McCARRICK and Cohen and Anor - [2019] FCCA 78

FEDERAL CIRCUIT COURT OF AUSTRALIA

McCARRICK & COHEN & ANOR

[2019] FCCA 78

Catchwords:
FAMILY LAW – Property dispute between de facto couple and also brother of the de facto husband – husband and brother both acting less than honestly – wife deceived as to ownership of the property the subject of dispute – wife’s position proceeding on fundamental misunderstanding of the position at law – court finding common intention constructive trust in respect of the property – consideration of whether trust brought to an end – trust ended by de facto husband borrowing $100,000 without authority of his brother – declaration that property owned in equal shares by brothers at that point – wife to receive 70 per cent of husband’s share of the property.

Legislation:

Family Law Act 1975 (Cth), s.106B

Jones v Dunkel (1959) 101 CLR 298
Sylvia (Trustee) v Williams [2018] FCAFC 194
Baumgartner v Baumgartner (1987) 164 CLR 137
Stanford v Stanford [2012] HCA 52

Applicant:

MS MCCARRICK

First Respondent:

MR COHEN

Second Respondent:

COMPANY A PTY LTD

File Number:

DGC 1508 of 2017

Judgment of:

Judge Burchardt

Hearing dates:

14, 15 and 16 November 2018

Date of Last Submission:

16 November 2018

Delivered at:

Dandenong

Delivered on:

23 January 2019

REPRESENTATION

The Applicant:

In person

The First Respondent:

In person

Counsel for the Second Respondent:

Mr McInnis

Solicitors for the Second Respondent:

Robinson Gill

ORDERS

THE COURT DECLARES THAT:

In 2000 Mr Cohen, Mr C and their mother jointly agreed to purchase the property at Property B.
It was the common intention of each of the three purchasers that they would jointly own the property.
Mr Cohen was the registered owner of property.
In the circumstances Mr Cohen, Mr C and their mother were the subject of a common intention constructive trust pursuant to which they were all owners of the property in equal shares.
The purchasers acted consistently with the common intention constructive trust by making contributions described in the reasons for judgment to the property between 2000 and 2013.
In 2013 Mr Cohen brought the common intention constructed trust to an end by borrowing $100,000 against the property as security without the knowledge or permission of Mr C.
The mother has abandoned any interest in the property by her failure to participate in the proceeding or otherwise assert any interest in it.
As at the cessation of the common intention constructive trust Mr Cohen and Mr C were entitled in equity to one half share each of the value of the property.

THE COURT ORDERS THAT:

The parties obtain a retrospective valuation of the property as at February 2013.
Mr Cohen’s equitable share of the property be calculated according to the following formula – value of the property as at February 2013, less mortgage $130,000 divided by 2, minus $100,000.
Mr C pay the applicant 70 per cent of the sum so calculated and Mr Cohen 30 per cent of the sum so calculated within 30 days.
There be liberty to the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] FCCA 78
Decision Date: 23 January 2019

CaseChat Overview and Summary

This matter concerned a dispute between Mr McCarrick (the applicant) and Mr Cohen (the first respondent) regarding beneficial ownership of a property registered in Mr Cohen's name. Mr C was also a party to the proceedings. The dispute arose from the initial joint purchase of the property in 2000 by Mr Cohen, Mr C, and their mother, with the common intention that they would jointly own it.

The central legal issue before Judge Burchardt was to determine the nature and extent of the beneficial interests in the property, given that Mr Cohen was the sole registered owner. The court was required to consider whether a common intention constructive trust had arisen and, if so, how that trust had been terminated and what the respective entitlements of the parties were upon its cessation.

The court found that a common intention constructive trust had been established, reflecting the purchasers' shared intention to own the property jointly and their subsequent contributions between 2000 and 2013. This trust was brought to an end in 2013 when Mr Cohen mortgaged the property for $100,000 without the knowledge or consent of Mr C. The court also determined that the mother had abandoned her interest in the property. Consequently, as at the cessation of the trust, Mr Cohen and Mr C were each entitled to an equitable half share of the property's value.

The court ordered a retrospective valuation of the property as at February 2013. Mr Cohen's equitable share was to be calculated by taking the February 2013 value, subtracting the $130,000 mortgage, dividing the result by two, and then further subtracting $100,000. Mr C was ordered to pay the applicant 70 per cent of this calculated sum and Mr Cohen 30 per cent within 30 days, with liberty to apply for sale orders in the event of non-compliance.

Orders

Orders of the court

THE COURT DECLARES THAT:

In 2000 Mr Cohen, Mr C and their mother jointly agreed to purchase the property at Property B.

It was the common intention of each of the three purchasers that they would jointly own the property.

Mr Cohen was the registered owner of property.

In the circumstances Mr Cohen, Mr C and their mother were the subject of a common intention constructive trust pursuant to which they were all owners of the property in equal shares.

The purchasers acted consistently with the common intention constructive trust by making contributions described in the reasons for judgment to the property between 2000 and 2013.

In 2013 Mr Cohen brought the common intention constructed trust to an end by borrowing $100,000 against the property as security without the knowledge or permission of Mr C.

The mother has abandoned any interest in the property by her failure to participate in the proceeding or otherwise assert any interest in it.

As at the cessation of the common intention constructive trust Mr Cohen and Mr C were entitled in equity to one half share each of the value of the property.

THE COURT ORDERS THAT:

The parties obtain a retrospective valuation of the property as at February 2013.

Mr Cohen’s equitable share of the property be calculated according to the following formula – value of the property as at February 2013, less mortgage $130,000 divided by 2, minus $100,000.

Mr C pay the applicant 70 per cent of the sum so calculated and Mr Cohen 30 per cent of the sum so calculated within 30 days.

There be liberty to the applicant and first respondent to apply for orders for the sale of the property in the event of non-compliance with these orders.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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