Hogden v Hogden

[2023] NSWSC 1149

Supreme Court

New South Wales

Medium Neutral Citation:

Hogden v Hogden [2023] NSWSC 1149

Hearing dates:

18 September 2023

Decision date:

22 September 2023

Jurisdiction:

Equity - Real Property List

Before:

Peden J

Decision:

See [34]

Catchwords:

EQUITY — Trusts and trustees — Constructive trusts — Whether evidence demonstrates that defendant and deceased held a common intention that property be held as joint tenancy — Where defendant and deceased registered as tenants in common — Where evidence of alleged conversation with deceased uncorroborated

LAND LAW — Co-ownership — Statutory trust for sale — Appointment of trustees — Where orders made pursuant to s 66G Conveyancing Act 1919 (NSW)

Legislation Cited:

Conveyancing Act 1919 (NSW) Pt 4 Div 6, s 66G

Cases Cited:

Allen v Snyder (1989) 17 NSWLR 343

Arrow Custodians Pty Ltd v Pine Forests of Australia Pty Ltd (2015) 18 BPR 35

Koprinvjak v Koprinvjak [2023] NSWCA 2

Plunkett v Bull (1915) 19 CLR 544

Stibbard-Leaver v Leaver [2021] NSWSC 65

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Suzanne Marie Hogden (Plaintiff)
Gregory Francis Allen Hogden (Defendant)

Representation:

Counsel:
D Price (Plaintiff)
L Byrne (Defendant)

Solicitors:
McPhee Kelshaw Pty Ltd (Plaintiff)
Coleman Greig Lawyers (Defendant)

File Number(s):

2021/00353218

Publication restriction:

Nil

Judgment

1. This is a dispute between siblings concerning a half-interest in a property at Big Jacks Creek, which is approximately 90km south-west-south of Tamworth (Property).

2. The plaintiff, Suzanne Hogden, seeks orders for a trustee sale of the property pursuant to s 66G of the Conveyancing Act1919 (NSW). Since November 2019, she has been the registered proprietor of half of the property, as executrix of the will of her father, Allan James Hogden. When he died in February 2019, the deceased held his half-share as a tenant in common with his son, the defendant, Gregory Hogden.

3. The defendant resists the orders for sale, asserting that he and the deceased had a common intention that the Property would be held by them as joint tenants, and that such intention ought to be recognised by a declaration of a “common intention constructive trust”.

4. The only evidence of the alleged common intention is conversations with the deceased, to which the defendant deposes. Therefore, the defendant’s case turns on whether he can establish on the balance of probabilities that those conversations took place, and whether the other elements of a common intention constructive trust are made out.

Acquisition of the Property

5. In June 2001, the deceased and the defendant purchased a farm at Breeza, NSW (Old Farm). They each contributed approximately half of the $247,500 purchase price when they acquired the Old Farm as “tenants in common in equal shares”.

6. Despite registration of title in that form, the defendant’s evidence is that he had a conversation with the deceased, in which the deceased said to him:

…if either of us dies, the other one of us will get the whole property.

7. According to the defendant, the deceased did “most of the negotiations” with the solicitor concerning the way in which title to the Old Farm would be held, and that the deceased then told the defendant:

We own the farm 50/50. If either one of us dies, their share in the farm will go to the survivor.

8. Despite identifying the solicitors who were engaged in the process as Curtis Gant Irving of Muswellbrook, the defendant did not provide any evidence from that firm concerning the alleged instructions the deceased provided to the solicitors. The defendant does not explain why the registration was as tenants in common, nor why the deceased would have given him such incorrect information about their interests in the Old Farm, had they intended to hold it as joint tenants but it was registered as tenants in common.

9. In October 2009, the Old Farm was sold for $2,200,000.00.

10. Shortly before that sale completed, the deceased and defendant agreed to purchase the Property for $1,450,000.00, contributing equal amounts, including from the proceeds of the Old Farm.

11. The defendant’s evidence is that the deceased expressed a concern that the defendant’s ex-partner “would have a claim against [the Property] if [the defendant] died and left [his] share to my two sons”. And for that reason, the defendant says, the deceased wanted to “set up” title to the Property as joint tenants, on “same deal as the last one”. The defendant does not explain how his ex-partner might have a claim over the Property if he died. For example, no information is provided regarding any property settlement between them.

Was there the alleged common intention?

12. For the following reasons, I do not accept on the balance of probabilities that the uncorroborated conversations alleged by the defendant occurred or that the deceased and the defendant agreed the Property would be held as joint tenants.

13. First, there is nothing in writing by the deceased that supports the conversations having taken place, nor any other corroboration. The defendant did not engage with the authorities that provide that the uncorroborated evidence of a communication with a deceased will be treated with caution: see eg Plunkett v Bull (1915) 19 CLR 544 at 548-9 (Isaacs J).

14. Secondly, and of particular importance, is the fact that the defendant’s evidence of the alleged conversations is contrary to his conduct after his father’s death. At all times, the defendant communicated with his siblings about his father owning half of the Property and at no time prior to the commencement of the proceedings did he assert there was a common intention of ownership on a joint tenancy basis.

15. For example, on 5 June 2020 the plaintiff sent an email to the defendant asking for a price to “purchase Dad’s part of the property”:

Greg I haven’t received in writing what you requested, “a price” as you wanted to purchase Dad’s part of the property, I believe this is what you asked Cathy Donna and me for over the phone. If you could put in writing what you need and your intentions and a time frame of your intentions, that would be fantastic…

16. A few hours later, the defendant responded:

For fuck sake Suzanne (you can pray I can swear)

… Please reframe [sic] from taking stuff from the farm…

As far as a price, as you cal [sic] it…

You all want to sell I do not, what’s it going to cost to by [sic] you out?

May the devil watch your every step, and snap that rotten board beneath it.

17. Later, and consistently with the recognition that the deceased held a half-interest in the Property, on 15 December 2020, the defendant instructed his solicitors to write to the plaintiff’s solicitors:

We have since obtained instructions from our client with respect to the purchase of the deceased’s share in the above property in addition to the deceased’s goods and chattels.

We are instructed to accept your client’s offer of $952,890.56 being for the deceased’s half interest in the property and the deceased’s goods and chattels. Please note that the purchase is subject to our client obtaining finance and if your client agrees to disclose the assets and expenses of the estate. …

18. In cross-examination the defendant accepted that he was unable to obtain finance around that time to buy the deceased’s half interest in the Property.

19. While the defendant maintained that he had the conversations alleged with the deceased and there was a common intention as to holding title as joint tenants, I do not accept that evidence.

20. This conclusion is also consistent with other unlikely evidence given by the defendant. His evidence is that the deceased organised the solicitors for the purchase of the Property and that he had a conversation with that solicitor during the preparation of the contract to purchase the Property:

Mr O’Reilly: You have to state whether you are holding as joint tenants or tenants in common. Which should I tick?

Defendant: Tenants in common.

21. For a solicitor to ask such a question about ticking a box appears odd, as the standard contract for sale of land provides for a default position that purchasers will hold as joint tenants; that position only changes if “tenants in common” is ticked.

22. The defendant’s evidence as to why he gave those instructions is:

When I had that conversation, I did not know what the difference between tenants-in-common and joint tenants was. I did not intend, by selecting “Tenants in Common” that the [Property] would not pass to the survivor of me and dad. I would not have agreed to contribute towards the purchase price of the [property] if I had not believed that my father’s half interest would pass to me if he died before me.

23. I do not accept that evidence. The defendant provides no explanation why he gave those express instructions, if he did not understand what was meant by those words and did not ask the solicitor on the telephone to explain. Instead, it is more likely that the defendant did understand the meaning of “tenants in common”, at least because he had held his interest in the Old Farm on that basis.

24. I am not satisfied that the conversations alleged in fact occurred. It is therefore unnecessary to make a finding about whether the plaintiff’s evidence of conversations with her father before the purchase of the Property were mis-remembered, as the defendant alleged. However, if it was necessary, I would accept the plaintiff’s evidence. She was challenged in cross-examination that her evidence that the deceased used “words to the effect of … I chose to put the property I own with Gregory as tenants in common” did not occur or did not occur in 2009. This was on the basis that she accepted she did not know the meaning of “tenants in common” in 2009.

25. I do not accept that it was necessary for the plaintiff to have understood at the time of the conversation what “tenants in common” legally meant for that evidence to be truthful. Her evidence concerned the effect of the words, and at the time of preparing the affidavit she had come to understand the legal meaning of “tenants in common” and can be taken to have expressed the essence of the deceased’s statement in her affidavit using legal language not necessarily used by the deceased.

26. By reason of the conclusion that the alleged conversations did not take place, it is unnecessary to consider the other elements and operation in Australian law of a common intention constructive trust: see Koprinvjak v Koprinvjak [2023] NSWCA 2 at [25] (Griffith AJA, Leeming and Mitchelmore JJA agreeing); Allen v Snyder (1989) 17 NSWLR 343. The parties hold their interests as recorded on title.

27. The cross-summons must be dismissed.

Trustee sale

28. The defendant accepts that if I am not satisfied that a common intention existed between him and the deceased, then a trustee sale ought to be ordered pursuant to s 66G Conveyancing Act1919 (NSW).

29. The plaintiff proposes John Boyd, solicitor, and David Martin, accountant. I note their consents to act as trustees and the affidavit of Paul McPhee, solicitor, as to their fitness for that role. The defendant does not provide alternative trustees, nor suggest that the plaintiff’s proposed trustees are unsuitable on the basis of conflicts of interest, or skill and experience: see, eg, Arrow Custodians Pty Ltd v Pine Forests of Australia Pty Ltd (2015) 18 BPR 35 [21]. I am satisfied that the proposed trustees are fit and proper persons to act as trustees for sale and that they have the necessary skill and experience to do so.

30. The defendant did not make any submissions proposing a delay of the sale process to allow him to purchase the deceased’s half-interest. I do not consider any delay appropriate in circumstances where it has not been sought and the defendant was entitled to purchase the deceased’s interest in the Property and he did not take that opportunity.

Costs

31. The plaintiff seeks her costs on an indemnity basis to be paid out of the proceeds of sale. The parties did not make any submissions as to costs, neither did they seek to be heard on that issue.

32. The principles concerning costs in s 66G cases were explained by Darke J in Stibbard-Leaver v Leaver [2021] NSWSC 65 at [5] (citations omitted):

…it is usual to order that the costs of the proceedings be paid out of the proceeds of sale. The rationale for this approach is that the costs of such an application are an incident of joint ownership…It remains the case of course that unreasonable conduct by a party may be a basis to conclude that some other order is appropriate…

33. I consider it appropriate that the plaintiff’s costs be paid on an indemnity basis. The parties had agreed that the defendant would buy the deceased’s interest in the Property (subject to finance), which is the complete opposite of the position he has taken in these proceedings. It is that unreasonable conduct that has caused the plaintiff to incur costs.

Orders

34. The appropriate orders are:

1. Pursuant to s 66G of the Conveyancing Act 1919 (NSW), appoint David Graham Martin and John Stanbridge Boyd as trustees (Trustees) for the sale of the property located at 292 Big Jacks Creek Road, Big Jacks reek, NSW, 2339 (folio identifier 1/119702 and 60/751016) (Property).

2. The Property is vested in the Trustees subject to any incumbrances affecting the entirety of the Property, but free from incumbrances, if any, affecting any undivided share or shares in the Property, to be held by the Trustees upon the statutory trust for sale under Division 6 of Part 4 of the Conveyancing Act 1919 (NSW).

3. On completion of the sale of the Property pursuant to Order 2, the Trustees distribute the proceeds in the following manner:

1. In payment of all rates, taxes and insurances and other outgoings on the Property;

2. In payment of the other costs of sale including, but not limited to legal costs, advertising costs and agent’s commission;

3. In payment of the Trustees’ fees for time in attendance up to completion of the sale on an indemnity basis;

4. In payment of the expenses incurred by the Trustees for the purpose of bringing the Property up to a reasonable condition that would facilitate the sale;

5. In payment of the plaintiff’s costs of the proceedings on the indemnity basis; and

6. The balance one-half each to the plaintiff and the defendant.

4. Cross-summons dismissed.

5. Cross-claimant/defendant to pay the plaintiff’s costs on an indemnity basis.

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