McDermott v McDermott
[2001] WASC 184
McDERMOTT -v- McDERMOTT [2001] WASC 184
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASC 184 | |
| Case No: | CIV:1272/2000 | 18 MAY 2001 | |
| Coram: | PIDGEON AUJ | 18/05/01 | |
| 7 | Judgment Part: | 1 of 1 | |
| Result: | Judgment for the plaintiff | ||
| PDF Version |
| Parties: | BRADLEY COLIN McDERMOTT BETTY DOROTHEA MAY McDERMOTT |
Catchwords: | Real property Trusts Gifts Money paid in reduction of mortgage by a person not the owner Whether a gift Whether an interest created Turns on own facts |
Legislation: | Nil |
Case References: | Nil Bull v Bull [1955] 1 QB 234 Calverley v Green (1984) 155 CLR 242 Giumelli v Giumelli (1999) 161 ALR 473 Robinson v Preston 70 ER 211 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
BETTY DOROTHEA MAY McDERMOTT
Defendant
Catchwords:
Real property - Trusts - Gifts - Money paid in reduction of mortgage by a person not the owner - Whether a gift - Whether an interest created - Turns on own facts
Legislation:
Nil
Result:
Judgment for the plaintiff
(Page 2)
Representation:
Counsel:
Plaintiff : Mr A D M Lindsay
Defendant : Mr K E Yin
Solicitors:
Plaintiff : R E Purvis & Co
Defendant : Leask & Co
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Bull v Bull [1955] 1 QB 234
Calverley v Green (1984) 155 CLR 242
Giumelli v Giumelli (1999) 161 ALR 473
Robinson v Preston 70 ER 211
(Page 3)
1 PIDGEON AUJ : I find this one of the sadder cases to judge by reason of a family being divided. Counsel has commented on that. It is sad to see this happening. I have had the picture here of a mother, Mrs McDermott, who impressed me as a very honest woman doing her best to recall what happened and it would be difficult for anyone in these circumstances to recall what happened. She has brought up a large family of nine children, under difficult circumstances. I did see the word "battling" in the evidence and I think that is right. So the circumstances are very sad, but I am satisfied on what I have heard today that the law does give some trust, some interest in the land, to the plaintiff and I will give my reasons for reaching that view.
2 The family was residing in a State Housing Commission house at Hilton. As I said, the family was Mrs McDermott, the defendant, and the large family that she brought up. Many of the family, when in work, put in the money to run the house. One of the members of the family was the plaintiff Bradley. He was born on 30 August 1960. He left school at the age of 15 years or so and for 3 years he said he had some work, the evidence is perhaps not much work, but when he was 20 he was involved in a serious accident. He was knocked off his bicycle, by a motor car. He suffered quite serious facial injuries and other injuries. They are before me in a document. There is no need to outline them further at this stage. In March 1986, he received as damages for the negligence of the person who knocked him off the bicycle an award of damages in the vicinity of $130,000. At that time and up to the time of his marriage he was living at home.
3 He was, following the accident, in hospital, it would seem, about a month or so and when he came back from hospital, the plaintiff's mother, Mrs McDermott, had to nurse him. There were difficulties with feeding, by reason of an injury to his tongue. Mrs McDermott said she nursed him for about a month. I suspect it may well have been longer than that and after the end of the month there would have still been a lot of nursing and difficult work to do.
4 Mrs McDermott was paying rent for the State Housing house and if nothing were done, no-one would own the house. It would go back to the State Housing Commission. It was discussed or the idea entered someone's head, particularly as there was money now available, a cash amount available, that the time had come to purchase the house as that had become possible. Originally when the State Housing Commission commenced it was not possible for a resident to purchase a home. That
(Page 4)
- changed and it became possible for a resident to purchase the house. I put it no higher than this, that they could make the purchase.
5 There is a dispute in evidence whether the suggestion came from the son Bradley or whether the suggestion came from the mother, Mrs McDermott. I do not for the purposes of this action have to resolve that. A lot might have been said at the time that I think now would be forgotten about. The parties and particularly the mother had to give evidence, under very distressing circumstances with a family that she has brought up that is divided and that is always a very distressing circumstance. I think all that was said at the time probably cannot now be recalled or certainly cannot be recalled accurately, but it is sufficient to say that the decision was made within the family to purchase the house and it could be purchased from the State Housing Commission for a figure of $45,000 and a deposit of $8000 was required. If a deposit of $8000 could be found, it was possible to obtain a mortgage for the balance of $37,000. Probably there were some incidentals, so a mortgage could be obtained for $37,000.
6 I do not know whose idea it was, where it started, and it matters not, but the decision was made that Bradley, the plaintiff, would lodge the deposit required out of his compensation money. That was what was to be lodged and he did in fact lodge this figure and the amount lodged has now been resolved by counsel agreeing the figure at $7160.13. I am going to disregard the 13 cents for the purpose of this judgment, so $7160 net was lodged. Maybe the deduction was stamp duty, maybe fees, I know not, but I do start on the basis that the proven figure of $7160 was lodged by Bradley.
7 When that amount was lodged, the mortgage for the balance of approximately $37,000 was obtained. It is always necessary for some cash to be put up before one can buy a house, but the whole of the cash that was required to be put up came from Bradley. That is the start of the situation.
8 Counsel I think have agreed on the law and I will outline the law I am applying this way: firstly there is no presumption of advancement that would arise when a parent, particularly a father, advances money to the son to buy the house. In those circumstances there is a presumption that would result in a gift. As I see it and as counsel, which I have found of great assistance in each case, have indicated, there is no such presumption when a son pays money to a parent; that is, there is no presumption of a gift.
(Page 5)
9 The next matter of law - and I think it is outlined in the book I have been given, Bradbrook, McCallum and Moore, Australian Real Property Law; it is probably the first edition, 1991 edition, p 222 onwards and it goes back to the very old original equities. If we have the situation that A gives B a sum of money and B uses that sum of money to purchase land and the land is purchased in his name, there is a resulting trust to A in proportion to the purchase money A has provided. That can be rebutted on the facts. That would be the situation if there is nothing else known. It can be rebutted on the facts and there are facts here that I must examine. It could be rebutted if there was a clear intention to make an unconditional gift. The other area is if it was decided, and this would rebut it, that Bradley would not make contributions to the living expenses, but, for what was done for him, that he would make it an absolute, unconditional gift. That would rebut the presumption.
10 There is a further matter I must examine and that is that at the time this was done Bradley signed a declaration, given to Homeswest on 13 June 1988, the successor to the State Housing Commission. He gave a statutory declaration to Homeswest saying, "I have given my mother Mrs Betty Dorothea May McDermott a gift of $8000 not to be returned to me." I emphasise those words, "a gift of $8000 not to be returned to me".
11 The evidence of Bradley there is that they had to make an arrangement around the rules that then existed; that under the Homeswest policy the eligible person could purchase and was not allowed to convey for a set period of time, I think it was 2 years, and would not be allowed to purchase it jointly with another person.
12 In order to make it clear that Mrs McDermott, the mother, was owning the house unconditionally at that time, for that period, it was necessary to make this declaration. In its literal terms it was right; perhaps not in its legal terms, but $8000 was given on the basis that the $8000 was not to come back to him. It was not being given temporarily and then to be repaid back to him. It was being given for the purpose of purchasing the home.
13 The next basis on which the plaintiff, which Bradley the plaintiff, said it occurred was he did it on the understanding that the land would be left to him. It was in that belief, on the understanding that the land would be left to him, that he signed this statement. That has put it in very general terms and using the words "as pleaded", but I am satisfied on all the circumstances, having heard each party here, I do not consider it would be likely to be said, and ever was said or intended to be said by the
(Page 6)
- defendant Mrs McDermott, that if Bradley did this he would be the one to acquire the house to the exclusion of the other members of the family. I do not consider that to have ever been in anyone's mind.
14 I consider it was in the minds that if Bradley did this to enable the family to acquire the asset of the house, then ultimately when Mrs McDermott died Bradley's share would be brought to account; that there was never the intention of the parties his share would be lost; that what he put in would be brought to account.
15 What he signed with the State Housing Commission is right. It was then given to the mother for the purpose of buying the house. It was not to be returned to him and in that sense, in one sense, there was a gift, but he was not excluding - and I do not consider by saying what was in the declaration that he was excluding the fact that he did have some interest in the land being purchased, and of course the family would not have precisely examined what the interest was to be.
16 So I do not consider on the evidence that I could ever come to the view that the money advanced, the $7160, was given unconditionally without any resulting trust whatever. It was money put into the house and as a result it was intended that Bradley would get an interest in it.
17 What subsequently happened was - and again it is hard to get a clear picture - the mortgage payments had to be made and they had to be made again in a family that may well - a big family that at times some were not in work and at times some may be struggling, but the mortgage payments had to be made and Bradley, with the money he had available, was in the best position, particularly when he was living in the house, to make those mortgage payments and he did sign a bank authority for a period whereby he made them.
18 It turned out, as I understand the evidence, it started I think - Mrs McDermott went away on holiday and Bradley was to make one payment. He did that but thereafter he continued - or after that time he continued to make a number of payments and he debited his bank to it and the payments varied to a degree. I think they started at $188 and they seemed to go up a bit.
19 He made a number of payments and I am told that the payments debited to his bank and that can be traced is the sum of $8650; that there was $8650 paid. That was paid to both principal and interest because as I see the law, as it was to acquire the asset, there is no requirement for me at this stage to apportion between principal and interest. It was paid to
(Page 7)
- acquire the asset which probably was increasing in value or undoubtedly would be increasing in value over that period. So a further $8650 was paid and on the facts before me, I consider a total amount of $15,810 was paid to a house that originally cost $45,000 and that was paid within a few years of being acquired which indicated, in my view, that that gives an interest of a third.
20 It is pleaded, and I think rightly pleaded, that it was not absolutely unconditional, and I would certainly see it this way, that it was never to be that the interest would be acquired in the lifetime in the sense that Mrs McDermott would not have the use of the home. The way it is pleaded is:
"The plaintiff claims he has acquired an equitable interest in the remainder of the land immediately expectant on the defendant's death which bears the same proportion to the whole of the land as his contribution towards the purchase be it at the present value."
21 I did not mention, I intended to say, that I am satisfied that those further mortgage payments were made on the same basis as the original amount, that the plaintiff had ultimately acquired some interest in the house and the payments were made to preserve the asset and to make the family life easier. I do not consider that they were made in exchange for him being looked after, that it was always that he was to get some interest in the house.
22 A detailed accounting I think would be very expensive. I see it roughly that the interest is a third, so in the terms of the statement of claim, I consider that there is an equitable interest, a resulting trust, that the proportion is 1:3 and I would see it as an interest expectant on death. If the land sold in the meantime, we would have to resolve to see what it is but I am satisfied the plaintiff has established a claim within the terms of the statement of claim.
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