Rance v Dempsey

[2024] NSWSC 1423

Supreme Court

New South Wales

Medium Neutral Citation:

Rance v Dempsey [2024] NSWSC 1423

Hearing dates:

6 November 2024

Date of orders:

8 November 2024

Decision date:

08 November 2024

Jurisdiction:

Equity

Before:

Hmelnitsky J

Decision:

See [38]

Catchwords:

EQUITY – Trusts and trustees – Resulting trusts – Presumption of resulting trust – Unequal contributions to purchase price

PRACTICE AND PROCEDURE – Application for appointment of representative of deceased’s estate pursuant to r 7.10 of the Uniform Civil Procedure Rules 2005 (NSW)

Legislation Cited:

Succession Act 2006 (NSW), s 127

Uniform Civil Procedure Rules 2005 (NSW), r 7.10

Cases Cited:

Calverley v Green (1984) 155 CLR 242; [1984] HCA 81

IMF (Australia) Pty Ltd v Sons of Gwalia Ltd [2004] FCA 1390; (2004) 211 ALR 231

In the matter of Pharmacy Depot Hurstville Pty Ltd (in prov liq) [2018] NSWSC 961

Oil Basins Ltd v Commonwealth of Australia (1993) 178 CLR 643; [1993] HCA 60

Zetting v Müller [2017] NSWSC 659

Texts Cited:

J D Heydon and M Leeming, Jacobs’ Law of Trusts in Australia (8th ed, 2016, LexisNexis)

Category:

Principal judgment

Parties:

Jesse Scott Rance (Plaintiff)
Glynis Annette Dempsey (Defendant)

Representation:

Counsel:
A Green (Plaintiff)

Solicitors:
Southern Waters Legal (Plaintiff)

File Number(s):

2023/424312

JUDGMENT

1. These proceedings concern the estate of the late Ian Scott Astill. They were brought by the deceased’s son Jesse Scott Rance by way of statement of claim dated 23 November 2023. For convenience I will refer to the parties by their first names.

2. The defendant, Glynis Annette Dempsey, is Ian’s former de facto partner. Ian and Glynis owned a property on White Street in East Gosford (the Gosford House) as joint tenants.

3. In the statement of claim, as filed, Jesse sought a declaration that Glynis holds the Gosford House on constructive trust for the estate. In the alternative, he sought an order for further provision out of the estate pursuant to s 60 of the Succession Act 2006 (NSW) and a complementary order under s 80 designating property as notional estate, being Ian’s interest in the Gosford House as joint tenant which passed to Glynis on his death. Jesse also sought an order under r 7.10 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) that Glynis be appointed as a representative of the estate for the purpose of these proceedings.

The non-appearance of the defendant

4. Glynis was served with the originating process pursuant to orders for substituted service in circumstances described below. However, she did not appear at the hearing and nor did she engage with the proceedings in any way prior to the hearing. Jesse’s former and current solicitors, Northern Beaches Lawyers (NBL) and Southern Waters Legal, respectively, have expended significant effort in attempting to notify Glynis of the proceedings and serve her with the originating process and other relevant documents.

5. Prior to the commencement of the proceedings, NBL sent a letter dated 12 September 2023 outlining their claim, to Glynis. They received a reply dated 12 October 2023 from McGirr & Associates who stated that they acted for Glynis in the matter. On 23 November 2023, NBL sent an email to McGirr & Associates attaching the statement of claim. On 18 December 2023, McGirr & Associates replied to NBL stating that they did not have instructions to accept service of the statement of claim.

6. NBL followed up with McGirr & Associates on 19 December 2023, 15 January 2024 and 23 January 2024. NBL received a response on 24 January 2024 in which McGirr & Associates confirmed that they were not instructed by Glynis.

7. On 17 January 2024, a process server instructed by NBL attended the Gosford House to serve Glynis with the statement of claim. At the Gosford House the process server spoke to a woman who said that her name was Erin. She informed the process server that Glynis did not live there anymore and had moved out a couple of months prior. The process server left without leaving any documents.

8. Multiple attempts were made, both by process servers and by Jesse’s solicitor, to serve the statement of claim on Glynis. On 10 February 2024, a process server spoke with a woman at the Gosford House who said she was Glynis’ daughter-in-law and that she could pass on the documents. On 23 May 2024, a process server spoke with a man at a house in St Ives who said he was Glynis’ son. He also received documents and said he would pass them on.

9. On 7 August 2024, the Court made orders for substituted service on Glynis. Substituted service was duly made by one of the means specified in the order. Pursuant to further orders made on 22 October 2024, Glynis was served with notice of the fact that the proceedings had been set down for final hearing on 6 December 2024.

10. NBL and Southern Waters Legal have additionally attempted contact with Glynis through Facebook, Instagram and by text message.

11. I am satisfied that Glynis has been duly served in accordance with the orders for substituted service and that she has been given appropriate notice of the final hearing.

Facts

12. Jesse relied on evidence appropriate to the nature of the pleaded claims, including his alternative claim for additional provision under the Succession Act. However, it was quite clear at the final hearing that his principal contention was that Ian had contributed the vast bulk of the purchase price for the Gosford House and so there was a strong presumption that he and Glynis held their legal title subject to a resulting trust reflecting their proportionate contributions. As such, the only substantive relief sought at the final hearing was an order to give effect to that conclusion. This represents a slight departure from the statement of claim, which sought orders relating to a “constructive trust”, not a “resulting trust”. I treated the submissions as involving an application to amend the statement of claim, which I have allowed, as I see no prejudice to Glynis in substituting “constructive” for “resulting”.

13. That being the case, I will describe the facts in a way that is appropriate to the resulting trust case. I will not deal in detail with the evidence that would have been relevant to the other claims, although I could not discern any reason to doubt Jesse’s evidence about those matters.

14. Ian was born in 1959. Jesse is one of two children born to the relationship between Ian and Diane Carol Rance. Jesse was born in 1988 and his brother, Blake, was born in 1989. Ian and Diane were never married. They separated in about 1992 when Jesse was four years old.

15. Ian and Glynis commenced a relationship in about 2012. They began living together that same year.

16. In March 2018, Ian received the sum of $952,758.11 in settlement of a claim against the estates of his late parents. Bank statements show that this sum was deposited into accounts in Ian’s name at around this time.

17. On 31 August 2018, Ian and Glynis purchased the Gosford House for the sum of $720,000. There was not much detail as to the circumstances of that transaction. Title to the property was transferred into the names of Ian and Glynis as joint tenants. There was no meaningful evidence as to Ian’s or Glynis’s actual intentions as to their respective ownership interests in the property at the time of the purchase.

18. Bank statements and other documents show that the purchase was largely funded from the proceeds of Ian’s inheritance, together with a bank loan of $253,000. That loan was in the joint names of Ian and Glynis and was secured by a mortgage over the Gosford House. It follows that Glynis’ contribution to the purchase price was $126,500 (being half the amount of the loan) and that Ian contributed the balance, being 82.43% of the total purchase price: Calverley v Green (1984) 155 CLR 242; [1984] HCA 81 at 252-253 (Gibbs CJ).

19. Ian and Glynis lived together at the Gosford House from the time it was purchased until about February or March 2019. Their separation was acrimonious. Glynis moved out. Ian continued to live at the Gosford House until July 2022 but he too moved out following a series of violent home invasions.

20. There was evidence showing that payments of interest and capital on the loan were all made by Ian. Between September 2018 and March 2021, Ian made monthly loan repayments from his CBA account totalling $42,446.34. He made some other repayments from his St George account totalling $2,524.04 between June 2021 and January 2022.

21. On 4 November 2021, the mortgagee issued a notice of default which showed that the loan was in arrears and that the payout figure was $238,225.77.

22. Ian died on 1 December 2022 without leaving a will. There has been no grant of administration in relation to his estate. On intestacy, the two persons entitled to share in his estate are Jesse and his brother, Blake, being his two surviving children: s 127 of the Succession Act. The evidence shows that apart from his interest in the Gosford House, he had only modest amounts of cash in a bank account as at the date of his death.

Resulting Trust

23. In Calverley v Green, Gibbs CJ said at 246-247:

“Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, i.e., a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser. Similarly, if the purchase money is provided by two or more persons jointly, and the property is put into the name of one only, there is, in the absence of any such relationship, presumed to be a resulting trust in favour of the other or others. For the presumption to apply the money must have been provided by the purchaser in his character as such — not, e.g., as a loan. Consistently with these principles it has been held that if two persons have contributed the purchase money in unequal shares, and the property is purchased in their joint names, there is, again in the absence of a relationship that gives rise to a presumption of advancement, a presumption that the property is held by the purchasers in trust for themselves as tenants in common in the proportions in which they contributed the purchase money: Robinson v. Preston; Ingram v. Ingram and Crisp v. Mullings (a decision of the English Court of Appeal).

24. The reasons of Mason and Brennan JJ at 255-256 and the reasons of Deane J at 266-267 were to the same effect. See also Jacobs’ Law of Trusts in Australia (8^th ed, 2016, LexisNexis) at [12-10].

25. These principles apply here. Ian and Glynis were not married and, as such, the presumption of advancement does not operate to displace the presumption of resulting trust that arises from their unequal contributions to the purchase of the Gosford House. The measure of Ian’s interest corresponds to his contribution to the purchase price, which in a case such as this is worked out at the time of the purchase and not by reference to later mortgage repayments, as explained in Calverley v Green at 252 (Gibbs CJ).

26. There is a strong presumption that Ian’s interest in the Gosford House was as to 82.43%. There being no reason not to make a finding on the basis of that presumption, I find that Ian’s beneficial interest in the Gosford House was 82.43%.

Two procedural matters

27. The question of whether a person has an equitable interest in property is, of course, ordinarily determined in proceedings in which that person is a party or where their interests are represented. Here, there has been no grant of administration of Ian’s estate, presumably because it appeared that there were no assets in the estate save for a small amount of cash and personal effects.

28. That being so, it is appropriate to make orders under UCPR r 7.10 appointing a person to represent the estate for the purposes of these proceedings. That rule is as follows:

7.10 Interests of deceased person

(1) This rule applies to any proceedings in which it appears to the court—

(a) that a deceased person’s estate has an interest in the proceedings, but is not represented in the proceedings, or

(b) that the executors or administrators of a deceased person’s estate have an interest in the proceedings that is adverse to the interests of the estate.

(2) The court—

(a) may order that the proceedings continue in the absence of a representative of the deceased person’s estate, or

(b) may appoint a representative of the deceased person’s estate for the purposes of the proceedings, but only with the consent of the person to be appointed.

(3) Any order under this rule, and any judgment or order subsequently entered or made in the proceedings, binds the deceased person’s estate to the same extent as the estate would have been bound had a personal representative of the deceased person been a party to the proceedings.

(4) Before making an order under this rule, the court may order that notice of the application be given to such of the persons having an interest in the estate as it thinks fit.

29. I was informed that Jesse consents to act as representative for the purposes of the proceedings. He is an appropriate person to represent the estate because he is one of the two persons entitled to benefit from it. He has also demonstrated the estate’s entitlement to a significant beneficial interest in the Gosford House, which has benefited the estate. I will express that order to take effect from the date on which the statement of claim was filed, because he has in effect been representing the interests of Ian’s estate in these proceedings since that point in time. This is a slight departure from the statement of claim, which sought an order that Glynis be appointed as representative of the estate. However, such an order would not be appropriate in the circumstances.

30. Next, it is necessary to consider whether it is appropriate to make orders in Glynis’ absence.

31. The role of a proper contradictor in the context of proceedings in which a declaration is sought was explained by French J in IMF (Australia) Pty Ltd v Sons of Gwalia Ltd [2004] FCA 1390 at [47]; (2004) 211 ALR 231 and by Gleeson JA in In the matter of Pharmacy Depot Hurstville Pty Ltd (in prov liq) [2018] NSWSC 961 at [20]-[21].

32. However, the fact that a party with a real interest in opposing a declaration chooses not to oppose it does not have the consequence that the Court lacks jurisdiction to make the declaration. In Oil Basins Ltd v Commonwealth of Australia (1993) 178 CLR 643; [1993] HCA 60, Dawson J said at 649:

” The question raised by the plaintiff is neither abstract nor hypothetical and the answer to that question will clearly produce consequences for the parties. In those circumstances I would, for my own part, doubt whether the failure on the part of the Commissioner to indicate whether or not he disputes the plaintiff's claim could preclude the plaintiff from seeking against him the relief which it does. The most that could be urged is that there is no proper contradictor, but I doubt whether that is so when the Commissioner's participation in the action is likely to force him to abandon his present stand of neutrality. Even if he were to maintain that stand, I doubt whether that would prevent him from being a proper contradictor. He clearly has a true interest in the plaintiff's claim and, if he were to choose not to oppose it and to abide by any order which the Court might make, that might perhaps amount to no more than the performance of his role as a contradictor in a particular manner.”

33. I was also referred to the reasons of Parker J in Zetting v Müller [2017] NSWSC 659. In that case, Mr Zetting commenced proceedings against his mother, Ms Müller. The parties had purchased a property in 1987 in their joint names and Mr Zetting sought orders to recognise his interest under a resulting trust that, he said, arose because of his contribution of the whole of the purchase price for the property.

34. Ms Müller died before the proceedings were concluded. Her estate was joined, and the proceedings were ultimately settled on terms that contemplated the making of a declaration that her estate held its interest in the property on trust for Mr Zetting.

35. Parker J explained why, in some circumstances, it is appropriate to make a declaration even in the absence of a contradictor. In that case, the proper contradictor had been joined and had agreed to the final orders. In my view, the fact that Glynis has been joined to the proceedings but has not indicated any view as to the final orders does not make a material difference, at least on the facts here.

36. I have jurisdiction to make the orders sought. The proper parties have been joined, save that Glynis appears to have chosen not to participate in the hearing. In the circumstances, I would not decline to grant final declaratory relief by reason only of her failure to appear. Jesse’s contention that Ian had the benefit of a resulting trust is very strong and there is considerable utility for Jesse (and anyone else with an interest in Ian’s estate, including Blake) in making a declaration recognising that interest.

ORDERS

37. I indicated that I would make orders giving effect to my conclusions but would otherwise stand the matter over to a date in about six months’ time, with liberty to apply in the event that additional matters arise concerning the implementation of my orders.

38. The orders of the Court will therefore be:

1. Order that the plaintiff be appointed as the representative of the estate of the late Ian Scott Astill with effect from 23 November 2023, for the purposes of this proceeding.

2. Declare that the defendant holds the Gosford House on a resulting trust as to 82.43% for the estate of the late Ian Scott Astill.

3. The defendant is to pay the plaintiff’s costs of the proceedings.

4. Any shortfall between the costs of the plaintiff and the costs recovered from the defendant pursuant to order (3) be paid from the estate of the late Ian Scott Astill on the indemnity basis.

5. List the matter for directions at 9:30am on 11 April 2025.

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Decision last updated: 08 November 2024