Re Hope; Ex parte Carter
[1985] FCA 93
•18 MARCH 1985
Re: ANTHONY PETER HOPE
Ex Parte: JEAN CARTER
No. QLD PET 559 of 1980
Trusts
COURT
IN THE FEDERAL COURT OF AUSTRALIA
GENERAL DIVISION
BANKRUPTCY DISTRICT OF THE SOUTHERN DISTRICT OF THE STATE OF QUEENSLAND
Spender J.
CATCHWORDS
Trusts - unmarried couple living in house owned by the female - transfer of ownership into their joint names - whether creation of an express or implied trust - evidence of common intention - uncontradicted evidence not necessarily conclusive - no common intention established - whether a constructive trust - whether a fraud for the male to assert a beneficial interest in relation to the interest legally held by him in the property.
Bankruptcy Act 1966 (Commonwealth) s 111
Allen v. Snyder (1977) 2 NSWLR 685
Boccalatte v. Bushelle (1980) Qd R 180
Bloch v. Bloch (1981) 37 ALR 55
Cole v. Commonwealth (1962) SR 700
Re Gear (Deceased) (1964) Qd R 528
Hohol v. Hohol (1981) VR 221
Taylor v. Ellis (1956) VLR 457
HEARING
BRISBANE
#DATE 18:3:1985
ORDER
The Official Receiver does not hold the land referred to in this application as Trustee for Jean Carter.
The application is dismissed, the applicant to pay the costs of and incidental to this application, to be taxed if not otherwise agreed.
JUDGE1
This is an application by Jean Carter, ("the applicant"), seeking a declaration that the Official Receiver stands possessed of certain land as trustee for her.
The land in question is the applicant's residential address at 11 Mankina Street, Slacks Creek, more particularly described as Lot 95 on Registered Plan No. 114502, County of Stanley, Parish of Yeerongpilly, being all that land contained in Certificate of Title Volume 4234, Folio 189.
The applicant was divorced in August 1976 after 24 years of marriage to Ronald John Carter. There were four children of that marriage.
In January 1976, Anthony Peter Hope ("the bankrupt") and the applicant commenced living together as man and wife at the applicant's home in 11 Mankina Street, Slacks Creek.
At that time, the applicant was in her mid-40s, separated from her husband, and in the course of getting a divorce. The bankrupt was considerably younger than the applicant. The parties lived together for a period just short of six years and, during this time, they became engaged to be married.
The evidence establishes that in early 1977, the applicant and the bankrupt entered into a partnership in the business of transport trucking. The bankrupt previously conducted his own trucking business.
On 13 August 1979, they signed a memorandum of transfer by which the property at 11 Mankina Street, Slacks Creek, was transferred from the applicant to the bankrupt and herself as joint tenants. At the time of this transfer, the applicant was calling herself Mrs Hope, and the transfer is described as being one to "Anthony Peter Hope and Jean Hope, his wife ..." The transfer is expressed to be "in consideration of the assumption by Anthony Peter Hope and Jean Hope of the mortgage indebtedness under Bill of Mortgage No. E869612 in favour of the Australian and New Zealand Banking Group Ltd".
In the period of more than three and a half years between the time when the applicant and the bankrupt first commenced living together and the date on which this transfer was signed, the repayments on the mortgage over the property at 11 Mankina Street, Slacks Creek, had been being made from the proceeds of the transport trucking business.
For some 42 months or more, the bankrupt had been making repayments on the home from the proceeds of that business, which repayments (at the time of the transfer) totalled more than $12,000, together with a further $6,000 in paying out the Finance Corporation of Australia, second mortgagee over the property. Repayments from the proceeds of that business continued to be made until late 1980.
At some time during the years 1979 and 1980, the bankrupt opened an account jointly in the names of both himself and the applicant at the Commercial Bank of Australia.
However, their relationship deteriorated from 1980 onwards and, ultimately, the applicant and the bankrupt separated in February 1982.
In the meantime, a sequestration order was made as against the bankrupt by his Honour Mr Justice Douglas on 4 November 1980, and the Official Receiver was made trustee of the bankrupt's estate.
In the Statement of Affairs of the bankrupt executed 10 November 1980, the bankrupt describes the A.N.Z. Bank Ltd as being the first mortgagee "over jointly owned property at 11 Mankina Street, Slacks Creek" and the C.B.A. Ltd as being second mortgagee "over jointly owned property at 11 Mankina Street, Slacks Creek".
The applicant contends that the Official Receiver now holds the land in question on trust for the applicant. It is contended that the transfer of the property was on the basis that the bankrupt needed an interest in the house as security to raise money to buy equipment for a cane farm venture related to the transport trucking business. This, it is said, was the sole purpose for the transfer. It was, therefore, to be temporary and the property was to be signed back to the applicant. Thus, the bankrupt is said to hold the interest in the property under an express trust for the applicant or, alternatively, under either a resulting trust or constructive trust.
An expressed trust is one in which there is an expressed common intention by the parties as to the existence of the trust.
A resulting trust is one in which that common intention is to be implied in all the circumstances.
A constructive trust arises irrespective of the common intentions of the parties where it would be a fraud for the legal owner to assert a beneficial interest. In such a case, the trust will be imposed upon the parties by the court.
The common intention as to the existence of the trust can be proved without writing and may be established by evidence of oral agreement between the parties or may be inferred from their conduct.
These principles are established in a number of recent decisions: see Allen v. Snyder (1977) 2 NSWLR 685; Boccalatte v. Bushelle (1980) QdR 180; Hohol v. Hohol (1981) VR 221; Bloch v. Bloch (1981) 37 ALR 55.
In the present case, the applicant contends that there is an expressed trust in that the transfer was for the sole purpose of enabling the bankrupt to raise money to buy equipment for the business. It is contended that the common intention of the parties was that the transfer would be merely temporary and that the property would be signed back to the applicant.
In the alternative, the applicant contends that even if there is no expressed trust created, a resulting trust is to be implied from the oral communications between and conduct of the parties in relation to the transfer.
Counsel for the applicant contends that her uncontradicted evidence of the common intention that existed between herself and the bankrupt as to the transfer must be accepted by the court as conclusive.
Uncontradicted evidence was sometimes given this operation in the older cases but the position is that a court in an appropriate case is not obliged to accept such evidence: see Cole v. Commonwealth (1962) SR (NSW) 700; Taylor v. Ellis (1956) VLR 457; and Re Gear (Deceased) (1964) QdR 528. At p 535 of that last case, Hart J. said:-
"Whether uncontradicted testimony should be accepted or not in my opinion must depend on all the circumstances of the case including its inherent probability and the possibility of calling evidence in denial."
In all the circumstances of the present case, I am not prepared to accept as conclusive the entirety of the evidence of the applicant. Rather, it seems to me that at the time at which the transfer was effected, the applicant was engaged to be married to the bankrupt, expected that the relationship would continue, and honestly expected that she would ultimately marry him. Further, on her evidence, she states that the relationship did not deteriorate until 1980. It is my view, therefore, that at the time of the transfer, the applicant fully expected to marry the bankrupt and I cannot accept that the transfer of the property into their joint names was intended merely as a temporary arrangement.
I also find support for this view in that no steps were taken by the applicant until late in 1983 to have the property re-transferred to her despite the failure of the purpose for which the transfer is said to have been made some four years earlier.
I do not accept that there was a common intention between herself and the bankrupt, either expressed or implied, by which a trust was created in relation to the half interest in the property transferred to the bankrupt.
Further, I do not accept that it would be a fraud for the bankrupt to assert a beneficial interest in relation to the interest legally held by him in that property. I find there is no constructive trust in favour of the applicant of that interest in the present case.
It is not, therefore, necessary for me to decide whether the applicant, having held herself out as the wife of the bankrupt, is a "spouse" for the purposes of postponement of her claims as against other creditors under s.111 of the Bankruptcy Act.
I find that the Official Receiver does not hold the land in question on trust for the applicant, and that the bankrupt did not take his interest in that property on trust.
I therefore dismiss the application with costs, to be taxed if not otherwise agreed.
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