King v Fister

Case [2022] QCA 47

SUPREME COURT OF QUEENSLAND

CITATION:

King & Anor v Fister & Anor [2022] QCA 47

PARTIES:

ANDREW ROBERT KING
JODI LEANE KING
(appellants/cross-respondents)
v
KAREN AMANDA FISTER
(first respondent/first cross-appellant)
CHRISTOPHER ROBERT HALL
(second respondent/second cross-appellant)

FILE NO/S:

Appeal No 595 of 2021
DC No 14 of 2018

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

District Court of Queensland at Cairns – [2020] QDC 333 (Fantin DCJ)

DELIVERED ON:

5 April 2022

DELIVERED AT:

Brisbane

HEARING DATE:

10 May 2021

JUDGES:

Sofronoff P and Mazza AJA and Davis J

ORDERS:

1.   Allow the appeal against the dismissal of the equitable damages claim.

2.    Award equitable damages in favour of the appellants against the respondents calculated as the difference between the entitlement of the respondents ($20,370.80) and the sum they received ($37,821.08) being $17,450.28 with interest as calculated under s 58 of the Civil Proceedings Act2011 and Practice Direction 7 of 2013 from the date of sale of the property to the date of judgment on the appeal.

3.   Dismiss the cross appeal.

4.   Allow the appeal against the costs order.

5.   Order the respondents to pay the appellants’ costs of the proceedings including the appeal and cross-appeal on the standard basis.

CATCHWORDS:

EQUITY – TRUSTS AND TRUSTEES – IMPLIED TRUSTS – CONSTRUCTIVE TRUSTS – COMMON INTENTION – ACTING TO DETRIMENT – where the parties formed a venture – where the respondents would purchase a house and borrow most of the money to effect the purchase – where the appellants would contribute to the purchase price – where the appellants would pay the payments due on the mortgage – where the appellants would pay outgoings and maintenance on the house – where the appellants would acquire a loan to pay out the existing mortgage and take a transfer of the title – where the respondents made further withdrawals on the loan account – where the venture failed – where the house was sold – whether the proceeds of sale were held pursuant to a constructive trust – where the trial judge found both a common intention constructive trust and a joint endeavour constructive trust – whether the respondents had to account for the further withdrawals – where the trial judge found that case not proved – where the appellants appealed against the dismissal of their claim concerning the redraws – where the respondents cross-appealed against the finding that the sale proceeds were held on constructive trust for the appellants – whether a common intention constructive trust was proved – whether a joint endeavour constructive trust was proved – whether account should be taken of the redraws – whether apportionment was required

Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59, followed
Clancy v Salienta Pty Ltd [2000] NSWCA 248, cited
Giumelli v Giumelli (1996) 196 CLR 101; [1999] HCA 10, followed
Imam Ali Islamic Centre v Imam Ali Islamic Centre Inc [2018] VSC 413, followed
Munro v Munro [2018] VSC…

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Details
AGLC
King v Fister [2022] QCA 47
Case
[2022] QCA 47
Decision Date

CaseChat Overview and Summary

The case of King v Fister involves a dispute over the beneficial ownership of a property in Cairns. The first respondent, Karen, and her partner, the second respondent, Christopher, purchased a property in their names. The first and second appellants, Andrew and Jodi, contributed to the purchase price and were responsible for the mortgage payments, outgoings, and maintenance. The property was eventually sold, and the appellants sought a declaration that the sale proceeds were held on constructive trust for them. The trial judge found in favour of the appellants, but the respondents appealed, and the appellants cross-appealed.

The legal issues before the court were whether a common intention constructive trust and a joint endeavour constructive trust were established, and whether the respondents had to account for the further withdrawals from the loan account. The court needed to determine if the trial judge's findings were correct and if the respondents should be ordered to pay equitable damages to the appellants.

The court found that the trial judge was correct in establishing a common intention constructive trust and a joint endeavour constructive trust. The court held that the respondents had to account for the further withdrawals from the loan account, as they were not entitled to those funds. The court also found that the respondents had received more than their entitlement from the sale proceeds, and therefore, the appellants were entitled to equitable damages. The court dismissed the respondents' cross-appeal and ordered them to pay the appellants' costs of the proceedings.

The court's final orders were to allow the appeal against the dismissal of the equitable damages claim, award equitable damages in favour of the appellants against the respondents, dismiss the cross-appeal, allow the appeal against the costs order, and order the respondents to pay the appellants' costs of the proceedings including the appeal and cross-appeal on the standard basis.

Orders

Orders of the court

1. Allow the appeal against the dismissal of the equitable damages claim.

2. Award equitable damages in favour of the appellants against the respondents calculated as the difference between the entitlement of the respondents ($20,370.80) and the sum they received ($37,821.08) being $17,450.28 with interest as calculated under s 58 of the Civil Proceedings Act 2011 and Practice Direction 7 of 2013 from the date of sale of the property to the date of judgment on the appeal.

3. Dismiss the cross appeal.

4. Allow the appeal against the costs order.

5. Order the respondents to pay the appellants’ costs of the proceedings including the appeal and cross-appeal on the standard basis.

Background

Background to the litigation

By cross-appeal, the respondents challenge the declaration and submit that the appellants’ claim ought to have been dismissed. Alternatively, they say that the appropriate declaration was that the appellants and respondents share in the fund equally. They resist the equitable damages claim.Background The first respondent (Karen) and the first of the two named appellants (Andrew) are brother and sister. Andrew had experienced financial difficulties. He and his wife, the second-named appellant (Jodi), were living with their children at Andrew and Karen’s mother’s house. That had become uncomfortable and the family needed a house of their own. However, the appellants could not raise money to purchase a house. That led to an arrangement being struck between the appellants and Karen and her partner, the second respondent (Christopher). As a result, a property at 77 Tills Street, Cairns (the property) was purchased in the name of the respondents using money borrowed by Karen and Christopher from a bank, and money borrowed by Andrew and Jodi from Andrew and Karen’s mother. The respondents and their children took up residence in the property. About seven years later the property was sold and the fund the subject of the declaration was the net sale proceeds. The arrangement struck between the parties was oral. There was substantial dispute as to the terms of the arrangement. The appellants’ case at its most basic was that the property was purchased by the respondents on the understanding that it would be the appellants’ house, at least at some stage. The respondents accepted that there was an arrangement which may ultimately lead to the house being transferred to the appellants. For reasons explored at the trial, a tenancy agreement was entered into between Jodi and the respondents. The existence of a tenancy was inconsistent with the appellants’ case. After generally preferring the evidence of the appellants where it conflicted with that of the respondents, the learned trial judge made the following factual findings as to the terms of the arrangement:“[230] I am satisfied that the terms of the agreement between the parties were essentially in the terms alleged by the plaintiffs.[2] That is, that in or about September 2011 Andrew and Karen agreed to cooperate in the purchase of the property with the objective that the property would become the residence for Andrew and his family, that would ultimately be wholly owned in law and equity by Andrew and Jodi on the following terms:[2]Now the appellants.1.the parties would attempt to acquire the property at auction;2.the plaintiffs would borrow sufficient money for the deposit from Ila;[3][3]Andrew and Karen’s mother.3.the defendants[4] would borrow funds sufficient to complete the purchase including stamp duty and legal costs;[4]Now the respondents.4.the purchasers would be the first defendant[5] or both defendants;[6][5]Karen.[6]Karen and Christopher.5.the plaintiffs would be responsible for payment of all mortgage loan repayments and other charges related to the borrowings to complete the purchase, together with council rates, water charges, insurance, maintenance, and other holding expenses;6.the plaintiffs and their family would occupy the property;7.if the plaintiffs were able to obtain the finance necessary to do so, the plaintiffs would discharge the balance of the indebtedness of the defendants remaining in respect of the purchase of the property and the defendants would convey the legal title in the property to the plaintiffs.[231]I am satisfied that that the agreement did not include any or all of the following terms:1.the plaintiffs would live in the property as the defendants’ tenants;2.both plaintiffs would both sign a residential tenancy agreement;3.the plaintiffs would purchase the property from the defendants within two years by payment of an agreed purchase price; and4.if the plaintiffs did not purchase the property within two years, the defendants would sell the property on the open market.”

Evidence

Evidence Before The Court

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Decision

Reasons for decision

In my view, the trial judge ought to have taken the sum of $37,821.08 into account in her calculations.Conclusions The benefit which flowed from the sale was a total of $101,853.98 being the cash of $64,032.90 and the value of the money withdrawn ($37,821.08). A constructive trust applies so the entitlement is as to 80 per cent to the appellants and 20 per cent to the respondents. That calculates to $81,483.18 to the appellants and $20,370.80 to the respondents. The respondents have received $37,821.08 being $17,450.80 beyond their entitlement. I would therefore:1.Allow the appeal against the dismissal of the equitable damages claim.2.Award equitable damages in favour of the appellants against the respondents calculated as the difference between the entitlement of the respondents ($20,370.80) and the sum they received ($37,821.08) being $17,450.28 with interest as calculated under s 58 of the Civil Proceedings Act2011 and Practice Direction 7 of 2013 from the date of sale of the property to the date of judgment on the appeal.3.Dismiss the cross appeal. I would set aside the costs order made below. The appellants were substantially successful and are entitled to their costs of the trial on a standard basis. The appellants have succeeded to the extent of improving their position by the sum of $17,450.28. The cross-appeal failed. I would order the respondents to pay the appellants’ costs of the appeal and cross-appeal on the standard basis.

Ratio Decidendi

Legal Principle Established

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