Hart v Milne

[2024] WASC 229

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   HART -v- MILNE [2024] WASC 229

CORAM:   MASTER RUSSELL

HEARD:   19 & 26 JUNE 2024

DELIVERED          :   26 JUNE 2024

FILE NO/S:   CIV 1956 of 2023

BETWEEN:   GERARD RICHARD HART

Plaintiff

AND

JULIE ANN MILNE

Defendant

Catchwords:

Practice and procedure – Judgment in default of appearance – Application for default judgment pursuant to O 13 r 9 of the Rules of the Supreme Court 1971 (WA) – Declaratory relief granted – Turns on own facts

Trusts – Constructive trusts – Property owned as joint tenants – Whether failed joint endeavour – Whether unconscionable for party holding legal title to retain interest in property – Turns on own facts

Legislation:

Interpretation Act 1984 (WA), s 13A(1)
Rules of the Supreme Court 1971 (WA), O 5 r 11(1), O 9 r 1(1), O 9 r 1(4), O 13 r 1(1), O 13 r 9(1), O 13 r 9(1)(a), O 13 r 9(2)(b), O 13 r 14, O 18 r 16
Supreme Court Act 1935 (WA), s 25(6)

Result:

Judgment entered in default of appearance
Declaratory relief granted
Declaration that defendant holds property on trust for plaintiff

Category:    B

Representation:

Counsel:

Plaintiff	:	Mr S J Brown
Defendant	:	No appearance

Solicitors:

Plaintiff	:	Lynn & Brown Lawyers
Defendant	:	N/A

Cases referred to in decision:

Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; (2007) 161 FCR 513

Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56; (2012) 201 FCR 378

Bass & Anor v Permanent Trustee Co Ltd & Ors (1999) 198 CLR 334

City of Stirling v Dueschen [2011] WASC 126

David Allan Collison as administrator of the estate of Diane Carol Collison v Collison [2024] WASC 87

Faithfull v Woodley (1890) 43 Ch D 287

Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421

In Re F (Mental Patient: Sterilisation) [1990] 2 AC 1

Lloyd v Tedesco [2002] WASCA 63; (2002) 25 WAR 360

Marchese v Marchese [2021] WASC 385

Muschinski v Dodds (1985) 160 CLR 583

Newmarket Court Pty Ltd v Andriani [2001] WASC 292

Phonographic Performance Ltd v Maitra [1998] 2 All ER 638

Willis v The State of Western Australia [No 3] [2010] WASCA 56

Woolcott v Seeger [2010] WASC 19

MASTER RUSSELL:

Overview

1. The plaintiff, Gerard Richard Hart, and the defendant, Julie Ann Milne (formerly known as Julie Ann Grove), are the registered proprietors as joint tenants of the property located at 19 Mends Way, Waikiki, Western Australia, which is more particularly described as Lot 358 on Plan 17795, being the whole of the land contained in Certificate of Title Volume 1900 Folio 539 (Property).

2. The plaintiff and the defendant were involved in a romantic relationship between January 1993 and August 1994.

3. The Property was acquired in September 1993 for the parties to live in together if and when they married.  They never married.        The relationship ended in August 1994.

4. The plaintiff has lived in the Property since its purchase.  It is the plaintiff's case that the defendant has never lived in the Property and has made no financial or other contributions towards the Property.  The plaintiff paid the deposit for the purchase of the Property, has made all loan and mortgage repayments, and paid all rates, outgoings and expenses for the upkeep of the Property since it was acquired.

5. The plaintiff says that the defendant has agreed on several occasions to transfer the Property to his sole name but has not executed the documents to effect the transfer.

6. On 24 August 2023, the plaintiff commenced these proceedings, seeking relief as set out in the writ, including:

   (a)a declaration that the defendant holds her interest in the Property on trust in favour of the plaintiff; and

   (b)orders that the trust be vested in the plaintiff and that the defendant transfer her interest in the Property to the plaintiff forthwith.

7. The defendant has been personally served with the writ and statement of claim. She has not entered an appearance within the time prescribed under O 5 r 11 (1) of the Rules of the Supreme Court 1971 (WA) (RSC), or at all.

8. By notice of motion filed on 8 January 2024, the plaintiff seeks judgment in default of appearance against the defendant and the relief claimed in the writ and statement of claim (Application).

9. In support of the Application, the plaintiff relies on:

   (a)affidavits sworn by him on 13 March 2024 and 24 June 2024;

   (b)an affidavit sworn by Andrew Hunt on 19 October 2023 verifying personal service of the writ of summons on the defendant on 6 October 2023;

   (c)an affidavit sworn by Shane Hedley Shaw on 18 December 2023 verifying personal service of the statement of claim on the defendant on 14 December 2023; and

   (d)an affidavit of Steven James Brown sworn on 18 June 2024.

10. The plaintiff has also filed an outline of submissions dated 13 March 2024.

11. For the reasons that follow, I find that the procedural requirements have been met and I am satisfied that it is appropriate to enter judgment in default of appearance and to grant the relief sought.

The facts

1. The following facts are derived from the affidavits filed in support of the Application, which are helpfully summarised in the plaintiff's submissions.

Relationship between the parties

1. The plaintiff and the defendant were romantically involved for approximately 19 months (from January 1993 until August 1994).[1]

   [1] Affidavit of Gerard Richard Hart sworn 13 March 2024 (First Hart Affidavit) [2], [11] and [13].

2. At no time during their relationship did the parties live together or share a residence.[2]

   [2] First Hart Affidavit [10].

3. The plaintiff and defendant were engaged to be married, but never married.  They had one child who was born in December 1994.[3] 

   [3] First Hart Affidavit [11] and [12].

4. They did not care for and support their child together as a couple as the child was born after their separation.[4]

   [4] First Hart Affidavit [12].

5. The plaintiff and defendant never had any financial interdependence on one another and maintained separate finances throughout their relationship.[5]

Acquisition of the Property

[5] First Hart Affidavit [3].

1. During the relationship, in or around August and September 1993, it was discussed and agreed between the parties that the plaintiff would purchase the Property for the parties to reside in if they married.[6]

   [6] First Hart Affidavit [6].

2. The plaintiff arranged for the purchase of the Property in September 1993.[7]  The Certificate of Title records that the purchase was completed on 28 September 1993, with the plaintiff and the defendant as the registered proprietors as joint tenants.[8]  A mortgage was registered on the title to the Property to secure a loan obtained for the purchase of Property (Loan).[9]

   [7] First Hart Affidavit [4].

   [8] First Hart Affidavit [4]. See also Affidavit of Steven James Brown sworn 18 June 2024 (Brown Affidavit), SJB-1.

   [9] Brown Affidavit, SJB-1: Affidavit of Gerard Richard Hart sworn 24 June 2024 (Second Hart Affidavit) [3] ‑ [4].

3. The plaintiff was solely responsible for all financial aspects of the purchase of the Property.  He has resided in the Property since it was purchased and has made all payments relating to the Property and its upkeep.[10]  The defendant has never resided in the Property and has made no financial or other contribution towards it.[11]

   [10] First Hart Affidavit [9].

   [11] First Hart Affidavit [10].

4. The plaintiff has made all of the repayments under the Loan.  He made a final payment to clear the Loan on 5 January 2017.[12]

   [12] Second Hart Affidavit [5], GRH-1, GRH-2.

5. The defendant informed the plaintiff in September 1995, and his lawyers in May 2021, that she agreed to transfer the Property to the plaintiff's sole name.  However, she has not executed the documents to effect the transfer.[13]

   [13] First Hart Affidavit [14] and [18], GRH-1.

6. Requests were made of the defendant for her assistance to transfer the Property into the plaintiff's sole name before and after the Loan was repaid. The defendant requested that her name first be removed from the mortgage.  However, to facilitate that, a statutory declaration was required to be made by the defendant confirming her change of name and for her to sign discharge forms. Despite requests made of the defendant, the plaintiff has been unable to obtain the defendant's assistance to arrange this.[14] 

   [14] First Hart Affidavit [15] - [21], GRH-2, GRH-3, GRH-4, GRH-5; Second Hart Affidavit [6].

Procedural requirements for default judgment

1. The procedural requirements for judgment to be entered in default of appearance are set out in O 13 RSC and were considered by Lundberg J in David Allan Collison as administrator of the estate of Diane Carol Collison v Collison.[15]

   [15] David Allan Collison as administrator of the estate of Diane Carol Collison v Collison [2024] WASC 87 [12] - [17], [19] - [21].

2. Order 13 r 9 RSC applies where, as in this case, a plaintiff's claim is other than for the recovery of a debt, damages, detention of goods or possession of land.

3. Relevantly, the procedural requirements that must be satisfied for default judgment under O13 r 9 RSC are:

   (1)The proceeding must have been commenced by writ of summons.[16]

   (2)Service of the writ on the defendant must be verified by affidavit, together with indorsement of service of the writ in accordance with O 9 r 1(4).

   (3)No appearance must have been filed by the defendant within the time prescribed for appearing.[17]

   (4)The plaintiff must produce a certificate issued by the proper officer on the day of the hearing stating that no appearance has been entered by the defendant, as required by O 13 r 9(2)(b) RSC.[18]

   [16] O 13 r 1(1) RSC.

   [17] O 13 r 9(1)(a) RSC.

   [18] O 13 r 9(2)(b) RSC.

4. Once the procedural requirements are satisfied, the court may consider the exercise of its discretion to grant default judgment for the relief sought.

Compliance with procedural requirements under O 13 r 9

1. I am satisfied on the evidence filed by the plaintiff that the relevant procedural requirements have been complied with. The defendant has been served with the writ and the statement of claim and the writ has been indorsed in accordance with O 9 r 1(4) RSC.

2. Counsel has tendered a certificate signed by the proper officer as required under O 13 r 9(2)(b) RSC, certifying that no appearance has been entered by the defendant.

3. The procedural requirements having been satisfied, I am empowered to consider the exercise of my discretion to grant default judgment for the relief sought. 

The relief sought

1. The plaintiff seeks a declaration that the defendant holds her interest in the Property on trust in favour of the plaintiff and an order that the trust be vested in the plaintiff.  He also seeks an order that the defendant take certain steps to facilitate the transfer of her interest in the Property to him.

2. The Court has discretionary power to grant declaratory relief under s 25(6) of the Supreme Court Act 1935 (WA) and O 18 r 16 RSC.

3. Generally, in the absence of an appearance and any responsive pleading from the defendant, the allegations made in the statement of claim are deemed to be admitted. An entitlement to the relief claimed must be disclosed in the plaintiff's pleading, and evidence is not admissible to support or supplement the pleaded facts.  However, where a plaintiff is seeking an equitable or discretionary remedy, the court must be sufficiently informed of the circumstances to properly exercise its discretion to grant or withhold the remedy.[19]  

Does the defendant hold her interest in the Property on trust for the plaintiff?

[19] City of Stirling v Dueschen [2011] WASC 126 [48] (Martin J), citing Faithfull v Woodley (1890) 43 Ch D 287, 287 ‑ 289; Phonographic Performance Ltd v Maitra [1998] 2 All ER 638, 644. See also Woolcott v Seeger [2010] WASC 19 [10]; Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd [2007] FCAFC 146; (2007) 161 FCR 513 [42].

1. The plaintiff claims, in effect, that the defendant's interest in the Property is held by her on a constructive trust for him. Specifically, the plaintiff relies on a trust arising from a joint endeavour.

2. I accept the plaintiff's submissions at paragraphs 30 - 34 as to the legal principles relating to constructive trusts in this context, as set out in Muschinski v Dodds,[20] and the other authorities referred to, and their application to the circumstances of this case.

   [20] Muschinski v Dodds (1985) 160 CLR 583, 620.

3. The principles relating to the circumstances in which a constructive trust will arise are well established and have been considered and applied by this court many times. The authorities and applicable principles as to when a constructive trust arises in the context of a relationship were considered by Buss JA (as his Honour then was) in Willis v The State of Western Australia [No 3].[21] They were also considered by Hill J in Marchese v Marchese relevantly, as follows:[22]

   [141]A joint endeavour constructive trust originates in the judgment of the High Court in Muschinski v Dodds.  In that case, Deane J (with whom Mason J agreed) held that:[23]

   [T]he principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do. (citations omitted)

   [142]In order to establish a joint endeavour constructive trust, the following must be established.  First, at the time of acquisition of the property in question, the parties must have a common intention as to the terms on which they will hold an interest in the property.  Second, valuable contributions have been made to the joint endeavour by the plaintiff. Third, as a result of the joint endeavour, the defendant has accrued a benefit.  Fourth, the joint endeavour has failed for which neither party is at fault and it would be unconscionable for a party to retain their legal interest without giving credit to the other for the contributions made by the other to the acquisition and improvement of the property.[24] 

   [143]There is a range of matters the court will take into account in determining whether to impose a joint endeavour constructive trust.  These include direct financial contributions to the purchase price and costs associated with the purchase, the pooling of financial resources, other financial contributions, contributions through labour and other non-financial contributions.  The court can also take into account events that occur after the purchase of the property. …

   [21] Willis v The State of Western Australia [No 3] [2010] WASCA 56 [51] - [66].

   [22] Marchese v Marchese [2021] WASC 385 [141] - [143].

   [23] Muschinski v Dodds, 620 (Deane J).

   [24] Lloyd v Tedesco [2002] WASCA 63; (2002) 25 WAR 360 [27].

4. In this case, the plaintiff submits it would be unconscionable for the plaintiff to retain a benefit by way of an interest in the Property in the circumstances where the parties were not in a de facto relationship and the plaintiff has made no financial or other contribution in respect of the Property at any time.

5. I accept the plaintiff's submissions at paragraphs 10 - 11 as to the considerations that inform whether a person is in a de facto relationship, as provided in s 13A(1) of the Interpretation Act 1984 (WA), and that the parties were not in such a relationship for the reasons stated in paragraph 12 of the submissions.

6. I am satisfied that the evidence adduced by the plaintiff is sufficient to establish that the defendant holds her interest in the Property on constructive trust for the plaintiff.

7. The plaintiff solely financed the purchase of the Property. It was purchased in the name of the parties as joint tenants for the joint endeavour that the plaintiff and defendant would marry, and use the Property as their matrimonial home.

8. The parties ended their relationship after a relatively short period and did not marry, which led to the removal of the joint endeavour.  There is no evidence to suggest there was attributable blame for the relationship ending.

9. The defendant has never lived at the Property. When their relationship ended, the parties went their separate ways. On the evidence before me, the plaintiff did not pay any of the purchase price or costs associated with the purchase of the Property and has made no financial or other contribution in respect of the Property in the 31 years since it was purchased.   

10. I accept the plaintiff's submission to the effect that, in the circumstances, it would be unconscionable for the defendant to retain a benefit, her interest in the Property, as it is not commensurate with her contribution.

11. For these reasons, I am satisfied the plaintiff has established that the defendant holds, and has since the Property was acquired held, her interest in the Property on constructive trust for the plaintiff.

12. Turning then to the relevant principles relating to the grant of declaratory relief and the exercise of the court's discretion to grant the relief sought.

The declaratory relief sought

1. I refer to the Full Federal Court's discussion of the requirements that must be met before the discretion is exercised in favour of making a declaration, and the background to those requirements in Australian Competition and Consumer Commission v MSY Technology Pty Ltd.[25]

   [25] Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56; (2012) 201 FCR 378 [12] - [16] citing, amongst the other authorities referred to, Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421, 437 - 438 (Gibbs J) (as his Honour then was).

2. I am satisfied that the application for declaratory relief raises real and not theoretical questions and that the plaintiff has a real interest in raising them.  As to whether there is a proper contradictor, the defendant exists, she has been served with the writ and statement of claim but has, for whatever reason, decided not to appear and oppose the grant of declaratory relief.

3. I also am satisfied that, despite the lack of opposition, there is utility in making the declaration sought. As was submitted on behalf of the plaintiff, there is a benefit to both parties in making the declaration. It will reflect the actual intent and interests that have existed in the Property since its acquisition.  Also, in the absence of the declaration to regularise the true position, any transfer of the plaintiff's interest to the defendant will likely result in tax liabilities for each party.

4. As to whether the declaratory relief sought may be granted by way of judgment in default of appearance, the plaintiff refers to Newmarket Court Pty Ltd v Andriani.[26]In that case, it was argued before Master Sanderson in an application to set aside a default judgment, by reference to Bass & Anor v Permanent Trustee Co Ltd & Ors,[27] that as a general rule a court will not make a declaration on a default judgment.  The Master noted that, in Bass,[28] the majority cited with approval Lord Goff of Chieveley's statement in In Re F (Mental Patient: Sterilisation),[29] to the effect that a declaration would not be made without proper argument, such as is the case when judgment is given in default of defence. 

   [26] Newmarket Court Pty Ltd v Andriani [2001] WASC 292 [18] (Sanderson M).

   [27] Bass & Anor v Permanent Trustee Co Ltd & Ors (1999) 198 CLR 334 (Bass).

   [28] Bass, 356 (Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ).

   [29] In Re F (Mental Patient: Sterilisation) [1990] 2 AC 1 [82] (In Re F).

1. Master Sanderson observed in Newmarket Court Pty Ltd v Andriani that neither Bass nor In Re F directly raise the question of whether or not declarations can be obtained by default. The Master stated that the judgment in that case (Newmarket Court v Andriani) was not obtained by default in the usual sense.  The second defendant had been served and did not appear. The plaintiffs then moved for judgment and supported their application by affidavit.  When the matter came on, the plaintiffs argued that judgment should be entered and they were successful. The Master stated that, in those circumstances, he could see no reason why default judgment, so called, cannot be entered.  He said, 'Were the position otherwise a defendant could always resist a claim for a declaration simply by refusing to enter an appearance to a writ.'[30]

   [30] Newmarket Court Pty Ltd v Andriani [18].

2. The plaintiff in this case has supported his claim for the relief sought by affidavit evidence, as outlined. The defendant has previously indicated her agreement to transferring ownership of the Property to the plaintiff.  She is on notice of the proceedings and the relief sought and has chosen not to participate or contest the plaintiff's claim.

3. In the circumstances, I am satisfied it is appropriate to enter judgment in default of appearance in favour of the plaintiff and to grant the relief sought by him.

Conclusion and orders

1. For these reasons, I grant judgment for the plaintiff against the defendant in default of appearance pursuant to O 13 r 9(1) RSC.

2. Subject to hearing from the plaintiff as to the final form of orders, I will make orders as follows:

   (1)Judgment is entered for the plaintiff against the defendant in default of appearance pursuant to Order 13 r 9(1) of the Rules of the Supreme Court 1971 (WA).

   (2)It is declared that the defendant, Julie Ann Milne (formerly known as Julie Ann Grove), holds and has since 28 September 1993 held her interest in the property known as 19 Mends Way, Waikiki in the State of Western Australia, more particularly described as Lot 358 on Plan 17795 being the whole of the land contained in Certificate of Title Volume 1900 Folio 539 (Property) on trust for the plaintiff (Trust).

   (3)The Trust declared in order 2 is vested in the plaintiff.

   (4)The defendant is to do all things necessary to transfer her interest in the Property to the plaintiff absolutely.

   (5)Within 14 business days of the date of this order, the defendant is to attend the office of the plaintiff's solicitor for the purposes of conducting her verification of identity and executing all documents required to transfer her interest in the Property to the plaintiff.

   (6)The parties have liberty to apply in relation to the implementation of these orders and generally.

3. I will hear from the plaintiff in relation to costs.

4. The orders made are to be served on the defendant. Notice is also to be given to the defendant, which will form part of the orders, of her right to apply under O 13 r 14 RSC for an order setting aside or varying the judgment, and for an order suspending the enforcement of all or any part of the judgment under s 15 of the Civil Judgments Enforcement Act 2004 (WA).

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

AM

Associate to Master Russell

26 JUNE 2024