Muschinski v Dodds

HIGH COURT OF AUSTRALIA

Gibbs C.J., Mason, Brennan, Deane and Dawson JJ.

MUSCHINSKI v. DODDS

(1985) 160 CLR 583

6 December 1985

Trust

Trust—Resulting trust—Constructive trust—Unconscionable retention of benefit—Failure of joint venture—Purchase of land by unmarried persons—Joint and several liability under contract—Price paid by woman—Undertaking by man to pay for certain repairs and cost of prefabricated house—Separation without fulfilment of undertaking—Whether resulting trust in favour of woman—Whether rebutted—Failure of joint venture—Contribution—Effect of discharge of joint debt by woman—Gift on condition—Failure to fulfil condition—Effect—Whether forfeiture or right to compensation.

Decisions

GIBBS C.J.: The appellant, the plaintiff in proceedings brought in the Equity Division of the Supreme Court of New South Wales, claimed a declaration that she is the beneficial owner of a parcel of land at Picton which is held in the names of the appellant and the respondent as tenants in common and that the respondent's "joint interest" in the land is held in trust for her. She claimed also certain ancillary relief. The respondent, by a cross claim, sought an order for the sale of the land and the division of the net proceeds of sale equally between the appellant and the respondent. The matter was heard by Waddell J., who dismissed the appellant's claim and stood over the cross claim. The appellant appealed from this decision to the Court of Appeal which dismissed the appeal. She now appeals to this Court.

2. On 26 February 1976, the appellant and the respondent entered into a contract to purchase the land at Picton for a price of $20,000. The contract commences by describing the property at Picton, and then continues as follows:

"Agreement made the 26th day of February 1976 between (the vendor) of the one part and (the respondent and the appellant) (herein called the Purchaser) of the other part WHEREBY the Vendor agrees to sell and the Purchaser agrees to purchase, if more than one as JOINT TENANTS/ TENANTS IN COMMON IN THE FOLLOWING SHARES: with joint and several liability under this agreement, the property above described ... "

The contract provided that the purchaser should upon the signing of the agreement pay a deposit of $2,000 and that the balance of the purchase price should be paid in cash on completion. Settlement of the contract took place in May 1976. The appellant provided the whole of the purchase price and other moneys needed to complete the purchase. She had been the owner of a house at Ingleburn which she sold; completion of that sale took place at about the same time as the completion of the purchase of the Picton land, and she was able to use the proceeds of that sale to provide the purchase moneys for the land at Picton.

3. The parties had lived together in the appellant's house at Ingleburn since November 1972. The appellant was a divorced woman and had three children of her former marriage. The respondent was married but was separated from his wife. He was in irregular employment…