Gregor v Amaya

[2021] NSWSC 89

Supreme Court

New South Wales

Medium Neutral Citation:

Gregor v Amaya [2021] NSWSC 89

Hearing dates:

2 February 2021

Decision date:

19 February 2021

Jurisdiction:

Equity - Expedition List

Before:

Sackar J

Decision:

See para [54]-[55]

Catchwords:

EQUITY – Trusts and trustees – Resulting trusts – Presumption of resulting trust – Parent and child –Unequal contributions to purchase price – Parent and child

EQUITY — Trusts and trustees — Resulting trusts — Presumption of advancement

Legislation Cited:

n/a

Cases Cited:

Black Uhlans Incorporated v New South Wales Crime Commission [2002] NSWSC 1060

Brown v Brown (1993) 31 NSWLR 582
Calverley v Green (1984) 155 CLR 242; [1984] HCA 81
Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353; [1956] HCA 28
Dyer v Dyer (1788) 2 Cox Eq Cas 92; (1788) 30 ER 42
Foundas v Arambatzis [2020] NSWCA 47
Fowkes v Pascoe (1875) LR 10 Ch App 343
Jain v Amit Laundry [2019] NSWCA 20
Micheletto (Trustee), El-Debel (Bankrupt) v El-Debel [2020] FCA 1031
Murtagh v Murtagh [2013] NSWSC 926
Nelson v Nelson (1995) 184 CLR 538; [1995] HCA 25
Ong v Lottwo Pty Ltd (in liq) (2013) 116 SASR 280; [2013] SASCFC 57
Ryan v Dries [2002] NSWCA 3; (2002) 10 BPR 19,947
Sivritas v Sivritas (2008) 23 VR 349; [2008] VSC 374
Tonna v Mendonca [2019] NSWSC 1849
Weige v Cupton Pty Ltd [2012] NSWCA 414

Category:

Principal judgment

Parties:

Anna Ligia Gregor (plaintiff)
Ligia Manuela Amaya (defendant)

Representation:

Counsel:
J Dooley (defendant)

Solicitors:
Stephen Hodges, Hodges Legal (plaintiff)
Makinson d’Apice, Lawyers (defendant)

File Number(s):

2020/12346

Publication restriction:

n/a

Judgment

1. In these proceedings two claims were initially made by the Plaintiff in the statement of claim.

2. First, a declaration that the Defendant holds the property at 82 View Street, Gymea, NSW in trust for the Plaintiff in the following shares, namely 75% for the Plaintiff, 25% for the Defendant.

3. Secondly the Plaintiff sought an opportunity to purchase the share of the Defendant in 82 View Street at a price to be agreed. This claim was not pressed at the hearing.

Background Facts:

4. The Defendant was born in 1939. She came to Australia in 1967 and then, with her then husband whom she married in 1969, purchased a property at 5/32-34 Hampton Court Road, Carlton. Her husband was Josef Gregor.

5. The Defendant and Gregor separated in 1973 and later divorced. The Defendant as a result of the divorce settlement had the property at Carlton transferred to her.

6. Gregor died in 1996. He left his estate in Australia (he also had property in the Czech Republic) to the Plaintiff. The estate relevantly comprised a property at 14/27-31 Burke Rd, Cronulla. The property was unencumbered.

7. Over the years the Defendant worked as a nurse and an interpreter until the early nineteen nineties when she ceased work. Her health was poor and as a result she felt she had to move out of the property at Carlton because it was on the second floor without a lift.

8. The Defendant asked the Plaintiff to move in with her which she did in 2000. The Plaintiff did the shopping, housework and took the Defendant to medical appointments and the like.

9. After discussion it was agreed that they would try and find a property without stairs. These discussions took place on numerous occasions between 2000 and 2008. It was always understood that the Plaintiff would live with and care for the Defendant.

10. The agreement was that the Plaintiff would sell her property in Cronulla, contribute to the purchase of the new property, and receive the Carlton property. The Defendant had been on a pension for some years and had no savings; however, the Defendant owned the Carlton property without a mortgage.

11. The property at Gymea was located as suitable and a decision to buy it was made. Cronulla was sold on 16 December 2008 and net proceeds of $399,434 were received. The property at Gymea was purchased for $537,500, but the total amount paid on purchase was $558,118.32 which included stamp duty ($19,697) plus legals and other disbursements, CB.41-43.

12. The Plaintiff says she deposited “most” of the proceeds of the sale of Cronulla into her account at the Teachers Credit Union. The Defendant insisted that the property at Gymea be registered in her name solely and that there be no mortgage over it. The Plaintiff acceded to her mother’s request and therefore Carlton was transferred into the Plaintiff’s name. The Plaintiff then borrowed $240,000 (from the Commonwealth Bank by way of what was described as a special rate saver Home Loan, CB.37) against Carlton and she also provided $380,000 from her account at the Credit Union for the purchase of Gymea.

13. The above amounts meant it is asserted that the Plaintiff provided $157,500 to complete the purchase of Gymea (although this amount does not accord with the contemporaneous documents and does not include stamp duty, legals and other disbursements). The Plaintiff also believes she spent what she estimates to be about $60,000 on repairs on the Gymea property, although there are no receipts for such expenditure. The interest rate that was carried on the loan with CBA was as at 1 July 2009 said to be 5.060% (CB.38). Although it seems Carlton has always been rented there is no evidence at what rent.

14. There were discussions between the Plaintiff and the Defendant to the effect that neither could sell their respective properties without the consent of the other. The parties also had discussions about the percentage the Plaintiff was entitled to of the Gymea property and although the Plaintiff attempted to have their discussions reduced to writing by a solicitor this never occurred.

15. From exhibit 1 to Ms Gregor’s affidavit other expenses were incurred as follows: $7140 was paid as commission on the sale of Cronulla, together $330 for advertising; and stamp duty of $8290 was paid on the transfer of Carlton to the Plaintiff.

16. Until they had their falling out the Defendant made it clear to the Plaintiff that the Plaintiff was the sole beneficiary under her will.

17. Although she qualified as a teacher the Plaintiff from time to time either worked part-time or gave up work altogether to look after the Defendant.

18. The Plaintiff and the Defendant discussed the Plaintiff having a child as the Defendant said she wanted a grandchild. The Plaintiff underwent IVF treatment and had a child in October 2009.

19. In any event, after the purchase of Gymea the parties did not immediately move in as the house needed repairs. The repairs were paid for out of the surplus funds after purchase.

20. The Plaintiff asserts that the parties behaved as if joint owners of the Gymea property. The Plaintiff and Defendant shared the expenses.

21. After 2018 the Defendant’s health began to deteriorate. She requested that the Plaintiff, who had taken some teaching work in country NSW, come back to Sydney and to look after her. The Plaintiff resigned from teaching to be with the Defendant.

22. At or about the same time the relationship between the parties also began to deteriorate. The Defendant became angry, aggressive and depressed. The Defendant on one occasion started attacking the Plaintiff and yelling at her. The Plaintiff’s daughter was also frightened of her grandmother.

23. The Defendant changed the locks on the doors of the Gymea house. The Plaintiff is living on a monthly rental without a lease. The house at Gymea is in need of repair.

The Evidence:

24. The Plaintiff filed one affidavit dated 20 June 2020. She was not cross examined.

25. In further support of the Plaintiff’s case there is an affidavit from a Geraldine McLusky of 13 March 2020. Again, she was not cross examined.

26. For the Defendant, an affidavit of Mr Jarrad McCarthy was filed dated 21 August 2020. He was not cross examined.

The Legal Principles:

Presumption in favour of a resulting trust

27. The circumstances in which the presumption of a resulting trust will arise were recently summarised in Foundas v Arambatzis [2020] NSWCA 47 (‘Foundas v Arambatzis’) at [48]:

Where two persons jointly provide the purchase money for the property and the property is put into the name of one of them, then, unless the relationship between the parties gives rise to a presumption of advancement, it is presumed that the beneficial ownership of the property is held in the proportions in which they each contributed the purchase money (Calverley v Green (1984) 155 CLR 242 (‘Calverley’) at 246 –247, 258, 269; [1984] HCA 81). The presumption can be rebutted by evidence of actual intention.

28. The presumption of trust is therefore the ‘“starting point of a factual inquiry” about the intention of the party (or parties) who provided the funds for the purchase in question’ (Tonna v Mendonca [2019] NSWSC 1849 (‘Tonna v Mendonca’) at [466], see also Dyer v Dyer (1788) 2 Cox Eq Cas 92; (1788) 30 ER 42 at 43, Fowkes v Pascoe (1875) LR 10 Ch App 343 (Fowkes v Pascoe ) at 352, Black Uhlans Incorporated v New South Wales Crime Commission [2002] NSWSC 1060 (‘Black Uhlans’) at [136]). The intention of the party or parties must be “objective, or manifest, intention’ and ‘is not a subjective, uncommunicated intention but it is to be inferred from what the parties do or say” (Tonna v Mendonca at [467]). This intention must be found at the time of purchase or immediately thereafter (Calverley at 251 (Gibbs CJ), 262 (Mason and Brennan JJ), Tonna v Mendonca at [467]). However, ‘evidence of later acts and declarations are admissible (as admissions against interest) against the party who made them’ (Tonna v Mendonca at [467], citing Black Uhlans at [138] (Campbell J, as his Honour then was)).

29. Once the primary fact giving rise to the presumption has been established, the burden then falls on the party disputing the trust’s existence to rebut the presumption on the balance of probabilities (Nelson v Nelson (1995) 184 CLR 538 at 547; [1995] HCA 25 (Deane and Gummow JJ), Weige v Cupton Pty Ltd [2012] NSWCA 414 at [46], cited in Tonna v Mendonca at [465]).

30. The presumption is rebuttable by evidence of actual intention common to all contributors to the purchase price, however, does not yield to slight circumstances (Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365; [1956] HCA 28, Black Uhlans at [140], [148], Jain v Amit Laundry [2019] NSWCA 20 at [89(6)] (‘Jain’), Foundas v Arambatzis at [48]). In Micheletto (Trustee), El-Debel (Bankrupt) v El-Debel [2020] FCA 1031 (‘Micheletto’), it was noted at [78(3)] that:

In deciding whether a presumption of resulting trust has been rebutted, the Court must reach a conclusion on the whole of the evidence. Conduct which may be taken into account could include who took occupation and control of the property, who paid periodical outgoings on the property, who received any rent from the property and who paid income tax on any rent received from the property. However, to the extent that such conduct did not occur so immediately thereafter as to constitute a part of the transaction, it may only be taken into account to the extent that it constitutes an admission: Black Uhlans at [138].

Calculating the proportions

31. If the presumption is not rebutted the beneficial interest of the parties must be determined in relation to the time the property was purchased when the trust arose (Black Uhlans at [141], Jain at [89(3)], Micheletto at [78(6)]). It is essential that it be established on the balance of probabilities that the party arguing for the existence of a resulting trust has made some contribution to the purchase price of the property (Calverley at 246 (Gibbs CJ), Ong v Lottwo Pty Ltd (in liq) (2013) 116 SASR 280; [2013] SASCFC 57 at [40] (Nicholson J, with whom Kourakis CJ and Stanley J agreed)).

32. In calculating the proportions in which each party has contributed to the purchase, it has been held that a broader interpretation of ‘purchase price’ is to be applied, including incidental expenses incurred in order to obtain the property, such as stamp duty, solicitor’s fees, bank fees and adjustment of rates (Ryan v Dries [2002] NSWCA 3; (2002) 10 BPR 19,947 at [25], [52]-[53] (Hodgson JA), Black Uhlans at [144], Sivritas v Sivritas (2008) 23 VR 349; [2008] VSC 374 at [126] (Kyrou J), Murtagh v Murtagh [2013] NSWSC 926 at [81] (Hallen J)).

33. There is a further presumption that if part of the purchase price is provided by being borrowed on mortgage, these monies raised are treated as contribution by the person liable to repay that money. This is rebuttable by evidence of the parties’ alternate intention at the time the property was acquired (Black Uhlans at [142], Jain at [89(5)], [97], Micheletto at [78(7)]).

The submissions of the Parties:

The Plaintiff’s submissions

34. The Plaintiff provided written submissions to the Court on 1 February 2021 and made further oral submissions on 2 February 2021.

35. The Plaintiff made submissions on two alternative outcomes. Firstly, that the Defendant transferred the Carlton property to the Plaintiff by way of advancement and so Carlton does not represent any contribution by the Defendant to the purchase of Gymea, or secondly, that if Carlton is deemed to be a contribution by the Defendant, the value of that contribution should be in the order of $75,000.

36. In relation to the first point the Plaintiff submits that I may infer, in the context of the Plaintiff being sole beneficiary of the Defendant’s will, that the Defendant’s intentions were that “if you buy me a home in my name, I will advance you my property at Carlton”. The Plaintiff submits that while the old law of advancements did not include advances from mothers to children, that since the decision in Brown v Brown (1993) 31 NSWLR 582 and Nelson v Nelson (1995) 184 CLR 538, the presumption in Australia applies equally to mothers and children. The Plaintiff submits that the transfer of Carlton could therefore not be viewed as consideration for the purchase of Gymea.

37. In relation to the second point, the Plaintiff submits that the transfer of Carlton to the Plaintiff does not equate to a contribution worth $315,000 (the value of Carlton). This is argued on the grounds that the agreement was that Carlton be security for a $240,000 loan which was raised on it and paid towards Gymea. The net value to the Plaintiff was therefore about $75,000.

38. It was put to me that the Plaintiff therefore contributed both the proceeds of Cronulla and the mortgage monies of $240,000, consistent with the result in Jain v Amit Laundry [2019] NSWCA 20 at [89].

39. It is submitted that the Plaintiff paid $557,177.50 to purchase Gymea, inclusive of stamp duty. This minus the $75,000 net benefit from the transfer of Carlton totals $482,177.50 or 86.5% of the purchase price. Nevertheless, the Plaintiff concedes that the transfer of Carlton at about the same time is problematic, so only seeks an interest of 75%.

40. The Plaintiff submits that the intention of the parties supporting this percentage must be found at the time of the acquisition of Gymea in March 2009, but that later events may be examined for the purpose of establishing the intentions at the relevant time. This is to be inferred from what the parties did or said. The Plaintiff therefore argues that her evidence as to the intentions of the parties, and from the Defendant by way of her actions, is that there was an agreement to the effect that the two needed to find a new home without steps for the Defendant’s comfort, that the Plaintiff would sell Cronulla, that because Carlton was not sold the parties would need to borrow and because of requirements of the lender, Carlton needed to be in the Plaintiff’s name. The Defendant demanded that Gymea be in her name and the parties agreed they would live mutually and interdependently in that property.

41. The Plaintiff submits that it was the intention of the parties at this time that both could live there as long as they wanted to do so, and therefore there is a conclusion that could be drawn that the Defendant, in seeking to obtain legal title, was merely seeking that her ongoing occupation of Gymea be without disturbance for as long as she wished to live there.

The Defendant’s submissions

42. The Defendant provided written submissions to the Court on 20 January 2021 and made further oral submissions on 2 February.

43. The Defendant submits that the case is to be determined with reference to the situation where two persons contribute to the purchase price of a property, and the property is put into one of their names, as per Foundas v Arambatzis at [48].

44. The Defendant submits two alternative calculations for the parties’ interest in Gymea. The first alternative is that in which the aggregate of the purchase price is $557,500 (the value of the property) and $19,677.50 (being stamp duty), totalling $557,177.50. Of this, the Defendant submits that the Plaintiff paid the total amount, but was then transferred Carlton (worth $315,000) representing the Defendant’s contribution. The difference between these amounts is $242,177.50 which defendant submits represents the Plaintiff’s contribution. These correlate to interests of 43.47% for the Plaintiff and 56.53% for the Defendant.

45. Furthermore, the Defendant submits that of the $240,000 mortgage taken out by the Plaintiff using Carlton as security only $157,000 was used to purchase the Gymea property.

46. In the alternative, if the estimated $60,000 of renovations is included, the total purchase price is said to be $617,177.50. This amount paid by the Plaintiff minus the $315,000 value of the Carlton property is $302,177.50. It is therefore submitted that in this situation the Plaintiff be entitled to 48.96% interest in the Gymea property and the Defendant to 51.04%.

Consideration:

47. The material facts are not seemingly in issue. I am satisfied that I should accept the Plaintiff’s evidence in its entirety for two reasons. First, there is a good deal of documentation attached to the Plaintiff’s affidavit which corroborates much of what she says and of course she was not cross examined.

48. I am satisfied that the agreement or understanding between the parties of which she gives evidence namely that Carlton was transferred to her as part of the overall arrangement whereby her mother secured a more suitable home at Gymea, given her health issues. I am also satisfied that the parties never reached any more than a vague understanding about what percentages each were entitled to in the Gymea home.

49. I am satisfied, however, that the parties agreed that the Plaintiff would facilitate the purchase of a suitable home for the Defendant, to be placed in her name solely and that the Defendant, in facilitating the purchase, would be responsible for all expenses associated with purchase. Although the Defendant got a property, namely Carlton, the Plaintiff took out a mortgage, and undertook all of the expenditure, that is stamp duty, legals and the like in making those arrangements.

50. It should be noted that the claim is for a resulting trust and not for example a constructive trust and no contributions to the house (except for acquisitions, expenses and repairs) or for ongoing care of the Defendant after the purchase is claimed.

51. I am satisfied the Plaintiff took out the mortgage over Carlton as part of the arrangement with the Defendant. I am also satisfied that the monies for repairs, legals and stamp duties were more likely than not paid for out of the proceeds obtained by the Plaintiff by way of advance against Carlton. In particular, although an estimate and not based on receipts, I am inclined to accept the Plaintiff’s belief that she advanced $60,000 towards the repairs to Gymea. And apart from the proceeds of the sale adjustments which also in my view need to be made in the Plaintiff’s favour for stamp duty, legals and other expenses associated with the transfer of Carlton, the sale of Cronulla and the purchase of Gymea. The reason for that is that there is no evidence that the Defendant had any capacity to or indeed did pay for any of these items. It is plain that the Defendant did not and could not make any contribution beyond the value of Carlton of $315,000.

47. The only evidence as it were from the Defendant (a statement dated 11 March 2013) says virtually nothing about the arrangement only confirming that one existed and that the reason why the Defendant wanted the Gymea property in her name was to prevent her from being evicted from Gymea by the Plaintiff. That to me is an indirect acknowledgment of the Plaintiff having an interest in Gymea which is in any event not disputed.

48. The purchase price in full therefore for Gymea including stamp duty, legals and the like was $558,118.32 (CB.41-43). The Plaintiff also paid $7140 commission on the sale of her house at Cronulla plus $330 for advertising (CB.31). She also paid $8981.80 in stamp duty, legals and disbursements associated with the transfer of the Carlton property (CB.35). In addition, she also contributed approximately $60,000 towards repairs. The Plaintiff did not charge the Defendant interest on her contribution although she was paying interest on her loan. The Defendant contributed $315,000 to the Gymea purchase.

49. However, it is appropriate to consider the total contribution by the Plaintiff to include first the difference in contribution between the purchase price including stamp duty, legals and the like which is $558,118.32 less the $315,000 equals $243,118.32. But the Plaintiff made a greater contribution because she had to pay commission on the sale of the property in Cronulla of $7140 plus $330 for advertising costs. In addition I am satisfied she paid $8981.80 stamp duty, legals and disbursements on the transfer of Carlton to her. Again in addition she paid I am satisfied $60,000 for repairs. That brings the total funds expended to acquire Gymea, inclusive of these necessary expenses, to $625,589.12. Of this the Plaintiff paid $319,570.12. In turn that is approximately 51% of the total of $625,588.32. In my view I consider that should be the proportion she is entitled to by way of a resulting trust in the Gymea property.

50. I would make an appropriate declaration consistent with my findings. I request the parties to bring in short minutes to reflect these reasons and I would if necessary determine any questions of costs.

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Decision last updated: 19 February 2021