Jain v Amit Laundry Pty Ltd

[2019] NSWCA 20

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Jain v Amit Laundry Pty Ltd [2019] NSWCA 20

Hearing dates:

28 August 2018

Decision date:

19 February 2019

Before:

Bathurst CJ at [1];
Beazley P at [2];
White JA at [154]

Decision:

(1)   Appeal dismissed.

 

(2)   Cross-appeal dismissed.

 

(3)   There be no order as to costs with the intent that each party pay its and his own costs.

 (4)   Note that order (3) also applies to Amit Jain.

Catchwords:

EQUITY — Trusts and trustees — Resulting trusts — Purchase money trusts — whether evidence of common intention as to allocation of beneficial interests rebutted presumption of resulting trust

 

EQUITY — Trusts and trustees — Resulting trusts — Purchase money trusts — presumption of resulting trust — whether mortgage repayments affect beneficial interests as between contributors — whether parties intended to acquire property burdened by mortgage or unburdened of all encumbrances — common intention

 

EQUITY — Trusts and trustees — Resulting trusts — where use of beneficial interest is subject to personal obligation or another beneficial interest — meaning of phrase “immediate and unconditional”

  LAND LAW — Co-ownership — Rights between co-owners — right to possession

Cases Cited:

Bilson v Rogers [2008] NSWSC 469
Bloch v Bloch (1981) 180 CLR 390; [1981] HCA 56
Calverley v Green (1984) 155 CLR 242; [1984] HCA 81
Dullow v Dullow (1985) 3 NSWLR 531
Gissing v Gissing [1971] AC 886
Muschinski v Dodds (1982) 8 Fam LR 622
Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78

Category:

Principal judgment

Parties:

Rajil Jain (Appellant)
Amit Laundry Pty Ltd (Respondent)

Representation:

Counsel:
A T S Dawson SC; C Mitchell (Appellant)
J E Thomson; M E Hall (Respondent)

  Solicitors:
Mills Oakley (Appellant)
Western Sydney Legal (Respondent)

File Number(s):

2017/364536

 Decision under appeal 

Court or tribunal:

Supreme Court

Jurisdiction:

Equity

Citation:

Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495

Date of Decision:

3 November 2017

Before:

Ward CJ in Eq

File Number(s):

2016/361471

HEADNOTE

[This headnote is not to be read as part of the judgment]

The appellant, Rajil Jain, is the sole registered proprietor of a property in Guildford, NSW (the Guildford Property), which was initially acquired in the names of Rajil and his brother, Vinay. Vinay subsequently transferred his registered interest to Rajil. The property was acquired in 1999. The deposit for the property was paid by Amit Laundry Pty Ltd (Amit Laundry), a family business operated by the Jains. A mortgage was taken out in the names of Rajil, Vinay, and their older brother, Amit, in order to pay the balance of the purchase price. The mortgage repayments were made by Amit Laundry. Amit Laundry has occupied the ground floor of the Guildford Property since 1999.

A dispute arose in relation to the beneficial ownership of the property when, on 2 November 2016, Rajil entered into a contract with a third party for the sale of the Guildford Property with vacant possession. On 4 November 2016, Rajil served on Amit Laundry a notice of termination and notice to quit the premises. Amit Laundry did not vacate the premises. In January 2017, Amit Laundry commenced proceedings in the Supreme Court, seeking, inter alia, a declaration that Rajil held the title to the Guildford Property for it on resulting trust, or, alternatively, under an express or implied trust. Alternatively, Amit Laundry sought a declaration that Rajil held the title to the property on trust to permit Amit Laundry to use the premises to conduct its laundry business for so long as it continued to operate its business from those premises, on condition that Amit Laundry was responsible for paying any water rates in respect of the property. Rajil submitted that it was the intention of the parties that he would hold the entire beneficial interest, or if the presumption of resulting trust did arise, that a presumption of advancement in his favour would rebut it.

The primary judge found that there was no express or implied trust in favour of Amit Laundry. Her Honour held, however, that a presumption of resulting trust arose in favour of Amit Laundry and Amit from the contributions that Amit Laundry made to the deposit and by Amit as a borrower under the mortgage. Her Honour further held that the mortgage repayments made by Amit Laundry did not count as contributions to the purchase price for the purpose of the presumption. Her Honour rejected Rajil’s submissions concerning the actual intention of the parties and the presumption of advancement. Her Honour made a declaration that Rajil held the Guildford Property on resulting trust as to 9.08 per cent for Amit Laundry, being the proportion of the deposit of the purchase price, and as to one-third of the balance for Amit. Her Honour also ordered that title to the property be rectified on the register of land titles to record that it was held by Rajil, Amit and Amit Laundry as tenants in common in the following shares: Rajil as to 60.61 per cent; Amit as 30.31 per cent; and Amit Laundry as to 9.08 per cent.

Rajil appealed on two grounds, arguing that:

Appeal Ground 1: the primary judge erred in failing to find that the presumption of resulting trust had been rebutted by the actual intention of the parties

Appeal Ground 2: the primary judge consequently erred in ordering that the register of the land titles office be altered to reflect the title to the property in accordance with the declaration her Honour made.

Amit Laundry cross-appealed on two grounds, arguing that:

Cross-appeal Ground 1: the primary judge erred in failing to characterise the relevant intention of the parties in respect of the repayment of the loan obtained for the purpose of the Guildford Property in accordance with the approach approved in Bloch v Bloch (1981) 180 CLR 390; [1981] HCA 56, rather than that adopted in Calverley v Green (1984) 155 CLR 242; [1984] HCA 81

Cross-appeal Ground 2: the primary judge erred in failing to find that Rajil held his interest in the property on trust to permit Amit Laundry to use the premises to conduct its laundry business until it no longer required the premises and on terms that Amit Laundry would pay any water rates levied on the property for the duration of its use.

The Court of Appeal (Beazley P, Bathurst CJ and White JA agreeing) dismissed the appeal and the cross-appeal, holding:

In relation to Appeal Grounds 1 and 2:

(i) The primary judge did not err in the manner asserted in Appeal Ground 1. The appellant did not prove that, at the time of acquisition, it was the actual common intention of the contributors to the purchase price that he would hold the entire beneficial interest in the property: [142]-[144].

Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 considered.

Dullow v Dullow (1985) 3 NSWLR 531 referred to.

(ii) The primary judge did not err in ordering the register of the land titles office be altered. Because Appeal Ground 2 was expressed to be consequent on Appeal Ground 1, it followed that Appeal Ground 2 failed: [149].

In relation to Cross-appeal Ground 1:

(iii) The primary judge did not err in the manner asserted in Appeal Ground 2. The cross-appellants failed to displace the primary judge’s findings as to the common intention of the contributors to the purchase price at the time of acquisition. The fact that Amit Laundry made the mortgage repayments did not alter the beneficial interests held by the parties: [87], [96], [103].

Bloch v Bloch (1981) 180 CLR 390; [1981] HCA 56 distinguished.

Calverley v Green (1984) 155 CLR 242; [1984] HCA 81 applied.

In relation to Cross-appeal Ground 2:

(iv) The primary judge did not err in the manner asserted in Cross-Appeal Ground 2. The Court upheld the primary judge’s finding that Amit Laundry is a co-owner of the Guildford Property, and as a co-owner enjoys the right to possession: [151]-[152].

Judgment

1. BATHURST CJ: I have had the advantage of reading the reasons of Beazley P in draft. I agree for the reasons given by her Honour that the appeal and the cross-appeal should be dismissed. I agree with the orders that her Honour proposes.

2. BEAZLEY P: The appellant, Rajil Jain, is the sole registered proprietor of a property in Guildford (the Guildford Property), which was initially acquired in the names of Rajil and his brother Vinay. Vinay subsequently transferred his interest to Rajil for the nominal consideration of $1.00. Since its acquisition in 1999, the ground floor of the property has been occupied by the respondent, Amit Laundry Pty Ltd (Amit Laundry) where it conducts a laundry business. Since 2003, the upper floor has been occupied by the appellant and his immediate family. As the parties are members of the same family, I refer to them by their first names.

3. A dispute arose in relation to the beneficial ownership of the property when, on 2 November 2016, Rajil entered into a contract with a third party for the sale of the Guildford Property with vacant possession. On 4 November 2016, Rajil served on Amit Laundry a notice of termination and notice to quit the premises. The notice stated that Amit Laundry occupied the premises pursuant to a tenancy at will which was legally terminable on one month’s notice. Vacant possession was required on or before 5 December 2016.

4. Amit Laundry did not vacate the premises as required by the notice, but responded by lodging a caveat on the title and seeking interlocutory relief to protect its claimed interests as the beneficial owner of the property. On 12 January 2017, Amit Laundry filed a statement of claim seeking, inter alia, a declaration that Rajil held the title to the Guildford Property for it on resulting trust or, alternatively, under an express or implied trust. The presumption of resulting trust was said to have arisen from Amit Laundry’s contribution to the purchase price of the property, by way of payment of the initial deposit and subsequent mortgage repayments in respect of the funds borrowed by Rajil, Vinay and their brother Amit for the purchase of the property. The express or implied trust was said to arise out of an agreement between the directors of Amit Laundry.

5. Amit Laundry alternatively sought a declaration that Rajil held the title to the property on trust to permit Amit Laundry to use the premises to conduct its laundry business for so long as it continued to operate its business from those premises on the condition that Amit Laundry was responsible for paying any water rates in respect of the property.

6. The primary judge, Ward CJ in Eq, found that there was no express or implied trust in favour of the respondent. However, her Honour considered that a presumption of resulting trust arose in favour of Amit Laundry and Amit from the contributions Amit Laundry made to the deposit and by Amit as a borrower under the loan facility. Her Honour held that the mortgage repayments made by Amit Laundry did not count as contributions to the purchase price for the purposes of the presumption. Her Honour also held that the presumption had neither been rebutted by the actual intention of the parties nor displaced by the presumption of advancement, as alleged by Rajil.

7. Her Honour made a declaration that Rajil held the Guildford Property on a resulting trust as to 9.08 per cent for Amit Laundry, being the proportion of the deposit to the purchase price, and as to one-third of the balance for Amit. Her Honour also ordered that title to the property be rectified on the register of land titles to record that it was held by Rajil, Amit and Amit Laundry as tenants in common in the following shares: Rajil as to 60.61 per cent; Amit as to 30.31 per cent; and Amit Laundry as to 9.08 per cent.

A preliminary matter

8. Amit was not made a party to the proceedings either at first instance or on the appeal as filed. At the hearing of the appeal, when this matter was raised by the Court, Amit, by leave, filed a notice of motion in which he sought an order that he be joined as a respondent to the proceedings. Upon that order being made, Amit filed a submitting appearance save as to costs.

Issues on the appeal and cross-appeal

The appeal

9. Rajil by his notice of appeal, contended that:

1. the primary judge erred in failing to find the presumption of resulting trust had been rebutted by the actual intention of the parties: appeal ground 1;

2. the primary judge consequently erred in ordering that the register of the land titles office be altered to reflect the title to the property in accordance with the declaration her Honour made: appeal ground 2.

10. Rajil did not challenge the primary judge’s findings that no express or implied trust existed. Nor did Rajil claim that the presumption of advancement operated in his favour so as to rebut the presumption of resulting trust.

The cross-appeal

11. Amit Laundry, by notice of cross-appeal, contended that:

1. The primary judge erred in failing to characterise the relevant intention of the parties in respect of the repayment of the loan obtained for the purpose of the Guildford Property in accordance with the approach approved in Bloch v Bloch (1981) 180 CLR 390; [1981] HCA 56, rather than that adopted in Calverley v Green (1984) 155 CLR 242; [1984] HCA 81: cross-appeal ground 1.

The purport of this ground was that her Honour should have held that the beneficial interest in the property was held on resulting trust for Amit Laundry. Alternatively:

2. The primary judge erred in failing to find that Rajil held his interest in the property on trust to permit Amit Laundry to use the premises to conduct its laundry business until it no longer required the premises and on terms that Amit Laundry would pay any water rates levied on the property for the duration of its use: cross-appeal ground 2.

12. The question of the common (or shared) intention of the parties is central to appeal ground 1 and cross-appeal ground 1. Accordingly, after setting out the factual background, it will be convenient to refer to her Honour’s reasoning in respect of the common intention of the parties. However, I will deal separately with Rajil’s argument based on Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78. Having considered her Honour’s findings and reasoning in respect of common intention, I will address cross-appeal ground 1 and appeal ground 1 in turn. I then briefly deal with appeal ground 2 and cross-appeal ground 2 in turn. For the reasons which follow, I would dismiss the appeal and the cross-appeal.

Factual background

13. The following facts relevant to the issues raised on the appeal and the cross-appeal are taken from the primary judge’s judgment at [10]-[103], and where necessary, are supplemented by reference to the evidence.

14. In 1984, Ramesh Jain emigrated from India to Australia with his wife and their three sons, Amit, Rajil and Vinay. The culture within the family was that deference was paid to the position and wishes of the father as the head of the family. As between the sons, Amit, as the eldest son, occupied a position of greater authority and responsibility within the family than that of Rajil and Vinay.

15. In March 1985, Amit entered into a contract to purchase a laundry business for the sum of $19,000. Until the acquisition of the Guildford Property, the family operated the laundry business out of leased premises (the leased premises) adjacent to the Guildford Property. There was a dispute between the various family members as to who owned the business and the source of funds for its purchase. That dispute is not presently relevant, except to the extent that Amit accepted in cross-examination that the purchase of the business was to support the family and its financial needs.

16. Both prior to and after the acquisition of the Guildford Property, various properties were purchased in the names of one or other of the sons. A pharmacy business was also purchased in Vinay’s name.

17. The first property was purchased in about 1986/1987 and was registered in Amit’s name. It was the family home until it was sold in 1988. Ramesh denied that the property was purchased for Amit’s sole benefit. The next property purchased was in Granville and was again registered in Amit’s name and was also the family home. It is sufficient to record that the repayments of the borrowings in respect of both these properties were made out of the earnings of the laundry business.

18. Amit Laundry was incorporated on 26 March 1996. On incorporation, the directors were Amit, Amit’s wife, Rajil, Rajil’s wife and Vinay. In April 2006, Rajil, his wife and Vinay ceased to be directors. The primary judge found that Amit was at all times the controlling mind of the company.

19. All ordinary shares in the company were issued to Amit. The other directors were issued E or F class shares, which conferred limited rights on them. For example, they did not have a right to vote at any general meeting of the company or any right on a winding up of the company to participate in any distribution of surplus assets or profits. Further, although they had a right to participate in any dividends declared and payable by the company on the class of share held, there were in fact no dividends declared on any of the E and F class shares at any relevant time.

20. In May 1996, Amit Laundry purchased a vacant block of land adjoining the leased premises (the Vacant Land) with a view to developing it and relocating the laundry business to that property. Ramesh gave evidence that it was not intended that this property would be owned by any of the sons. However, problems were encountered with obtaining development consent for the proposed development and the Vacant Land remained undeveloped.

21. In June 1999, the Guildford Property was purchased. Rajil and Vinay were registered on the title as registered proprietors in equal shares as tenants in common. The purchase price was $185,000. Amit Laundry paid the deposit, which, as found by the primary judge, it did in its own right and not on behalf of Rajil or Vinay. The balance of the purchase price was provided by way of a loan facility in the sum of $168,204.57 from Westpac, in respect of which Amit, Rajil and Vinay were the borrowers.

22. In the Loan Acknowledgement and Acceptance document relating to the loan, Amit, Rajil and Vinay declared that the credit provided was to be applied “wholly or predominantly for business or investment purposes (or for both purposes)” and they confirmed that they “do not hold any assets as the trustee of a trust unless the [Loan] Agreement states that [they are] a trustee”.

23. The loan was secured by an existing mortgage over the Granville property, which at that time was still the family home and was guaranteed by Amit Laundry. The primary judge observed, at [223], that it was accepted by the parties that “as a matter of fact”, Amit, Rajil and Vinay were jointly liable in respect of the Westpac loan. Her Honour did not accept that it was their common intention that the loan was taken out on behalf of Amit Laundry.

24. Following the acquisition, Amit Laundry relocated its business to the Guildford Property. The Guildford Property was never recorded as an asset in Amit Laundry’s accounts. Nor was any reference made to the loan in its accounts as a liability of the company, nor to any interest on the loan as an expense of the company.

25. Her Honour found, at [186], that Amit Laundry made all the mortgage repayments on the loan. The loan was repaid in full by 8 May 2001. To the extent that there were cheque butts evidencing the repayments, they were described as being for the credit of “R & V Jain” for “Repayment of Property”, “Transfer Loan” and “Loan”. For the 2000/2001 financial year, the repayments were recorded as “rent” in the respondent’s accounts.

26. There was a further draw down of the loan facility on 14 June 2002 which was repaid on 22 August 2002. It appears that this related to the purchase of the pharmacy business by Vinay. As the redraw and repayment occurred after the loan for the purchase of the Guildford Property, that transaction is not directly relevant to the issues before her Honour.

13. Subsequent to the purchase of the Guildford Property, in October 2002, Rajil purchased a property at Redhead (the Redhead Property) for $321,500. Rajil and Amit obtained a loan in their joint names for the purchase of this property. Amit Laundry paid the deposit and made the loan repayments. The Redhead Property was sold in January 2006 for $485,000. The outstanding loan on the property at that time was $252,041.

14. The primary judge found that the expectation of the parties was that the mortgage repayments in respect of the Guildford Property would be made out of the revenue derived from the laundry business and that there could not have been any realistic expectation at the time the loan was entered into that Rajil, Vinay or Amit would meet the repayments. As her Honour noted, although Rajil and Amit were working in the laundry business, they were not drawing any wages to enable them to do so. Vinay was in the process of becoming a pharmacist and was also not in a financial position to make repayments. Her Honour found that it was implausible that he would have entered into the loan absent an expectation that someone else would attend to the repayment given his financial circumstances at the time.

15. None of the family members were paid a salary or wages for working in the laundry, although according to Ramesh, the family’s living expenses were paid out of the business both before and after incorporation. After incorporation, although none of the family members were paid wages in cash, they were issued with group certificates and monies were credited to the shareholders’ loan accounts, presumably reflecting the wages for which group certificates were issued. Her Honour noted that even after incorporation, Amit Laundry continued to be the source of funds for the day to day needs of the various family members, as determined by Ramesh.

16. Her Honour found, and it was not disputed, that the entirety of the mortgage was repaid by Amit Laundry and this is not in dispute, although the parties differed as to what legal consequences flowed from this.

17. The banking records relating to the loan account show an initial debit of $168,204. Deposits, allocated to “Guildford” were then made in various lump sum amounts. According to the banking records in evidence a total sum of $157,000 was paid. This included a payment of $57,500 as well as a number of smaller payments ranging between $7,000 and $20,000. There is no explanation for the difference in the loan amount and the repayments, but as it was not disputed that Amit Laundry made all the loan repayments, nothing flows from this deficiency.

18. The loan repayments, in the amounts paid, were not correspondingly reflected in Amit Laundry’s books of account. For example, the loan repayment of $57,500 did not appear as a separate entry but was said to be incorporated in the amount for wages in the Profit & Loss Account for the year ended 30 June 2000. There is an entry in Amit Laundry’s books of account for rent in the financial year ending June 2000. There was, however, no entry for rent in 2002. As the loan was repaid in full on 8 May 2001, the 2001 entry is consistent with Amit Laundry paying rent from the commencement of its occupation of the premises until the loan was repaid.

19. Her Honour considered, at [178], that these accounting practices were inconsistent with the payment of the deposit and the making of the loan repayments being intended to be in lieu of the payment of wages. Her Honour also noted that neither Rajil or Vinay had made a claim for wages prior to the commencement of the proceedings below and that to have done so would have been inconsistent with the way in which the laundry business operated and inconsistent with Amit Laundry’s accounts.

20. Her Honour was not persuaded therefore, at [184], that Amit Laundry paid the deposit in lieu of wages to Rajil and Vinay. Her Honour, at [186], also rejected Rajil’s submission that the loan repayments were made in lieu of wages or other entitlements of Rajil and Vinay as employees. Her Honour did not accept, therefore, that any mortgage repayments by Amit Laundry were, in substance, contributions by Rajil and Vinay to the purchase of the property.

21. In January 2007, Vinay transferred his interest in the Guildford Property to Rajil for $1.00.

22. The primary judge stated, at [87], that in 2008 Amit Laundry began making monthly payments of $2,465 per month to Rajil, which were recorded in Amit Laundry’s financial records as “rent”. These payments have been made on a ‘without admissions’ basis since the commencement of these proceedings in 2017. The primary judge, at [88]–[90], recorded the evidence as to the reasons why Amit Laundry commenced to pay rent, which differed as between Ramesh and Rajil on the one hand (although their evidence was not entirely consistent) and with that of Amit on the other.

23. In late 2016, the appellant entered into a contract for the sale of the Guildford Property with vacant possession, which, as has been noted, was the precursor to the present proceedings.

Purpose of the purchase of the Guildford Property

38. Amit gave evidence that the Guildford Property was purchased with a view to relocating and expanding the laundry business, noting that difficulties had been encountered with the proposed development of the Vacant Land that was adjacent to the leased premises in which the laundry had originally operated and which Amit Laundry had purchased in 1996. He stated that he proposed the purchase of the Guildford Property at a family gathering, where he announced that the laundry business was doing well and that bigger premises were required. He also referred to his father’s wish “that the company should save rent and own a property”.

39. Amit gave the following evidence in relation to the purchase:

“Q.   Can you tell us what you recall each of them said on that occasion?

A.   I just have to cast my mind back.

Q.   Yes, please do that.

A.   Yes. Yeah, I think they all, they all agreed with me and said:

‘Yeah, that’s a very good decision and we can operate – you can run the laundry from, from that premises for as long as we can and we want to.’

Q.   Who said that, do you recall?

A.   I think my brothers, Rajil and Vinay, like in the same context.

Q.   They both said words to that effect?

A.   Yeah, yeah, yeah.”

40. Amit re-iterated this evidence in cross-examination, stating that:

“… my father’s wish was that we should save rent, and as long as the laundry is there, permit it there, that property should remain with Amit Laundry …”

41. Amit continued as follows:

“[The Guildford Property] was meant to be for Amit Laundry … to be run from that particular place for as long as it wanted, or as long as it could be run.”

42. According to both Amit and Ramesh, the Guildford property was purchased so that the laundry could be relocated and expanded. However, Ramesh could not remember whether Amit told the family that an advantage of buying the property would be that the laundry could operate from the premises for as long as it wanted. Her Honour summarised Amit’s evidence, at [63], as follows:

“Amit says that it was his decision to put the title into the name of his younger brothers and explains the reason for this as being ‘in part’ because his father had on a number of occasions expressed the wish to have property put into their names ... He said in the witness box that Ramesh ‘wanted to have something in their name’ ... and accepted that he understood that his father wanted to make sure that all his sons were set up in life. He agreed that his father wanted each of his sons to end up with property in their names which they owned. He said that their names were there (on the title of Property A) just to please his father or fulfil his father’s wish … and that the ‘main thing’ was to have something in their name, though also referring in this context to his father’s wish to save rent …” (transcript references omitted)

43. Vinay gave evidence to the same effect. Although he stated that he did not recall being present for the discussions surrounding the purchase of the Guildford Property, he gave the following evidence in cross-examination:

“Q. Did you understand at that stage that the purpose of you participating in this borrowing was to enable the Amit Laundry business to be relocated to [the Guildford Property]?

A. Yes sir, yes, yeah.

Q. How did you know that?

A. I think there might have been a conversation sitting down sir that look, you know, I think we need to buy our own building so that we can move the laundromat in there and also to - I guess, to buy property, to have a property for the family.

Q. Do you recall it being mentioned that one of the advantages of buying the premises at [the Guildford Property] was that the premises that the laundry was then operating from were charging rent, were costing rent?

A. Sorry, I didn’t understand the question?

Q. I’m sorry, I’ve mangled it. Did you also hear in the context of discussion about the laundry moving to the adjoining premises?

A. Yes.

Q. That one reason for moving was that they could avoid having to pay rent for their existing premises by buying [the Guildford Property]?

A. Yes sir, yes, I can, I can say yes.”

44. Her Honour, at [66], said this was “hardly a firm recollection”, but that it was consistent with an aspect of the argument of both parties, namely, “that the property was to be acquired for the family”, and that the purpose of the acquisition was to enable the laundry business to relocate there.

45. Rajil also gave evidence concerning the purpose of the purchase of the Guildford Property. In his March 2017 affidavit, he said that he understood Ramesh’s intention to be that the family business would operate downstairs in the Guildford Property ‘temporarily’ until such time as it was possible to build new premises on the Vacant Land, and that the upstairs of the Guildford Property would be rented out as a source of income. In cross-examination, Rajil repeated his view that moving the laundry business to the Guildford Property was, at least initially, understood to be temporary, “maybe one year”, while they awaited development approval for the Vacant Land.

46. Rajil said in his affidavit that the Guildford Property was to be bought in his and Vinay’s names, as the eldest brother, Amit, already owned a property (and was thus ‘provided for’ in a sense that mattered to the family). Rajil deposed that Amit was amenable to the Guildford Property being registered in Rajil and Vinay’s names, and that Amit was amenable to acting as guarantor for the loan that would be required to purchase the property.

Structure of the purchase and loan

47. Amit gave evidence that, at the family gathering at which he proposed purchasing the property, he suggested that “we should buy it and the company will pay the loan, pay back the loan”. He stated that, on another occasion, after having met with his bank manager, he explained the structure of the loan to Rajil and Vinay, to which they agreed.

48. Vinay stated that:

“In accordance with our family’s usual practice, it would have been that my father made the decision to register my name as co-owner on the title deeds of the property.”

49. He also stated that when the property was purchased, he understood that he would be named on the loan as one of the borrowers and that he would be jointly liable to the bank with Rajil.

The issue of the common intention of the parties: cross-appeal ground 1 and appeal ground 1

50. As indicated above, at [12], at the heart of both cross-appeal ground 1 and appeal ground 1 is the issue of the common intention of the parties concerning the beneficial ownership of the Guildford Property. It is therefore convenient to set out her Honour’s findings and reasoning on the issue of common intention, before then considering cross-appeal ground 1 and appeal ground 1 in turn.

Primary judge’s findings and reasons concerning the issue of common intention

51. The primary judge identified Amit Laundry, Rajil, Vinay and Amit as the contributors to the purchase of the property in circumstances where Amit Laundry had paid the deposit and Rajil, Vinay and Amit had undertaken a joint and several liability under the mortgage.

52. Her Honour dealt with the intention of the contributors to the acquisition of the Guildford Property firstly in relation to the case based on an express or implied trust and then again when dealing with the case based on a resulting trust. In her “Introductory observations”, at [115], her Honour stated:

“It has been clearly established in my opinion that at the time of acquisition of [the Guildford Property] there was a shared intention on the part of the respective family members (Amit, Rajil and, insofar as he must be taken as being willing to accede to his father’s wishes, whatever they were, Vinay) that title to [the Guildford Property] be registered in the names of Rajil and Vinay and that Amit Laundry be able to occupy and operate its business from the ground floor of [the Guildford Property] for an undefined (be it temporary, on Ramesh/Rajil’s evidence, or indefinite, on Amit’s evidence) period of time.” (emphasis in original)

53. Her Honour, at [150], rejected that there was an express trust based on an agreement between the directors of Amit Laundry. Although her Honour rejected Amit Laundry’s case based on an express or implied trust, reference to those parts of her Honour’s judgment that deal with the parties’ intention remain relevant. In that context, her Honour made the following findings in relation to the intention of the contributors at the time of acquisition, having noted, at [151], that relevant discussions took place over the dinner table.

54. As to Vinay, her Honour observed, at [152], that he was not present at the discussions, but had heard of the intention to relocate the laundry to the Guildford Property. In general terms, however, he was prepared to accede to his father’s wishes or those of Amit, as the older brother, “at any particular time”, as a matter of family and/or Indian culture. Her Honour commented that it “seems evident from the later transfer of his 50% interest, [that the wishes of his father or Amit were] not necessarily a fixed or static concept”. In this regard, it is to be remembered at this point that Vinay transferred his one half interest, not for its actual value, but for $1.00.

55. Her Honour considered, at [153], that Rajil would have been in agreement with the suggestion that his name be on title and he would thereby gain a 50 per cent interest in the property notwithstanding that he would not have to make any actual contribution. Her Honour considered this was even more so given his custom of compliance with his father’s wishes. Her Honour further observed Rajil accepted that part of the purpose for the purchase was to enable Amit Laundry to relocate its business so as to save on rent that it was then paying.

56. Her Honour summarised these two findings earlier at [127], where she said:

“… both Rajil and Vinay seem to have been prepared to accede to or conform with their father’s wishes on a range of property/financial dealings – including Vinay’s compliance with the request that he transfer his half share of [the Guildford Property] to Rajil (even accepting that Vinay also appears to have thought that by so doing the property could be taken out of the reach of his first wife in his then forthcoming divorce) and his compliance with the request that he says his father made that he make loan repayments back in 2002.”

57. Her Honour considered Amit’s evidence at [154]. Relevantly, her Honour did not accept Amit’s contention that his intention was that his brothers be on title “in name only”. Her Honour continued:

“It is implausible that he could have believed that a wish (by his father) to see his sons set up in life and have property in their own name ‘which they would own’ (which he accepted in cross-examination was what he understood his father’s wish to be) would be satisfied by putting the title of [the Guildford Property] into the names of Rajil and Vinay but for them only to hold that title in effect [as] the bare trustee for Amit Laundry. That, however, does not mean that he had an intention at the time Rajil and Vinay should acquire both legal and beneficial interests in the property immediately and unconditionally …”

58. Her Honour found, at [155], that:

“… Amit’s intention was to do that which he seems to have accepted was intended to be the case with acquisition in his name of the Granville Property, namely to facilitate the acquisition by Rajil and Vinay of [the Guildford Property] as an investment shared by the two of them.”

59. Her Honour also found, at [156], that Amit’s intention in relation to the acquisition was:

“… to enable Amit Laundry to operate its business from that property at least until the Vacant Land was developed and the laundry business could be relocated to that property.”

60. Having made those findings, and finding that Amit Laundry’s intention was the same as Amit’s, her Honour found, at [157], that the contributors intended, as at the date of acquisition, that legal title would be vested in Rajil and Vinay by the fact of registration, but that they would not be free to do as they wished with the land. Rather, the intention was that the ground floor would be made available for use by Amit Laundry at least until the Vacant Land was available for use as a laundry.

61. Having rejected that there was an express trust, her Honour turned to the principal way in which the case had been put, namely, that there was a resulting trust in favour of each of the parties having regard to their actual contribution to the acquisition of the property. In that context, her Honour again considered whether there was a common intention, held by the contributors at the date of acquisition, that Rajil and Vinay would have the full beneficial interest in the property.

62. In dealing with Amit Laundry’s argument based on Bloch v Bloch, her Honour stated, at [198]:

“The essential point of Bloch … was thus that the shared intention of the parties was that the parties’ interests in the property were to be determined by reference not only to the contribution to the purchase price but also to their contribution to the loan repayments in discharge of the mortgage debt.” (emphasis added)

63. Her Honour had anticipated Amit Laundry’s argument based on Bloch v Bloch at [61], when she stated that whether or not Rajil and Vinay agreed with Amit’s proposal that the bank was willing to lend the money for the purchase with the company paying back the loan:

“… this does not go so far as establishing that there was a clear agreement at the time of purchase of the property that the repayments by the company were to be taken into account when determining the respective contributions to the purchase price.”

64. Her Honour, at [219], held that it was not open on the facts of this case to find that there was:

“… any ‘consensus’ between the relevant purchasers as to the respective contributions which the parties would make towards the acquisition of [the Guildford Property] as land unencumbered by mortgage.”

65. Her Honour then summarised the respective understandings of the parties as follows:

“… Amit seems to have thought that the payments would be coming out of the laundry profits (and, incorrectly, that this amounted to a contribution by him personally); and both Rajil and Vinay appear to have left it up to Amit (whether through Amit Laundry or otherwise) to look after the matter (at their father’s instigation or otherwise).”

66. Her Honour concluded, at [220], that the mortgage repayments were made by Amit Laundry in its own right but did not count as contributions to the purchase price for the purposes of the presumption of a resulting trust.

67. Her Honour’s reasoning in coming to this conclusion was as follows. Her Honour considered, at [215], that at the time of acquisition of the Guildford Property and entering into the loan for its purchase, there could not have been any realistic expectation that Amit, Rajil and Vinay would meet the mortgage repayments. None was in a financial position to do so. Rather, her Honour considered that the only expectation could have been that the repayments would be made out of the earnings of Amit Laundry.

66. Her Honour found, at [216], that there was nothing to support an inference that Rajil and Vinay were joint borrowers in order to facilitate Amit Laundry arranging finance. Her Honour considered that the more likely explanation for the Bank requiring Rajil and Vinay to undertake mortgage obligations, if in fact there was any such requirement, was that the loan was to be secured over the property that they were acquiring.

67. Her Honour, at [217]-[218], rejected the proposition that Amit Laundry’s repayment of the mortgage was made on the basis that it was the sole beneficial owner of the Guildford Property. There were two reasons for this: first, her view that Amit, Rajil and Vinay had no clear understanding as to the consequences of incorporation or the responsibilities of directors to the corporate entity and its shareholders; and second, a course of conduct over the years whereby Amit Laundry had obtained loan facilities and made loan repayments in connection with assets in respect of which it had not claimed any beneficial interest. On the latter point, her Honour referred to the purchase of the Redhead property in Rajil’s name.

68. The primary judge held, at [275], that the common intention of Amit, Rajil and Vinay was that the legal title to the Guildford Property would reside in Rajil and Vinay. However, her Honour considered, at [276], that that was not enough to rebut the presumption of resulting trust and that the relevant question was whether Rajil had established, on the balance of probabilities, that there was an intention on the part of the contributors that Rajil and Vinay were to take the beneficial interest in the property. Rajil accepted in oral argument on appeal that that was the correct legal question to ask.

69. Her Honour distinguished the present case from Muschinski v Dodds, in which it was found that the common intention of the parties was that Mr Dodds would acquire an “immediate and unconditional” beneficial interest in the relevant property. Her Honour stated, at [282], that although all the contributors to the purchase of the Guildford Property intended for Rajil and Vinay to become the registered proprietors of the property, she was not satisfied that all contributors intended that Rajil and Vinay would be free to do what they wanted with the property. That is, her Honour did not accept that registration was intended by the contributors to confer on Rajil and Vinay “an immediate or unconditional beneficial interest”, to use the language which her Honour derived from Muschinski v Dodds.

70. Her Honour found, at [284], based on her findings as to the evidence of the contributors to which she referred at [285]-[286], that central to the purpose of the contributors in purchasing the Guildford Property were Amit Laundry’s business interests. Her Honour considered that there was a “plausible inference” that the registration of the property in the name of Rajil and Vinay was “incidental to this main purpose”, representing in various ways an “equality” between the three brothers, even if there was an expectation that Rajil and Vinay would remain the registered proprietors once Amit Laundry ceased to use it for its business purposes.

71. In her Honour’s view, at [284], no one contemplated that the beneficial interest would reside wholly and unconditionally in Rajil and Vinay once registration occurred. Her Honour found, at [293], that even if, contrary to her finding, Rajil and Vinay had expected that the registration of the Guildford Property in their names would confer on them immediate, unconditional beneficial ownership, that was not the intention of Amit Laundry in paying the deposit or of Amit in assuming liability under the mortgage.

72. Although the contributors did not agree as to how long it was intended that Amit Laundry would occupy the Guildford Property, her Honour concluded, at [289]-[290], that the contributors intended that the occupation would be for an indefinite period until such time as the Vacant Land was developed. Her Honour, at [291], was not satisfied that Amit Laundry or Amit intended to disclaim any beneficial interest in the Guildford Property, in respect of which Amit Laundry advanced funds towards its acquisition and Amit had undertaken a borrowing liability. Her Honour also found, at [292], that it was the shared understanding of the contributors that the mortgage would be repaid out of the earnings of Amit Laundry’s business at least until the business had been relocated to the Vacant Land.

73. Her Honour considered that it was unlikely that the three brothers could have articulated the intended entitlement of each of the contributor’s entitlement to the property, but nonetheless found, at [292]:

“… it is clear that everyone understood and intended that Amit Laundry was to be able to operate its business from the premises then being acquired and it was the shared understanding and intention that the mortgage repayments were to be made out of the funds generated from the operation of the laundry business from those premises (at least until such time as the laundry could be relocated to the Vacant Land, which was dependent on its re-development).”

76. Her Honour concluded, at [293], that the interest intended to be conferred on Rajil and Vinay by registration of the Guildford Property in their names was one conditional on Amit Laundry having certain beneficial rights in respect of the property. Her Honour also considered, at [293], that even if Rajil’s and Vinay’s intention was that they had an immediate, unconditional beneficial interest in the Guildford Property, that intention was not shared by Amit Laundry in paying the deposit or by Amit in assuming liability under the mortgage.

77. Having regard to her finding of a resulting trust, her Honour made two obiter observations in relation to the issues at trial. The first, at [297], was consequent upon her Honour’s finding that Amit Laundry was an equitable co-owner. Her Honour stated that there may have been a potential issue as to what obligations Amit Laundry had to develop the Vacant Land on which it was initially intended to relocate the laundry. Her Honour observed that those matters had not been argued before her and, in any event, fell away in circumstances where she had found that Amit Laundry was a co-owner. As I explain below, this is the subject of the second ground of the cross-appeal.

78. The second observation, at [298], was her Honour’s statement that even if she had been of the view that Rajil’s legal title to the Guildford Property was not qualified by Amit Laundry’s rights in equity, the giving of one month’s notice of termination of tenancy was problematic, given the length of time Amit Laundry had been in the premises. It was not, however, necessary for her Honour to consider that question, nor does it arise on the appeal or the cross-appeal.

Cross-appeal ground 1: parties’ submissions

79. Amit Laundry contended that her Honour erred in finding that it did not acquire the entire beneficial interest in the Guildford Property. In particular, Amit Laundry contended that her Honour erred in failing to characterise the relevant intention of the parties as being to treat the funds borrowed under the loan facility, which it repaid, as funds it contributed to the acquisition of the Guildford Property, such that the resulting trust was to be quantified under the approach adopted in Bloch v Bloch and not that which was adopted in Calverley v Green.

80. Amit Laundry submitted that the decision in Bloch v Bloch was authority for the proposition that mortgage repayments may be considered as contributions to the purchase price of property if it can be inferred that the parties intended their respective beneficial interests to be proportionate to the contributions made to acquire the land and to free it from encumbrances, and that that was the position in this case: see Bloch v Bloch per Brennan J at 402.

81. There were four aspects to this argument.

82. First, that her Honour erred in focussing on the actual intention of the parties rather than their presumed intention. This submission amounted to an argument that her Honour had wrongly imposed a higher standard of intention than the High Court articulated in Bloch v Bloch and that she should have inferred that the intention of the contributors was that Amit Laundry would have a 100 per cent beneficial interest in the property.

83. Second, that her Honour erred in having regard to what had occurred on previous occasions, when property had been acquired in the names of one of the family members, but paid for by Amit Laundry. Amit Laundry contended that this past conduct was irrelevant to the question of what could be inferred from its continuing to make mortgage repayments on the Guildford Property.

84. Third, that her Honour erred in only having regard to Amit Laundry’s intention in paying the deposit and ignoring the fact that it guaranteed the loan and that it was always intended that it would make the mortgage repayments.

85. Fourth, that the ignorance of the three brothers as to the consequences of incorporation and their subjective intentions were irrelevant and should not have been taken into account.

86. Rajil, for his part, relied essentially on the fact that Amit Laundry had never treated the Guildford Property as its asset. Indeed, to the contrary, it had treated the loan repayments as rent in its books of account. Rajil also relied upon Amit Laundry’s rental payments from 2008 as inconsistent with it having the full beneficial ownership of the property.

Cross-appeal ground 1: consideration

87. Amit Laundry’s challenge to her Honour’s finding against its claim for a 100 per cent beneficial interest in the property was essentially based on its argument that the principles stated in Bloch v Bloch ought to have been applied in its favour. As I seek to explain, however, the relevant principles are to be found in Calverley v Green. The outcome in Bloch v Bloch, which was distinguished in Calverley v Green by Mason and Brennan JJ at 262-263, was based upon a factual finding as to the intention of the parties at the time of acquisition of the property that was the subject of the dispute in that case: see Bloch v Bloch per Wilson J at 398; Brennan J at 402. Unless Amit Laundry is able to displace her Honour’s factual findings as to the intention of the parties at the time of the acquisition of the Guildford Property, its claim that the entire beneficial interest in the property resided in it must fail.

88. In Calverley v Green, the parties were registered as joint tenants of the subject property. The appellant had paid the deposit and certain other monies at the time of acquisition. The balance of the purchase price was provided by way of a mortgage loan under which each of the parties was jointly and severally liable. The appellant made all the mortgage repayments. It was found that as the respondent was jointly and severally liable on the mortgage, the appellant was not the sole contributor to the purchase price.

89. It is convenient to summarise the principles, relevant to this case, to be derived from Calverley v Green as follows:

1. Where property has been purchased in joint names, equity presumes a trust in favour of the party who has contributed the whole of the purchase price: per Gibbs J at 255.

2. Where two purchasers contribute to the purchase price and the property is conveyed to them as joint tenants, equity presumes that they hold the equitable interest in the property in shares proportionate to their contribution: per Gibbs CJ at 246-247; Mason and Brennan JJ at 258; Deane J at 269.

3. The material time for determining the beneficial ownership of property is at the time of acquisition: per Gibbs CJ at 252; Mason and Brennan JJ at 262. The same point was made in Bloch v Bloch per Wilson J at 398.

4. The purchase price is what is paid to the vendor to acquire the property. Mortgage instalments, being paid not to the vendor but to the lender, do not constitute a payment of the purchase price: per Mason and Brennan JJ at 257.

5. The entry into a mortgage constitutes a contribution to the purchase of the property as, under a mortgage, each mortgagor undertakes a joint and several liability in respect of the repayment of the mortgage: per Mason and Brennan JJ at 257-258.

6. The equitable presumptions may be displaced, rebutted or qualified by evidence of a contrary intention that is common to all contributors to the purchase price: per Gibbs CJ at 251; Mason and Brennan JJ at 261; Deane J at 269.

7. Usually, the common intention of the contributors to the purchase price is to be inferred from what the parties do or say, not their own uncommunicated state of mind: per Mason and Brennan JJ at 261; Deane J at 269-270; see also Gissing v Gissing [1971] AC 886 at 906.

90. Having regard to Rajil’s reliance on Bloch v Bloch, it is appropriate to say something further about the relevance of the making of mortgage repayments by one party in circumstances where more than one party has undertaken a liability under the mortgage loan.

91. As indicated, the material time for determining the beneficial interest of parties in property is at the time of its acquisition. In Calverley v Green, Mason and Brennan JJ considered the matters relevant to determining whether the equitable presumptions had been displaced, rebutted or qualified, having regard to the intention of the parties at the time of acquisition. Their Honours stated, at 262:

“The evidentiary material from which the court might have drawn an inference as to the intention of the parties included their acts and declarations before or at the time of the purchase, or so immediately after it as to constitute a part of the transaction … In some cases it is possible to treat the concurrence of one party with the other’s payment of the mortgage instalments as an admission of the former’s exclusive interest, but the circumstance attending the payment of mortgage instalments is no more than one of the relevant facts. Another relevant fact is the relationship between the parties at the time.”

92. Their Honours concluded, at 262-263, that as there was no agreement after the purchase to alter the equitable interest acquired when the property was purchased, the payments made under the mortgage did not work any alteration to those interests. In that regard, their Honours concluded that the case was different from Bloch v Bloch, where it had been found that the parties had intended to acquire the land freed of any mortgage, not the title to land subject to mortgage. Their Honours observed that, on the facts of Bloch v Bloch, the price paid to discharge the mortgage thus accounted for the payment of part of the purchase price for the land itself and was to be taken into account in determining the parties’ beneficial interests.

93. Deane J, at 269, took a similar approach. Gibbs CJ’s approach to this question was slightly different. Gibbs CJ’s view, at 252, was that if the extent of the beneficial interests in property is determined as at the date of acquisition, the repayment of the mortgage debt by one party is not relevant in determining those beneficial interests, but may be relevant to an equitable accounting between the parties.

94. In Bloch v Bloch Wilson J, with whom Gibbs CJ, Murphy and Aickin JJ agreed, held, at 397, that the case was a classic illustration of a resulting trust in proportion to the purchase price contributed by the plaintiff father in circumstances where the property had been registered in the name of the defendant son.

95. Brennan J, at 402, expressly addressed the question whether the mortgage repayments were relevant to the determination of the respective beneficial interests in the property, as follows:

“However, it is necessary to ascertain whether it was the intention of the parties that their respective interests should be in accordance with the contributions made when the land was purchased or in accordance with the contributions made by them to the purchase of the land and the discharge of the mortgage debt upon it … In the circumstances of this case the utilization of the rentals and the making of cash contributions by all parties tend to show that the asset which they sought to acquire was not merely the mortgaged land but the unencumbered land. They contributed what they could afford to acquire the unencumbered title and it is more likely than not that they intended the whole of their respective contributions to furnish the measure of their respective interests in that asset. Lord Diplock, in Gissing v. Gissing, in reference to the intention of spouses who contribute to the purchase of the matrimonial home, said:

‘The conduct of the spouses in relation to the payment of the mortgage instalments may be no less relevant to their common intention as to the beneficial interests in a matrimonial home acquired in this way than their conduct in relation to the payment of the cash deposit.’

The inference to be drawn from the facts of the present case is that the parties intended their respective beneficial interests to be proportionate to the contributions made to acquire the land and to free it of encumbrance. The agreement by the son that the parents should have one-third of the proceeds of the land is both supportive of this inference and the best evidence of the proportion of the contributions made by the parties and of their respective beneficial interests in the asset.” (emphasis added) (footnotes omitted)

96. In the present case, her Honour concluded that there was no common intention as to the beneficial interests in the property such as to displace the presumption of a resulting trust in proportion to the contributions made by the parties. Amit Laundry has not demonstrated that her Honour’s finding was wrong. For the reasons which follow, this was not a case where the factual circumstances were like those in Bloch v Bloch.

97. Each of Rajil, Vinay and Amit undertook a personal liability under the mortgage which constituted a personal contribution by each: Calverley v Green per Mason and Brennan JJ at 257-258. This was so notwithstanding that a third party, in this case, Amit Laundry, made the mortgage repayments. Indeed, putting aside the guarantee (see above at [23]), there was no relationship between the Bank and Amit Laundry in respect of the loan. The guarantee stood in a different category from the mortgage liability in the sense that liability under it would only arise should there be a breach of the principal obligation under the mortgage. Put another way, unlike the liability under the mortgage, the guarantee did not give rise to a primary liability under the loan.

98. Likewise, the fact that the Granville Property, which was registered in Amit’s name, was security for the loan, does not assist Amit Laundry’s claimed 100 per cent beneficial interest in the Guildford Property. There was no suggestion in the evidence that Amit Laundry had any interest in the Granville Property.

99. There was no error in her Honour having regard to the history of family dealings with property from time to time. Those dealings reinforced what was apparent in respect of the acquisition of the Guildford Property in any event. Amit Laundry was the only entity that had the ability to make the mortgage repayments and, for that matter, to support the family. The evidence demonstrated that Ramesh made decisions, if not alone, then as the significant decision maker, as to how the earnings of Amit Laundry were to be utilised. Amit Laundry did not prove that there was any common intention that it would hold the entire beneficial interest in the Guildford Property. The only common intentions proved were: (i) an intention to save Amit Laundry from paying rent; and (ii) an intention that Amit Laundry be able to use the Guildford Property to conduct the laundry business until such time as the Vacant Land was developed.

100. There were other factors that pointed to Amit Laundry not having the entire beneficial interest in the property. Significantly, the fact that the Guildford Property was not recorded as an asset in the company’s books and that it claimed in its books and records the payment of rent for the property, both before and after the loan was repaid, was evidence that Amit Laundry itself never claimed or understood or intended that it had the full beneficial interest in the property. Her Honour noted that there was no common evidence as to why rent was paid. However, from the evidence that was given, it was referable, at least in part, to the manner in which the family arranged their financial dealings from time to time as various exigencies presented themselves.

96. The legal implications of this conduct may be considered in either one or other of the following two ways. It could be treated as evidence from which an inference could be drawn that Amit Laundry was not the beneficial owner of the property, except to the extent of the resulting trust arising from its contribution to the deposit. Not only could that inference be drawn, it is the probable if not the only inference to draw from those facts. Otherwise, Amit Laundry’s books of account in this regard would have been book entries only, and that was not suggested. Alternatively, the entries for rent may be taken as an admission against interest that it did not have a beneficial interest in the property other than pursuant to the extent of the resulting trust found in its favour.

97. Further, the only found common intention of the parties was that Amit Laundry would occupy the premises until the Vacant Land was developed. That common intention was inconsistent with it having the full beneficial interest in the property. If it did have the entire beneficial interest in the property, there would be no need for it to have an arrangement that its occupation of the property would be temporary, even if the period of occupation was open-ended.

98. Amit Laundry has not demonstrated that the common intention of the contributors at the time that the property was acquired was that it would be the sole beneficial owner of the land. Not only has it failed to demonstrate any error in the primary judge’s factual finding, but, as I have explained, the structure of the loan and mortgage do not support this conclusion, nor does the arrangement, agreed to by all, that Amit Laundry was only to occupy the Guildford Property until such time as the Vacant Land could be developed and the business moved there. Likewise, the absence of the property as an asset in Amit Laundry’s books of account and its recorded and actual payment of rent are all indicators that Amit Laundry did not have the beneficial interest in the property.

99. The only possible indication to the contrary was Amit Laundry’s repayment of the mortgage loan. However, again for the reasons given, it failed to demonstrate that at the date of acquisition there was a common intention that Amit Laundry was to have the full beneficial interest in the property, or that that the mortgage repayments were to count towards its beneficial interest. Not only did it fail to prove that that was the common intention, the history of family dealings with property and other assets was strong evidence to the contrary. For that reason, Amit Laundry’s reliance on Bloch v Bloch was of no assistance to it. As I have explained, the factual circumstances in that case led the High Court to find a relevant common intention in relation to the mortgage repayments. No such common intention was proved in this case.

100. It follows that the first ground of the cross-appeal should be dismissed.

Appeal ground 1: the primary judge’s reasons concerning Muschinski v Dodds

106. Rajil contended that the primary judge erred in her application of the principles in Muschinski v Dodds in determining whether the presumption of resulting trust had been rebutted and thereby reached a wrong conclusion on the evidence in finding that it had not. Rajil accepted, however, that Amit Laundry had certain rights in relation to the property. He characterised Amit Laundry’s occupation of the ground floor of the premises from which it operated the laundry as a tenancy at will.

107. Her Honour, at [275], stated that it was the shared intention of Rajil, Vinay and Amit that (to the extent that Vinay had given the matter any independent consideration) when the Guildford Property was acquired, the legal title would reside in Rajil and Vinay.

108. Her Honour held, at [276], that that was not enough to rebut the presumption of resulting trust. Rather, it was necessary for Rajil to establish that there was an intention on the part of the respective contributors that he and Vinay were to take the beneficial interest in the property: see Muschinski v Dodds per Gibbs CJ at 589, 591; Mason J at 598-599; Deane J at 611-612. Rajil accepted that this was a correct statement of legal principle.

109. Her Honour observed that in Muschinski v Dodds it had been found, as a fact, that Ms Muschinski intended, by the act of registration, to confer upon Mr Dodds an immediate and unconditional beneficial half interest in the property. Her Honour held that that was not so in this case. Her Honour’s reasoning was as follows:

“[282]   … I accept that all contributors to the acquisition intended that Rajil and Vinay would become the registered proprietors of [the Guildford Property]. However, I am not satisfied that all contributors intended that Rajil and Vinay would then be free to do what they wanted with the property. That is not to say that, in order to rebut the presumption, it is necessary for Rajil to establish that the contributors intended to confer on Rajil and Vinay indefeasible title as such; it is merely to say that I do not accept, on the balance of probabilities, that registration was intended by the contributors, in their own way, to confer on Rajil and Vinay an immediate or unconditional beneficial interest.

…

[284]   … But in the circumstances, I cannot accept that any of the contributors had the intention that upon registration it would have been open to Rajil and Vinay to exclude all others from [the Guildford Property] (which is to say, none contemplated that the beneficial interest would reside wholly and unconditionally in Rajil and Vinay).

…

[292]   … I have concluded that at the time of acquisition the interest intended to be conferred on Rajil and Vinay (by registration on the title) was one that was conditional on Amit Laundry having certain beneficial entitlements vis-à-vis [the Guildford Property].

…

[295]   … In Muschinski v Dodds, the presumption of resulting trust was rebutted by evidence that the transferee, Mr Dodds, was intended to acquire by registration an ‘immediate and unconditional’ beneficial interest in the property by virtue of registration (see 593 (Gibbs CJ); 598 (Mason J); 603 (Brennan J); 612 (Deane J); 624 (Dawson J)). It is that intention that is missing in the present case.

[296]   I am not persuaded that registration was intended to confer an unconditional beneficial interest upon Rajil and Vinay. For the foregoing reasons, the fact of registration, though certainly material, cannot be decisive in assessing the evidence of the contributors’ intentions at the time of acquisition. The conclusion that the contributors’ shared intention (drawn from the evidence as a whole) at the time of the acquisition was that any interest vested in Rajil and Vinay was to be subject to and conditioned upon Amit Laundry’s own business concerns means that I cannot find positively on the balance of probabilities that Amit/Amit Laundry intended to confer upon Rajil and Vinay an immediate and unconditional beneficial interest in [the Guildford Property]. Therefore, Rajil has not discharged his onus of proving that it was more likely than not that he (Rajil) and Vinay were intended by the contributors to be the immediate and unconditional beneficial owners of [the Guildford Property].”

Appeal ground 1: parties’ submissions

110. Rajil did not dispute her Honour’s analysis of the law and its application in Muschinski v Dodds, nor did he dispute that it was necessary for him to establish an intention on the part of all of the contributors to the acquisition of the Guildford Property that he and Vinay were to have the entire beneficial interest in the property. However, he disputed her Honour’s finding that he had not established that that was the intention of the contributors.

111. The error, according to Rajil, was that her Honour elevated the words “immediate and unconditional” as used in Muschinski v Dodds to the level of principle by requiring those same factual conditions to be established in this case in order for the presumption of resulting trust to have been rebutted. He submitted that her Honour erred, therefore, in finding that the presumption of resulting trust may only be rebutted where the conferor intends to confer a beneficial interest that is “immediate and unconditional”.

112. The legal issue at the heart of Rajil’s argument concerned the meaning of the words “immediate and unconditional”, as used in Muschinski v Dodds. In Muschinski, the appellant argued that a beneficial interest would only vest in Mr Dodds by stages, as and when he made certain contributions to the property. The High Court rejected that argument on the facts, and several members of the Court adopted the phrase “immediate and unconditional” to describe the beneficial interest that they found had vested in Mr Dodds.

113. The phrase “immediate and unconditional” was drawn from Hope JA’s judgment in this Court’s decision under appeal in the High Court (Muschinski v Dodds (1982) 8 Fam LR 622). Justice Hope had found, at 628, that the evidence pointed to Ms Muschinski having an intention to give Mr Dodds “an immediate and unconditional beneficial interest in the property, and not to an intention to limit it, to suspend it, or to make it conditional”.

114. Rajil submitted that the phrase “immediate and unconditional” did not mean that a beneficial interest, once conferred, could not be subject to some qualification or burden. (For example, a beneficial interest could be subject to a personal obligation, as Brennan J would have found in Muschinski (at 607), or to some other beneficial proprietary interest in the same property.) Rajil argued that in this case, he and Vinay had taken the full beneficial interest in the property, subject to Amit Laundry having a tenancy at will.

115. Rajil submitted that her Honour had found that the actual intention of the parties was to facilitate the acquisition of the Guildford Property as an investment for Rajil and Vinay subject to it being available for use by Amit Laundry for an undefined period. Rajil contended that this was consistent with Dullow v Dullow and Brennan J’s findings in Muschinski v Dodds, namely, that the actual intention of the parties was that he and Vinay have the legal and beneficial interest in the property subject to occupation by Amit Laundry until it could move to the vacant land when developed. I discuss these two decisions below. He submitted that had her Honour not applied an additional and erroneous requirement that the beneficial title must be “immediate and unconditional”, it would follow that she would have found that he had the full legal and beneficial interest in the property. Rajil submitted, therefore, that her Honour’s factual finding that the presumption of a resulting trust had not been rebutted on the evidence was wrong.

116. In support of his argument, Rajil pointed out that the primary judge had rejected Amit Laundry’s case that it was the beneficial owner of the property. He also referred to her Honour’s rejection of Amit’s evidence that he had no intention for Rajil and Vinay to hold the property “in some sense beneficially” as “implausible” and that he intended for his brothers to be on the title “in name only”.

117. Rajil raised a further argument to the effect that as Amit had not made any claim in the proceedings personally, he had disclaimed any interest in the Guildford Property. Rajil submitted, therefore, that her Honour erred in finding that Amit had a 30.31 per cent beneficial interest pursuant to a resulting trust. The fact of disclaimer, so it was said, supported his case that the common intention at the time of acquisition was that Rajil and Vinay had the entire beneficial interest in the property: see Bilson v Rogers [2008] NSWSC 469.

118. Rajil’s argument, therefore, was that her Honour erred in determining that it was necessary for him to prove that there was a common intention that he and Vinay have an “immediate and unconditional” interest. He accepted that the interest he and Vinay acquired was always subject to a condition that Amit Laundry operate out of the premises. However, consistently with the statement of Brennan J in Muschinski v Dodds and the decision in this Court in Dullow v Dullow, he submitted that the existence of that condition did not negate the common intention that as at the date of acquisition, he and Vinay became the beneficial owners of the property.

Appeal ground 1: consideration

119. In Muschinski v Dodds Gibbs CJ, at 591-593, summarised the factual circumstances in that case as follows:

“… the appellant intended that the respondent should have a beneficial one-half share in the property … each undertaking the obligation to pay the purchase price. Both intended to borrow jointly from the bank, if that became necessary, to finance the purchase. When the appellant first saw the Picton property, she wanted to put it in her own name because she expected to supply all the money. The respondent, however, told her that he would assist her financially and by his own physical work on the property, but only if his name was ‘on the title’. The appellant in her evidence frequently spoke about ‘putting (the respondent’s) name on the title’ … The parties had frequent discussions about the matter; the appellant had doubts about putting the land in both names, but the respondent regarded it as unfair that he should have no interest in the property when he intended to contribute, roughly equally, to the total cost of obtaining the asset in its final form.

…

… The appellant did not suggest in her evidence that she intended that the respondent should have a beneficial interest which depended on the extent of his contributions, and it is implausible to suggest that she entertained any such idea. The true conclusion was, as Hope JA said, that the appellant, having faith in the respondent, intended to give him ‘an immediate and unconditional beneficial interest in the property, and (did not intend) to limit it, to suspend it, or to make it conditional’.”

120. Deane J stated, at 611-612:

“… the evidence leads inexorably to the conclusion - expressed in concurrent findings of fact in the courts below - that it was their shared intention that, from the time of purchase, each should have a full one-half beneficial, as well as legal, interest in the property. Mrs Muschinski’s intention was that her own and Mr Dodds’ interest or, to use her word, ‘status’ in the whole venture should be equal: it should be a ‘joint venture’, a ‘partnership’ …

…

… it was not the intention of either of them that Mr Dodds’ equal beneficial interest should be acquired by stages as he contributed towards the planned joint endeavour. Their planned future association and joint activity provided the occasion for, and the explanation of, the arrangement between them. That arrangement was however to the effect that Mr Dodds’ beneficial interest in the property should be immediate and unconditional. It was not qualified to provide for the uncontemplated double contingency that their personal relationship would fail and that the proposed venture involving the development and joint use of the land would crumble under the yoke of inauspicious stars.

In these circumstances, there is no occasion for recourse to the presumption of the law of equity that, where two or more persons advance the purchase price of property in different shares, the person or persons to whom the legal title is transferred holds or hold the property upon resulting trust in favour of those who provided the purchase price in the shares in which they provided it …”

121. Mason J, in agreeing with Deane J, stated, at 598-599:

“… the common intention of the parties was that each should enjoy, from the time of purchase, an immediate and unconditional legal and beneficial one-half interest in the property. The suggestions that Mr Dodds’ interest was conditional upon the actual making of his contributions or that his interest was to arise by stages as and when he made them has no foundation in that common intention. Accordingly, there is no scope for a resulting trust.”

His Honour held, however, that there should be an equitable accounting between the parties as to the monies that had been contributed by Ms Muschinski.

122. The primary judge, in this case, however, found that there was no common intention that Rajil and Vinay have the entire beneficial interest in the property. Rajil challenged this finding, relying, in particular, upon the observations of Brennan J at 604 in Muschinski v Dodds and the decision of this Court in Dullow v Dullow.

123. Before turning to those decisions, however, it is appropriate to be clear about the primary judge’s finding. Rajil’s submission, set out above, at [110], has abbreviated her Honour’s finding. Her Honour first dealt with this at [130], where she stated:

“I include in the aspects of Amit’s evidence that I find implausible his evidence that his brothers’ names were to be registered on the title to [the Guildford Property] for the purpose of fulfilling his father’s wish (that they own property and be set up in life) without such registration being intended to carry with it any actual ownership interest in the property.”

124. Her Honour returned to this, at [154], where she said:

“Amit was also in agreement for the property to be acquired in the names of his brothers; indeed, he says that this was his suggestion (in order to satisfy his father’s wish). Amit also understood that it was his father’s wish for the company not to pay rent in addition to his father’s wish for there to be property in his brothers’ names … Amit’s evidence was it was because of both of these wishes that he suggested that the purchase of [the Guildford Property] be effected in the way that it ultimately was … I do not accept the suggestion put forward by Amit to the effect that his intention was that his brothers’ were to be on the title ‘in name only’. It is implausible that he could have believed that a wish (by his father) to see his sons set up in life and have property in their own name ‘which they would own’ (which he accepted in cross-examination was what he understood his father’s wish to be) would be satisfied by putting the title of [the Guildford Property] into the names of Rajil and Vinay but for them only to hold that title in effect [as] the bare trustee for Amit Laundry. That, however, does not mean that he had an intention at the time Rajil and Vinay should acquire both legal and beneficial interests in the property immediately and unconditionally (as to which see the discussion at [275]ff below).” (transcript references omitted)

125. Her Honour found, at [155], that Amit’s intention was the same as had occurred with the acquisition of the Granville property, namely, to facilitate the acquisition of the Guildford Property as an investment shared by Rajil and Vinay. Her Honour did not find that there was a common intention that at the time of acquisition that they would have the full beneficial interest in the property. Her Honour’s finding as to the common intention was only that it was intended that Amit Laundry was to have the right to use the property for an undefined period, at least until the Vacant Land was developed.

126. The particular passage of the judgment of Brennan J in Muschinski v Dodds upon which Rajil relied was at 604, as follows:

“The particular circumstances of the case rebut the presumption of a resulting trust in favour of Mrs Muschinski arising from her payment of the purchase price: Russell v Scott [1936] HCA 34; (1936) 55 CLR 440; Calverley v Green. That is not to say that Mr Dodds took his beneficial interest free of any obligation on his part.”

127. His Honour continued, at 604:

“Waddell J was surely right in finding that Mr Dodds took his beneficial interest in the property ‘in return for his assurances that he would assist her to set up a craft business in the old cottage and that he would have a cottage built on the land and pay for it ...’. In the Court of Appeal, Hope JA agreed that Mrs Muschinski’s intention that Mr Dodds should have a beneficial interest was based ‘on the assurances which the defendant gave to her and not upon the fulfilment of those assurances’. But on these findings, it is not right to hold that Mrs Muschinski was moved by disinterested generosity towards Mr Dodds in giving him his interest in the property. She did not give him his interest merely in the hope that his assurances would be fulfilled. She gave the interest ‘in return for his assurances’, that is, on terms that he should be bound to fulfil his assurances.”

128. Brennan J then went on to consider the nature of the obligation that Mr Dodds had assumed and continued, at 606:

“Whether a condition is such that its non-fulfilment involves forfeiture of the property given depends upon the intention of the donor communicated to the donee at the time when the latter accepts the property, that is, the intention which the donee reasonably understands to be the donee’s intention from what the donee has said or done (cf. Calverley v. Green, at 262).”

129. His Honour concluded, at 607:

“… I would find that the condition annexed to the gift created only a personal obligation resting on Mr Dodds. Although a failure to fulfil the condition did not involve forfeiture of the beneficial interest given, partial non-fulfilment was not without remedy: Mrs Muschinski might have made a claim for compensation, but she did not do so …”

130. Brennan J was alone in finding that Mr Dodds would have been subject to a personal obligation. Rajil did not seek to explore the distinction between personal and proprietary obligations that he might have owed to Amit Laundry. The point he sought to draw from Brennan J’s reasons was simply that a beneficial interest could be taken subject to an obligation, but nonetheless taken ‘unconditionally’ in the sense discussed above at [114].

131. In Dullow v Dullow (1985) 3 NSWLR 531 the plaintiff’s two sons were registered proprietors of two pieces of property in respect of which the plaintiff had paid the purchase price. The question in issue was where the beneficial interest in the property lay. The governing presumption was of a resulting trust, unless that was rebutted either by the presumption of advancement or the intention of the parties. As no presumption of advancement arises in the relationship of a mother and children, the question was whether the presumption of the resulting trust has been rebutted, having regard to the intention of the mother at the time of the purchase in placing the property in her sons’ names.

132. In finding that the mother’s intention was to reserve a beneficial interest for herself during her lifetime Hope JA, with whom Kirby P and McHugh JA agreed, observed, at 540:

“… she did intend to give them a benefit. The problem is to determine from the conflicting evidence which she has given what her intention as to the nature of that benefit was.

The doctrine of the resulting trust is not inflexible as to the nature of the interest that can result to the person who pays the purchase money, and whose intention regulates the matter. The resulting trust may be limited to a life estate …”

133. In Muschinski v Dodds, the question in issue was whether Ms Muschinski had the intention to confer on Mr Dodds an immediate and an unconditional one half beneficial interest in the property. The phrase “immediate and unconditional” and, in particular, the reference to the intention of the parties that Mr Dodds’ interest be “unconditional”, was used in the context where it was found that, although there had been discussions between the parties that Mr Dodds would make contributions to the mortgage and perform work on the property, Ms Muschinski intended him to have a one half interest in the property immediately upon acquisition.

134. In other words, Mr Dodds’ acquisition of a one half beneficial interest in the property at the time of acquisition was not conditional upon his, in fact, making a contribution to the mortgage repayments or in fact carrying out the work that he said he would undertake. That was a finding of fact in that case and, to that extent, I agree with Rajil’s submission that the existence of a condition which is expected to be fulfilled or honoured, does not mean, as a matter of law, that the presumption of a resulting trust is not or cannot be rebutted.

135. However, it at all times remains necessary for the party seeking to rebut the presumption to prove, as a fact, that the party or parties who contributed to the purchase price intended that the other party was to have a beneficial interest. The extent of the beneficial interest will depend upon proof of what was intended by the contributors to the purchase price. As the present case demonstrates, the legal owner may also be a contributor to the purchase price. In that case, if the legal owner seeks the entire beneficial interest, the legal owner will have to prove as a fact that it was the common intention of all contributors that the legal owner was to have the entire beneficial interest and not only a beneficial interest proportionate to their own contribution.

136. There is no doubt that in this case the primary judge focussed on whether there was a common intention to confer an immediate and unconditional beneficial interest on Rajil and Vinay. I have set out above her Honour’s statement, at [282], that registration did not prove a common intention that Rajil and Vinay have an immediate and unconditional beneficial interest in the Guildford Property. Her Honour, at [283], tested that proposition, by posing the following counterfactual:

“… what would have been Amit’s reaction, had it been put to Amit (in his own right or as the controlling mind of Amit Laundry) that as from the date of completion of the purchase of [the Guildford Property], Rajil and Vinay were to be free to assert ownership of the property to the exclusion of any right of occupation on Amit Laundry’s part?”

137. Her Honour answered the counterfactual, stating that she had:

“… no doubt that this would have been unacceptable to Amit and that it was not the intention of Amit (or Ramesh, whose intention is only of relevance insofar as both Rajil and Vinay have made very clear that he was the primary decision maker and that they acceded, as a matter of culture and tradition, to his wishes in family and business matters).”

138. Her Honour added that had the parties asked the question at the time of acquisition, it was implausible that Amit and Amit Laundry would have purchased the Guildford Property in the name of Rajil and Vinay without there being some protection for the operation of the laundry business.

139. Rajil submitted that her Honour had posed the wrong counterfactual. He contended that “a better counterfactual” was “what did the parties intend to occur once Amit Laundry vacated [the Guildford property]?”. He contended that the evidence overwhelmingly supported an inference that all parties had intended for the Guildford property to be treated in the same way as the Redhead property and the purchase of the Newcastle pharmacy, as properties that Amit Laundry had paid off, but in which it had never asserted a beneficial interest.

140. However, this answer to Rajil’s posed counterfactual is contrary to her Honour’s finding, at [79], in respect of the Redhead property and other business dealings:

“Insofar as it was suggested by Amit Laundry that the Redhead property was in effect to be ‘Rajil’s’ property, Rajil says the property was instead regarded as ‘Vinay’s’ property. Rajil gave evidence (unable to be tested by reference to any contemporaneous documents) that the net proceeds of sale from the Redhead property went to Vinay. The most relevant conclusion to be drawn from the account given by Rajil in this regard is that he seems to have paid little attention to the legal consequence of registration of legal title in respect of properties acquired over the whole of the relevant period – and in a loose sense may be said to have treated various of the properties acquired, with funds obtained or repaid by Amit Laundry, simply as ‘family’ property.”

141. Thus, her Honour considered that the purchase of the Redhead property was but one example of how various members understood that when property was purchased and registered in a particular name or names, it did not follow that they understood the property to be owned beneficially by them. Rajil did not point to any evidence that demonstrated that this finding was wrong or contend that it was based on no evidence.

142. But in any event, I do not agree that the counterfactual posed by Rajil was “a better counterfactual”. Various counterfactuals may be posed to test a proposition. Nor do I agree that the answer he gave to his counterfactual was a necessary or the only answer. Given the family culture that all family members be looked after and the manner in which they conducted their family and financial interests, I consider that the better, or at least, an equally likely answer to that question, even had it been asked at the time of acquisition of the Guildford Property, was that “it will depend upon the position at the time”. The evidence very much pointed to there being fluidity in the family arrangements as they presented themselves from time to time. The dealings in relation to the Redhead property and the Newcastle pharmacy and the dealings with Vinay’s interest in the Guildford Property, which Vinay understood was to protect it from the property settlement consequent upon his divorce, were illustrative of this.

143. In my opinion, the proper understanding of her Honour’s reasons is encapsulated at [284], which is set out above. Her Honour found that the reason the parties purchased the property was the business interests of Amit Laundry. It is apparent from her Honour’s findings, and this is the effect of the evidence, that the contributors, and Ramesh for that matter, did not turn their minds to the beneficial interest in the property except, perhaps, to the extent that its purchase might plausibly have been as her Honour expressed it, “symbolic of equality between the sons”. That, however, falls far short of a finding that it was the common intention of the contributors that Rajil and Vinay were intended at the time of acquisition to have the entire beneficial interest in the property.

144. Whilst her Honour focussed on there being a condition attached to the acquisition of the Guildford property such that Rajil and Vinay could not deal with the property as they wished, that reasoning was the route to her Honour’s finding that there was no common intention that at the time of acquisition they had the beneficial interest in the property such as to rebut the presumption of resulting trust. In my opinion, the correct understanding of her Honour’s reasons and, in any event, the conclusion I would draw on the evidence and the factual findings of her Honour which have not been challenged or shown to be wrong, is that, to the extent that there was any common intention of the contributors at the time of acquisition, it was that the laundry was to operate out of the premises for so long as it needed to, and that it would thereby be saved from paying rent to a third party. Although there was an understanding on the part of each of the contributors that Rajil and Vinay at some time may have an interest in the property, there was no settled or agreed intention at the time of acquisition as to what that interest would be. As I have indicated above, the financial dealings within the family were fluid, depending on how circumstances presented themselves from time to time.

145. As her Honour found, at [291], neither Amit nor Amit Laundry intended to disclaim any beneficial interest in the property based upon their contribution to its acquisition. Rajil submitted that that did not follow from her Honour’s finding that the contributors had the common intention that Amit Laundry was to occupy the Guildford Property for an indefinite period. Whilst that may be so, it is not to the point. Her Honour was not satisfied on the evidence that there was a common intention among the contributors that, as at the date of acquisition Rajil and Vinay were to have the full beneficial interest in the property.

146. Rajil also submitted that her Honour erred in finding that Amit had a 30 per cent beneficial interest in the property, contending that as he had not claimed any such interest, he must be taken to have disclaimed it. In Bilson v Rogers Jagot AJ stated, at [31], that if a person who had paid a portion of the purchase price denied a claim by others as to their beneficial interest in property, it might be expected that the person would assert that was so. A failure to do so could be taken as an admission against interest.

147. However, Jagot AJ’s observation related to what might be taken as an admission having regard to the facts and circumstances of that case. It was not asserted before the primary judge in this case that any such failure by Amit was an admission against interest. His position in not asserting an interest himself is explicable, given that Amit Laundry’s case was that it had a 100 per cent beneficial interest. Even if Amit’s failure to assert a beneficial interest constituted an admission, it would not have proved the positive case that Rajil was required to establish, namely, that there was a common intention of all contributors that he and Vinay had the beneficial interest as at the time of acquisition.

148. It must also be said that there was no error in her Honour finding, on the facts proved before her, that the beneficial interests were different from those claimed.

Appeal ground 2

149. As ground 2 of the appeal was consequent upon the success of ground 1, it too should be dismissed. It follows that the appeal should be dismissed.

Cross-appeal ground 2

150. The second ground of the cross-appeal may be dealt with briefly. Amit Laundry’s case at trial was that if it did not hold the entire beneficial interest in the property, and if the beneficial interest lay with Rajil, Rajil held his interest on trust to permit it to use the premises for the conduct of the laundry business for so long as it continues to operate from the premises, upon condition that it was responsible for the payment of the water rates.

151. However, as I have upheld her Honour’s finding in respect of the resulting trust such that Amit Laundry is a co-owner with the right to possession as a co-owner, her Honour was correct in finding that any right to occupy the property held on trust by Rajil fell away.

152. It follows that ground 2 of the cross-appeal should also be dismissed.

Orders

153. Accordingly, I propose the following orders:

1. Appeal dismissed.

2. Cross-appeal dismissed.

3. There be no order as to costs with the intent that each party pay its and his own costs.

4. Note that order (3) also applies to Amit Jain.

154. WHITE JA: I have had the advantage of reading in draft the reasons for judgment of Beazley P. As her Honour explains, the principal issues on this appeal were whether the primary judge erred in her findings that when the Guildford Land was acquired, the presumption of resulting trust had not been rebutted and that the proportions in which the beneficial interest in the property was acquired was in accordance with the contributions that Rajil, Vinay, Amit and Amit Laundry made to the purchase price of the property. The primary judge’s findings as to the actual intentions of the individuals concerned in the purchase are unassailable. For the reasons given by the primary judge and the further reasons given by the President, I agree with their Honours’ conclusion that the presumption of resulting trust has not been rebutted and the proportions in which the beneficial interest in the property is held is to be calculated according to the parties’ contribution to the purchase price.

155. This is not a harsh result for Amit Laundry. Had the question of the parties’ beneficial interests in the Guildford Property been litigated within six years of the payment off of the mortgage, prima facie Amit Laundry would have been entitled to indemnity from Amit, Rajil and Vinay for the mortgage payments it made to discharge the mortgage debt for which they were principally liable and for which Amit Laundry was only liable as guarantor. Amit Laundry made no claim for such an indemnity, no doubt because its claim would have been barred by the provisions of the Limitation Act 1969 (NSW). The fact that its claim for an indemnity from the mortgagors whose debt it paid is statute barred is not a reason for now assessing the quantum of its beneficial interest in the property by reference to the mortgage instalments it paid.

156. For the reasons explained by the primary judge and Beazley P, the evidence did not establish that at the time of the acquisition of the Guildford Property the parties intended that their beneficial interests should be proportionate to the contributions made both to acquire the land and to free it from the mortgage.

157. I agree with the orders proposed by the President.

**********

Decision last updated: 19 February 2019