Miller v Nicol No. DCCIV-96-274 Judgment No. D3620

[1997] SADC 3620

Court

DISTRICT COURT OF SOUTH AUSTRALIA

Judgment of His Honour Judge Russell

Hearing

13/05/97 to 15/05/97.

Catchwords

Law of trusts - Constructive trusts - Whether plaintiff acquired a beneficial entitlement in the property as a result of the association between plaintiff and the defendant - Whether a constructive trust can be imputed to the parties - Payment for goods supplied - Judgment for the plaintiff in the sum of $7,579 inclusive of interest.

Representation

Plaintiff LEO FRANCIS MILLER:
In Person

Defendant ISABELLA NICOL:
In Person

DCCIV-96-274

Judgment No. D3620

3 June 1997

(Civil)

MILLER V NICOL

CIVIL

JUDGE RUSSELL

The plaintiff's claim against the defendant, as pleaded in the Statement of Claim, is as follows -

'1. (a) A declaration that the plaintiff and the defendant are the joint beneficial owners of the property situate at 3 Grimstead Road (sic) Elizabeth North aforesaid and that the defendant holds her legal interest upon trust for the plaintiff as to an equal entitlement therein;

(b) An order directing the defendant to transfer to the plaintiff and the defendant as joint tenants all her estate and interest both at law and in equity in the said land as sole tenant or alternatively appointing the Registrar-General or a Deputy Registrar-General to execute such documents as shall be necessary to transfer the said land to the plaintiff and the defendant as joint tenants and for an order for sale;

(c) An injunction to restraint the defendant, her servants or agents from dealing with the said land otherwise than by transferring it to the plaintiff and the defendant as aforesaid;

Alternatively

2. (a) A declaration that the plaintiff is entitled to a lien on the said land for the amount of money paid by him towards the acquisition thereof, the value of improvements thereon and work performed by him thereon, at the request of or with the knowledge and consent of the defendant;

(b) A declaration that the plaintiff is entitled to an repayment by or compensation from the defendant of the said moneys and expenditure on acquisition and improvement;

(c) An enquiry as to the amount due from the defendant to the plaintiff under 2(a) and (b) hereof.

3. Damages.

4. All consequential accounts, enquiries and directions.

5. Such further or other relief as this Honourable Court may deem proper.

6. Costs.'

In her defence the defendant denies that the plaintiff is entitled to the relief sought.

Whilst the pleadings were drafted by the solicitors who were then acting for the parties, those solicitors no longer act for them and the plaintiff and the defendant appeared in person at the trial.

The plaintiff's case was that he met the defendant in January 1991.They were both divorced persons and met at a dance.They both enjoyed dancing and a relationship developed between them.The plaintiff alleged that shortly after they met he moved into the defendant's then residence at 28 Rickaby Street, Croydon Park, and they lived in a defacto relationship, that is to say, a relationship between the two of them, who, although not legally married to each other, lived together on a genuine domestic basis as husband and wife.

The plaintiff alleged that in May 1991 he and the defendant purchased a property situate at 3 Grimstead Street, Elizabeth North, in the name of the defendant for $43,000.He alleged that he contributed to the deposit of $12,000 together with certain fees and government charges and that the defendant contributed to the balance of the purchase price.

The house required considerable renovation and he and the defendant jointly renovated the property.In order to do that he purchased certain materials at a total cost of $5,584.

He also alleged that he expended the sum of $1,120 on a gas conversion for the defendant's motor car.

He alleged that he was gainfully employed during the period of cohabitation and contributed all of his income and efforts to the acquisition and improvement of the property.

They separated in mid September 1994.

The defendant admitted that she met the plaintiff in January 1991 and, whilst she accepted that from time to time the plaintiff stayed the night at her home and shared the same bedroom, she denied that the relationship between them developed into a defacto relationship.

It was the defendant's case that she purchased the house at 3 Grimstead Street, which is the land described in Certificate of Title Volume 2698 Folio 60. Indeed, that Certificate of Title discloses that the estate in fee simple was transferred to the defendant as sole proprietor on 24 May 1991.

The contract note for the sale and purchase of the property discloses that the purchase price was $43,000, of which $1,000 was required to be paid upon the expiration of the 'cooling off' period and the balance of $42,000 at settlement.

Although the defendant did not personally have sufficient funds to finance the total purchase price, it was her evidence that her son, Shane Nicol, had funds in an investment account which could not be realised until after the settlement date.It was her contention that the plaintiff had suggested that rather than obtaining bridging finance from a bank and incurring interest to be paid on the money borrowed, he would lend her the shortfall until Shane Nicol was able to realise his investment.When that happened the loan would be repaid.

At the trial I heard evidence from both the plaintiff and the defendant and also from the following -

Andrew John Speake

June Norma Miller (the plaintiff's former wife)

David James Miller (the plaintiff's son)

Julie Ann Gross (the defendant's daughter)

Shane Dale Nicol (the defendant's son)

In the light of both the oral and documentary evidence before me and the impressions that each of the witnesses made on me when they gave their evidence and, where different versions of the facts were given by witnesses, doing the best to assess that evidence bearing in mind other evidence which I have found to be acceptable, I find the following facts to have been proved on the balance of probability.

Both the plaintiff and the defendant are divorced persons.

At all material times both of them enjoyed dancing.In early January 1991 they both met at a dance.They were attracted to each other.The plaintiff, who then lived at Para Hills, began to take the defendant out on social occasions.

At that time the plaintiff was employed as a painter performing work in the country.

In about March 1991 the plaintiff left his residence at Para Hills and went to live with the defendant's son at 39 Yorktown Road, Elizabeth Park, where he occupied a bedroom.That house had three bedrooms, one of which was occupied by the defendant's son, Shane, and his girlfriend;the second was occupied by the plaintiff;and the third had been converted into a gymnasium where Shane worked out with exercises.

In about April 1991 the house at 3 Grimstead Street, Elizabeth North, came on the market at a mortgagee sale.It was in a awful mess.The house had been vandalised.However that may be, the defendant wished to purchase the house, it being her intention to renovate the building and make it into a comfortable home.

The plaintiff was willing to help her renovate the house, using his skills which he had learned in the building trade.

However, the defendant did not have sufficient funds to meet the purchase price of $43,000.

She needed another $10,000.

Shane Nicol had funds in an investment account and was willing to let his mother have the proceeds of that account at a future point in time at which he was able to realise the asset.

That meant that in the mean time the defendant needed bridging finance.

The plaintiff suggested to her that rather than obtaining that finance from a bank or other lending institution, he could raise the money.

I find that what happened then was that the plaintiff loaned the money to Shane Nicol, since he had an asset backing in the form of his investment account.

Indeed, the plaintiff tendered a photocopy of a bank cheque for $9,063 payable to Shane Nicol and dated 21 May 1991 as evidence of his having paid that money on that occasion (Exhibit P3).

There is no direct evidence as to how the balance of the $10,000 was paid by the plaintiff to Shane Nicol, but later evidence in the form of a Co-operative Society savings and investment book (Exhibit D1) leads me to draw the inference that what Shane Nicol at that point knew he had to repay was the sum of $10,000.I infer that the difference between the proceeds of the cheque (Exhibit P3) and $10,000 was paid by the plaintiff to Shane Nicol either in cash or by personal cheque.

The contract note for the sale and purchase of the Grimstead Street property was signed by the defendant on 24 April 1991 and by the State Bank of South Australia on 26 April 1991.The property was transferred to the defendant on 24 May 1991.

Both the defendant and Shane Nicol gave evidence that when he (Shane Nicol) realised the proceeds from his investment, the plaintiff did not want the cash at that point in time.

By reference to the Savings and Investment Share Account (Exhibit D1), which is in the name of the defendant, I infer that the defendant's son realised his asset on or about 29 August 1991 and deposited $10,000 in cash into that account.

On 13 January 1992 both the deposit and interest was withdrawn in cash, namely $10,325.33.

That entry is consistent with the evidence of both the defendant and Shane Nicol that the plaintiff had requested that he be paid in cash because, at that point in time, he was in receipt of unemployment benefits and did not wish that money to be recorded in his bank account.

I am satisfied that Shane Nicol did in fact repay the money that had been loaned to him by the plaintiff.

It is common ground that both the plaintiff and the defendant commenced to renovate the house at Grimstead Street in or about May 1991 and the uncontested evidence of the plaintiff is that he paid $5,584 for the materials listed in paragraph 5 of the Statement of Claim for the purpose of installing them in the home.

However, there is no proof that the plaintiff expended the sum of $1,120 on the gas conversion of the defendant's motor car.

The defendant moved into the house at Grimstead Street on 20 August 1991.

From time to time the plaintiff stayed the night at Grimstead Street, but I am not satisfied that he actually lived there, despite the fact that he had a notice outside the house advertising his business as a painter and that he advertised the telephone number of the defendant as being his business telephone.

The fact of the matter is that the defendant had an answering service on her telephone and it was a matter of convenience to the plaintiff, who, when he was working on odd jobs, was unable to receive calls from prospective customers.

However, the plaintiff gave his residential address to the Department of Social Security as 39 Yorktown Road, Elizabeth Park.An inspector from the department visited that address and Shane Nicol confirmed that the rent payable by the plaintiff for the use of the bedroom was $80 per week, as a result of which, in addition to the unemployment benefits, the plaintiff received some rent relief payment.

In my view, I ought to be slow to draw the conclusion that the plaintiff lied to the inspector and to the department about his place of residence, in that to do so would be to conclude that he wilfully committed a criminal offence.

If I were to draw the conclusion that in fact he had so lied, then, of course, such a conclusion would go very much against the credibility of the plaintiff.

Although the defendant admitted that the plaintiff paid for the various improvements to the defendant's home, it was her evidence and that of Shane Nicol that those payments were repaid by Shane Nicol either in cash or in kind. What Shane Nicol said was that he did not receive the $80 rent per week from the plaintiff and that that offset the cost of the material for which the plaintiff had paid.

However, the evidence on that topic was vague and uncertain and it is to be noticed that the plaintiff also performed painting work and the like at 39 Yorktown Road, Elizabeth Park.

There are no records of any such payments being made by Shane Nicol to the plaintiff, other than the repayment of the loan originally made by the plaintiff to Shane Nicol.

In those circumstances, I am satisfied that the money expended by the plaintiff on the renovations, namely $5,584 still remains owing to the plaintiff by the defendant.

Seemingly, the plaintiff's labour expended on the home at Grimstead Street was given gratuitously.The fact of the matter is that during the earlier part of the relationship between them the plaintiff and the defendant were on friendly and, indeed, intimate terms.

That, however, came to an end in September 1994 when the defendant broke off the relationship, it being her view that the plaintiff was becoming too 'pushy'.She said that he was trying to get her to marry him and that is something that she just did not want.

She said that she did not wish to see him again and took out a restraining order in the Magistrates Court.(Exhibit D5)

Shortly after that Shane Nicol told the plaintiff that, in the circumstances, he should leave 39 Yorktown Road and the plaintiff did so.

In all the circumstances I am not satisfied, on the balance of probability, that the plaintiff and the defendant were living in a defacto relationship when the house at Grimstead Street was purchased by the defendant, nor did they do so after the purchase of that property had taken place.They were friends and very fond of each other until the plaintiff became what the defendant described too 'pushy'.But they did not live together in a defacto relationship.

The first question that must be answered is whether, in all the circumstances, the plaintiff acquired a beneficial entitlement in the property at Grimstead Street as a result of the association between him and the defendant.

That depends essentially upon the application of the principles of the Law of Trusts which determines whether or not a beneficial interest in the disputed property has arisen by way of an express, resulting or constructive trust. (See Constructive Trusts - M Cope - Law Book Company Ltd 1992 at page 775.)

In the present case there is no suggestion that the plaintiff acquired a beneficial interest as a result of an express trust.

In order that a resulting trust may be implied, it must be established that the plaintiff made a contribution to the purchase price.Subsequent contributions, such as contributions to the improvements to the property do not give rise to any claim under resulting trust principles.Nor does a resulting trust arise where monies used for the purchase price have been advanced by way of a loan. (Re Sharpe [1980] 1 WLR 219 at 223 per Browne - Wilkinson J (as he then was)).

In my opinion, that is the case here.The plaintiff loaned the money to the defendant's son to enable him to fund his mother's shortfall and then to repay the money loaned to him by the plaintiff when he realised the proceeds from his investment as and when they became available.

It follows, in my opinion, that no resulting trust arose in favour of the plaintiff in respect of the property.

And so I turn to the question as to whether a constructive trust can be imputed to the parties.

Such a trust must arise from evidence of a common intention on the part of the parties, at the time at which the property was acquired.

In my opinion the evidence does not support the crystallisation of any intention on the part of the parties with respect to the beneficial interest of the plaintiff in the property either at that time or at any other time.

Clearly the money loaned by the plaintiff was a loan to the defendant's son, who, at that time, could not realise his investment in order to assist his mother in purchasing the property.The cheque proved by the plaintiff to have been given to the defendant's son in order to make the loan was payable to the defendant's son.The defendant's son subsequently repaid the loan to the plaintiff.The property was conveyed to the defendant as sole proprietor of the land.It was not until some years after the purchase of the property that the plaintiff unsuccessfully endeavoured to persuade the defendant to engage in a more permanent relationship.

I can find no evidence on which I can be satisfied that at the time of the purchase of the property a common intention existed between the parties that the plaintiff should have a beneficial interest in the property.To the contrary, in my view, the evidence leads me to the conclusion that no such intention existed.

Be that as it may, whilst it may well be that the plaintiff voluntarily gave his labour to assist in making the house habitable by carrying out the renovations jointly with the defendant, I can find no evidence to support the view that the expenditure incurred by the plaintiff for the purchase of materials required for the renovations was considered by the parties to be a gift made by the plaintiff to the defendant.

The evidence is to the contrary.The fact that both the defendant and her son claimed that those purchases were offset by the defendant's son not requiring the plaintiff to pay rent that he said the plaintiff owed to him for his accommodations, seems to me to be an acknowledgment that the supply of goods was not a gratuitous supply.

The evidence of how much rent was foregone by the defendant's son is, however, so uncertain and unquantified as to make it impossible to say by how much the cost of materials should be reduced, if at all.Moreover, it seems much more likely that the rent foregone by Shane Nicol was in respect of materials purchased and work done by the plaintiff in renovating his property at 39 Yorktown Road, Elizabeth Park.

I can see no reason to discount the amount claimed by the plaintiff to be the cost of materials, namely, $5,584.That amount was not disputed by the defendant.

In my opinion the plaintiff is also entitled to a lump sum by way of interest and I award the sum of $1,195 as interest on the money expended by him on those materials.

Accordingly, there will be judgment for the plaintiff in the sum of $7,579 inclusive of interest.

In all other respects the claim is dismissed.

There will be a stay of the execution of the judgment for one calendar month. Liberty to apply.

No order as to costs.