Leaman v Public Trustee

[1990] TASSC 67

Serial No 66/1990
List “A”

COURT:  SUPREME COURT OF TASMANIA

CITATION:              Leaman v Public Trustee [1990] TASSC  67; A66/1990

PARTIES:  LEAMAN, Frank Anthony
  v
  PUBLIC TRUSTEE AS TRUSTEE OF THE ESTATE OF
  LEAMAN, Kathleen May (Deceased)

FILE NO/S:  M88/1988
DELIVERED ON:  1 November 1990
JUDGMENT OF:  Cox J

Judgment Number:  A66/1990
Number of paragraphs:  16

Serial No 66/1990
List "A"
File No M88/1988

FRANK ANTHONY LEAMAN v PUBLIC TRUSTEE AS TRUSTEE OF THE ESTATE OF KATHLEEN MAY LEAMAN, DECEASED.

REASONS FOR JUDGMENT  COX J

1 November 1990

1. By Originating Application the applicant seeks the following orders:

1A declaration that he is the beneficial owner of the land situate at 146 Patrick Street, Hobart in Tasmania and being the land described in Indenture of Conveyance registered No 317333.

2A declaration that the property does not form part of the estate of Kathleen May Leaman, deceased.

3An order that the respondent transfer the property to the applicant.

1. The applicant, whose former surname was Andruszkow, migrated to this country in 1947 and worked for some years as a plumber for the Hydro–Electric Commission at the Great Lake and Bronte Park. He first met the deceased in 1948. She worked as a waitress in a Hobart cafe frequented by the applicant on his trips to Hobart and they became friends. In 1950 he came to Hobart to work and live. The deceased was already married, but then separated from her husband, and she and the applicant commenced to live together as man and wife in a flat in Liverpool Street, Hobart. After about three months they moved to other rented accommodation in Warwick Street, living there for about 3½ years. At this time the house they rented was sold and the land at Patrick Street came on the market. In about May 1954 a decision was made to purchase it on a long term contract for a purchase price of £3,200.0.0.

1. The deceased had no savings and had brought no money or assets into the relationship other than a small amount of furniture. The applicant had £350.0.0 in the bank and he contributed this towards the deposit of £500.0.0 required by the Vendor. The balance of £150.0.0 was advanced by way of loan by the legal firm of Henry Wherrett and Benjamin. The contract was not put in evidence, due search having failed to locate it, but it appears that the deceased was named as purchaser and she conducted all the dealings with the solicitors. The applicant's command of English, even to this day, is not good and that combined with his embarrassment over having to explain and spell his name inhibited him in taking an active part in these dealings. Indeed there was nothing in the documentary records produced which suggested that his existence was ever known to any of the firms of solicitors who dealt with the deceased and the property prior to her death. It would therefore seem that the £150.0.0 loan was, so far as Henry Wherrett and Benjamin were concerned, made to the deceased.

1. It is clear that the contract provided for payment by instalments, and these were regularly paid to Henry Wherrett and Benjamin until in 1959 the land was conveyed to the deceased. I accept the applicant's evidence that he made all the payments to that firm, and I infer that his payments were used to repay the £150.0.0 loan together with the instalments off the purchase price required by the contract. The deceased was no longer working and was being maintained by him. While she physically delivered the payments, he was the sole source of them. When the conveyancing was undertaken, finance was provided by a first mortgage loan of £1,600.0.0 from National Trustees Executors and Agency Company of Tasmania Limited and a second mortgage from the vendor for an amount representing the balance then owing on the contract and the funds by way of stamp duty, filing fees and costs necessary to complete the transaction. That sum was £550.0.0. The applicant's contribution to the purchase of the property by that time accordingly represented £1,100.0.0 paid directly by him while the deceased's contribution was £150.0.0 theoretically borrowed by her and applied to the deposit but in fact repaid to the lender by the applicant. In addition, he had met any interest payments under the instalment contract and the costs of the conveyancing.

1. He gave evidence, which I accept, that the property was placed in the name of the deceased partly because of his embarrassment concerning his own name and partly because he was venturing into business on his own account and, fearful of not succeeding, preferred not to have assets in his name. He said they had discussed the matter and were going to buy the property together. He also said that his understanding of the arrangement was that "naturally whoever died first, the other would take over".

1. The respondent placed reliance on Tinker v Tinker [1970] Probate 136 where a husband sought to rebut the presumption of advancement on the basis that for similar reasons to those of the applicant, he had placed property paid for by him in the name of his wife. The Court of Appeal there held that as the husband had been held at first instance to have been an honest man acting sensibly and on good advice when embarking on a new and risky venture, he must have genuinely intended that the house should belong to his wife and that the husband could not be heard to say that it belonged to him because he could not be allowed to take advantage of his own dishonesty. On the other hand, the High Court of Australia held in Martin v Martin (1959) 110 CLR 297 that even where a transfer was effected to a wife in order to cloak the truth it did not follow that the husband could assert true ownership, but that "when that is the case there must, under Australian case Law, be further enquiry and it must be ascertained whether the unlawful purpose was in any degree carried out or, on the other hand, the intending law breaker recanted before any necessity arose of using the cover he had thus provided or else virtuously refrain from using it" (at p305). In the present case there is no evidence to suggest that if that were the applicant's purpose (in whole or in part) he was ever put to the test of unlawfully taking advantage of it, let alone failing such test. I do not regard his refraining from being named as purchaser and mortgagor as evidencing a gift to the deceased of his contributions nor as conduct estopping him from asserting his right to a beneficial interest in the land.

1. In 1962, the applicant changed his name to Frank Anthony Leaman. Since 1959, when the conveyancing was completed, the applicant had continued to provide all instalments which the deceased would take to Henry Wherrett and Benjamin, who would account to each mortgagee. The applicant paid all rates, hydro–electric accounts and telephone bills and provided housekeeping money to the deceased. Some time in the 1960s the deceased procured a part–time job as a cleaner and earned a small amount which she used for her own purposes. Some time in the 1970s she received a Social Security pension. As she was born in 1915, I infer it was an age pension to which she would have become entitled in 1975. I find that prior to March 1983, none of her funds was used to reduce the mortgages or meet interest on them.

1. In 1971, finance was rearranged. The second mortgage to the vendor of the house was reconveyed and a fresh second mortgage taken out through the firm of Murdoch Clarke Cosgrove and Drake for $2,100.00. Part of this money at least was used to meet overdue income tax and the cost of car repairs incurred by the applicant. By 1982 the applicant had repaid the whole of this mortgage debt. The first mortgage was not reducible by instalments, and the applicant regularly made payments of interest through the 1960s and 1970s. Receipts produced show that between July 1984 and 23 April 1985 $3,000.00 was paid off the principal in a series of seven payments, but the evidence does not enable me to find precisely when the last payment of principal and interest was made, although it seems likely to have been made soon after the last–mentioned date and before the death of the deceased on 7 December 1986.

1. In May 1982 the husband of the deceased died intestate and the Public Trustee elected to administer his estate. As they had never divorced the deceased was entitled, as next of kin, to the whole of the estate, the net cash balance of which amounted to $8,263.41. This sum was sent to the deceased by the Public Trustee on or about 4 March 1983 and she thereupon opened a cheque account at the North Hobart branch of the Commonwealth Trading Bank of Australia and deposited that amount in it on 9 March 1983. Throughout the next nine months, the deceased drew two cheques for $264.00 representing periodic payments of interest on the first mortgage, paid rates on the property and a few household accounts and clothing accounts at a department store, and the balance was drawn in cash payments typically of $50.00 to $100.00, so that by 3 January 1984 there remained only $3.29 in the account which was soon eaten up in bank fees. Most of the money was spent by the deceased on alcohol. It does not appear that the applicant received the benefit of any of it.

1. Notwithstanding the deceased's apparent weakness for alcohol, the relationship was happy enough. At one time, about ten years before her death, the deceased told the applicant she had made a will leaving all her possessions to him, but in fact she died intestate. In addition to making almost all the cash contributions to repaying the mortgages, the applicant paid the deceased a housekeeping allowance plus the household accounts I have mentioned, and expended labour and money on improvements to the kitchen and bathroom, a new garage and fencing. He also painted the house inside and out several times. The deceased's income from the pension and part–time work was spent on her own purposes. She was devoted to stray animals and at one, not atypical stage, had 4 dogs and 30 cats, the cost of feeding which must have consumed most of her resources.

1. Shortly before her death, she was involved in a motor car accident and suffered bad facial disfigurement. She died at home on 7 December 1986. I am satisfied that throughout the whole of the time the deceased and the applicant lived together they treated each other as if they were man and wife and held themselves out generally as having that relationship, notwithstanding that according to the applicant the deceased had informed the Department of Social Security that he was a boarder.

1. There are many cases in which, property being held wholly or in part in the name of one person whose contribution to its acquisition is less than the legal estate vested in him, equity will identify or impute a trust which recognises the interest of the person who contributed the balance. In Calverley v Green (1984) 155 CLR 242, Gibbs CJ said at p246:

"Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, ie, a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser. Similarly, if the purchase money is provided by two or more persons jointly, and the property is put into the name of one only, there is, in the absence of any such relationship, presumed to be a resulting trust in favour of the other or others. For the presumption to apply the money must have been provided by the purchaser in his character as such–not, e.g., as a loan. Consistently with these principles it has been held that if two persons have contributed the purchase money in unequal shares, and the property is purchased in their joint names, there is, again in the absence of a relationship that gives rise to a presumption of advancement, a presumption that the property is held by the purchasers in trust for themselves as tenants in common in the proportions in which they contributed the purchase money."

1. However, as McInerney J made clear in Carkeek v Tate–Jones [1971] VR 691 at p696, presumptions must take their place with the rest of the evidence and the question is what conclusions should be drawn from the totality of the facts established in the evidence including the matters giving rise to the resulting trust. The material time for the ascertainment of the relevant intention, whether unilateral or mutual, is the time of the relevant contract or conveyance (Pearson v Pearson [1961] VR 693 at p701), although as the Full Court of Victoria pointed out in that case,

"Rights, whether acquired by unilateral disposition or by bilateral agreement, may be subsequently disposed of by the owner thereof, either unilaterally or bilaterally, and there may be cases in which the state of the parties' rights is ultimately held to be different from what would have been ascertained at the time of the original contract or conveyance" (ibid.).

1. In my view, the proper inference to be drawn from the evidence is that the land was acquired in contemplation of the parties living together therein until death, and on the basis that it should be held as a joint tenancy at law, the entirety of the estate to pass to the survivor. Had differences arisen between them before the death of the deceased and had steps been taken to sever the joint tenancy, the beneficial ownership would have been divided between them, recognition being given to the contributions of the applicant by way of cash payments and to those of the deceased by reason of her having accepted responsibility for the mortgage repayments (see Calverley v Green (supra) per Mason and Brennan JJ at p257), but, as it happened, they at all times lived in harmony, neither asserting any claim inconsistent with the proposition that upon the death of the first, the survivor should have a home and enjoy the property to the exclusion of any claim by the estate of the other. The fact that the deceased spent virtually all her windfall from her late husband's estate without reducing the mortgage principal, which was paid off by the applicant after that sum had been dissipated by her but before her death, is, in my view, inconsistent with there being any understanding by her or by them jointly that upon her death her estate would have an interest in the house which could operate adversely to the applicant's enjoyment of the property.

1. Some reliance was placed by counsel for the applicant on the cases of Muschinski v Dodds (1986) 160 CLR 583 and Baumgartner v Baumgartner (1987) 164 CLR 137 which establish that a court of equity will not countenance unconscionable conduct whereby the holder of the legal estate asserts ownership to the exclusion of any interest by a significant contributor. Clearly, it would be unconscionable to deny the very significant contribution made by the applicant in this case, but though the application of that principle here would protect him to the extent of a substantial beneficial share in the property, I am satisfied that he is entitled, in the events which have happened, to the entirety in consequence of the mutual intention of the parties.

1. In my view, he should have the orders sought.