Miller v Martin

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S CI 2016 02443

JAMES EDWARD MILLER	Plaintiff
v
IAN DONALD MARTIN, TERESA MARTIN, ROSS HAROLD BRABHAM and MARGARET BRABHAM	Defendants

---

JUDGE:	Mukhtar AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	16, 17 March 2017
DATE OF JUDGMENT:	10 August 2018
CASE MAY BE CITED AS:	Miller v Martin & ors
MEDIUM NEUTRAL CITATION:	[2018] VSC 444

---

REAL PROPERTY ― Co-ownership of land ― Statutory application for sale of co-owned land and division of proceeds ― Determination of nature and extent of co-ownership ― Formation of non-commercial but profit making partnership between co owners as friends ― Purchase of beach house as leisure asset ― Co-owners registered as tenants in common in equal shares ― Whether interest of two owners held on resulting trust for third co-owner ― Money to purchase land originated from third co-owner being in charge of partnership affairs ― Dispute over identifying source of money ― Whether presumption of resulting trust in favour of third owner was rebutted by intention to treat source money as partnership funds and intention for land to be beneficially owned by all three co-owners ― Objective evidence and admissions of intention ― Finding by Victorian Civil and Administrative Tribunal that presumption of resulting trust rebutted and no other basis for construing a trust ― Appeal from finding dismissed ― Appeal allowed residually on Tribunal’s omission to consider statutory claim for sale and adjustment of interests according to payment of certain expenses ― Property Law Act 1958 (Vic) (No 6344), ss 225, 228, 233.

---

APPEARANCES:	Counsel	Solicitors
The Plaintiff appeared in person
For the Defendants	Mr D G Collins QC with Mr R Squirrel	GE Law Services Pty Ltd (formerly Goddard Elliott & Co)

HIS HONOUR:

Two or more persons may concurrently own and be entitled to possession and enjoyment of one piece of land. The two typical forms of co-ownership are the tenancy in common in which each co-owner has a proportionate interest in the land, and, the joint tenancy in which each co-owner has a right shared with the others to the whole of the land.

Disputes may arise between co-owners about their interest in the land or its extent, typically following a breakdown of a personal relationship or a venture that was the basis of the acquisition in the first place, and the bringing into account moneys or outgoings that were paid or payable in owning the land. In that situation, a co‑owner may request the Victorian Civil and Administrative Tribunal under s 225 of the Property Law Act of Victoria (‘the Act’) to order a sale of the land and the division of the sale proceeds amongst the co‑owners, or, to order a physical division of the land amongst them, or, to order a combination of both. All co-owners are party to such a proceeding. The Tribunal is given the power under s 228(1) of the Act to ‘… make any order it thinks fit to ensure that a just and fair sale or division of land or goods occurs.’

If the Tribunal considers it ‘just and fair’, it may order under s 230 of the Act that the land be physically divided into shares that differ from the entitlements of each of the co-owners, and that compensation be paid for any differences in the value of the shares.

Under s 233 of the Act, the Tribunal is also empowered to make orders for compensation or reimbursement as between co-owners.[1] Or, it can adjust a co‑owner’s interest in the land to take account of amounts payable by co-owners to each other during the co-ownership. Under s 233(2), in determining whether or not to make such an order the Tribunal can take into account —

(a)any amount that a co-owner has reasonably spent in improving the land or goods;
(b)any costs reasonably incurred by a co-owner in the maintenance or insurance of the land or goods;
(c)the payment by a co-owner of more than that co-owner’s proportionate share of rates (in the case of land), mortgage repayments, purchase money, instalments or other outgoings in respect of that land or goods for which all the co-owners are liable; …

[1]This provision came into operation on 1 July 2006. The power to adjust the interests of co-owners applies to legal and equitable interests acquired before the commencement of this section: see Tien v Pho [2014] VSC 391 [29]–[39].

The Tribunal’s jurisdiction to hear an application under Part IV of the Act is, subject to some exceptions, exclusive of the Supreme Court and the County Court.[2] Investing the Tribunal with that original jurisdiction to do what is ‘just and fair’ correlates with the Tribunal’s statutory obligation under its establishing Act to ‘act fairly and according to the substantial merits of the case’.[3]
[2]See s 234C to 234G.
[3]Section 97 of the Victorian Civil and Administrative Tribunal Act 1998 (‘VCAT Act’).

The Tribunal is a prominent part of the administration of justice in Victoria with extensive jurisdiction, but it is not a Court. In conducting its hearings, the Tribunal is not bound by the rules of evidence or the practices and procedures as would apply in a Court of record ‘except to the extent that it adopts those rules, practices and procedures’.[4] In deciding cases on their substantial merits, that means eschewing legal technicalities and procedural strategies, and looking to do justice according to the substance of the dispute and not according to its form. However, the lesser procedural formality or stringency does not reduce the requirement for decisions to be made according to law. Hence an appeal lies to this Court but only by leave of this Court and only on a question of law.[5]That type of appeal limits the ability to challenge the Tribunal’s findings of fact or to ask this Court to engage in a re-run of the merits of the case.
[4]Section 98 of the VCAT Act.
[5]Section 148 of the VCAT Act.

The plaintiff James Edward Miller made an application to the Tribunal partially under Part IV of the Act concerning co-ownership, with eight others, of a beach house at 3 Robyn Road, Moggs Creek in Victoria. I say ‘partially’ because his claim as made and propounded in the Tribunal was that in February 1987 he paid the whole of the purchase price of $150,502 for the beach house as well as paying subsequently for the costs of improvements, expenses and outgoings of ownership. He said his cumulative expenditure, including the purchase price, was $309,564. But, his was not primarily a request to the Tribunal for a sale of the co-owned land and a division of the sale proceeds or an adjustment of interests under Part IV of the Act. His primary application to the Tribunal as articulated formally by Points of Claim sought categorically a declaration ― by origin a discretionary equitable remedy ― that his co-owners held their legal interest in the land on a resulting trust and, or, a constructive trust entirely for his benefit. He sought an ancillary order that his co-owners carry out the trust by transferring their interest in the land so as to make him sole proprietor. That resembles an equity proceeding.

As relief of that nature or effect is not a sale or a division of co-owned land, in the interests of certainty I agitated the question whether the Tribunal had jurisdiction under the Act to hear and determine his application for a declaration of trust, or if its jurisdiction was confined to an adjustment of a co-owner’s interest according to the statutory method in s 233(2). If the Tribunal had no jurisdiction to make the declaration as sought, this Court on any successful appeal could not do so. I called for further written submissions on that jurisdictional question to which I shall return ultimately.[6] But I will say now, although the Act does not confer power to grant equitable relief and remedies, I do not think there is a jurisdictional problem here or in any case where the Tribunal in exercise of its statutory jurisdiction to do what is ’just and fair’ has to make findings, along the way, about the nature and extent of interests in land according to equitable doctrine or principles.
[6]See Court order dated 17 March 2017 with attached statement of reasons.

Apart from his primary claim for declaratory relief, Miller made an alternative claim in the Tribunal for a sale of the beach house under s 228 of the Act, and, an order under s 233 that one hundred per cent of the net proceeds of sale after selling expenses be distributed entirely to him. He also made a second alternative claim for an order under s 233 that the proceeds of sale be distributed ‘in such proportions as the Tribunal shall determine’. Although the first alternative claim was, in form, made by reference to the statute that gave the Tribunal its jurisdiction, the substance of such a claim could only be predicated on it being ‘just and fair’ for him to have, in money’s worth, the whole beneficial interest in the land on the same basis as his claim for a declaration of a resulting or constructive trust; that is, adjustment of his interest based on his payment of the purchase price and the expenses of maintenance and ownership.

There were initially eight co-owners as respondents to the Tribunal application. The key players in the dispute were Miller, Ian Donald Martin (the first respondent) and Ross Harold Brabham (the third respondent). The three of them were co‑employees working at the head office of Coles Myer Limited, a well-known major corporation and national retailer of consumer goods. Miller was a qualified accountant and an alternate director on the Coles Board representing an American shareholder, K-Mart Corporation. He arrived in Australia in 1977. He later left K‑Mart and joined Coles as Assistant Finance Director and then became General Manager for Finance. Martin was a money market manager. Brabham was a senior accountant. All three worked in the Coles finance planning department of which Miller was the head manager. They and their wives became close personal friends, described in the materials as a tightly knit group. They socialised frequently. They travelled together. Miller was a godfather to one of their children.

According to the evidence, the purchase and transfer of the beach house was completed in February 1987. Miller claimed he paid for the beach house and that it belonged to him even though, on its acquisition from the vendor, Martin and Brabham became registered as tenants in common with him in equal shares. Others were subsequently brought in and registered on title. By a transfer of land from Brabham, Martin and Miller dated 18 June 1990, Miller’s (then) wife Pam, and Martin’s wife Teresa, and Brabham’s (then) wife Margaret became registered as joint tenants with their husbands. By the same transfer two other couples became registered as joint tenants, namely: John and Judy Stodgell; and Robyn and Craig Lambert. John Stodgell was part of the staff in the managing director’s department at Coles. Robyn Lambert was Miller’s personal secretary. They too were described as close work colleagues. The transfer was expressed to be for a consideration of $30,000. The materials say the $30,000 was a nominal value ascribed by Miller referable to the 20 per cent interest to the Stodgells and the Lamberts on a purchase price of $150,000 for the beach house.

Each couple held their interest jointly as between themselves. But as between each ‘coupled’ joint holding, the interests were held as tenants in common. In the aggregate, the co-ownership of the beach house came to be divided into 30 parts. Miller and his wife were registered proprietors of 8 out of 30 undivided parts, which is about 27 per cent. The Martins and the Brabhams were likewise each registered proprietors of 8 out of 30 parts. The Stodgells were registered proprietors of 3 out of 30 parts, or ten per cent. The Lamberts were likewise registered proprietors of 3 out of 30 parts.

Judy Stodgell died in April 1996. In September 1999, Miller and his wife Pamela were divorced. One would think the divorce severed the joint tenancy. Pamela has died and it appears her interest in the beach house passed to Miller as survivor. That gave him individually a co-ownership of 8 out of 30 parts. Thus, including Miller and the deceased estate of Judy Stodgell, there came to be nine co‑owners of the beach house, and therefore eight respondents to Miller’s application in the Tribunal.

Events occurred whilst the matter was being heard at the Tribunal which reduced the case to being only against the Martins and the Brabhams as respondents. The fifth respondent John Stodgell transferred his three parts to Miller which included the interest gained by his survivorship on the death of his wife Judy Stodgell who was the sixth respondent. Robyn and Craig Lambert, the seventh and eight respondents, who jointly held 3 parts, agreed to make no claim to co‑ownership. Without knowing the details of the dealing with the Lamberts, I suppose their agreement meant a reduction of the total number of parts of co-ownership from 30 to 27. If so, the upshot was to create a co-ownership in which Miller had a proportionate interest of 11 out of 27 parts, and the Martins and the Brabhams each had 8 out of 27 parts.

After a seven-day hearing and the publication of substantial reasons, the Tribunal held there was no resulting trust because, in an unsatisfactory state of evidence, it could not be satisfied that the money used to purchase the beach house truly was Miller’s money. But it could be satisfied that, whatever the source, the evident intention was that the three of them would have equal beneficial ownership of the beach house. As a cardinal matter, the Tribunal found that in about October 1980, Brabham Martin and Miller formed a partnership, non-commercial in nature or legal structure, with a view to buying and selling shares at a profit. A joint cheque account in the name of the trio was opened for the purposes of the partnership. The Tribunal also found that a form of partnership deed was purchased at the time and signed by the parties although the whereabouts of that document are now unknown.[7] It was common ground that the partners bought and sold shares.
[7]Reasons [28].

The Tribunal preferred the evidence of Brabham and Martin that the partnership made substantial profits, even though they could not gauge the magnitude. Most pertinently, the Tribunal found that shortly before December 1986, Miller deposited $282,820 into the partnership account. That money was the proceeds of sale of shares in Coles Myer in the name of New Kapital Investments, which was a business name used by Miller. The Tribunal found the money was paid into the partnership account with the intention that it would belong to the three partners, and was then used to pay for the beach house. That finding of intention, on principle, defeated Miller’s claim that the legal interest of Brabham and Miller in the beach house was held on resulting trust for him. In the way his case was articulated and conducted in the Tribunal, those findings collaterally made unsustainable his claim for a declaration of constructive trust.

Accordingly, the Tribunal made an amended order dated 3 June 2016 stating that ‘The application is dismissed’.[8] That is, the whole of the application including the alternative statutory claims was dismissed. That was the principal order as sought in the Tribunal by counsel for Brabham and Miller.[9]
[8]Miller v Martin (Building and Property) [2016] VCAT 854.
[9]‘Respondents Closing Submissions’ dated 23 March 2016, para 228(a) and (b).

But, the Tribunal’s decision and order was unconcerned with Miller’s first alternative statutory claim made under s 228 of the Act for a sale of the beach house. Martin and Brabham had accepted Miller’s contention that the breakdown of their relationship made it more beneficial to order a sale of the beach house and a distribution of the proceeds of sale rather than order a partition of the land. Their position was that the sale proceeds should be distributed in accordance with their one third equal interest as tenants in common as registered on title. What remained for consideration though as ancillary to a claim for an ordered sale, was Miller’s claim under s 233 for a distribution of the net sale proceeds. His claim for 100% of the sale proceeds was based on sole beneficial proprietorship. But, the Tribunal’s finding about the partnership and the shared beneficial interest was adverse logically to such a claim. In the closing submissions to the Tribunal, Miller’s case was: ’In the event that the Tribunal is persuaded that the first to fourth Respondents do have an interest in the land then there ought to an adjustment against their interests for the contributions made by the Applicant.[10] The contributions were summarised as being for a total of $324,134.25 but that included the purchase price of $150,502 found by the Tribunal to have been partnership moneys paid from the partnership account.
[10]‘Submissions of the Applicant’ dated 13 April 2016.

The evidence of outgoings and expenses was not clear, but the Tribunal made some findings about post-acquisition payments and expenses. Most invoices for those payments were addressed to Miller although some were addressed to Martin or Brabham and another to ‘J Miller syndicate’. Some of the payments for renovation, maintenance rates and other expenses were made by Miller either on his personal account or the partnership account; some by credit card; but most were in cash.[11] At the time, Miller did not seek contribution from the others for any payments made.
[11]Miller v Martin [2016] VCAT 854 [140]. See exhibit JEM-28.

In the Tribunal, the respondents contended there was insufficient evidence about the state of accounts between the partners, and the Tribunal should not in effect undertake under the Act a taking of partnership accounts. There was also a question whether Miller’s claimed contributions and payment of expenses came from partnership funds anyway in the same way as payment of the purchase price. There was another question whether the expenses were of a type capable of being brought to account for an adjustment of property rights under s 233.

Miller’s case for a declaration of a resulting trust or constructive trust was that he paid not only for the purchase of the land but for all of the expenses of ownership. As I read and construe the Tribunal’s reasons, it may be the alternative claims were consumed by the Tribunal’s ultimate conclusion that there was a partnership; there was a pool of partnership funds; Miller was in charge of it; the pool of funds was regarded by Brabham Martin and Miller as belonging to the three of them; payments were made from that fund.[12] But, what matters on this appeal is that there appears to have been, expressly at least, no adjudication or order under Part IV of the Act which is the source of the Tribunal’s jurisdiction. Hence my quandary on jurisdiction.
[12]Reasons [202]–[203].

At this juncture, I am bound to say something about the evidentiary difficulties with which the Tribunal had to work in discovering the source of the money coming into the partnership and how this partnership conducted its financial affairs. It is plain the Tribunal was dealing with a most peculiar and trying case where, despite the accounting credentials of these three men, the conduct of the partnership and accounting for its dealings was most unbusinesslike. Money transactions were occurring ‘…without any clear paper trails or explanation of why substantial sums were paid without any apparent consideration or record of whose money it was or its sources’.[13] Although Brabham Martin and Miller were trained accountants, and therefore conversant with account keeping and recording of financial dealings, there was an absence of any comprehensive set of accounts. On top of all that, there were shortcomings in the spoken evidence —
[13]Reasons [138].

I heard evidence from Mr Miller, Mr and Mrs Martin, Mr Brabham and a Mr Robert Parker.
The passage of time has been a major problem for the parties. It is unsurprising that memories, of what occurred and what was said, were incomplete or inaccurate given that the events occurred up to 35 years ago.
When first Mr Brabham and then Mr Martin left Australia to work overseas, such documents as there were relating to the financial dealings between the parties were left with Mr Miller. Mr Miller also appears to have retained other documents. According to Mr Martin, Mr Miller is a meticulous keeper of records. By contrast, Mr Brabham and Mr Martin do not appear to have retained anything of consequence.
As a result, most of the documents that have been produced are annexed to Mr Miller’s witness statements. They were available to prompt his memory but not that of the other witnesses until Mr Miller’s witness statements were filed.
None of the witnesses was particularly impressive although Mrs Martin gave clear evidence about one matter that had not been agitated by the other parties in the material that was filed. I have had some difficulty reconciling much of the oral evidence with the documentary evidence.

The Tribunal was resigned to saying, ‘As a result I have to determine where all this money is likely to have come from on very inadequate evidence’.[14]

[14]Reasons [169].

Under s 148 of the Victorian Civil and Administrative Tribunal Act (‘VCAT Act’) Mr Miller has sought leave to appeal on 13 questions of law. The proposed notice of appeal states 15 grounds of appeal. There is overlap. He asks this Court to set aside the Tribunal’s orders, and remit the matter to be reheard by the Tribunal as differently constituted. The application for leave to appeal, and if granted, the hearing of the appeal were heard coextensively for expedience.

Miller was represented by quite experienced counsel at the Tribunal. On the first day of hearing in this Court, Mr Miller’s solicitors ceased to act for him. He conducted his case in person. I am afraid to say the Court had to endure quite a pugnacious performance by Mr Miller which did not aid a comprehension of his arguments, much of which was directed to: calling the respondents liars; a denunciation of the procedural fairness of Tribunal hearing; a venting of indignation at the outcome; and attempting in effect to have this Court conduct a rehearing on appeal.

More recently, there was an astonishing turn of events. Having informed the parties of my intention to publish judgment at 4.15 on 10 August 2018, on 7 August 2018 Miller filed a summons seeking an order for production of the files in the matter kept by the respondent’s lawyers, and, an order ‘That His Honour stay his decision in this proceeding whilst inspection of the files is undertaken by the plaintiff’. The summons was filed by electronic means from the United States of America. It was filed in this appeal proceeding. A supporting affidavit sworn by him in Melbourne on 3 August 2018 with 16 exhibits says he has a claim under section 82 and 314 of the Crimes Act (Vic). Section 84 makes it a crime to obtain financial advantage by deception. Section 314 concerns the crime of perjury. His affidavit contains a farrago of references to the evidence before the Tribunal which he asserts shows there was a ‘false narrative’. It says he says he is concerned that key documents in the possession of the defendants’ solicitors will be lost. He asks for a hearing date in six weeks on his return to Australia.

The Court makes allowances for a litigant in person. But I am bound to say, this really was cavalier conduct. Miller was informed that the Court would hear the summons at 4.15 on 10 August 2018 before the handing down of this judgment.

I shall return to the appeal.

In discerning his case on a requisite question of law, the Court has had to depend largely upon the written submissions that were filed on his behalf by Miller’s solicitors before they ceased acting, which is the case that the respondents came to Court to meet. On the question of other materials for this appeal, I will disregard most of an affidavit sworn by Miller on 9 September 2016 which is irrelevant, or more conspicuously, which includes new or additional evidence of a financial or accounting nature which was not before the Tribunal.[15]
[15]See paragraphs 4 to 30 and 36 to 40 and the exhibits produced.

My conclusion is that having regard the nature of the case, and its instabilities, and its presentation here, it is in the interests of justice to grant leave to appeal. It ought be said that the grant of leave is not given on the basis that the appeal has ‘a real prospect of success’, that being the amended test for leave under s 148(2)(a) of the VCAT Act. That amendment came into force on 1 May 2018, and does not apply to applications for leave before that date which remain to be considered according to considerations stated in Secretary to the Department of Premier and Cabinet v Hulls.[16] I will grant leave because there were uncertainties borne of the nature of the case which called for extensive argument to ensure no error had occurred.
[16]See [1999] 3 VR 331, 337 [16].

With one exception, the appeal will be dismissed. In my view, despite the unsatisfactory evidentiary conditions in which the Tribunal had to operate, the findings which informed the outcome of the case were soundly based on the available evidence and the conclusion that there was no resulting trust was soundly based on the applicable legal principles. The Tribunal’s salient conclusion that the parties were in partnership is unassailable. Miller’s credibility in denying a partnership was damaged in the Tribunal, and I do not understand Miller’s appeal materials to be challenging that conclusion. His case at the Tribunal for a resulting trust devoted itself to the contention that the sole question for determination was ’Who paid the money?’ It was not. Although Miller denied being in partnership with Brabham and Martin, the evidence of a partnership was, as the Tribunal described it: ‘overwhelming’. The money used to pay for the beach house was paid by Miller into the partnership account. The Tribunal’s finding that the money was partnership money was not only open, but it was more aligned with the objective evidence which showed Miller as acknowledging that the beach house was purchased with the apparent and executed common intention that it would belong to all three partners beneficially.[17] That rebutted equity’s presumption that when a person purchases a property in the name of himself and another it is presumed that the purchaser did not intend the other person to take beneficially.
[17]See Miller v Martin and Others [2016] VCAT 854 [205].

Further, I would reject the various other grounds of appeal based upon a denial of procedural fairness or natural justice, the rule in Browne v Dunn,[18] and insufficiency of reasons. Those grounds are based variously on a contention put to the Tribunal that Brabham and Martin were bound by their pleadings and their evidence in chief that they contributed to the source of the purchase moneys in the partnership account. That could not be proved in a case riddled, all round, with evidentiary inadequacies. But, nevertheless, in being bound to decide Miller’s case for a resulting trust on its substantial merits and according to law on the whole of the evidence before it, the Tribunal (not being a Court of pleading) certainly did not err or cause a procedural injustice in proceeding to apply correctly the law of resulting trusts by looking to the evidence of common intention to rebut the presumption. As Miller would have it, the evidence of common intention, adverse to his case, was irrelevant. That cannot be countenanced. Equity’s concern is with the effectuation of intention.
[18](1893) 6 R 67.

The one exception is an error of law as conceded properly by the respondents. Ground M of the proposed notice of appeal states:

The learned senior member erred in law in failing to make a decision on the following matters:
(a)should the property be sold pursuant to s 228 of the Property Law Act and if so, how should the sale proceeds be distributed pursuant to s 233 of the Property Law Act?
(b)what were the terms of the partnership agreement between the parties?
(c)that the Applicant had the right to withdraw his own funds?

The respondents agree that an error of law was made by the Tribunal in not considering and deciding the application for relief under Part IV of the Act and making a determination under s 228 of the Act. They accept the appropriate remedy is for the matter to be remitted to the Tribunal constituted by the same Senior Member to make determinations under s 228 of the Act, with reasons, according to the evidence already adduced and the findings already made on the application.

In the interests of better understanding the issues at the Tribunal and illuminating the questions and grounds of appeal, in this judgment I shall defer dealing with each question of law or ground of appeal until first exposing the elements of the dispute and the way it was pleaded and conducted at the Tribunal. In particular, I shall focus on the evidence and findings concerning the crucial issue whether the parties were in partnership, and their apparent intentions about beneficial ownership of the beach house. That is the quintessence of the dispute.

The elements of the case

The application proceeded in the Tribunal by de facto pleadings. In his points of claim, Miller alleged where relevant:

(a) in late 1986 he purchased the beach house and paid 100% of the purchase price of $150,502 (paragraph 3);

(b) the co-owners did not pay or advance any money for that purchase (paragraph 4);

(c) as well as paying the purchase price, he also paid up to October 2011 all insurance, rates, outgoings and other expenses over the property, which he particularised and quantified at $132,008.74 (paragraph 5); and

(d) as at 2015 he had paid for the purchase price, rates, maintenance, insurance, energy, telephone and other expenses to the cumulative amount of $309,546.37 (paragraph 6);

(e) in August 2012, the fifth respondent John Stodgell agreed to transfer all of his interest to Miller (including the interest gained by survivorship on the death of his wife Judy Stodgell), but failed to honour that agreement (paragraph 9);

(f) in 2012, the seventh respondent, Robyn Lambert executed a transfer of her interest in the land to him (paragraph 11);

(g) in October 2011, the eighth respondent, Craig Lambert, agreed to transfer all of his interest in the property to him (paragraph 12); and

(h) ‘Despite requests the first to sixth and eight Respondents have failed, refused and/or neglected to transfer their respective interests in the Property to the Applicant’ (paragraph 13).

Then came these consequential allegations or contentions —

14.By reason of the matters pleaded in paragraphs 1 to 6 herein, the first and third Respondents hold their respective interests on resulting trust, alternatively constructive trust, for the Applicant and the second, fourth, fifth, sixth and eighth Respondents hold their respective interests on constructive trust for the Applicant.
15.Further and alternatively, because of the nature of the Property and the persons interested in the Property, a sale of the Property and distribution of the proceeds on sale would be more beneficial to the Applicant and the Respondents than a partition of the Property.
PARTICULARS
The first, third, fifth and seventh Respondents were originally work colleagues of the Applicant. The remaining Respondents are or were the respective spouses of the abovementioned Respondents. The relationship between the Applicant has broken down. The Property comprises the land and a two-storey weatherboard dwelling within close proximity to the beach and the Otway Ranges. It was purchased for, and has at all material times been used for, recreational purposes, namely as a holiday house.

He claimed these remedies:

A.A declaration that the first to sixth and eighth Respondents [i.e. excluding Robyn Lambert] hold their respective interests in the Property on resulting trust and/or constructive trust for the Applicant.
B.An order that the first to sixth Respondents and eighth [i.e. excluding again the Robyn Lambert] transfer all their right title and interest in the Property to the Applicant.
C.Alternatively an order pursuant to s 228 of the Property Law Act 1958 (Vic) that the land be sold on such terms and conditions as the Tribunal shall direct.
D.An order pursuant to s 233 of the Property Law Act 1958 (Vic) that the proceeds of sale after the deduction of selling costs, security costs and legal costs of the sale be distributed to the Applicant in its entirety (100%), alternatively, in such proportions as the Tribunal shall determine.

A little needs to be said now about the declaratory relief sought. A resulting trust is not required to be in writing and can arise by operation of law where property is transferred by one person into the name of another without consideration, or, where a purchaser pays the vendor and directs a transfer of the property to another person without consideration from that person. In a court of equity, it is presumed that the person providing all of the purchase money intended, at the time of purchase, to benefit himself even though the property is put legally in the name of others or another. A court of equity will then treat the person in whose name the land is legally owned as holding the land on resulting trust for the purchaser, unless it can be shown that no trust was intended or, put another way, the purchaser intended the beneficial interest to pass to the other person in whom legal title is vested.[19]
[19]See Napier v Public Trustee (1980) 32 ALR 153, 158 and Calverley v Green (1984) 155 CLR 242, 246-7, 266‑7. See generally Heydon and Leeming, Jacobs Law of Trusts in Australia (8^th Ed) at [1210] ff.

A constructive trust is not required to be in writing and is distinguishable, but not always readily, from a resulting trust. Speaking broadly, a constructive trust can arise by operation of law independently of the parties’ intentions and in a wide variety of circumstances according to how a court of equity construes the conduct of the parties. The general equitable principle is that a constructive trust will arise in a proprietary or institutional sense when the conduct is such as to make it unconscionable for the legal owner or co-owner of property to deny a claimant an interest or greater interest in the property, particularly if the claimant has incurred detriment in the reasonable expectation that the property was his or hers to the extent claimed. Or, speaking broadly again, the constructive trust may be a remedial device fastened by a court of equity not on property but on the legal owner to remediate unconscionable conduct by imposing personal liability on the legal owner or co-owner to account to the claimant in the same manner as that of an express trustee.[20]
[20]See Giumelli v Giumelli (1999) 196 CLR 101, 112. See Young, Croft and Smith, On Equity (Lawbook Co, 2009), [6.660].

Miller’s claim did not differentiate between the foundations for seeking a declaration under equitable principles of resulting trust and constructive trust, especially if the sole question for determination according to Miller was: ‘Who paid the money?’ Equitable relief by way of constructive trust was presumably being sought on the basis that the discord or failure in the personal relationship that brought the co-owners together to use and enjoy the land made it against justice and good conscience for the other co-owners to retain their legal interest in the land if Miller paid for all the land and subsequent expenses and outgoings of ownership, and if the others did not contribute anything.[21] Thus, so it seems to me, his case for a constructive trust would rise or fall according to his case for a resulting trust.
[21]See Muschinski v Dodds (1984) 160 CLR 583.

But there is more to the nature or availability of a constructive trust by pointing to a failed consensual joint relationship or endeavour. Legal interests can remain in cases dealing with an acquisition of property under a failed relationship created on the foundations of a partnership or contractual joint venture. Equity recognises that rights of parties will depend on any express or implied terms of the partnership, on the dissolution of which, after the discharge of partnership debts, parties become entitled to repayment of respective capital contributions in an equitable accounting.[22]
[22]Ibid, 609 (Brennan J) and 618-9 (Deane J).

Martin and Brabham took the defence that the purchase price was paid out of funds in a joint account held with the Commonwealth Bank in the name of ‘Brabham Martin and Miller’ which was set up and used for the purposes of a partnership to buy and sell shares that was formed between them as friends. The material parts of the points of defence stated:

3.Save that the property was purchased in or about late 1986, the respondents … say that the whole of the purchase price for the purchase of the property derived from partnership funds of the Applicant, the First Respondent and the Third Respondent.
PARTICULARS
In or about 1980 the Applicant, the First Respondent and the Third Respondent formed a partnership known as Brabham, Martin & Miller (‘the partnership’), through the execution of a deed that was purchased from a legal stationary store. This deed was held by the Applicant.
Funds were contributed equally to the partnership and each partner held 1/3 interest in the partnership. A bank account was established in the name of the partnership.
The partnership invested in shares including, newly listed Buddha Gold Mine shares, which resulted in profits for the partnership and provided wealth creating opportunities.
The profits were used for further quality of life investments, rather than commercial investments including, investments inter alia, a campervan, race horses, overseas vacations, spa baths, real property in Surfers Paradise and in Mansfield as well as the property that is the basis of this application.

…
5.… the Respondents did not receive any requests for financial contributions to be made towards the property by the Applicant as the partnership bank account held surplus funds from the sale of the properties in Surfers Paradise and Mansfield to cover all outgoings, insurance and other expenses.
PARTICULARS
The Applicant was the administrator of the partnership and responsible for the management of partnership finances and any management of partnership property on behalf of the partnership and then later the affairs of all the proprietors of the real property. The Applicant was the holder of all partnership deeds, share purchase documentation, share certificates and bank account records.

…
7.Throughout the time of ownership, the Respondents have provided labour and assistance in the upkeep and maintenance of the property and garden (save for the time they resided overseas) and partnership funds were expended for its upkeep, repair and maintenance.

The defence admitted that the beach house should be sold and ‘the proceeds of the sale of the property be distributed in accordance with the Respondents’ registered interest as recorded on title’.

In a reply to that defence, Miller squarely denied any partnership. He denied signing any partnership deed. He admitted the existence of a joint account, into which he said Martin and Brabham had never deposited any money. He said he had deposited $282,720 into that account from a sale of Coles Myer shares owned by him, and that was the source of funds to buy the beach house. On that basis, he said all the purchase money for the beach house was paid by him, even though the three of them were registered on title as co-owners. In denying a partnership, Miller pleaded (in reply that is, and not at the outset) the basis of the relationship according to this unwritten agreement:

4.Further, by agreement made in or about late 1986, it was agreed between the Applicant, the First Respondent [Martin] and the Third Respondent [Brabham] that:-
(a)the funds of $282,720 which was deposited in the account of Brabham, Martin and Miller were the sole funds of the Applicant being the proceeds from the sale of Coles Myer Limited shares owned by the Applicant;
(b)the property was acquired for recreational use rather than commercial investment for profit and the Respondents entitlement was only as to recreational use;
(c)the Applicant had the sole right to sell the property; and
(d)upon the sale of the property, any distribution of the proceeds of sale was to be based on the financial contributions of the First and Third Respondents and the Applicant.

PARTICULARS
The agreement was oral and made between the First and Third Respondents and the Applicant at various face-to-face meetings between these three persons. The meetings occurred in late 1986 prior to the purchase of the property. The terms of the agreement were to the effect alleged.
5.The Applicant … says further that any moneys held in the partnership account were moneys solely contributed by the Applicant and that the records were kept by the First Respondent until 28 March 1988 and thereafter by the Applicant.

The prime issue in the case, on the pleadings, was whether there was a partnership between the three of them, or, whether the relationship was defined legally according to that alleged unwritten agreement under which Brabham and Miller only had the right of recreational use yet, at odds with that, they would be on title as equal legal co‑owners with Miller. He told the Tribunal ‘…if they were to earn an interest in the Beach House by a later contribution, it would not be necessary to transfer a share to them at that time if they were already registered as owners’.[23] Brabham and Martin denied any discussion with Miller about such an agreement. The Tribunal found such an agreement was not was proved. There was nothing in writing and no other evidence supporting the alleged conversations, Miller’s explanation was ‘difficult to understand’ (that is, not plausible) because it is possible to permit friends to use one’s beach house without putting them on title. As I understand the appeal papers, there is no challenge to this part of the Tribunal’s decision.
[23]Reasons [59].

However, the Tribunal found there was ‘overwhelming’ evidence of a partnership. It was the fact that Miller, Martin and Brabham had a joint cheque account in their names, referred to commonly as the ‘partnership account’. It was the fact that after a house inspection, Miller paid an holding deposit of $1,000 to buy the beach house using a cheque drawn on a personal account. It was also the fact that on 5 December 1986 a cheque for $282,820 was deposited into the partnership account as the proceeds of sale of shares in Coles Myer held in the name of New Kapital Investments, a business name registered by Miller. The Tribunal’s reasons state that Miller’s evidence did not say where those shares came from or who paid for them. The business name was not registered until 15 October 1986 and the shares were sold less than 6 weeks later on 3 December 1986.[24]
[24]Reasons [188] ff.

The question then became whether the $282,820 deposited in the partnership account was partnership property. As a matter of law, unless the contrary intention appears, property brought into a partnership for the purposes of the partnership becomes partnership property to be applied exclusively for the purposes of the partnership and in accordance with the partnership agreement.[25] Unless the contrary intention appears, property bought with money belonging to the partnership is deemed to have been bought on account of the partnership. Consistently with his denial of a partnership, Miller‘s case was that it was his money that was used to buy the beach house, and that was the basis for his claim that Brabham and Martin held their interest on a resulting or constructive trust. In receiving and examining the evidence about the existence of a denied partnership, the Tribunal was exposed to much objective evidence of acknowledgments by Miller that Brabham and Martin had a one third beneficial interest in the beach house (and other assets) as partners. The starting point to an understanding of the case and the approach of the Tribunal is the evidence concerning the phenomenon of the partnership.
[25]Section 24(1) Partnership Act 1958 (Vic). See K L Fletcher, The Law of Partnership in Australia (9^th ed. 2007 Thomson Lawbook Co) 137-9.

The evidence of a partnership

The existence of a partnership was sworn to by Martin and Brabham but denied by Miller who said in his witness statement that at no time had he seen or executed a partnership deed. He said that if he used the words ‘the partnership’ ― which he did over the years ― that was in relation to an entitlement to use certain assets.

Martin’s witness statement said where relevant:

7. In my role as Money Market Manager, I was personally dealing with major financial institutions and stock brokering houses.

8. In or about late 1979 I was invited to purchase shares in the initial public offering of a gold mining company in Queensland known as Buddha Gold Mines NL (“Buddha Gold Mine”).

9. Following discussions with Brabham and Miller it was decided that we take up the invitation to purchase Buddha Gold Mine shares.

10. I do not remember the exact amount of money we contributed, however I believe it was around $15,000.

11. To the best of my recollection, it was at this point we decided to formalise our partnership and duly completed and executed a Partnership Deed (“the Deed”) purchased from a Melbourne CBD legal stationary store. I recall the Deed was light blue/green in colour and A3 size. The partnership was named Brabham, Martin and Miller Partnership (“the partnership”).

At one point I held the Partnership Deed but I no longer know of its whereabouts.

12. We incorporated the partnership into Tegal Pty Ltd in the early 1990s.

13. Upon completion of the Partnership Deed we opened a bank account in the name of Braham, Martin & Miller with the Commonwealth Bank Australia.

In his witness statement, Brabham said, where relevant:

3.In the early and mid‑1980s the share market was booming and Miller, Martin and I wanted a piece of the action and as senior financial business people we believed we could make money in speculative investments.
4.Our first main investment together was in or about 1980 purchasing shares in a newly listed company called Buddha Gold Mine NL (‘Buddha Gold Mine’) which was located in Queensland. …
5.Buddha Gold Mine issued a prospectus and to the best of my recollection the shares were offered at 5 cents and Miller, Martin and I agreed to take the punt and invest. As I recollect Miller, Martin and I contributed equally to purchase around $5,000 each which would have purchased 100,000 shares each in Buddha Gold Mine. The money I contributed came from my own personal savings and this contribution was the beginning of our investment syndicate.
6.In early 1982 the value of Buddha Gold Mine shares was increasing … In early 1982 Miller, Martin and I sold our Buddha Gold Mine shares … and we made a return of approximately $190,000.
…
8.To the best of my recollection, once we received our capital gain, we decided jointly to create a partnership. I went and purchased a paper partnership agreement (‘the Deed’) from a stationery shop located in the Melbourne CBD, as a blank document template and we completed and filled in the template and named our partnership simply ‘Brabham Martin and Miller’, (in order alphabetically). The Deed was signed by myself, Miller and Martin and would have been kept by Miller as the more senior Coles executive. The Deed document was not treated as really important by us as much as the partnership name and allowing us to open a bank account in the name of the partnership legal entity. As business people we believed the formal partnership was good business practice.
9.We would have received a cheque from the broker from the sale. Everything was by cheque in those days. As the partnership did not exist when we purchased the shares the purchase and sale probably would have been in the name of Miller so the broker’s cheque payee name would have been so made out. Eventually the proceeds were deposited into the new joint bank account when it was set up and named Brabham, Miller and Martin (‘the partnership bank account’).

Mr Miller’s witness statement is replete with details concerning share trading. Confining myself to the Buddha Gold Mine shares, his witness statement said that Brabham and Martin made no contributions whatsoever to the purchase of those shares. He denied that he ever executed any partnership deed. He denied that there was ever an entity known as the Brabham, Martin and Miller partnership. He said that the joint bank account was opened by him on about 31 October 1980 by a deposit of $30 from him; and denied that any profits or funds from the sale of Buddha Gold Mine shares were deposited into the joint account. In his witness statement he stated:

45.On 3 December 1986, I sold 50,000 Coles Myer Ltd ordinary shares for $282,720, through JB Weir & Son, in the name of James Miller trading as New Kapital Investments, a business name registered by me on 15 October 1986. I used New Kapital Investments for recording transactions involving Kmart Corporation.
…
46.On 5 December 1986, I arranged for the proceeds of $282,720 from the sale of my 50,000 Coles Myer Ltd shares to be deposited into the BMM [i.e., Brabham Martin and Miller] Bank Account for the purpose of funding the purchase of the Property.
…
47.I decided to deposit the sale proceeds of my 50,000 Coles Myer Ltd shares into the BMM Bank Account because it appeared ideal to manage payments and contributions relating to the Property, thereby providing a single record for determining distributions when the Property was sold.
The balance in the BMM Bank Account at the time was only $14.29. The bank statements for that period of time have not been given to me and they were in the possession of Martin.

As for Tegal Pty Ltd, he stated that in April 1988 there was an allocation of four shares to each of Brabham, Martin and himself in that company, but that the beach house formed no part of the Tegal ‘partnership’ as the company was used for other investments. He says that Martin transferred his Tegal shares to him between 2002 and 2004 and the company was deregistered on 19 February 2015.

On the question of the existence of a partnership, there was a striking piece of forensic evidence supporting the evidence of Martin and Brabham about the existence of a partnership deed. In evidence before the Tribunal were the cheque stubs of the joint bank account. The very first cheque stub, dated 31 October 1980, was recorded as being a payment ‘To R H Brabham’ for $1, leaving a balance of $29. The handwriting on the stub was accepted as Martin’s handwriting. Alongside the word ‘For’ in the place where one would ordinarily expect to see a note of the payee or a description of the payment, there was a thick black patching of the sort recognisable as made by a felt tip marker. When shown that cheque stub by the cross examiner and asked if he had blacked out the notation, Miller said ‘I might have’. When further pressed, Miller admitted ‘it’s blacked out by me’. When asked for an explanation he said:

But I can tell you that at the time that I got the documents from Martin there was no partnership deed. I had never seen a partnership deed and I have never signed a partnership deed. The only document I was given that would seem to correspond to $1 was an investment portfolio dated 1981. I thought that they put the wrong connotation down. Also within the investment portfolio it said Mr Parker was admitted to the partnership and none of those positions were right.

The cross-examiner demonstrated to Miller that holding up the stub in the light enabled the words ‘Partnership deed’ to be seen. When asked again why he blacked out the cheque stub Miller said: ‘Because it was wrong. … It wasn’t that I disagreed, it’s – I didn’t get a document.’ He denied blacking out those words to remove something inconsistent with his case. When pressed to explain, he said (with my underlining):

I believed it [the words Partnership deed] was written later. I believe it was written – that by the time I got the cheques in 1988 I had put in $282,000. We had bought – we had settled on Moggs Creek and Imperial Surf. I was concerned if somebody was trying to put into the book that those properties were part of a partnership.

A less dramatic piece of forensic evidence, but nevertheless adverse to Miller’s case and his credibility, was that the cheque stub for the fifth cheque dated 10 March 1981 was a cheque to Miller for $144.92 for ‘partnership expenses’. Miller’s evidence was that he did not know what the partnership expenses were. Later he said ‘But also as I’ve said throughout if there is a casual use of the word partnership it relates to only two funds that I’ve put in. There was no other funds prior to that date put in by anybody else and no funds put in by Brabham and Martin.’

In the face of his categorical denial of a partnership, the evidence of the deliberate conduct of blacking out the words ‘Partnership Deed’ was certainly embarrassing to Miller on such a major issue and its ramifications in the case. To any finder of fact in a case such as this, it had to cast serious aspersions on his credibility, at least without a compelling and verifiable explanation.

After the deposit of the $282,820 cheque into the joint account on 5 December 1986, the immediate dealing with money in that account was forensically telling. On the same day, $96,273.05 was withdrawn from the joint account to purchase a bill of exchange from the Commonwealth Bank in the name of Brabham Martin and Miller. On 11 December 1986 a second bank bill was purchased on the joint account in their names for $149,555. When that bill matured on 15 January 1987, $125,000 from the proceeds was then deposited in their names with Australian European Finance Corporation Limited. That deposit was repaid into the joint account on 30 January 1987 which is about the time that payment was made and settlement occurred for the beach house. As the Tribunal posed: If the money was Miller’s why pay it into a joint account and then invest it in the names of the partners? And then have it transferred to the three of them as transferees?

Then, as the Tribunal reasons recite,[26] on 3 April 1987 Miller paid a deposit of $16,000 for the purchase of a residential unit in Surfers Paradise known as Imperial Surf. There was a dispute whether the cheque for the deposit was drawn on Miller’s personal account or whether that came from the partnership. But, the balance of the purchase price was paid from the partnership account on a direction given to the bank signed by Miller and Brabham. Miller said that the money transferred to the vendor from the partnership account was the balance of the funds that had been invested in the bank bills which he said was his money, even though it was in the partnership account. The Tribunal said:

87.Both Mr Martin and Mr Brabham said that they believed that Imperial Surf was registered in Mr Miller’s sole name because there was some legal difficulty about registering a title in Queensland in the name of a partnership but there would seem to be no reason why it could not have been registered in their three names. Mr Miller said that it was put into his sole name because he did not believe that Mr Martin or Mr Brabham would be contributing any money towards the purchase.
88.When the property was not used by any of the partners it was rented. Rental statements up to June 1993 were in the name of Mr Miller. After that they were in the names of the three partners. On 5 December 1995 they were in the name of Mr Miller, Mr Martin and Mr Stodgell and then, from 31 January 1996 they reverted to the names of the three partners. The rentals were deposited in the Partnership Account.

[26]Reasons [85]–[94].

Years later, Miller sent a signed memorandum dated 13 June 2000 to Martin which said (with my interpolations in italics):

RE: Apartment 30B, Imperial Surf
This memorandum is to confirm that on or about 7 January 1983 [query if that was meant to say 1986], I James Edward Miller acquired the following property.
Certificate of Title
Volume No 6412
Folio No 82
Address: Unit 30B
72-80 The Esplanard
Surfers Paradise Queensland 4217

The beneficial interest in the property is held for myself, Ian Donald Martin and Ross Harold Brabham in equal one-third shares.

Miller’s explanation of this document is recorded by the Tribunal in this way:

44.… When asked to explain this during cross‑examination, Mr Miller said that, at the time he signed this memorandum, he had not fully considered the contents as he was leaving on an overseas trip to Rome on 16 June, which was three days later. He said that he assumed that the memorandum referred to the entitlement of Mr Brabham and Mr Martin to use Imperial Surf. He said that he provided the document to allow Mr Martin to borrow money. Mr Martin said that he had his solicitor prepare the document so that he would have something in writing to prove that he owned his one-third share in Imperial Surf.
45.Mr Miller is and was at the time an experienced businessman and he would have understood the meaning of the document which is short and unequivocal. If he believed that Mr Martin was intending to use the document in order to secure some borrowing he must have known that the document would have been worthless for that purpose if it was only intended to refer to a right to use the unit.
…
91.Mr Martin said that this memorandum was prepared by his solicitors in order to record the correct and actual ownership of Imperial Surf and that it was signed by Mr Miller ‘after various discussions’. I found Mr Miller’s explanation for having signed this document unconvincing.

The Tribunal’s reasons record that Miller sold the Imperial Surf apartment and kept the money for himself. Neither Martin nor Brabham demanded a share of the proceeds. The Tribunal stated:

92.Mr Martin said that he agreed to this because Mr Miller told him that he needed the money for his property settlement with his wife. He said that he and Mr Miller initially argued about the matter but that he and his wife finally agreed to allow Mr Miller to sell it. He said that he did not know what happened to the funds.
93.Mr Brabham said that he was not consulted about the sale of Imperial Surf. He said that he only became aware that it had been sold when his relatives arrived to stay in the unit and they were informed by someone there that it had been sold. He telephoned Mr Miller who told him that he needed the proceeds of sale to pay debts and that there was no surplus left. Mr Brabham said that he was very upset over the sale but believed that he could do nothing about it because he was not on title.

There are other contents of the reasons which refer to other acquisitions of leisure assets including land at Merrijig in north-eastern Victoria which Miller purchased on his personal account but in whose name the land was registered in the names of Brabham, Martin and Miller, for whom Miller held a power of attorney. The dealings with this land appear to be quite complicated as they involved discussions with the Lamberts and the Stodgells. It is sufficient to say it was another example of a joint acquisition, although in this case the payment did not come from the partnership account.

The Tribunal’s reasons recite the purchase of thoroughbred racehorses by Miller. Ownership of the horses was registered in the names of Brabham Martin and Miller.[27] One of those horses, Rapavan was said by Miller to have been bought by him from his own money, although the Tribunal did not have unequivocal documented evidence of that fact. Other horses were purchased from funds from Tegal Pty Ltd, a company in which the shares were owned by Brabham Martin and Miller.
[27]Reasons [76]–[80].

By October 1992, it appears the Brabhams were in the hands of lawyers concerning a financial or property settlement on a dissolution of their marriage. This required them to provide instructions concerning their financial interests. In evidence was a letter from Margaret Brabham (the fourth respondent) to Miller on 14 October 1992 stating:

Dear Jim,
I have been requested by my lawyer to supply information to her re the Partnership, for settlement purposes. I wonder if you can supply me with answers to the following questions please?
1. Is there a ‘Deed of Partnership’?
2. When was the partnership set up?
3.Is it a registered Partnership with the Company’s office (or Aust equivalent)?
4.What are the entitlements of Ross and myself as of May 23^rd 1992 and now?
5.Confirmation, in writing, that the Partners are happy for me to remain in Partnership.
6.What rights do I have to sell my share in the P’Ship in the future?

Jim, I would appreciate your response to the above as soon as possible …

There was no response to that letter in evidence. But there was a response from Miller to Ross Brabham on 26 November 1992 with a document saying (with my explanatory annotations in italics):

1.Moggs Creek Beach House (80% owned by members of partnership). [i.e. allowing for the subsequent 20% share to the added co-owners]
2.‘Lancer 48’ Motor cruiser (1/3 interest).
3.Shares (at market) - $50,000.
4.Cash reserve - $30,000.
5.Land – Mansfield, Vic. (housing block).[i.e. the Merrijig Land referred to in paragraphs 95 to 105 of the Reasons, which was also purchased by Miller and registered in their three names]
6.Horses:-

RAPAVAN - 6 y.o. gelding – near end of career (has bleed).

KALAHAWK - Unraced 4 y.o. gelding – no prospects.

WINNING STRIKE - Well performed 4 y.o. gelding (recently broken down).

COLOUR ME PROUD - Disappointing 3 y.o. gelding

NOTE:
(a)Unit 30B at Imperial Surf (Gold Coast) is owned by J.E. Miller. The partners (Brabham, Martin & Miller) have been given rights to use the unit at no charge. Rental receipts and operating expenses are credited/charged to the partnership’s bank account.
(b)The assets of the partnership were intended to represent quality of life investments, rather than commercial investments for profits. The majority of the funding has been provided by J.E. Miller. The partners entitlement, as agreed by the partners, is to the use of assets for recreational purposes. The partners have agreed that no sale of any partners entitlement, or distribution of funds can be made without the agreement of all partners, except for certain situations in respect of J.E. Miller.

Additional material in evidence concerning the Brabhams was a deed made between them for the purposes of a settlement of their financial affairs, dated 11 December 1992. Recital H of that deed stated that:

THE partnership (hereinafter referred to as “the Partnership”) is a partnership consisting of the parties hereto, Mr and Mrs Martin and Mr and Mrs Miller and is the subject of a Partnership Deed wherein the parties hereto hold one‑sixth each interest in the capital and property of the Partnership.

A Statement of Assets attached to that deed stated: ‘Partnership holding Moggs Creek house, Imperial Surf Surfers unit, and race horses, etc. is not at issue as both R & M [i.e. Ross and Margaret] both hold equal shares.’

Of great significance was the contents of documents in Family Court proceedings between James and Pamela Miller in 1999. After a decree nisi of a dissolution of marriage in August 1999, an order was made by the Family Court on 6 April 2000 approving a deed dated 12 November 1999 made between the Millers in settlement of their financial affairs. Certain recitals in that deed are unequivocal acknowledgments of the equal interests of Brabham and Martin in the beach house. The deed, which is a serious legal document relied on by a Court, and possibly others, concerning people’s financial affairs stated in its recitals ―

I.The husband and the wife each have a one sixth interest in property situate at:-
i.3 Robyn Road Moggs Creek Victoria (“Robyn Road”); and
ii.Lot 52 Alpine Ridge Drive Merrijig Victoria (“Alpine Ridge Drive”).

J.The wife has a 50% interest in property situate at Spring Arbor Michigan in the United States of America (“Spring Arbor”). The husband has a one third interest in property situate at unit 30B Imperial Surf Esplanade Surfers Paradise Queensland (“Imperial Surf”). There is a loan outstanding of $140,000.00 to the National Australia Bank secured against the Imperial Surf property.

Recital N stated:

N.In summary, the husband and the wife or either of them own or are entitled to the following real and personal property:-

ASSET

AGREED VALUE

Real estate

i.

The former matrimonial home

$386,500.00

ii.

A 27% interest in Robyn Road

$60,000.00

iii.

A 27% interest in Alpine Ridge Drive

$8,000.00

iv.

The husband’s 33% interest in Imperial Surf

$90,000.00

v.

The wife’s 50% interest in Spring Arbor

$16,000.00

vi.

The husband’s 50% interest in Wahine Court

$280,000.00

The amount of $60,000 for the 27% interest in Robyn Road (Moggs Creek) can only be the value of the one-third beneficial interest as stated in Recital I. Clause 7 of the Deed provided that Miller would retain for his own use and benefit his interest in properties including the beach house at Moggs Creek and the Imperial Surf apartment.

Another acknowledgement of co‑ownership from Miller was in a letter from him to the Commissioner of State Revenue dated 2 July 2014 concerning an assessment of land tax for the beach house. The details of that letter and its calculations are not material. But, as the Tribunal noted,[28] the letter acknowledges that all co‑owners, including Brabham and Martin, were the owners of their respective registered interests in the beach house. The letter concerned assessments Miller had received for 2010, 2011, 2012, 2013 and 2014 about which he said ‘To my knowledge, no joint owner had greater than 13.33% of the property ($96,000), and therefore less than the threshold of $250,000 for individual assessment.’
[28]Reasons [46]-[48].

The closing paragraphs state:

I presume that now that the records of the SRO have been updated to record 10 owners for the property rather than three, I was improperly charged in 2011 and 2012 as the SRO records had not been updated for title changes dating back to 1990.

Despite the thrust of the letter being concerned to show there were other owners liable for land tax assessment, another paragraph stated:

… I confirm that at this time, I have not issued proceedings against the other joint owners pursuant to a resulting and/or constructive trust and therefore no order of the court exists or further consent obtained. However, I plan to issue within the year and will keep you informed.

On the materials, this seems to be the first written occasion upon which there was any reference to an intended claim by Miller that the beach house was held on trust for him.

The closing submissions in the Tribunal

Some of the grounds of appeal make it necessary to make some reference to the substance of the closing written submissions made to the Tribunal.

The principles concerning the creation of a resulting trust look to the intention of the parties at the time of acquisition. In this case, the respondents, who addressed the Tribunal first, contended the intention was manifested by the creation of the partnership, the purchase of the property from partnership funds, and the registration of the three of them as joint tenants in common, faithful to a partnership. They contended: that despite Miller’s denials now, a partnership was established by deed between them in 1980; his conduct until the breakdown of the relationship was consistent to show that Miller regarded himself to be in partnership with them; and there were multiple documented acknowledgments (some of which have already been identified in this judgment) that the beach house was acquired as partnership property; and that Brabham and Martin were equal beneficial owners with Miller. Hence, the respondents said, even if the Tribunal was to determine that the money to buy the beach house originated from Miller, that was secondary to the decisive question of intention. They said if Miller contributed more funds into the account than did Brabham or Martin, then that occurred in the context of the partnership, but even then, it was not for the Tribunal to undertake a taking of partnership accounts. In any event, they said there was insufficient evidence to determine the state of accounts as between the three parties. Thus, the respondents contended, it did not matter which of the partners contributed to what amounts to the acquisition of the property. The property was partnership property. Any dispute between partners concerning financial adjustments according to contributions to a partnership undertaking is a matter for the law of partnership and the taking of proceedings to dissolve the partnership and to seek a taking of accounts. But that is an entirely different matter to a claim that they held the property on trust for Miller.

On the case for a constructive trust, the respondents’ closing submissions contended in essence that there was no basis for declaring a constructive trust, substantive or remedial. There was no evidence that could support a finding that Brabham or Martin did or said anything that induced Miller to agree to register the title of the beach house in their names as joint tenants. The property was acquired in pursuance of a consensual arrangement that it was to be acquired for the purposes of or as part of their partnership. The collapse of that partnership and the failure of their personal relationship did not lead to the imposition of a constructive trust. Any equitable adjustment, or equitable contribution or reimbursement is effected by means of a taking of accounts.

In the closing written submissions for Miller at the Tribunal, it was said:[29]

Accordingly, the parameters of this case are one of narrow ambit. Or as the Tribunal succinctly stated, ‘The sole question is: who paid the money?’ The Points of Claim and the Points of Defence and the witness statements confirm this question to be the issue and the only issue between the parties.

[29]Written submissions paragraph 7.

Posited as the sole question, as I read the submissions for Miller, his counsel was unconcerned with the question whether there was a partnership. In essence, the closing submissions by Miller reasserted that it was he, Miller, who had purchased the property with his own funds and that the respondents did not pay any money for the purchase. Counsel asserted that the respondents were bound by their pleadings and their evidence that they, Brabham and Martin, contributed to the purchase of the beach house, and that they were to be limited to that proposition. The case in essence was that the evidence could only show that case to be ‘incorrect, false and factually impossible’ because the funds paid into the partnership account to buy the beach house came from the sale of Miller’s shares in Coles Myer, and the respondents had not challenged any of the financial evidence adduced by Miller.

I think to pose the sole question as being ‘Who paid the money?’ was too narrow and simplistic, and certainly incomplete as a matter of established legal principles concerning resulting trusts, about which there was no debate.[30] But Miller’s closing submissions did not go outside the purview of that solitary question. A resulting trust is a presumed trust and the question of who paid the money to purchase the trust estate is one question; but not the only question and not necessarily the decisive question. For Miller to confine himself to the contention he paid for the beach house could go only to create a presumption of a trust in his favour when the house was conveyed into the joint names of himself and Brabham and Martin. But that presumption may be confirmed, rebutted or qualified by evidence of his intention.
[30]See Calverley v Green (1984) 155 CLR 242 as referred to by the Tribunal at [13] and [14].

One source of possible confirmation was the alleged unwritten agreement pleaded by Miller as his answer to the allegation of a partnership, merely mentioned in Miller’s closing submissions. But that was found by the Tribunal to be not proved.

The presumption may be rebutted on evidence that the purchaser intended the others to take beneficially. The respondents closing submission were comprehensive elaborate, but in essence their rebuttal case was the proceeds of sale of the Coles Myer shares were deposited in the partnership account and became a partnership asset. One thing is clear from the respondents’ closing submission to the Tribunal: they centred on the question of intention. It was all integral to their case for a partnership. They said for example:

21.A presumption of a resulting trust is only a presumption and it may be displaced if a contrary intention is expressed before or at the time or registration of the party’s interest in land. It is for this reason that the question of whether or not the land was acquired for the partnership becomes a highly relevant issue. If the land was acquired for the partnership as contended by the evidence of the Respondents then this displaces any presumption. Of course, the presumption of a resulting trust arises only if Miller was at the time of the purchase of land the sole contributor of the purchase price.
22.The argument has a degree of circularity about it but the circulatory is resolved if the question of intent is clearly addressed. For the reasons set out below, if the property was purchased for the partnership as is contended by the Respondents then the question of who actually contributed money for the purchase price or from what pool of funds the purchase price was taken becomes a secondary consideration. The reason for this is because it is the intention of the parties that is the core point and the source of the funds is a secondary point. The intention is established by the acquisition of the property for the partnership.
23.The intention of Miller can be inferred from his acts and declarations as to the interests of the parties and the relationship between the parties. The evidence of Miller’s acts and declarations subsequent to the purchase of the property is admissible against him.

So what was the closing submission for Miller on the question on intention? It was essentially a pleadings point, taken in a Tribunal that is not a Court of pleadings. The Points of Defence for Brabham and Miller stated in paragraph 3:

3.Save that the property was purchased in or about late 1986, the Respondents deny paragraph 3 and say that the whole of the purchase price for the purchase of the property derived from partnership funds of the Applicant, the First Respondent and the Third Respondent.
PARTICULARS
In or about 1980 the Applicant, the First Respondent and the Third Respondent formed a partnership known as Brabham, Martin & Miller (‘the partnership’), through the execution of a deed that was purchased from a legal stationary store. This deed was held by the Applicant.
Funds were contributed equally to the partnership and each partner held 1/3 interest in the partnership. A bank account was established in the name of the partnership.
The partnership invested in shares including, newly listed Buddha Gold Mine shares, which resulted in profits for the partnership and provided wealth creating opportunity.
The profits were used for further quality of life investments, rather than commercial investments including, investments inter alia a campervan, race horses, overseas vacations, spa baths, real property in Surfers Paradise and in Mansfield as well as the property that is the basis of this application.

Miller’s written submissions at the Tribunal need special attention. Whilst he conceded that the Tribunal is not a court of pleadings, he said ‘It does not permit a wholesale change of story and contradiction of the pleadings.’[31] The relevant parts of the submission said:

… It is submitted that the Respondents are bound by their pleadings and evidence‑in‑chief in that they, or more particularly Messrs Martin and Brabham, contributed to the purchase price of the Moggs Creek property. The Respondents’ case is that the Moggs Creek property was paid for out of partnership funds and they are limited to that proposition.

[31]Submissions of Applicant, 13 April 2016 [13].

The contribution from Brabham and Martin was said by them in their evidence‑in-chief to have come from profits made from shares in Buddha Gold Mine. Yet, Miller contended, that was ‘totally incorrect, false and factually impossible’. The submission went on to say that:

54.Accordingly, despite the submissions of the Respondents it is not open for the Respondents to put forward the rebuttable presumption of the intention of the parties. This is because it is in contradiction to both the pleadings and evidence‑in‑chief and cross‑examination of the Respondents.
55.Further, it was not put to the Applicant.
56.At no stage have the Respondents put forward a case that the Applicant and Messrs Martin and Brabham intended that the property be held in equal shares despite the Applicant being the only person to contribute to the purchase price. To the contrary, the case of the Respondents has always been that partnership funds were used to purchase the Moggs Creek property.
57.Indeed, the common intention argument contradicts the pleaded case and evidence of the Respondents, as if partnership funds were used to purchase the Moggs Creek property then the intention of the parties becomes irrelevant as actual contributions have been made.
…
59.In any event, there is no evidence of such an intention and to the contrary there is evidence of the Applicant and the Respondents did not have a proprietary entitlement until they made a final contribution.

It is of particular significance that there was nothing in the submissions of Miller’s counsel in the Tribunal to put a case for a constructive trust. The written submissions, proceed on the sole question ‘Who paid the money?’ That question was posed as being seen as decisive of the case made for a resulting trust and a constructive trust. The closing paragraph states that ‘In the event that the Tribunal is persuaded that the first to fourth Respondents do have an interest in the land then there ought be an adjustment against their interests for the contributions made by the Applicant.’

The Tribunal’s findings

The Senior Member concluded that: ‘…the evidence of the existence of a partnership is overwhelming’.[32] And I think that was no exaggeration. The Senior Member made these findings —
[32]Reasons [27].

23. At the time the partnership is said to have been entered into, a joint bank account was opened by the three men with the Commonwealth Bank. The first cheque stub of this bank account has the words “Partnership deed” written on it in Mr Martin’s handwriting. Mr Martin said that the cheque was written to reimburse Mr Brabham for the purchase of a form of partnership deed from a legal stationer. Mr Miller, who had been given the cheque butts and other records of the three men when Mr Martin left for overseas, has blacked out the works [sic, words] “Partnership deed” on the cheque stub.

I think this ground of appeal is untenable. The rule Browne v Dunn can have very limited application where the evidence said to have been given in breach of the rule was not adduced in‑chief, but was induced in cross‑examination. Teresa Martin’s explanation that the conversation with Miller had been deleted from her draft witness statement on advice from her lawyer worked to rebut any inference of recent invention by her. But, above all, no finding of impropriety was sought by the defendants, and no finding of impropriety was made. Any complaint now about the perceived prejudicial effect of the evidence, and any complaint now by Miller that the evidence resulted in the Tribunal accepting that the conversation occurred (but not of any unauthorised conduct) could have been avoided had Miller’s counsel applied for leave to further cross‑examine Mrs Martin, or to recall Mr Miller.

The ground of appeal that the Tribunal ‘permitted’ late changes in the defence is a repetition of the closing submission in the Tribunal to which I have already referred. I think the pleadings point being taken is a technical evasion. Pleadings are a tool of justice in courts. The Tribunal is not a court, and does not conduct its adjudicative process according to the formalities of pleadings. Points of claim and defence are ordered where the nature of the case calls for a presentation of the material acts in an orderly way to ensure the grounds of establishing or resisting liability are articulated, all the better to enable a party to understand the case to be met. It would be said that by adopting a procedure of de facto pleadings, the Tribunal is bound by the court practice that evidence may not be adduced going outside the purview of the pleadings and the case cannot be decided on the basis of the case not pleaded.

But that did not occur here. Miller cannot say he was taken by surprise by a case that he was not pre-prepared to meet. To rebut the case for a resulting trust, the threshold issue was whether there was partnership. The points of defence took the stance that there was a partnership, and the money for the beach house came from partnership funds. There was no departure from that case. True it is, the particulars of defence refer to partnership profits from investment in newly listed Buddha Gold Mine NL shares. The evidence in chief of Brabham and Miller was in essence that their first main investment as a syndicate of three which led to the later formation of the partnership was in shares in Buddha Gold Mine bought from personal savings. But given the Tribunal’s strong remarks about the state of the evidence all round, the gist of their evidence was the beach house was bought with ‘partnership funds’. There was no departure from that.

As I see it, Miller sought to build an edifice on the fact the $282,000 that came into the partnership, and from which the beach house was bought, was the proceeds of sale of shares in Coles Myer and was used to buy the beach house. It was ‘his’ money because he denied a partnership even though it was paid into the joint account and the title was in three names. Brabham’s evidence was accepted that the $282,820 was paid into the partnership account to pay for the beach house but said there was an adjustment later on, although had no records of it. Martin too agreed that the source of the funds was the sale of the shares in Coles Myer but said that the funds were paid into the partnership account in repayment of money that Miller owed the partnership. But these adjustments and repayments could not be verified.

As part of the exercise of determining whether a partnership existed, the Tribunal’s attention had to turn to ascertaining whether the parties intended the $282,820 to be partnership money. I cannot understand how it could be said that such an enquiry was irrelevant and off the pleadings. Miller’s case was put on the basis of a resulting or constructive trust. In both situations, equity is looking to effect a conscientious carrying out of the parties’ intentions. What the Tribunal accepted was the objective evidence of the existence of the partnership and the objective evidence concerning the intention that the three of them regarded themselves as entitled to the partnership pool of funds and above all, and explicitly, that Miller regarded Brabham and Martin as equal beneficial owners of the beach house, which is what this case was all about, and how, faithful to principle, it was decided.

Accordingly, I reject the submission that the Tribunal ‘permitted’ the defendants to have a late change of defence.

The Tribunal erred in law by failing to give sufficient reasons- Ground G

Section 117(5) of the VCAT Act states that:

If the tribunal gives written reasons, it must include in those reasons its findings on material questions of fact.

It has been observed that there are conflicting first instance decisions in this Court as to the circumstances, if any, in which the provisions of inadequate or deficient reasons by a tribunal constitutes an error of law.[41] Questions have arisen whether it is an error of law for an tribunal’s reasons not to fully disclose the reasoning process, or, whether it is enough that a failure to provide ‘adequate’ reasons to constitute an error of law. The difficulty that can arise with the use of imprecise expressions such as ‘inadequate reasons’ or ‘insufficient reasons’ has led the Court, faithful to the terms of s 117 of the VCAT Act, to say that where the tribunal fails to give reasons or give reasons which omit a finding on a material question of fact or otherwise fail to disclose its path of reasoning for reaching the decision, it commits a vitiating error of law.[42]
[41]See Victoria v Turner (2009) 23 VR 110 [241].
[42]Ibid [240].

But there are important considerations when it comes to the Court’s evaluation of the of reasons produced by a tribunal. First, the reasons have to be read fairly, and particular parts have to be read in the context of the reasons as a whole. Secondly, the reasons have to also be read having regard to the way in which the parties conducted the case. Thirdly, depending on the case, courts will not scrutinise reasons with too fastidious an eye for the presence of appealable error.

In paragraph 28 of his written submissions, Miller contends the Tribunal did not provide sufficient reasons for the following findings:

(a) That the plaintiff invested Coles/Myer money to make an unauthorised profit.

(b) That the money used to purchase the Beach House came from an unknown source.

(c) That the plaintiff intended that the monies used to purchase the Beach House belonged to the partnership.

(d) That there was a pool of partnership funds.

(e) The rejection of the documentary evidence of the partnership accounts that shows that there were limited funds therein, and that the defendants’ had not paid monies therein.

(f) There were profitable investments of the partnership.

(g) The money used to purchase the Beach House came from an unknown source [This repeats paragraph (b)].

Miller contends that the reasoning for those findings is absent. He says his case adduced evidence as to the source of the money and the profits of investments, evidence which was unchallenged by any documentary evidence adduced by the respondents. He submits the basis for rejecting the plaintiff’s evidence was omitted by the Tribunal, and that vitiates the decision.

I reject those submissions. Overall, the submission is oblivious of the basis of the decision, which faithful to principle, looked to whether there was an intention that that moneys paid into the partnership account were intended to be partnership funds with which to purchase assets in which the partners would have a beneficial interest. It is not possible for Miller to sensibly contend that the Tribunal’ reasons do not state disclose the evidence and the reasoning by which the Tribunal reached its conclusion about intention. A disapproval of the decision does not mean the reasoning was inadequate.

As for finding (a), I have already shown it is incorrect to say that the Tribunal made a finding that Miller invested Coles Myer money to make an unauthorised profit. Associated with that, finding (b) comes from paragraph 184 of the Tribunal’s reasons, which states:

In particular, I am not prepared to make any findings of unlawful conduct on behalf of anyone without firm evidence that it has occurred and there is no such evidence. However the statement Mr Miller made to Mrs Martin amounts to an admission by him that the money came from an unknown source and not from his own resources.

The Tribunal’s reasons for finding (c) and (d) are stated in paragraphs 187 to 202. Miller’s submissions on this ground are focussed on saying that he adduced evidence about the source of money and the modest profits of investments, and that evidence was not challenged by the respondents. Therefore, he would say, how can it be said there was an unknown source? This overlooks the Tribunal’s stated difficulty in gaining a satisfactory explanation from him about the source of the money. In looking to ascertain ‘the large sums of money passing back and forth’ the Tribunal said that ‘... it seems that Mr Miller had substantial money at his disposal that might have been the source of the large sums that appear to have passed back and forth between the parties’, yet the absence of a proper set of accounts meant that there was ‘very inadequate evidence’ from where all this money is likely to have come.[43] The Tribunal was sceptical about Miller’s explanation that he was a wealthy man and that he was generous to his friends,[44] and it could not understand why he would spend such substantial sums on others, and buy substantial assets and put them in other people’s names.[45] Added to the inadequacy of the evidence was the Tribunals’ doubt about Miller’s credibility as a witness as a result of the evidence that he had concealed evidence on the cheque stub about the purchase of the partnership deed.
[43]Reasons [169].
[44]Reasons [173].
[45]Reasons [173], [194].

What matters I think is the patent reasoning of the Tribunal that, on the evidence as identified, and whatever the source of the funds or the investments , Miller, Martin and Brabham regarded those funds as belonging to the three of them. The Tribunal’s reasons for the ultimate conclusion are stated meaningfully in paragraphs 187 to 205.

As for finding (e), the reasons for finding that there were profitable investments of the partnership are stated at paragraphs 108 to 123.

The Tribunal denied the plaintiff natural justice - Ground H

Miller contends the Tribunal made a number of findings adverse to him which had not been pleaded by the respondents, on matters which were not supported by written or spoken evidence, and in some cases were raised for the first time after he closed his case. This ground overlaps with grounds with which I have already found are not made out. Paragraph 30 to 33 of his submissions concerns the evidence of Teresa Martin. The respondents submitted precisely, and it must be accepted, there can be no denial of natural justice by reason of the evidence which was given by her in cross examination pursued by Miller’s counsel, and about which counsel did not seek to recall Miller or seek an adjournment.

In paragraph 34 of his written submissions, Miller contends that the Tribunal made the following findings in circumstances in which Miller had no sensible opportunity to meaningfully contradict:

(a)the money used to purchase the beach house came from an unknown source;
(b)Miller intended that the moneys used to purchase the beach house belonged to the partnership;
(c)there was a pool of partnership funds; and
(d)the defendants had an involvement in obtaining the moneys that were used to purchase the beach house (other than a contribution of $5,000 each plus the investment income upon it).

There was no finding as stated in (d). The evidence was that the beginning of the investment syndicate occurred when the partners contributed about $5,000 each to purchase shares in Buddha Gold Mine. That was denied by Miller who said that Brabham and Martin made no contributions to those shares.

Findings (a) (b) and (c) were all part of the legal elements of the case as I have sought to expose them. The finding of an unknown source was attributable to the inadequate and undocumented state of evidence in the case, unimpressive witnesses, damage to Miller’s credibility, and the absence of credible evidence from Miller about the source of the money. As for (b) and (c), the resolute pleaded defence as propounded was that there was a partnership and the beach house was purchased from partnership funds. I think it preposterous to contend that Miller had no sensible opportunity to contradict that case. He denied the partnership, in the face of overwhelming evidence.

The Tribunal failed to make a finding and/or give reasons for any finding in respect of the plaintiff’s constructive trust claim and on other submissions worthy of consideration – Grounds I and M

Ground M of Mr Miller’s proposed notice of appeal states:

The learned senior member erred in law in failing to make a decision on the following matters:
(a)should the property be sold pursuant to s 228 of the Property Law Act and if so, how should the sale proceeds be distributed pursuant to s 233 of the Property Law Act?
(b)what were the terms of the partnership agreement between the parties?
(c)that the Applicant had the right to withdraw his own funds?

The Tribunal was not called upon to decide the matters in para (b) and (c), nor was I required for the determination that Brabham Martin and Miller were in a partnership.

The defendants agree that an error of law has occurred on ground(a) by the Tribunal’s failure to make a determination pursuant to s 228 of the Property Law Act 1958 that the beach house should be sold and how the sale proceeds should be distributed. To that extent only, the appeal will be allowed.

In his proposed notice of appeal, Mr Miller contends that the Tribunal erred in law by failing to deal with his claim based on constructive trusts. Ground I of his proposed notice of appeal states:

The learned senior member erred in law by failing to make a finding and/or failing to give reasons for any finding in respect of the Applicant’s claim that the Respondents hold their respective interests in the Beach House for him on a constructive trust because:
(a)such a claim was raised for determination by the senior member (Reasons, para 2);
(b)the learned senior member did not state any findings of fact relevant to that claim including whether the applicant intended to vest beneficial ownership in the Respondents or whether the vesting of beneficial ownership was for a purpose which has now failed;
(c)the learned senior member did not refer to any authorities relevant to that claim;
(d)the learned senior member did not consider the evidence relevant to that claim;
(e)if and to the extent the learned senior member had decided the matter adversely to the Applicant, the senior member’s reasons do not disclose or explain his process of reasoning.

I have already observed the obvious: the Tribunal’s reasons do not give any consideration to the claim for a declaration based on a constructive trust. The Tribunal’s closing words are: ‘Since I am not satisfied on the balance of probabilities that the money used to purchase the Beach House belonged solely to Mr Miller no resulting trust arises and so the application will be dismissed.’ But, it is also plain that in the way the case was pleaded, and conducted for Miller, the constructive trust case was not propounded. It fell collaterally on the same basis as the resulting trust case fell; that is, the beach house was partnership property and it was intended, on the evidence, that all three partners take beneficially and equally. Moreover, integral to that determination was the Tribunal’s rejection of Miller’s antithetical case that the relationship was defined by the unwritten agreement and not a partnership.

The allegation in paragraph 14 of the Points of Claim was:

By reason of the matters pleaded in paragraphs 1 to 6 herein, the first and third Respondents (Martin and Brabham) hold their respective interests on resulting trust, alternatively constructive trust, for the Applicant and the second, fourth, fifth, sixth and eighth Respondents hold their respective interests on constructive trust for the Applicant.

Paragraphs 1 to 6 of the points of claim, on which that conclusion of law is based, are confined to saying that Miller purchased the beach house and paid all of the purchase price and paid all of the insurance, rates, outgoings and other expenses for the property. Come the points of reply, and not before, Miller alleged the unwritten agreement under which he said the respondents made no contribution and hence gained no proprietary interest. What matters is that there was no distinction in the points of claim between the resulting trust and the constructive trust. Nothing else in the allegations provided any basis for any form of constructive trust. Thus, it is plain that the pleading only raises the issue of whether a trust arose by reason of Miller paying the whole of the purchase price. The closing submissions to the Tribunal were put the same way. They referred only to the principles concerning resulting trusts. There was no consideration given to the constructive trust claim and no reference to principle or authority, yet the written submissions on this appeal see fit to contend error was made by the Tribunal in not doing so.

Thus, on the pleadings and on the closing submissions on behalf of Miller the Tribunal member correctly commenced the reasons by saying:

2.By this proceeding the applicant, Mr Miller, seeks a declaration that the respondents hold their respective interests in the beach house for him on a resulting or constructive trust. In the alternative he seeks an order that the beach house be sold and, after the deduction of the selling costs, the whole of the net proceeds be distributed to him.
3.In each case the ground of the claim is that, on Mr Miller’s evidence, he provided all the money to purchase the beach house and has also paid all insurance, rates, outgoings and other expenses in respect of it since its purchase.

This is not the occasion for an exegesis on the law of constructive trusts. One of the situations in which a constructive trust may be declared is on the basis of:

The general equitable principle which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions had been made in circumstances in which it was not intended that the other party should enjoy them.[46]

[46]See Baumgartner v Baumgartner (1987) 164 CLR 137, 148.

In Muschinsky v Dodds an unmarried couple purchased land with the intention of renovating a cottage on the land and to erect a house on the land. The woman paid for the land from her own funds and agreed to include the man’s name on the title if he undertook to renovate the cottage and pay for the installation of a pre-fabricated house. The land was transferred to them as tenants in common in equal shares. The parties subsequently separated without any renovations or acquiring a house. The woman claims sole beneficial ownership of the land. Although the whole of the purchase price was provided by the woman, on the facts, the presumption of a resulting trust was rebutted on the grounds that there was an intention that the man be on the title and have the benefit as a tenant in common in equal shares. Despite that, a constructive trust though was imposed on the following basis —

Like most of the traditional doctrines of equity, it operates upon legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct [citation omitted] … Those circumstances [giving rise to the principle] can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that the other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him to do so [citation omitted].[47]

[47](1984) 160 CLR 583, 619-620.

Thus, in Muschinsky the circumstances precluded the man from obtaining against the woman a one half ownership of the land to the extent that it would be unconscionable for him so to do. But in this case, once the Tribunal rejected the unwritten agreement, and found there was a partnership, and that the property and improvements were paid for by drawings from the partnership account with the acknowledged intention that Brabham and Miller have the equal beneficial ownership, then there was no basis for the assertion of a constructive trust.

This ground of appeal is not valid.

The Tribunal erred in making findings not reasonably open on the evidence before it – Ground J

A determination of fact can never give rise to an error of law, but ordinarily it will not be so unless it is shown that the fact finding tribunal arrived at a finding that was simply not open to it. To perceive an error of law in the ultimate conclusion by reason of a totally unsubstantiated finding which is critical to it can rest on the recognition of an unstated premise that the Tribunal will proceed only according to the evidence and not arbitrarily, according to some frolic of its own: see S v Crimes Compensation Tribunal.[48] Secondly, it is said the word ‘reasonably’ is a distraction. S v Crimes Compensation Tribunal explains that the word reasonably is used to emphasise that when judging what was open and what was not open, one is speaking of rational tribunals acting according to law, not irrational ones acting arbitrarily. The case says that the danger of using the word ‘reasonably’ lies in its being taken to suggest that a finding of fact may be overturned, on an appeal which is limited to a question of law, simply because that finding is regarded as ‘unreasonable’. A finding of fact will be overturned on an appeal on a question of law only if that finding was not open.[49]
[48][1998] 1 VR 83, 90.
[49]Ibid, 91.

First, Miller contends that it was not reasonably open for the Tribunal to find that the purchase money for the beach house did not solely belong to him. As the respondents submit, this amounts to a submission that the Tribunal erred in not finding that the purchase moneys were solely paid by Miller. That was his allegation and it had to be proved to establish the presumption of the resulting trust.

The Tribunal accepted that the amount of $282,820 was deposited into the partnership account, and it was the proceeds of sale of shares in Coles Myer in the name of New Kapital Investments. The relevant conclusion was that the money paid into the partnership account was partnership money. That is what defeated the case for a resulting trust, and collaterally, defeated the case for a constructive trust. The money was paid into the partnership account and then used to buy bank bills in the name of all three partners and then to purchase the beach house and the apartment at Surfers Paradise. The objective evidence to which I have made reference in this judgment made it not only open, but I think compelled the view that there was an evident intention that the beach house was a partnership asset in which Brabham, Martin and Miller had an equal beneficial interest, especially given the Tribunal’s rejection of his case concerning the unwritten agreement which, like the conclusion that there truly was a partnership, was not challenged on this appeal.

The Tribunal erred by taking into account irrelevant considerations – Ground K

Miller submits that the Tribunal erred in law by taking into account these irrelevant considerations:

(a) moneys spent on race horses after the purchase of the Moggs Creek beach house;

(b) moneys spent on holidays and other real and personal property after the purchase of the Moggs Creek beach house;

(c) moneys deposited in an account owned by Tegal Pty Ltd after the purchase of the Moggs Creek beach house; and

(d) the fact that after the plaintiff’s money was paid into a joint bank account it was used in the purchase of bank bills in the names of all three partners.

It is said that those matters were irrelevant to the determination of the issue of the ultimate source of the funds for the purchase of the beach house, and, they were irrelevant to the determination of the issue whether there was evidence of an intention on Miller’s part to transfer a beneficial interest in the beach house to Brabham and Martin.

The Tribunal’s reasons state that the racehorse, Rapavan, was purchased by Miller in January 1988 for $62,000 by a cheque drawn on his personal account. He said he paid for Rapavan from his winnings of $101,107.80 at the Melbourne Cup in November 1987, a winning which Brabham and Martin acknowledged had occurred. Miller said the other horses were purchased using funds from Tegal Pty Ltd a company in which the shares were owned by the three partners. Rapavan and the other horses were registered in the names of all three partners. The Tribunal said:

When Mr Miller was asked why he did this if the horses were not purchased from partnership funds he said that it was in order that Mr Martin and Mr Brabham could enjoy free access to race meetings as owners. He did not say whether they attended race meetings and according to Mr Martin’s evidence he was not interested in horse racing. Expenses with respect to the horses appear to have been met, at least partially, from the Partnership Account.

The relevance of this, and other evidence, is evident in paragraph 194 of the Tribunal’s reasons in which the Tribunal sets out a litany of matters revealing the basis on which the Senior Member had ‘a number of concerns’ that gave reason not to believe Miller’s evidence on the question whether the money going into the partnership account was all of Miller’s personal money and that his conduct in allowing assets to be put in the names of all three of them was explicable because he was a wealthy man and was generous to his friends. The fact that the three partners were registered as owners of the race horses was of itself not decisive of the ultimate question, but it was plainly relevant to show, as part of the exercise of looking at the evidence as a whole and not in a piece meal way, that as a consistent modus operandi in this relationship there were a number of assets that were in the names of all three partners.

The same can be said for the evidence of the money spent on holidays and other real and personal property after the purchase of the beach house. That too was part of the body of circumstantial evidence to which the Tribunal looked to judge the plausibility of Miller’s explanation that all money going into the partnership was his money because he was wealthy and generous to his friends. Most importantly, as the respondents emphasise, the Imperial Surf property was funded from the same partnership account using the balance of funds that had been invested in the bank bills which had been deposited into the partnership account shortly before the acquisition of the beach house.

The third matter said to be irrelevant concerns moneys deposited in an account owned by Tegal Pty Ltd. That was dealt with by the Tribunal at 124 to 134 of its reasons. In evaluating that evidence, the Tribunal concluded that the evidence was equivocal and it does not appear to form any part of the process of reasoning for the Tribunal’s ultimate conclusion.

The fourth fact, contended to be irrelevant, was the payment of the $282,820 into a joint bank account and then used to purchase bank bills in the name of all three partners. I think it is simply fanciful to say that this matter was not relevant. To the contrary, it was not only relevant but quite probative, with other facts, in ascertaining whether or not the funds were intended to be partnership property from which to acquire partnership assets.

Accordingly, in my view apart from Ground M none of the grounds of appeal are made out and apart from that ground the appeal ought be dismissed. Before stating proposed orders, I wish to return for completeness to the question of jurisdiction.

The question of jurisdiction

In his first written submissions on the subject, Miller stated:

50.…I don’t see jurisdiction as the major issue in this case, the major issue is the multiple use of chains of false evidence to achieve the findings in Reasons dated 3 June 2016, which would be critical independent of jurisdiction.
51.I prefer not to charge my former friends in criminal proceedings, if I eventually get natural justice, and if the injustice against me is found.

Subsequently, the Court received from Miller written submissions on jurisdiction dated 5 April 2017 which appear to have been composed by a lawyer and which attended to the question.

The defendants provided written submissions dated 24 April 2017.

The commencement point is that VCAT is a creature of statute and does not have a general equitable jurisdiction. It is assumed that once VCAT’s original jurisdiction is invoked on a matter within its original jurisdiction, it does not have accrued jurisdiction as occurs in the federal context in which a matter within jurisdiction may include a cause of action arising under another non-federal law as long as it arises out of a common transaction or facts, and is not severable from the federal claim. [50] But it is open to Parliament, expressly or by implication, to give the power or ― if the Tribunal has a duty to act according to law ― give it the duty to recognise and apply equitable doctrines, defences and remedies.[51]
[50]See Tucci v VCAT [2010] VSC 425 [48].
[51]Ibid [41].

Miller’s points of claim included a claim under s 228 of the Act that the beach house be sold and an order under s 223 of the Act that the net proceeds of sale be distributed to him, or alternatively in such proportions as the Tribunal shall determine. There can be no doubt that the Tribunal had the jurisdiction to hear and determine those claims, brought by a person who was a co-owner as defined under the Act. And he was entitled to invoke the original jurisdiction of the Tribunal under Part IV and apply for orders for the sale of the land and the division of proceeds among the co-owners. Once a co-owner makes such a claim, the Tribunal’s jurisdiction under s 228 is to make any order it thinks fit to ensure that a ‘just and fair’ sale or division of land or division of proceeds occur. In that regard, under s 233(2)(c) in determining whether to make an order, the Tribunal must take into account amongst other things —

(a)any amount that a co-owner has reasonably spent in improving the land or goods;
(b)any costs reasonably incurred by a co-owner in the maintenance or insurance of the land or goods;
(c)the payment by a co-owner of more than that co-owner’s proportionate share of rates (in the case of land), mortgage repayments, purchase money, instalments or other outgoings in respect of that land or goods for which all the co-owners are liable; …

In exercising jurisdiction under Part IV of the Act and considering what order ought be made ‘to ensure that a just and fair sale or division of land or goods occurs’ there will be a necessity intrinsic to that task, to be decided according to law, to determine the nature and extent of existing interests in the co-owned property be they at law or in equity. That is, in order to carry out and properly adjudicate the conferred jurisdiction, the Tribunal may have to consider the nature and extent of the interests that exist to decide if adjustments are to be made to a co-owners interest and to carry out the statutory jurisdiction to order a just and fair sale or division of land. It will be quite a different matter, of course, if a co-owner applied to VCAT not under Part IV of the Act, but in some other way for the declarations of trust that were sought in this case.

That view was supported by decisions to which I was taken made by the Tribunal. In Sherwood v Sherwood [52] Senior Member Riegler was dealing with a situation of a co‑owned property held as joint tenants in which the question was whether a constructive trust should be imposed, arising out of a failed endeavour. It also concerned a resulting trust. The Tribunal found it was ‘just and fair’ that the legal interests in the property be adjusted under the Act to take into account the unequal contributions to the purchase price. The Tribunal concluded that a resulting trust arose by reason of the unequal contributions to the purchase price such that it was fair to vary the legal interests according to the contribution made. That is, once the original jurisdiction of VCAT is properly invoked under Part IV of the Act by a co‑owner, the exercise of that discretion to make an order for sale or division of the property may, depending on the case, necessarily involve findings about the nature and extent of interests held in the land according to equitable principles or remedies. It was well observed I think by Senior Member Riegler in Trakas v Aravopoulos[53] that the giving of relief under the Act and the making of adjustments must necessarily involve an alteration of parties rights and interests at common law and in equity, the discretion bestowed upon the Tribunal under the Act to do what was ‘just and fair’ was not based upon idiosyncratic notions of justice and fairness, but rather taking responsibility to do that which is just and fair having regard to the general law as applied to the facts as found.
[52][2013] VCAT 1746.
[53][2016] VCAT 592.

There may be a question whether the Tribunal can or ought give a declaration as a remedy. But it is now clear to me that the Tribunal can certainly make findings about beneficial interests in the land under resulting or constructive trusts for the purposes of and in order to make its ultimate determination under s 228 or s 233 of the Act.

In the present is case, there is the oddity that the Tribunal’s order was circumscribed to say only that the proceeding was dismissed. That means the entirety of the proceeding including the claims under the Act. That also meant the Tribunal gave no consideration to the statutory claims but confined itself to the question of the resulting trust without then applying that finding to exercise the jurisdiction to determine what was just and fair. The analysis is not to impeach that finding as beyond jurisdiction. Miller properly invoked the jurisdiction under Part IV of the Act. The remedy, as the respondents have properly conceded, is that the proceeding must now be remitted to the Tribunal so that it may exercise its jurisdiction under Part IV of the Act, and that jurisdiction is to be exercised according to the findings that have already been made on the question of the resulting trust.

Proposed orders

I propose to make the following orders, subject to exceptions or improvements or submissions by the parties –

1. The plaintiff has leave under s 148(1)(b) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) to appeal paragraph 1 of the amended order made by the Tribunal on 3 June 2016 in proceeding BP 244/2015.

2. The appeal is allowed in part, and only on Ground M(a) of the plaintiff’s notice of appeal filed 9 September 2016.

3. Paragraph 1 of the Tribunal’s order is set aside but only to the extent that it dismissed or had the effect of dismissing the claims (‘the statutory claims’) —

(a) under s 228 of the Property Law Act 1958 (Vic) as made in paragraph C of the plaintiff’s Points of Claim dated 26 February 2015; and

(b) under s 233 of the Property Law Act 1958 (Vic) as made in paragraph D of the Points of Claim.

4. The proceeding is remitted to the Tribunal to be constituted by the same Senior Member who made the order, to enable the Tribunal to determine the statutory claims according to the evidence already heard and the findings already made by the Tribunal as published in Miller v Martin (Building and Property) [2016] VCAT 854 (3 June 2016), and after hearing or rehearing any further submissions on the determination of the statutory claims according to the evidence already heard and the findings already made by the Tribunal.

5. For to the purposes of the conduct of the remittal, the Tribunal may make such procedural directions or procedural orders as it thinks fit in aid of determining the matter on remittal.

These proposed orders leave untouched the Tribunal’s second order that reserved the costs of the Tribunal proceeding, and leave open the question of costs of this appeal proceeding. The Court will need a good reason not to apply the ordinary rule that costs follow the event. A question arises about the costs consequences of the conceded error of law, which has produced the remittal.

---

RAPAVAN	-	6 y.o. gelding – near end of career (has bleed).
KALAHAWK	-	Unraced 4 y.o. gelding – no prospects.
WINNING STRIKE	-	Well performed 4 y.o. gelding (recently broken down).
COLOUR ME PROUD	-	Disappointing 3 y.o. gelding

ASSET		AGREED VALUE
Real estate
i.	The former matrimonial home	$386,500.00
ii.	A 27% interest in Robyn Road	$60,000.00
iii.	A 27% interest in Alpine Ridge Drive	$8,000.00
iv.	The husband’s 33% interest in Imperial Surf	$90,000.00
v.	The wife’s 50% interest in Spring Arbor	$16,000.00
vi.	The husband’s 50% interest in Wahine Court	$280,000.00

[2018] VSC 444

10 August 2018