Herbert v Dennis - [2025] TASSC 16

[2025] TASSC 16

COURT:	SUPREME COURT OF TASMANIA
CITATION:	Herbert v Dennis & Anor [2025] TASSC 16
PARTIES:	HERBERT, Lisa Jayne as administrator of the estate of Neil Maxwell Herbert, deceased
v
DENNIS, Daryl John
DENNIS, Vanessa
FILE NO:	393/2012
DELIVERED ON:	27 March 2025
DELIVERED AT:	Launceston
HEARING DATE/S:	11, 12 and 13 March 2025
JUDGMENT OF:	Pearce J
CATCHWORDS:

Equity – Trusts and trustees – Implied trusts – Constructive trusts – Common intention – Transfer of title to property at undervalue to avoid mortgagee sale – Trust not established

Aust Dig Equity [1316]

REPRESENTATION:

Counsel:

Plaintiff: A Wells
Defendants: G O'Rafferty

Solicitors:

Plaintiff: Terracall and Associates
Defendants: Bishops

Judgment Number:	[2025] TASSC 16
Number of paragraphs:	88

Serial No 16/2025 File No 393/2012

LISA JAYNE HERBERT as administrator of the estate of

Neil Maxwell Herbert, deceased v DARYL JOHN DENNIS and VANESSA DENNIS

REASONS FOR JUDGMENT

PEARCE J
27 MARCH 2025

1 This action concerns a dispute about the beneficial ownership of the house and land at 20 William Street, Perth in northern Tasmania. The property is comprised in three titles, folios of the register volume 54184, folios 2, 3 and 4. Prior to 2002 the property was owned by the plaintiff's parents, Neil and Shirley Herbert, both of whom are now deceased. For reasons which will be explained, the plaintiff's name was also on the titles. In 2002 the titles were transferred to the defendants. They became, and remain, registered proprietors. In this action, the plaintiff claims that the circumstances of the transfer were such that the defendants held the property subject to a common intention constructive trust in favour of her late father, Neil Herbert. The plaintiff seeks a declaration of the trust and an order that the property now be transferred back to her in her capacity as administrator of her father's estate.
2 For the following reasons a constructive trust is not established and the plaintiff's claim fails.

The background circumstances

3 Some of the background circumstances are agreed and can be relatively shortly stated. Mr Herbert and Mrs Herbert purchased the property as their home in 1966. The plaintiff is their only child. The land was subsequently made subject to the Land Titles Act 1980 and divided into three titles, each of which was registered in the names of Mr and Mrs Herbert as joint tenants.
4 Mr Herbert was a textile worker but retired in about 1996. In 1995 Mrs Herbert purchased a business. However, by 1999, the business was in financial difficulty. To enable them to pay the business debts Mr and Mrs Herbert borrowed money from Island Mortgage Fund Pty Ltd. The loan was secured by a registered mortgage. At the time, the plaintiff was employed as a support worker. According to the plaintiff, a finance broker advised that her income would help "secure the loan", and so it became necessary for her to be a party to the mortgage and for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Herbert v Dennis

Details

AGLC: Herbert v Dennis [2025] TASSC 16
Case: [2025] TASSC 16
Decision Date: 27 March 2025

CaseChat Overview and Summary

In the case of Herbert v Dennis, the High Court of Australia was called upon to decide the validity of a trust claimed by the plaintiff over a property owned by the defendant. The plaintiff alleged that the defendant held the property on trust for them, as a result of an agreement to transfer the property to the defendant at an undervalue in order to avoid the property being sold by the mortgagee. The defendant denied the existence of such a trust and maintained that the transfer was a bona fide sale at market value.

The central legal issue for the Court was whether an implied trust arose from the circumstances of the transfer of the property. The plaintiff argued that the transfer, made to prevent the property from being sold by the mortgagee, evidenced an agreement between the parties that the defendant would hold the property on trust for the plaintiff. The defendant countered that the transfer was a genuine commercial transaction, and no trust existed as there was no common intention to that effect.

The Court held that for an implied trust to arise, there must be clear and unequivocal evidence of a common intention that the defendant would hold the property on trust for the plaintiff. The Court found that the evidence did not establish such an intention. Instead, the Court observed that the transfer was a genuine sale, motivated by the practical necessity to prevent the mortgagee from selling the property. The Court concluded that the plaintiff had not discharged the onus of proving the existence of a common intention that resulted in a trust.

The Court did not establish a trust over the property in favour of the plaintiff. Consequently, the defendant remained the sole owner of the property, and the plaintiff's claim was dismissed.

Orders