Mauger v Pearson
[1999] NSWSC 268
•30 March 1999
NEW SOUTH WALES SUPREME COURT
CITATION: Mauger v Pearson [1999] NSWSC 268
CURRENT JURISDICTION: Equity
FILE NUMBER(S): 2552 of 1998
HEARING DATE{S): 26 March 1999
JUDGMENT DATE: 30/03/1999
PARTIES:
Kevin William Mauger (Plaintiff)
Michael Pearson (Defendant)
JUDGMENT OF: Windeyer J
LOWER COURT JURISDICTION: Not Applicable
LOWER COURT FILE NUMBER(S): Not Applicable
LOWER COURT JUDICIAL OFFICER: Not Applicable
COUNSEL:
Mr. S. Stewart (Plaintiff)
Mr. S.A. Kerr (Defendant)
SOLICITORS:
Wallbanks (Plaintiff)
W.G. McNally & Co (Defendant)
CATCHWORDS:
EQUITY - property purchased as joint tenants - whether unequal contributions gift or whether resulting trust in accordance with contributions
ACTS CITED:
DECISION:
JUDGMENT:
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IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
WINDEYER J
TUESDAY 30 MARCH 1999
2552/98 KEVIN WILLIAM MAUGER v MICHAEL PEARSON
JUDGMENT
Question
The question for determination is the entitlement to proceeds of sale of property 27 Edward Street, Marrickville of which the plaintiff and the defendant were the registered proprietors as joint tenants.
Facts
The plaintiff and the defendant entered into homosexual relation in 1989 or 1990. It does not matter which. They first lived together at 11 Bridge Street, Erskineville, which property was owned by the defendant.
In 1992 they moved to Perth. After a short time they purchased 48 Hampshire Street, East Victoria Park, Perth. The purchase price was $94,000. They borrowed $75,000 and I find they contributed equally towards the balance. There was some conflict about this but I find that it was agreed the plaintiff would contribute his share over a period; that he did have the available funds to do so; and that so far as this was relevant, the defendant lent him his share in the meantime. It does not really matter because the defendant agreed that they both had equal shares in the Perth property.
In 1994, the Perth property was sold for $134,000. After repayment of mortgage expenses a sum of about $60,000 was received and put into a joint account in the names of the plaintiff and defendant. They returned to Sydney and lived in the Erskineville property for a while. They purchased property 27 Edward Street, Marrickville for $250,000. The property was placed in their names as joint tenants. Of that purchase price $75,000 was borrowed by way of bank loan, about $60,000 came from the joint account including the proceeds of the Perth property and about $130,000 came from the proceeds of sale of the Erskineville property. From those figures it can be seen that the plaintiff contributed about $67,500 and the defendant $197,500, a total of $265,000. The difference over the purchase price is not explained by evidence but could in part be accounted for by the stamp duty. On that basis the proportional interest of the plaintiff in the property in accordance with contributions to the purchase price would be about 25.5%.
Some time prior to November 1997 the relationship came to an end. In November the Marrickville property was sold for $362,000 and after discharging the mortgage and paying costs the sum of $241,080 was paid to the joint account at the Commonwealth Bank. Subsequently the deposit after deduction of commission, namely $27,300 was paid in equal shares to the plaintiff and the defendant.
On 24 or 25 December 1997, the defendant withdrew $241,080 from the joint account so that, together with his share of the deposit meant that he received a total of $254,730. He subsequently repaid $10,286 for some reason which is not explained and as a result of these proceedings later paid back into the bank account $222,000. The result of this is that he has received $22,444 from the joint account moneys. As against that the plaintiff withdrew the sum of $19,000 and has retained his one half of the deposit of $13,650 so that he has retained the total of $32,650.
The plaintiff seeks a declaration that the bank account is held for the parties in equal shares. In the alternative he seeks a declaration that it is held in proportion to the contributions of each to the acquisition of the funds.
Other financial and non-financial contributions
There was considerable evidence as to who did what so far as improvements and contributions to the upkeep of the homes was concerned. In the long run this is of little, if any, significance. It does not go to the relief claimed by the plaintiff. This is because, while it is alleged in paragraph 5 of the statement of claim, that it would be unconscionable for the defendant to retain more than one half so that a constructive trust should be imposed, the relief sought does not really go to that. In any event while the plaintiff, on his evidence, made a fair contribution to the joint welfare of the parties and to the maintenance of the various properties, the defendant contributed as well and it must be remembered that the defendant owned the Erskineville property. There is no basis shown for the imposition of a constructive trust.
Claim for joint tenancy
The plaintiff says that it was the common intention the parties would obtain equal shares in the properties and thus in the proceeds of sale.
This gives rise to a simple question. It can relate only to the Marrickville property as I am satisfied each contributed equally to the Perth property. So far as Marrickville is concerned the homosexual relationship does not give rise to a presumption of advancement. Accordingly the Marrickville property would be held by the parties on resulting trust for themselves in shares proportionate to their contributions to the purchase price, unless the evidence shows that the presumption of the resulting trust is rebutted.
On this question the evidence of each party given on cross-examination really favoured the other. Mr. Pearson admitted that the Perth property was held beneficially in equal shares and that was his intention. That was, according to him, because they were together at the time, as he did not accept that the contributions were equal, although I have found that they were. Nevertheless he said that so far as Perth was concerned he accepted this was equal ownership and there was equal entitlement to the proceeds of sale paid into the joint account.
So far as the Marrickville property was concerned the defendant's evidence was quite clear that the property was purchased as joint tenants because he and the plaintiff had a relationship; that he wanted himself and the plaintiff to feel they were on the same footing financially; that he had told both the plaintiff and the plaintiff's children that there was an equality between them and that this was because he thought they had a future together. His view changed when the relationship came to an end. On the clear evidence of the defendant at the time the Marrickville property was purchased he intended, so far as contributions were unequal, to make a gift to the plaintiff so as to make their interests equal. The fact that his intentions altered later cannot bear on this.
The defendant's case is that he and the plaintiff made an agreement for the disposition of the proceeds of sale under which the whole of the proceeds of sale of Erskineville, namely $180,000 plus an amount of $800, which is not explained, were to be deducted from the proceeds of sale in the joint account; that he was to get the $180,000 and the balance of about $60,000 was to be divided equally between the plaintiff and the defendant. Then some further adjustments made for the benefits which the plaintiff had obtained under another loan.
The plaintiff's evidence was that he arranged to meet the defendant on 30 December 1997 to negotiate the split up of the money. He said the defendant was drunk and he arranged to see him shortly thereafter. He agreed that they had to sit down and work out their financial and non-financial contributions and divide the assets fairly based on those contributions. This evidence must be seen alongside his evidence on affidavit, which I accept. He and the defendant had discussed their future after the Marrickville property was purchased, because he became anxious about the defendant's health and said to him that they should see a lawyer "about who owns what in case something happens to me". He said that the following conversation took place, he saying to the defendant:
Plaintiff:
We should see a lawyer about who owns what in case something happens to you or me.
Defendant:
We don't need to, you don't have to worry about anything you are set up now. It's 50/50 between us.
Plaintiff:
What about your family?
Defendant:
Don't worry its 50/50 they can't throw you out of here. If something happened to me you'd stay. You know this is your home as much as mine you're on the title with me now.
Conclusion
While there must be some little doubt in view of the evidence about splitting up the moneys, I consider the plaintiff has made out his case. I consider it clear that the intention of the defendant was that he and the plaintiff should have equal shares in the Marrickville property. The fact that the deposit was shared equally, apparently in accordance with instructions from both, supports that view. There does not seem to be any logical reason to support the claim of the defendant that the total sale price of the Erskineville property should be brought to his credit without any allowance for the amount paid to discharge the mortgage over that property.
It follows from this that the balance in the joint account should be divided equally between the plaintiff and the defendant, subject to the plaintiff bringing to account the sum of $19,000 withdrawn by him and the moneys withdrawn and deposited by the defendant being brought to account. There is one further adjustment that should be made. The evidence is that in respect of a particular loan from the Commonwealth Bank the plaintiff used about $10,000 to purchase a motor vehicle. There was no evidence which convinced me that amount had been repaid but the debt to the bank was discharged on sale of the Marrickville property. This amount should be brought to account in adjusting the entitlement to the proceeds of sale.
The parties can bring in draft minutes to give effect to this judgment.
I certify that paragraphs 1 to 17 are a true copy of the Reasons for Judgment given by Mr Justice Windeyer in matter 2552/98 Mauger v Pearson.
______________________________
Laurel Laurent
Associate to Mr. Justice Windeyer
30th March 1999.
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LAST UPDATED: 30/03/1999
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