances of and her involvement in the acquisition of the property. She said her husband had taken over the running of it. She accepted her personal knowledge was very limited.
SMITH, MR: You would have known because your husband would have told you?
[MS R]: Mm.
SMITH, MR: So you weren’t responsible at any stage for making payments back to [Ms Gabini] for any of the loans or the rates or the taxes, were you?
[MS R]: Not myself.
SMITH, MR: No, but that, once again, that was left to your husband and he made those payments?
[MS R]: Mm’hm.
SMITH, MR: Do you know how or when he made those payments?
[MS R]: No, I don’t.
SMITH, MR: So that was, once again, left to him ---?
[MS R]: Yes.
SMITH, MR: --- and you trusted what he was doing. So subsequently to that, you say in your affidavit that, at some point, it was decided you would stop making payments to the – go back a sec. Can you remember what payments you made towards the mortgage?
[MS R]: No, I don’t, because it wasn’t up to me, no.
SMITH, MR: Right, and at some point – you can’t recall when you stopped making to the mortgage?
[MS R]: No.
SMITH, MR: Were you involved in discussions between [Ms Gabini] and your husband regarding what the next arrangement would be?
[MS R]: No.
SMITH, MR: So this is, you – and you got told after the event, or it just happened?
[MS R]: It just happened.
(Trial transcript, 15 June 2011, p 37)
We observe that the explanation for why the B property was placed in the sole name of the wife was also less than clear. Initially, the wife deposed that she was employed by a bank and was entitled to a lower interest rate on any borrowings. This was certainly not a consistent position under cross-examination. This aside, it does not explain why, at the very least, the one third share inherited by her mother, not involving any cash adjustment, was transferred into her sole name.
It was also said the wife’s parents, as self-employed business owners, would have difficulty obtaining finance to fund a share of the property. We note however that it was conceded that they did not ever make any attempt to obtain finance or apply for a loan in their own names. It also transpired in cross-examination that the father said he had a gambling problem and for this reason did not feel comfortable having property in his own name. This however does not explain his wife’s position.
We observe that the father was also asked about why the property was not put into joint names:
SMITH, MR: Why wasn’t the property put in both your names at the time, as fifty-fifty, as you and your wife and also [Ms Gabini’s]? Was that discussed?
[MR R]: Yes, [Ms Gabini] at the time was just single and wasn’t doing anything much with her money, so I suggested a good investment for her. Why wasn’t it put in my name?
SMITH, MR: Yes?
[MR R]: Well, if you look at my property dealings, I only own a quarter of a share in [K property], and I’m a compulsive gambler. So I put as much of my assets into my children’s and wife’s name, so that I couldn’t waste it.
SMITH, MR: So you were a compulsive gambler back then?
[MR R]: Still am.
SMITH, MR: But I’m saying, back then you were as well?
[MR R]: Yes.
(Trial transcript, 14 June 2011, p 89)
We observe the loan for the purchase of two thirds of the property was in the wife’s sole name. It was common ground that the repayment amount on the loan was $187 each week. This was debited directly by the lending institution from the wife’s bank account.We observe the wife deposed that her mother was to contribute $13,500 towards the loan, plus any interest incurred. This, she says, would have the effect of increasing her mother’s existing one third share to a half share. The trial judge also noted her assertion that this arrangement was subsequently varied so that the parents would thereafter pay “all the rates, lawn mowing, utilities and other outgoings associated with the property and I would pay the balance of the loan. By this time my parents had contributed approximately $5000 to repayment of the [B property] loan”.
In final submissions to his Honour, counsel for the husband described the arrangement “at its highest” as “in relation to [the B property], the condition was, ‘This will be transferred into your name. You pay two-thirds of it now and we will pay you a certain amount back, $13,000, by payment of the mortgage and interest on that share of the mortgage, and whereupon when that’s completed we get a half interest’”. We think that is a reasonable characterisation of the wife’s case as presented and what she deposed to in her trial affidavit.
However, as counsel for the husband also pointed out, “that was never completed on any version of events”.
In her affidavit filed 2 March 2011 the wife’s mother deposes:
15.We paid $200 per month to [Ms Gabini] for a period of about three years in reduction of the amount we owed for the [B property] loan. After this time we agreed with [Ms Gabini] that we would meet all of the outgoings on the property and she would make all repayments of the loan, which were approximately equivalent to our share of the loan repayments.
The mother said that the wife did not ever make any contribution towards the rates, maintenance or general outgoings associated with the property. She said she and her husband always met those expenses.
The wife said in cross-examination that in the first three (or sometimes said to be four) years after the wife’s purchase of the B property, her father gave her cash to repay her mother’s share of the loan. She put the money into her bank account. She was asked in cross-examination:
SMITH, MR: The repayments that they made, how much did they make towards the loan in those three years – three to four years?
[MS GABINI]: I don’t know.
(Trial transcript, 13 June 2011, p 86)
When it was put to the wife that her mother had said $200 was paid each month she accepted that was not reflective of her own position. She was asked:
HIS HONOUR: … How much money did your parents give you on a monthly basis for the repayment of the loan?
[MS GABINI]: It varied every month.
(Trial transcript, 13 June 2011, p 87)
Again in cross-examination the wife was asked how her parents made payments to her:
[MS GABINI]: They paid me cash into my bank account.
SMITH, MR: How much did they pay?
[MS GABINI]: It was dependent on what was happening at the time, because at that time we were also sharing the costs. So if we had lawn mowing or water rates or shire rates that had to paid, it all got split up, I paid half , Mum and Dad paid half, then they would have to also pay for their portion of the loan, so the amounts varied.
(Trial transcript, 13 June 2011, p 84)
In her affidavit sworn 1 March 2011 the wife further deposes:
26.Approximately three years after this arrangement, and after I had moved [to an area outside of Perth], managing the cost of outgoings and loan repayments, had become quite complicated and time consuming. My parents and I agreed that they would pay all the rates, lawn mowing, utilities and other outgoings associated with the property and I would repay the balance of the loan. By this time my parents had contributed approximately $5000 to repayment of the [B property] loan. We calculated that the average outgoings were equivalent to their portion of the loan repayments.
27.In the 18 years that I have owned the property I have never once paid any rates, maintenance or other costs, aside from repayments towards the [B property] loan. These costs have all been met by my parents. All correspondence regarding the property is sent to my parents’ address.
28.As a result of this arrangement my mother and I have made an equal contribution to purchasing and maintaining the [B] property and we each have a half share in the property. When the property is sold, my mother and I will each receive an equal amount of the proceeds of sale.
In cross-examination the wife’s father was questioned about these issues. In his affidavit he refers to an amount of $13,000 having to be repaid. He was asked how he had to pay the money back to his daughter:
SMITH, MR: Now, you had to pay $13,000 back to [Ms Gabini]. How did you do that?
[MR R]: Monthly payments.
SMITH, MR: Monthly payment of what?
[MR R]: $200.
SMITH, MR: How did you make those payments?
[MR R]: Mainly cash.
SMITH, MR: But you did consistently make your $200 a week payments?
[MR R]: Yes.
SMITH, MR: Do you recall doing it?
[MR R]: Yes.
SMITH, MR: So what would you do? You’d sort of transfer it into a bank or give [Ms Gabini] $200?
[MR R]: Just give her cash when I saw her.
SMITH, MR: That was on a monthly basis, you’d just give her $200?
[MR R]: Not on the 1st of every month, but - - -
SMITH, MR: But every month?
[MR R]: Every month, whenever I saw her.
SMITH, MR: How long did that go on for?
[MR R]: Several years.
SMITH, MR: When you say “several”, let’s be a bit more specific. How long did it go on for?
[MR R]: I can’t recollect.
SMITH, MR: Five years, four years?
[MR R]: [Ms Gabini] said to me – I just said, “How much do I owe,” and she said, “That’s it.” Well, I just paid her until she said I’d paid enough.
SMITH, MR: Right, so it was then, you kept paying until – what [Ms Gabini] came to you and said, “Well, I don’t need any more, you’ve paid off enough”?
[MR R]: Yes.
SMITH, MR: So that’s when you then considered it was a fifty-fifty at that point? Is that correct?
[MR R]: Yes.
(Trial transcript, 14 June 2011, pp 88–89)
In our view this version was in its basic detail consistent with the wife’s version, that is, for a period of time and consistent with their agreement at the outset, the wife received regular payments from her parents. However, the reason given for ceasing those payments was inconsistent. On the wife’s version it became more efficacious for her to meet all mortgage payments and for the parents to pay other outgoings. She said there had by then been about $5000 repaid, not, as the father said, that the cessation of payments was considered “fifty-fifty at that point”.
His Honour concluded:
37.Because I accept the evidence of the wife, her mother and father, I find a common intention of the wife and her that the wife hold one-half of the [B] property to the benefit of her mother.
Given there was an onus on the wife, the reliability and precision of her evidence is important. The issue is whether there was sufficient commonality to enable his Honour to rebut the presumption of advancement and to find the elements of a common intention constructive trust from the evidence, differing as it did in many respects. In the cross-examination of the three witnesses who supposedly had a common intention, there was little internal consistency about detail and there was some contradiction. We observe that the evidence of all three did, however, support the following findings which we summarise as :
·The wife paid for a two thirds interest albeit the property was solely in her name and was responsible for obtaining a mortgage;
·The idea for the acquisition of the interest of the mother’s siblings came from the wife’s father;
·The parties agreed that there was a sum of $13,500 that would need to be contributed by the wife’s mother to increase her share from one third to one half;
·The wife’s parents paid to her various sums, but around the figure of $200 per month;
·At the conclusion of about 3 years and having paid a sum calculated to be about $5000, the arrangements for payment were altered so that the wife was thereafter responsible for all mortgage payments and the parents thereafter paid the outgoings; and
·The wife’s parents occasionally used the property for holidays.
His Honour also made it clear that he was able to infer intention from the evidence of surrounding circumstances. He says:
39.I accept that immediately following the transfer to the wife, her parents (mother) made regular payments towards the mortgage. If these payments were not for the purpose of increasing the mother’s one-third beneficial interest to the property, what were they? Payments because the parents occasionally used the property for holidays? There is no evidence that there was any link between usage of the property and payments. It is an unlikely scenario, and such payments are much more consistent with what the wife asserts.
Heydon JA held in Damberg v Damberg & Ors [2001] NSWCA 87:
42.There is a presumption that where one or more parents convey property to a child, the parent or parents intended to give the child the beneficial interest in the property, not merely the legal title. That presumption can be rebutted by showing, on the balance of probabilities, that the parent or parents did not have that intention. In the present circumstances, where the husband alone transferred the property, it is his actual intention alone which is to be ascertained: Calverley v Green (1984) 155 CLR 242 at 246-251 per Gibbs CJ.
43.It has been said that although the presumption is rebuttable, it does “not ... give way to slight circumstances”: Shephard v Cartwright [1955] AC 431 at 445 per Viscount Simonds, quoted in Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365 by Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ. According to Viscount Simonds, the quoted words were uttered by Lord Eldon LC in Finch v Finch (1808) 15 Ves Jun 43; 33 ER 671; in fact they were not, though they appear in the headnote, though the expression “slight circumstances” was used by the losing counsel, Sir Samuel Romilly, in argument (at 48 and 673), and though Lord Eldon LC said that the "presumption is not to be frittered away by nice refinements" (at 50 and 674). There are other authorities suggesting that the standard of proof is higher than the normal civil standard. In Grey v Grey (1677) 2 Swans 594 at 598; 36 ER 742 at 743, Lord Nottingham LC said:
“the natural consideration of blood and affection is so apparently predominant, that those acts which would imply a trust in a stranger, will not do so in a son; and, ergo, the father who would check and control the appearance of nature, ought to provide for himself by some instrument, or some clear proof of a declaration of trust, and not depend upon any implication of law; for there is no necessity to give way to constructive trusts, but great justice and conscience in restraining such constructions.”
(By “constructive trusts” he meant “resulting trusts”.) In In Re Kerrigan; ex p Jones (1946) 47 SR (NSW) 76 at 87 the presumption was said by Davidson J to be “a strong one”.
44.However, A W Scott and W L Fratcher, The Law of Trusts (4th ed) vol V para 443 p 194-p196 said:
“It has been said in a number of cases that the presumption of a gift where property is purchased in the name of a relative can be rebutted only by evidence that is strong and clear, or as it is said in some cases by conclusive or indubitable evidence. There is no reason, however, why the payor should be required to produce evidence of this character. The better view is that it is necessary to produce such evidence as is required to establish any other fact. As the court said in one case: ‘It is the intention of the parties in such cases that must control, and what that intention was may be proved by the same quantum or degree of evidence required to establish any other fact upon which a judicial tribunal is authorised to act’.”
The quotation was from Hartley v Hartley 117 NE 69 at 73 (1917, SC Ill). See, to the same effect, R P Meagher and W M C Gummow (eds), Jacobs' Law of Trusts in Australia (6th ed, 1997) para 1216 p 300. Hence the standard of proof to be met in order to rebut the presumption does not call for application of the principles discussed in Briginshaw v Briginshaw (1938) 60 CLR 336, or rest on any analogy with the high standard of proof in rectification. But it does call for proof of a “definite intention” to retain beneficial title, not a “nebulous intention to rely upon the ... relationship as a source of control over the property”: Drever v Drever [1936] ALR 446 at 450 per Dixon J (dissenting, but not on this point).
The questions for us are, did his Honour properly consider the question of a “definite intention” and, if he did, was he entitled on the evidence to come to the conclusion he arrived at?
His Honour did not specifically consider the rebuttal of the presumption of advancement but simply found it was rebutted (by inference) upon his finding that the evidence supported a common intention constructive trust. Ground 5 contends that his Honour erred in not specifically addressing this as a separate issue. Provided the evidence supports a finding of a common intention constructive trust, in our view it can be inferred that the presumption of advancement was rebutted without a direct finding to that effect. When evidence is given as to the intention with which parties effected a transaction, “it is unlikely that the question whether or not there is a presumption of advancement will be important, or at least decisive” (per Gibbs ACJ in Napier v Public Trustee (WA) (1980) 32 ALR 153). Ground 5 therefore must fail but it remains to consider whether the evidence was capable of supporting the finding his Honour reached.
Despite the varying and in some respects contradictory evidence of the parties as to reasons (as opposed to intentions) for the transactions, in our view
his Honour was entitled to find on the common elements as they emerged from the evidence as we have set out at [83] that there was a “definite intention” for the wife to hold the property on trust for herself and her mother equally. By inference this finding rebuts the presumption of advancement.
It is true that his Honour did not detail the more contentious parts of the evidence, a fact relied upon by the husband to support his argument that his Honour’s finding was not open on the evidence, but that he was conscious of the shortcomings in the wife’s case is apparent from [23], [24], [45], [46] and [47] of the reasons for judgment. Hence in relation to the B property we are not satisfied his Honour erred as asserted in Grounds 2, 3, 6, 7 and 8.
As to Ground 10 that asserts a failure to give sufficient reasons, the obligation to give adequate reasons and the failure to do so as founding an appeal is the subject of long standing authority (see for example Bennett and Bennett (supra)). Adequate reasons illuminate the path to the ultimate orders, but it is not necessary for a court to deal with all the arguments raised in support of an application, nor all the arguments against it provided the path is clear (see for example, Soulemezis v Dudley Holdings Pty Ltd (1987) 10 NSWLR 247). We are satisfied his Honour’s path or reasoning is sufficiently clear and no error is demonstrated.
The K Property
We now turn to the second property in which the wife, her sister and her parents each have a legal interest. A number of our observations in relation to both the general facts and the law relating to the B property are equally pertinent here.
At the commencement of the parties’ relationship the wife, her sister and her parents were tenants in common with equal shares in the K property. They were each a party to a mortgage registered over the property for the purpose of securing a portion of the purchase price. Each was jointly and severally liable for repayment of that loan. The wife was instrumental in securing finance for the acquisition given her own employment with a lending institution.
In July 2005 the wife had included the K property as one of the parties’ assets in an application they made to borrow a total of $166,000 from Bank E.
In a financial statement sworn by the wife on 8 April 2009 and filed 14 April 2009 she deposes that she owns a 25 per cent interest in the K property. This interest is quantified as $125,000. It does not reflect any share of the mortgage over that property. However, on 22 August 2008 the wife’s lawyers had identified $39,250 as being a home loan liability of the parties to the marriage in relation to that property.
It is common ground the wife made no financial contribution to the K property, including in reduction of the mortgage, apart from an amount of $1500 paid in October 2008, which may have been reimbursed by her parents.
At trial the wife’s position was that she had no beneficial interest in the property and her legal title was, in reality, that of her parents. She says her and her sister’s names were on the registered title to facilitate her parents obtaining funds to purchase the property and to make what would eventually become an inheritance to them easier to access.
Again, the trial judge referred to and relied upon the affidavit material of the parties, the wife’s sister and her parents in coming to certain factual conclusions. Once again, the certainty of evidence displayed in the affidavit material was inconsistent, with the quality of that evidence displayed under cross-examination.
The wife said she was uncertain about why she was a party to the mortgage over the K property. She had not really become aware of it or thought about it until around 2004 when the lending institution was changed from the Commonwealth Bank to Bank E.
The fact the property was owned as tenants in common in equal shares was another matter she could not explain. She surmised that her father’s gambling problem may provide an explanation for the method of ownership. She again accepted she had reconstructed certain matters in her affidavit as a result of considering issues many years after the events.
Her mother was also unable to recall much detail about the method of acquisition of property. She said that there must have been discussions about the children’s interest in the property.
In his affidavit the wife’s father was clear in stating that there was a mutual understanding between the parents and their children that the children would have no beneficial interest in the. In cross-examination when asked the basis upon which he considered the children came to this understanding he proffered “[c]ommonsense [sic], I suppose” (Trial transcript, 14 June 2011, p 96).
In October 2008, at the parent’s instigation, the joint mortgage over the property was increased by approximately $100,000. The wife was a party to the application for the further increase. In relation to this matter the wife’s affidavit evidence and her answers under cross-examination were consistent. Although not in a position to account for all of the additional money borrowed, ostensibly for her parents, she said that:
·$50,000 went to her father to repay his debts;
·$15,000 went to her sister, [Ms D]; and
·$25,000 went into a separate [Bank E] account in the names of herself, her sister and her parents. This account was linked to the mortgage account and was to cover repayments due on the [K] property. These repayments would be automatically deducted.
In contrast, the wife’s father said that the extra money was used to pay daily living expenses for himself and his wife as he was not working at the time. He said that he and his wife also had a holiday and paid expenses in relation to another inherited property he had.
It is common ground that the K property was used by the wife’s parents and, from time to time, the wife’s sister, as their residence. It was also accepted that, at some stage, the property would form an inheritance for the wife and her sister. The method of acquisition and the increase in the mortgage in October 2008 required the active involvement of the wife. Her evidence is that some of the additional money borrowed went into an account in the names of each of the family members to cover repayments of the mortgage over that property.
His Honour was again confronted with an interplay of various presumptions and principles about the ownership of the property. Relevantly:
·the beneficial interest in the K property was consistent with the legal title, thus giving the wife a one quarter share in the property; or
·a presumption the wife held her one quarter share on a resulting trust in favour of her parents, the purchasers, who his Honour found had paid all the costs of acquisition; or
·a presumption the wife held the legal title and the beneficial interest to the one quarter share as a result of her parent’s gifting it to her; or
·the one quarter share was held by the wife for her parents by way of constructive trust based on a common intention.
Calverley v Green (supra) demonstrates that where parties contribute unequally to the purchase price of a property, the beneficial interest in the property is held in accordance with the level of contribution (subject to any presumption of advancement). In that case, Gibbs CJ said at 246:
Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, i.e., a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser. …
The High Court also found that joint and severable borrowings secured to purchase a property are considered a financial contribution to property whether or not repayment of principal and interest is actually made by one or all of the borrowers.
Both the presumption of advancement and the presumption of a resulting trust may be rebutted by evidence of the actual intention of the purchaser at the time of the purchase (Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353).
Gibbs CJ stated in Calverley v Green (supra) at 251:
… In the present case however both purchasers contributed the purchase money. The amount of $18,000 borrowed under the mortgage was provided equally by the parties, for it was lent to them jointly, on terms which made them jointly and severally liable for its repayment, and, having thus been borrowed, was applied by them in part payment of the purchase price. Where there are two purchasers, who have contributed unequal proportions, but have taken the purchase in their joint names, the intentions of both are material. …
The evidence in relation to the K property was in many respects clearer than in relation to the B property. The wife made no contribution to the purchase price, nor to any subsequent payments. The property was the home of the wife’s parents. In addition, as his Honour noted at [30] there was no evidence that the wife or her sister ever acted as beneficial owners at a practical level. Counsel for the husband took us to passages in the transcript and in particular to the relevant passages of cross-examination of the wife, and her mother. Whilst the evidence of the wife indicated little recollection of reasons why things were done and no recollection about discussions at the time the property was acquired, the essence of what she described as the intention of the parties remained consistent, that is, that she had no beneficial interest in the property and never had. The father’s evidence was clear and the mother’s evidence was that she relied upon the father to arrange their affairs and effectively had no independent recollection.
These facts posed difficulties for the husband. As is apparent from what we have said above at [105], a resulting trust would occur in favour of those providing the purchase price (in this case the father and mother) (Calverley v Green (supra) per Gibbs CJ at 246). A resulting trust can be replaced by a presumption of advancement, but both the presumption of advancement and the presumption of a resulting trust may be rebutted by evidence of the actual intention of the purchaser (Calverley v Green (supra) per Gibbs CJ at 251). Such evidence was given and despite difficulties with recollections as to detail, the witnesses were all clear that the wife was not intended to take any beneficial interest in the property. That in our view is probably what caused the husband’s counsel to take the following position, noted by his Honour at [31]:
Mr Smith accepted that there was sufficient evidence for a finding that the wife’s father had an intention in common with the wife as to the beneficial ownership of her quarter share, but he submitted there was insufficient evidence of the wife’s mother’s intention.
His Honour dealt with this, unexceptionally in our view, by noting his satisfaction that the intention of the wife and her mother was to “go along” with the father’s ideas and that he communicated his ideas to both the wife and his wife.
We cannot discern any error by his Honour in the assessment of the evidence, particularly having regard to counsel for the husband’s concession noted at [109], and in our view his Honour was entitled to find:
·there was a common intention at the time of purchase that the wife’s share was held on behalf of her parents; or
·any presumption of advancement had been rebutted.
Conclusion
Accordingly, we are not satisfied that the grounds of appeal, which all (save for one relating to sufficiency of reasons) related to the sufficiency of the evidence, have been made out and accordingly we would dismiss the appeal.
Costs
At the conclusion of the hearing we invited counsel to advise a position on costs. In the event of the appeal being dismissed the wife sought costs. The husband accepted this would be appropriate.
Given the above and that the husband was ultimately unsuccessful the husband should pay the wife’s costs.
I certify that the preceding one hundred and thirteen (113) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court (Bryant CJ, Finn & Crisford JJ) delivered on 17 February 2014.
Associate:
Date: 17 February 2014
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