Harmer v Pearson

[1993] QCA 19

IN THE COURT OF APPEAL	[1993] QCA 019
SUPREME COURT OF QUEENSLAND	Appeal No. 147 of 1992
Before the Court of Appeal The President Mr Justice Pincus Mr Justice de Jersey
BETWEEN:

RONALD DOUGLAS ROSS HARMER

(Plaintiff) Respondent

AND:

WARREN ANDREW PEARSON

(Defendant) Appellant

REASONS FOR JUDGMENT - THE PRESIDENT and de JERSEY J.

Delivered the 22nd day of February, 1992

This is an appeal from a judgment given in the District Court at Southport on 26 June, 1992, which declared that certain property at Clagiraba of which the parties are registered as proprietors as joint tenants is beneficially held by the respondent and the appellant as tenants in common in the shares of 88.18% and 11.82% respectively. Orders were made for the sale of the property and the distribution of the net proceeds of sale in proportion to the parties' respective shares in the property, and the appellant was ordered to pay the respondent's costs of the action. In the counter-claim which he made in the action instituted by the respondent, the appellant sought an order that the net proceeds of sale be divided equally between him and the respondent "or alternatively in such proportions as may be determined by this Honourable Court." By this appeal, the appellant seeks a determination that he is entitled "to such greater share of the said property than 11.82% as to the Court ... may seem meet."

In 1983, the respondent purchased a house in Chippendale in Sydney, which was mortgaged to the Westpac Bank. The parties met in September of 1986 and commenced living together in a homosexual relationship in the house at Chippendale on 29 December 1986. In May 1987, the appellant provided the respondent with $15,000.00, which was more than sufficient to discharge the Westpac mortgage. The appellant allowed the respondent to retain the balance, approximately $2,000.00, but there was a dispute between them concerning the terms of their arrangement. The trial judge preferred the respondent's evidence that the $15,000.00 provided by the appellant was given by way of loan. While the parties continued to reside at Chippendale, the respondent paid all expenses relating to the property but the parties contributed equally to other living expenses. The appellant did not pay the respondent rent.

In June 1987, the parties made wills, the effect of which was that the survivor would inherit the property of the other upon his death.

About Easter, 1989, the parties visited Queensland and decided to move from Sydney to reside together on a property which they decided to purchase at Clagiraba.

At that time, both parties were using the appellant's bank account to deposit monies, including a deposit of $12,300.00 which the respondent received when a contract was entered into for the sale of the Chippendale property. Other money from other sources, eg., joint fixed deposits to which both had contributed, also were paid to the appellant's bank account. The monies in that account were used for their living expenses and sometimes for personal expenditure. For example, on 29 June, 1989, approximately $17,700.00 was withdrawn from the appellant's account and used for the purchase of a motor vehicle in the respondent's name. The deposit on the Clagiraba property ($7,000.00) and legal expenses associated with the purchase ($3,400.00) were also paid from that account. No records were kept concerning which of the appellant and the respondent made the respective deposits and withdrawals.

The sale price of the Chippendale property was in excess of the purchase price of the Clagiraba property, which was $127,000.00. The difference was paid into the appellant's bank account, in part (according to the respondent) to repay the amounts withdrawn from that account as a deposit and to pay the solicitors in respect of the purchase of the Clagiraba property.

That purchase was made in the name of the parties as joint tenants. Each of the appellant, the respondent, and the real estate agent gave evidence of discussions which took place which led to the adoption of that course.

According to the respondent, the real estate agent pointed out that with a tenancy in common the owners' respective shares were recorded on the deed, whereas with a joint tenancy no percentages were recorded and the survivor automatically inherited the property upon the death of the other registered proprietor. The respondent said that he asked the appellant what his wishes were with respect to the sum of $15,000.00 which he had provided to pay out the Westpac mortgage on the Chippendale property, that the appellant had replied that he wanted that amount invested as an interest in the Clagiraba property and that the respondent had agreed. However, the respondent said that he did not promise the appellant a half share in the Clagiraba property and that a joint tenancy was agreed upon only so that the appellant would have a home should the respondent predecease the appellant.

According to the appellant, a joint tenancy was agreed on in order to ensure that the survivor would be entitled to the property but that, in the presence of the real estate agent, the appellant and the respondent also said that they were to own the property in equal shares.

The real estate agent said that the parties were more concerned with the survivorship aspect of a joint tenancy but that she had explained to the parties matters relating to shares in the property and had indicated that, with a joint tenancy, their shares would be equal.

The respondent told his solicitors that the names were to be registered as joint tenants, although he was informed that a joint tenancy would indicate equal shares in the property.

The trial judge accepted the evidence of the respondent. His findings are inconsistent with a common intention that the parties would own the property beneficially in equal shares.

Subject to one matter referred to below, the nature and extent of the parties' respective beneficial interests in the Clagiraba property arises in such circumstances from the constructive trust imposed by law: see Baumgartner v. Baumgartner (1987) 164 CLR 137. However, neither the evidence nor the findings greatly assist in determining the respective interests in the property to which the appellant and the respondent is each entitled in accordance with the principles established by that case.

In his counterclaim, the appellant alleged that money from his bank account (which included the pooled funds of the parties) was used to pay for the improvement and maintenance of both the Chippendale and Clagiraba properties. However, the evidence did not bear that out. At most, there was evidence from the appellant, who was not regarded favourably as a witness by the trial judge, that he contributed equally not only to living expenses but to the purchase of electrical and other items, that he carried out the major part of the basic domestic chores associated with the house at Chippendale such as cleaning, washing, ironing, cooking etc., and that he also carried out most of the work required to improve the Clagiraba property, such as landscaping, slashing, terracing, drainage and gardening.

However, on the findings of the trial judge, there was little, if any, basis for concluding that the events up to and including the acquisition of the Clagiraba property entitled the appellant to more than a share in the property proportional to the $15,000.00 which he contributed to the purchase price.

Relations between the parties deteriorated in 1990 and they separated in December that year. Meanwhile in August, they had signed the following agreement:

RE: LOT 23 GLEN CIRCUIT, CLAGIRABA 4211 QUEENSLAND
LOCATED IN THE PARISH OF WITHERIN

I, RONALD DOUGLAS ROSS HARMER and I, WARREN ANDREW PEARSON wish it to be noted that the abovementioned property was purchased on the 2nd June 1989 in joint ownership.

The purchase price of the abovementioned property was $127,000.00 of which I, WARREN ANDREW PEARSON contributed $15,000.00 representing my ownership of 11.82% and I, RONALD DOUGLAS ROSS HARMER contributed $112,000.00 representing 88.18% ownership.

Should either party wish to discontinue the joint ownership in the abovementioned property the remaining party is to have first option on purchase of the remaining share. The remaining share is to be valued at the current real estate price as determined at the time that the joint ownership is determined to discontinue. Notice of the desire to discontinue the partnership is to be given in writing. The party deciding to discontinue the joint ownership is to give the remaining party reasonable time to be in a financial position to organise any required monies from a lending institution should the occasion arise.

Signed ................... RONALD DOUGLAS ROSS HARMER

Signed ................... WARREN ANDREW PEARSON

Signed ...................

Justice of the Peace

Dated this day 13th August 1990 in the State of
Queensland, Australia."

On any view, that document detracts heavily from the appellant's claim to equal ownership. At the very least, it contains an admission against interest by the appellant which provides some further support for a conclusion that the intention of the parties when they purchased the Clagiraba property was that their beneficial interests would be proportional to their respective contributions to the purchase price. It certainly includes a statement that that was their common intention in August, 1989, and perhaps constituted a binding agreement to that effect.

In these circumstances, the appellant has failed to
demonstrate any ground for interfering with the trial
judge's decision concerning the parties' respective
beneficial interests in the property.

The appellant also sought to introduce an issue concerning the respondent's sole use and occupation of the property after December, 1990, when the appellant departed.

However, this was outside the pleadings and was not litigated at trial. In the circumstances, it is not a matter which will be considered by this Court on this appeal.

In summary, the appeal fails and is dismissed, with costs to be taxed.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	Appeal No. 147 of 1992
Before the Court of Appeal The President Mr Justice Pincus Mr Justice de Jersey
BETWEEN:

RONALD DOUGLAS ROSS HARMER

(Plaintiff) Respondent

AND:

WARREN ANDREW PEARSON

(Defendant) Appellant

REASONS FOR JUDGMENT - THE PRESIDENT and de JERSEY J.

Delivered the 22nd day of February, 1993

MINUTE OF ORDER:	Appeal dismissed with costs to be taxed.
CATCHWORDS:	TRUSTS AND TRUSTEES - Constructive trusts - Parties in homosexual relationships - Registered proprietors of land as joint tenants - Appellant contributed 11.82% of purchase price - Whether appellant entitled to a beneficial share greater than 11.82%.
Counsel:	Mr P. de Plater for the Appellant
Mr P. Keane Q.C. with him Mr. J. Hutton for the Respondent
Solicitors:	Messrs. O'Keefe and Mahoney for the Appellant Messrs. Watts and Co. for the Respondent

Hearing Date: 27th October, 1992

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND	Appeal No. 147 of 1992
BETWEEN:

RONALD DOUGLAS ROSS HARMER

(Plaintiff) Respondent

AND:

WARREN ANDREW PEARSON

(Defendant) Appellant

The President
Mr Justice Pincus
Mr Justice de Jersey

Judgment delivered on the 22nd day of February, 1993. Reasons for judgment by the President and de Jersey J. jointly, Pincus JA. separately. Pincus JA. agreeing with the order of the President and de Jersey J.

APPEAL DISMISSED WITH COSTS TO BE TAXED.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 147 of

1992

BETWEEN:

RONALD DOUGLAS ROSS HARMER

(Plaintiff) Respondent

AND:

WARREN ANDREW PEARSON

(Defendant) Appellant

JUDGMENT OF PINCUS J.A.

Delivered the Twenty-second day of February 1993

I have read the reasons of the President and de Jersey J. and agree with them, subject to what follows.

It was argued for the appellant that a legal point arose. The contention was to the effect that Baumgartner v. Baumgartner (1987) 164 C.L.R. 137 requires, where there has been a pooling of finances, a "broad brush approach". In that case, a man and his de facto wife pooled their respective incomes. When the relationship came to an end, the parties' residence, a house vested in the man, was claimed by him as his sole property and that was held to amount to unconscionable conduct (149). In determining the parties' interests, the Court started from the proposition that the man had contributed 55% and the woman 45% to the common pool. Those proportions took into account the total earnings contributed by the parties for all purposes, not merely those applied to the house; they also credited the woman with three months earnings, of which she was deprived when she gave birth to a child.

This supports the appellant's contention that a broad approach is appropriate. That notion is also consistent with the view which has been expressed that attribution of blame for the termination of the relationship might be relevant to the problem: Muschinski v. Dodds (1985) 160 C.L.R. 583 at 620, referred to in Baumgartner at 157.

I note that McHugh J.A., as his Honour then was, applied Baumgartner in Hibberson v. George (1989) 12 Fam. L.R. 725, holding that a pooling of resources is not absolutely necessary to bring into operation the doctrine there applied (742).

In the present case, the complaint made by the appellant was, in essence, that the trial judge took too narrow a view of the law applicable. The reasons contain no reference to Baumgartner, nor to the principle applied in that case. The judge said, as to the purchase of the property in question, that there was no presumption of advancement in favour of a homosexual lover and therefore no basis for rebutting the presumption of resulting trust in favour of a person who has paid the bulk of the purchase moneys. He held that the real intention of the respondent at the time of the purchase of the Clagiraba property was that the appellant should hold a joint interest beneficially only during the existence of the relationship between the parties. But the respondent's intention, as to the beneficial ownership of the property, could hardly be decisive.

It is my opinion that the approach taken by the learned judge is difficult to reconcile with currently accepted principle; the appellant's pleading alleged enough to enable him to rely on Baumgartner and it should have been considered. It is now clear that the interests of the parties are not necessarily to be defined, in a case of this kind, merely by application of Wirth v. Wirth (1956) 98 C.L.R. 228.

Nevertheless, it does not appear to me that it has been shown to have been unconscionable on the part of the respondent to attempt to adhere to the terms of the agreement set out in the reasons of the President and de Jersey J. There was no finding or, indeed, evidence that the agreement was signed by the appellant under a misapprehension as to its effect, or under any other circumstance which could justify a court, exercising equitable jurisdiction, in ignoring it or even treating it as, in the popular sense of the word, unfair.

The result is that, although there was evidence of a pooling of resources which might well, but for the agreement I have mentioned, have required the Court to enter upon such an analysis of contributions as was made in Baumgartner, on the primary factual findings made below, it was not, in my opinion, shown that the respondent's stance was unconscionable.

I therefore agree with the orders proposed in the joint reasons of the President and de Jersey J.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 147 of

1992

Before the Court of Appeal
The President
Mr. Justice Pincus

Mr. Justice de Jersey

BETWEEN:

RONALD DOUGLAS ROSS HARMER

(Plaintiff) Respondent

AND:

WARREN ANDREW PEARSON

(Defendant) Appellant

JUDGMENT OF PINCUS J.A.

Delivered the Twenty-second day of February 1993

MINUTE OF ORDER:	Appeal dismissed with costs to be taxed.
CATCHWORDS:
Counsel:	P. de Plater for the Appellant P. Keane Q.C., with him J. Hutton for the Respondent
Solicitors:	O'Keefe & Mahoney for the Appellant Watts & Co. for the Respondent
Hearing Date(s):	27 October 1992