McGregor v Nicol

[2003] NSWSC 332

CITATION:	McGregor v Nicol [2003] NSWSC 332
HEARING DATE(S):	3 and 4 April 2003
JUDGMENT DATE:	23 April 2003
JURISDICTION:	Equity Division
JUDGMENT OF:	Davies AJ at 1
DECISION:	Paragraph 39.
CATCHWORDS:	EQUITY - resulting trust - no general presumption of advancement between siblings - siblings provided purchase moneys - another sibling lived in property - whether presumption of resulting trust rebutted
LEGISLATION CITED:	Evidence Act 1995, s72 Family Provision Act 1982
CASES CITED:	Calverley v Green (1984) 155 CLR 242 Napier v Public Trustee (Western Australia) (1980) 32 ALR 153 Noack v Noack [1959] VR 137 Wirth v Wirth (1956) 98 CLR 228
PARTIES :	Sandra June McGregor (First Plaintiff/Cross Defendant) Colleen Leslie Lenton (Second Plaintiff/Cross Defendant) Leanne Nicol (Defendant/Cross Claimant)
FILE NUMBER(S):	SC 4106/02
COUNSEL:	Mrs D Coulton (Plaintiffs/Cross Defendants) Mr B Antcliffe (Defendant/ Cross-Claimant)
SOLICITORS:	Vizzone Ruggero & Associates (Plaintiffs/Cross Defendants) T.H. Drake & Associates (Defendant/Cross Claimant)

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

DAVIES AJ

WEDNESDAY 23 APRIL 2003

4106/02 SANDRA JUNE MCGREGOR & ANOR V LEANNE NICOL

REASONS

1 The plaintiffs, Sandra June McGregor and Colleen Leslie Lenton, are the registered proprietors of a block of land at San Remo on which a house has been erected. The defendant was the de facto partner of the plaintiffs’ brother Robert, and is now the administratrix of his estate. Robert and the defendant occupied the property prior to his death and the defendant has remained in possession.

2 The plaintiffs seek an order for possession of the premises. The defendant seeks, inter alia, a declaration that the plaintiffs hold the legal title in trust for Robert’s estate and a declaration that Robert’s estate is entitled to the whole of the beneficial interest in the property.

3 As the principles of resulting trust are well established, it is sufficient for me to cite the words of Gibbs CJ in Calverley v Green (1984) 155 CLR 242 at 246, where His Honour said:

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, i.e., 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: Robinson v. Preston, (1858) 4 k. &j. 505, at 510 [70 E.R 211 at 213], Ingram v. Ingram [1941] VLR 95; and Crisp v. Mullings [1976] E.G 730 (a decision of the English Court of Appeal).

4 At 247, Gibbs CJ went on to deal with the presumption of advancement. In the present case, had the moneys been provided by the plaintiffs’ mother, that principle may have had application, although Robert was aged 27 at the time. However, there is no general principle of advancement as between siblings: Noack v Noack [1959] VR 137 at 140. After discussing the judgment of Dixon CJ in Wirth v Wirth (1956) 98 CLR 228, Gibbs CJ said at 250:

The presumption [of advancement] should be held to be raised when the relationship between the parties is such that it is more probable than not that a beneficial interest was intended to be conferred, whether or not a purchaser owed the other a legal or moral duty of support.

The relationship between the plaintiffs and Robert was not such as to raise that presumption.

5 The presumption of a resulting trust may be rebutted by evidence that the person purchasing the property intended to benefit the person in whose name the property was purchased. The presumption may be rebutted in whole or in part. In Napier v Public Trustee (Western Australia) (1980) 32 ALR 153, the facts were that a man had purchased a house and had it transferred into the name of his de facto wife who did not contribute to the purchase moneys. After the death of the de facto wife, the question arose as to whether there was a resulting trust in favour of the man. The High Court consisting of, Gibbs ACJ, Mason, Murphy, Aickin and Wilson JJ, held that a resulting trust need not relate to the entire interest in the property and that, in the circumstances before them, the presumption was rebutted as to a life interest but operated in respect of the interest in remainder.

6 In the present case, a block of land was purchased in late 1990 or early 1991. The property was purchased in the name of Robert and was transferred into his name. A house was erected on the land, Robert being named as the owner. The price of the land was $40,000 and the price fixed by the building contract was $50,000, a total of $90,000. The first plaintiff, Mrs McGregor, contributed $65,000 to the purchase and construction and the second plaintiff, Mrs Lenton, contributed $26,000, a total of $91,000. The plaintiffs’ mother may have contributed any additional moneys that were required for incidental expenses. However, there was no evidence identifying her contributions. On the evidence before the Court, Robert contributed no funds to the acquisition.

7 The plaintiffs have both given evidence and have been cross-examined. I consider that they were honest witnesses with a reasonable recollection of events. The substance of Mrs McGregor’s evidence is contained at paragraph 2 of her affidavit of 8 April 2002, in which she deposed:

Our mother said:
‘I’ve found a vacate [sic] block of land at San Remo (meaning 55 Catalina Road, San Remo) for you two to buy and invest in. The vacant land is about $40,000.00. It will need to have a house built on it which will cost about $60,000.00 It will be a good weekender for both of you, but what I propose is that you put it into Robert’s name (meaning the deceased Robert Shaun Taylor) so that you won’t lose the pension when you eventually go off work. He will at a time in the future upon request from either of you put the property back into your names.’
The second plaintiff said:
‘My husband and I are owed about $26,000.00 from Caroline and John Taylor (meaning our sister-in-law and brother). I’ll see if I can get the money back from them’
I said:
‘I can probably raise about $65,000.00 over my house at Cleland Street (meaning 2 Cleland Street, Mascot which I owned).’
Our mother said:
‘If it costs slightly anymore I’ll put in the balance.’

8 Mrs Lenton gave like evidence. Lynette Parkinson who, at the time of the acquisition, was Robert’s de facto wife, has deposed as follows:

At about the end of 1990 the deceased’s mother June Taylor had various conversations with the deceased and me about the purchase of the property at San Remo which took place in January 1991. She said: “There’s a block of land at 55 Catalina Road, San Remo. I’m getting Sandra (meaning the deceased’s sister) and Colleen (meaning the deceased’s sister) to put the moneys in to purchase the property. It’s going to cost about $40,000 for the land and $60,000 to build a house on the land. We want to put it in your name, Robert because they won’t be able to get the pension when they retire as they already own a house. You and Lynn and the girls can live here for the time being. You won’t have to pay rent and rates but you will have to pay for the electricity. It’s their property and if they want it transferred back into their names they you’ll have to do that.” The deceased said: “Yes.” I agreed because it was somewhere for the deceased and my children and myself to live rent free.

9 Lynette, like the other minor witnesses, was not cross-examined. Her actions in 1992 and 1993 might throw some doubt upon this evidence.

10 The conversation as deposed by Lynette accords with the facts as thereafter eventuated. The plaintiffs provided the funds for the purchase and construction. Robert lived in the house and paid the electricity bills. Mrs McGregor, with some help from Mrs Lenton, paid the annual rates and taxes.

11 The plaintiffs gave evidence as to the payment of the purchase price. Mrs McGregor said that she raised a mortgage on her home for $65,000 and paid out that sum as moneys were required for the purchase of the land and the construction of the home. Mrs Lenton said she called in a loan of $26,000 which she had made and contributed that money to the project. Mrs McGregor said that, with Mrs Lenton’s assistance, she paid instalments on the mortgage for approximately three years. When her husband received a compensation payment, he gave $50,000 to her which she put towards the mortgage. The mortgage was fully paid off shortly thereafter.

12 Robert was 27 years of age when the property was acquired. He was living in a caravan in a nearby caravan park with his then partner, Lynette, and her two children, of one of whom Robert was the father. The plaintiffs’ mother visited the family regularly, approximately once a month, staying in the caravan park when she did so. Mrs McGregor also visited the family from time to time. Robert was a heroin addict who from time to time entered a methadone programme. He drank heavily and tended to become abusive and violent in his relations with his partner.

13 Robert had earlier suffered a severe drug overdose and had possibly suffered some brain impairment. His work history was poor and, during 1990, he was out of work and dependent upon the dole.

14 Understandably, the mother was anxious to see that Robert and his family were adequately housed. This may have been the major factor which prompted her to suggest to her daughters that they purchase the land and build a house on it. However, the mother first mentioned the acquisition to her daughters on the basis that it would serve as a good investment and holiday home for them. Several years earlier, the plaintiffs had, on their mother’s suggestion, each purchased a flat by instalment payments after their mother had paid the deposits.

15 By the time the land was purchased, the plaintiffs had agreed with their mother that Robert and his family would occupy the premises. The house was constructed and was designed so that there was a small flat where the mother or others could stay from time to time.

16 Mrs McGregor agreed in evidence that it was the intention of the mother to ensure that Robert had a roof over his head permanently. Mrs McGregor added, “Until the day he died, yes.” She said that, “I always promised Mum I would look after Robert.” Mrs McGregor said that her will, which she had executed some time after the acquisition of the property, provided for Robert to live in the house so long as he cared for it and maintained it. She said that she had spoken to Mrs Lenton about the matter. Mrs Lenton, in her evidence, said that her mother wanted Robert to have a roof over his head and that she, Mrs Lenton, was agreeable that Robert could occupy the house.

17 Accordingly, the provision of a home for Robert and his family was a factor which influenced the plaintiffs to undertake the project. However, that conclusion does not lead to the inference that the plaintiffs intended to make a gift of the capital to Robert. Neither the plaintiffs nor their parents were wealthy people. Mrs McGregor had to borrow in order to make the transaction. It is improbable that the plaintiffs intended to give the benefit of the capital value of the property to Robert, whose life was so little under control.

18 There is nothing in the history of the plaintiffs’ relationship with Robert which suggests that they intended to make a gift to him of the substantial sums which they put into the property. I am satisfied that the plaintiffs were relevantly the purchasers of the property notwithstanding that the mother instigated and managed the project and it was carried out in Robert’s name. The moneys provided by the plaintiffs were not lent either to their mother or to Robert. Mrs McGregor took an active part with her mother in the decisions made as to the design of the home to be erected, although Mrs Lenton left the matter to her mother and sister.

19 On the whole of the evidence I am satisfied that the plaintiffs were the only persons to put any substantial moneys into the purchase of the land and the construction of the house. I am satisfied that they intended the project to provide them with an investment and holiday home. The property was placed in Robert’s name to overcome what was seen to be a problem with the pension laws. I accept Mrs McGregor’s evidence that she trusted Robert to hold the property for the plaintiffs. I am also satisfied that the plaintiffs intended that Robert and his family would occupy the home for the time being at least.

20 I should now mention some of the subsequent events and other evidence.

21 In 1992, problems arose between Robert and his partner, Lynette. Robert was abusive and violent. To protect the plaintiffs’ position, should Lynette make any claim against the property, a mortgage was executed by Robert, whereby Robert purported to mortgage the property to his mother and to Mrs McGregor in respect of a purported $100,000 lent to him by them. There was no such loan. The mortgage was executed in the names of Mrs McGregor and her mother because, it seems, Mrs Lenton was not then available. The mortgage was a sham transaction designed to mislead Lynette.

22 In the middle of 1992, Lynette obtained an AVO against Robert. As a result, Robert was excluded from the house. Lynette then applied to the Wyong Local Court for money or property. In November 1992, Lynette lodged a caveat against the property. In early 1993, at the Wyong Local Court, Lynette and her solicitor accepted the assurance that the plaintiffs had provided the moneys for the acquisition of the property and that Robert had provided none. By consent, Lynette’s application to the Court was dismissed. Later in April 1993, Lynette withdrew her caveat and left the property.

23 On 1 October 1993, Robert executed a transfer of the land to the plaintiffs for the consideration of one dollar. That transfer was registered.

24 The affidavit of Mrs McGregor describes the conversations which took place in relation to this transaction as follows:

I said:
‘After all the problems Robert with Lynette (his de facto) and its adverse affect on our property at San Remo we want the San Remo property transferred to Colleen and me. This is our property and I can’t believe how it got wrongly involved in your case with Lynette (meaning his de facto Lynette Collins).’
My mother said:
‘The property should be transferred back into Colleen and Sandra’s names particularly after what Lynette has done by trying to claim an interest in the land because you’re on the title.’
Robert said:
‘Yes, go ahead and get the documents and I’ll sign them to transfer the property back to you. It’s not my property.’
I said:
‘Even though the property will be in our names we’ll still allow you to live there.’

Mrs Lenton’s affidavit is in generally similar terms.

25 Mrs McGregor’s affidavit also refers to a discussion between the solicitor who handled the transfer, Mr Pearce, and Robert in these terms:

Mr Pearce said:
‘Robert you want to transfer your title in the property at 55 Catalina Avenue, San Remo to your sisters Sandra and Colleen for $1 as it is not your property in that you did not pay any moneys for the purchase price of the property? Your sisters paid the purchase price of the property.’
Robert said:
‘Yes I want to do that. I don’t want any de facto of mine wrongly thinking that I have an interest in the land at San Remo.’

26 However, I doubt that the recollection of Mrs McGregor is, in that respect, accurate. There is in evidence a letter dated 3 June 1993 from Mr Pearce to Mrs McGregor which states, inter alia:

We note your instructions are that there is to be a transfer from Robert Shaun Taylor of all his right, title and interest in the property to yourself and your sister Colleen Lenton. We assume that if that be the case that there will also be a discharge of mortgage by Zeni Taylor and yourself. We need to know whether or not there is to be any mortgage registered against your name and the name of Mrs Lenton.
It will be necessary for us to see you, Robert and Mrs Taylor. Although not necessary, it would also be appropriate for us to see Mrs Lenton.

27 Subsequently, there was a typed document, addressed to the solicitors, and presumably prepared by the solicitors, which read:

You are hereby directed and authorised to prepare such documents as may be necessary, authorise such agents or valuers as may be necessary to effect a transfer of the ownership of 55 Catalina Ave, San Remo from Robert Shaun Taylor to Sandra June McGregor, this authorisation being given on the basis that Robert Shaun Taylor is unable to meet the cost of the mortgage repayments.

That form was signed by the mother, Mrs McGregor and Robert. The transfer itself, dated 1 October 1993, was signed by Robert, Mrs McGregor and Mrs Lenton in the mother’s presence, not in the presence of Mr Pearce. It is also to be noted that the mortgage was not discharged.

28 These documents suggest that Mr Pearce was under the impression that the transfer was effected because Robert was not able to meet the cost of the mortgage repayments. It seems probable that Mr Pearce did not himself speak to Robert and that, if he did, he did not fully explain the transaction to Robert, for he himself misunderstood its nature.

29 There is evidence which tends to show that Robert, for his part, was under the impression that, if he wished to do so, he could call for the title to be transferred back to him. For example, Mr L R Butler deposed that, in or about 1993, whilst he was visiting Robert at the home in San Remo, there was the following conversation:

“Mum and Dad have helped me to buy this property
I replied:
Oh is that so?
The deceased replied:
I’ve put the house into my sisters name to stop Lynette getting hold of it
I then asked:
How do you mean?
To which the deceased said:
I transferred it to my sister for a dollar so that Lynette can’t get it.
I then asked:
Is that legal?
To which the deceased replied:
Yes
I then said:
Will you get it back?
The deceased replied
I can get it back at any time.”

30 Of course, as this conversation shows, Robert did not remember that the property had been acquired with the plaintiffs’ money. His opening words to Mr Butler, “Mum and Dad have helped me to buy this property” were mistaken. Robert himself put nothing into the property and the property was acquired, not with the parents’ money, but with the plaintiffs’ money.

31 Other evidence shows that Robert continued to maintain this mistaken belief. I allowed into evidence a number of affidavits, including Mr Butler’s affidavit, on the basis that Robert’s declarations were relevant insofar as they disclosed his belief or intention. See s72 of the Evidence Act 1995. I indicated that, otherwise, the material carried no probative weight. Indeed, in respect of all the substantial allegations which Robert made, he spoke without knowledge. Thus, Robert’s preliminary instructions to his solicitor were, “House bought 1990 $130,000 paid for by mother”. The true facts were that the land was purchased for $40,000, and the price payable under the building contract was $50,000 a total of $90,000, and that Mrs McGregor raised and contributed $65,000 while Mrs Lenton called in and contributed $26,000.

32 Counsel for the defendant contended that the plaintiffs failed in some way by not calling their brother John as a witness to contradict allegations which Robert made in these notes. However, Robert’s allegations were not evidence of the facts which he alleged and there was no need to contradict them.

33 The plaintiffs’ mother died in January 1996. Her estate was almost entirely comprised of her home, which may have passed to the father on a joint tenancy. The mother left her estate to him. Mrs McGregor was executor of the estate.

34 The plaintiffs’ father died on 28 June 1998. Again the estate was comprised almost entirely of the home. The estate was left to the plaintiffs. Mrs McGregor was appointed executor. Nothing was left to the three sons.

35 Counsel for the defendant has contended that the home was left to the plaintiffs as compensation for the fact that they had purchased the house at San Remo for Robert. However, the plaintiffs denied that there was any such arrangement. It is to be remembered that the title to the property had been in the name of the plaintiffs since 1993, well before the death of either parent. The evidence before the court does not justify the drawing of the suggested inference.

36 After his father’s death, Robert sought money or property from his father’s estate. In 1999, he lodged an application under the Family Provision Act 1982. At about the same time, a caveat was lodged against the subject property. Robert specified his estate or interest in the land in the following way:

The Caveator purchased the property in 1990 at which time he was registered as the proprietor of the land. In 1992, it was transferred to the existing present registered proprietors on the understanding that at the Caveator’s request it would be subsequently transferred into the Caveator’s name as the registered proprietor.

37 Negotiations for settlement of the Family Provision claim were underway when Robert died intestate on 16 March 2001. The documents relating to the claim under the Family Provision Act are not in evidence, but I assume that the claim was made on the basis that Robert was not the owner of the San Remo property. It is unlikely that Robert would have claimed a share in his father’s estate if he had intended to take the stance, in those proceedings, that he had already received the benefaction of the San Remo property.

38 Nothing in these subsequent facts or in the evidence to which I have referred leads me to doubt the view that the plaintiffs purchased the San Remo property as an investment and holiday home, but with the intention that Robert would occupy the premises for the immediate future at least. It follows that the presumption of a resulting trust, which arises from the provision of the purchase price and the construction costs and is confirmed by the payment of the annual rates and taxes, is not rebutted. It is not necessary to consider whether the presumption would be rebutted to the extent of a right to occupy the premises whilst Robert needed to do so. Robert did occupy the premises throughout his lifetime. The present proceedings are not concerned with that.

39 It follows that the plaintiffs are entitled to an order for possession and that the defendant in her personal capacity should pay the costs of the claim. The cross-claim should be dismissed. The defendant, as executrix of Robert’s estate, should pay the costs of the cross-claim. Counsel should bring in short minutes within seven days of the orders which they propose. The minutes should include an order directing the defendant to withdraw the caveat lodged by Robert. If both counsel agree, the minutes should also include a direction that Mrs McGregor, in her personal capacity and as executor of her mother’s estate, should lodge a discharge of the sham mortgage.

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Last Modified: 05/02/2003