Read v Nicholls
[2004] VSC 66
•16 March 2004
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 6857 of 2002
| KEVIN READ (as Executor of the will of ETHEL JUDY READ, deceased) | Plaintiff |
| v | |
| ALICE CECILIA NICHOLLS (as Executrix of the will of KYRAN PATRICK NICHOLLS, deceased) | Defendant |
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JUDGE: | NETTLE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 26, 27 February, 1 March 2004 | |
DATE OF JUDGMENT: | 16 March 2004 | |
CASE MAY BE CITED AS: | Read v Nicholls | |
MEDIUM NEUTRAL CITATION: | [2004] VSC 66 | |
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Administration And Probate – Testator’s Family Maintenance – Survival of Actions – Rights under Part IV of Administration and Probate Act 1958 – Whether rights survive death of applicant – Administration and Probate Act 1958, s.91
Real Property – De facto partners – rights under Part IX of Real Property Act 1958 – Whether rights survive death of applicant – Property Law Act 1958, Part IX
Equity – Trusts – Constructive Trust – De facto partners – Unconscionable retention of benefit – Purchase of real property in name of man alone – Non financial contribution of de facto partner – whether constructive trust in favour of de facto partner.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Dr J. F. Bleechmore | David Wilkinson & Co |
| For the Defendant | Mr S. P. Newton | Clark & Toop |
HIS HONOUR:
The facts
Ethel Judy Read (nee, Barker), deceased, was born on 26 October 1919. In 1939 she married George Graham Read and in the following eight years she bore him three children: Kevin George Read on 5 February 1943; Barbara Ann Holden (nee Read) on 6 November 1944; and Graham Edward Read on 5 March 1947. Thereafter until about 1958 she and George Read lived with their three children in rented premises at 34 Francis Street, Ferntree Gully.
George Read was a carpenter and in the course of his work he came in contact with Kyran Patrick Nicholls who was then a builders labourer. Kyran Nicholls was born in 1932 and so was about 13 years younger than George and Ethel Read, but it appears that he and George Read became friends and that at some time in or about 1958 George Read took Kyran Nicholls home for a drink and to introduce him to Ethel Read.
Ethel Read did not drink alcohol in those days and she would not allow others to drink it in the house. Therefore George Read and Kyran Nicholls and other friends did their drinking in a shed at the back of the house. But after a while Kyran Nicholls became attracted to Ethel Read and she to him and it may be because of the attraction that Ethel Read began to take a drink herself.
In or about 1959 George Read was convicted of theft and sent to prison. That left the way open for the development of a relationship between Kyran Nicholls and Ethel Read. There is a dispute about it on the evidence, but the weight of evidence is that Kyran Nicholls became a frequent visitor to the house and that he formed a sexual relationship with Ethel Read and that they carried on the relationship during his visits to the house. There is also evidence of frequent drunken parties; that the house was damaged as a result of riotous behaviour; and that the children became concerned about the way things were developing. In or about 1960 the children were moved out into the care of their grandparents.
After a time Kyran Nicholls was also convicted of theft and sent to prison, and Ethel Read was evicted from 34 Francis Crescent and moved to live in her father’s house in South Yarra with him and her brother. That, however, was not the end of the relationship.
In or about 1961 Kyran Nicholls was released from gaol and began to call on Ethel Read at her father’s home. Her father disapproved of Kyran Nicholls and would not allow him into the house. But there is evidence that Kyran Nicholls managed on occasion to enter the house unseen through Ethel Read’s bedroom window, and that they were able thereby to continue their liaison. After a month or two of carrying on their relationship in that way, Ethel Read left her father’s home and moved to live with Kyran Nicholls at a derelict boarding house in Mulberry Street, Richmond.
There is a dispute as to whether Ethel Read went to Mulberry Street as a boarder or as Kyran Nicholls’ lover. According to the defendant, there were at least two other lodgers at the house: a truck driver called George Byrne and retired sailor called Ted Gully, and by most accounts both were heavy drinkers. The defendant says that Ethel Read was just another lodger like them, with her own room, for which she paid rent to the landlord. There is, however, other evidence, which I prefer, that Ethel Read and Kyran Nicholls shared a room and a bed and thus in effect lived as man and wife. There is also evidence, which is disputed but which on balance I accept, that Ethel Read did the bulk of the cooking and cleaning for herself, Kyran Nicholls, George Byrne and Ted Gully and that she may also have worked for a while at the Epworth Hospital, as a kitchen maid; although the period was probably brief.
George Read was released from prison sometime before March 1966, and upon his release he went to the Mulberry Street property to have it out with Kyran Nicholls. But Read was a man of diminutive stature who weighed only 9 stone, whereas Nicholls was big and weighed in the order of 16 stone, and Read was badly beaten. Read returned later that day with a .22 rifle and shot Kyran Nicholls, although not dead, and Read was charged with attempted murder. That was the end of the marriage. After being acquitted of that offence, George Read lived apart from Ethel Read until he died of lung cancer in 1970 at the age of 50.
Ethel Read and Kyran Nicholls continued to live together in the Mulberry Street house until it burned down in or about 1973. From there they moved to another rented house in George Street Richmond. George Byrne and Ted Gully went with them as boarders. According to the defendant, Ethel Read was again just a boarder paying rent for her own room, and the defendant says that Ethel Read carried on an affair with George Byrne for the better part of ten years while living at George Street. But there is other evidence, which I prefer, that Ethel Read and Kyran Nicholls continued to live as man and wife at George Street, sharing the same bed in the front bedroom, and that Ethel Read did the cooking and cleaning for the whole household, including Byrne and Gully.
In 1978 Kyran Nicholls purchased a holiday house at Wonthaggi for $10,500. The defendant paid the initial deposit of $500 and Kyran Nicholls paid the remaining $1,500 of the deposit out of savings. He financed the balance of the purchase price on vendor terms of $200 per month. He also told Kevin Read at the time that he regarded the property as an investment. He said that Ethel Read would be able to look after the boarders (at George Street) and that he and Ethel should therefore be able to afford the $200 per month. But according to the defendant, whose evidence on this point I accept, the defendant paid all of the instalments for the first three years, totalling $7,200, and Kyran Nicholls paid off the balance of the purchase price of $5,500 out of an industrial deafness compensation award.
In or about 1985 Kyran Nicholls and Ethel Read moved from the George Street property to another rented house in Coppin Street, Burnley. Again George Byrne and Ted Gully went with them as lodgers and again, although there is a dispute about it, the bulk of the evidence is that Kyran Nicholls and Ethel Read lived as man and wife, sharing the front bedroom, and that Ethel Read did the cooking and cleaning for the whole household including the two boarders. During that period Ethel Read also received a single woman’s old age pension, and I infer that she contributed some of it in some fashion to the running of the household.
In 1987 Kyran Nicholls purchased a derelict two bedroom house in Birkenhead Street, Fitzroy at a price of $60,000. He paid $42,500 of that amount out of a workers compensation back injury award and he financed the rest on a mortgage loan from the Westpac Bank. He told Kevin Read at the time that the property was “not much” but that Ethel Read “was happy with it”.
For the next two years, Kyran Nicholls renovated the property with the assistance of friends and relatives while continuing to live with Ethel Read and the two boarders at Coppin Street. Then after part of the renovations had been completed, Kyran Nicholls and Ethel Read moved into the new property together leaving the boarders behind.
Kyran Nicholls retired in 1991 and from then on he also received a single old age pension. Consequently, throughout the bulk of the time that Kyran Nicholls and Ethel Read were together at Birkenhead Street they both received a pension and during that period the Westpac loan was paid off.
There is a dispute about the domestic arrangements at Birkenhead Street. According to the defendant, Ethel Read was again simply a boarder who paid $45 per month board for the exclusive use of the front bedroom and Kyran Nicholls slept alone with his possessions and dogs in the second bedroom. But there is other evidence, which I prefer, that Kyran Nicholls and Ethel Read continued to live as man and wife and that they shared the bed in the front bedroom until the late 1990’s. Age and illness then made it more convenient or necessary for them to sleep in separate rooms. By that stage, Kyran Nicholls had contracted an illness later diagnosed as bone cancer, and Ethel Read was suffering from kidney failure which was to necessitate thrice weekly dialysis treatment at St Vincent’s Hospital.
For some time after moving to Birkenhead Street, Ethel Read continued to do the cooking and cleaning as she had before. But as she became weaker in the later years Kyran Nicholls took on some of the burden, and as Ethel Read’s illness worsened it is likely that Kyran Nicholls took over completely the burden of domestic chores. While he retained his strength he washed for her and cleaned for her. He appears to have been devoted to her. He took her to hospital for dialysis three times a week until his own health became so bad that he could no longer do so. Then until he died he arranged for taxis and others to take her and return her.
On 28 April 2002 Kyran Nicholls died of bone cancer. By his will dated 2 March 2000 he left the whole of his estate to his mother, the defendant. According to the inventory filed with the application for probate, his estate consisted of:
a) house and land at 39 Birkenhead Street, North Fitzroy, valued at $400,000;
b) house and land at 15 Brown Street, Wonthaggi, valued at $100,000; and
c) furniture and effects valued at $20,000.
On 28 December 2002 Ethel Read died of kidney failure. By her will dated 30 April 2002 she appointed her elder son, Kevin Read, her executor and trustee. According to the inventory filed with her application for probate, her estate apart from the assets the subject of this proceeding consisted of furniture worth approximately $12,000 and a savings account of approximately $22,800.
The proceedings
Ethel Read instituted this proceeding by Originating Motion dated 19 August 2002, four months before her death. To begin with the only relief which she sought was orders pursuant to Part IV of the Administration and Probate Act 1958 for provision for her proper maintenance and support out of the estate. But later the indorsement on the Originating Motion was amended pursuant to orders made on 2 October 2002, to include a claim of entitlement to a beneficial interest in the house at 39 Birkenhead Street, North Fitzroy and in the holiday home at Wonthaggi (“as the surviving joint owner in equity as the deceased’s common law wife and by virtue of her contributions to the purchase and maintenance and pursuant to an express and/or constructive or resultant trust in fee simple absolutely”). Since her death on 28 December 2002, the proceeding has been carried on by Kevin Read as her legal personal representative.
The evidence
The account of the facts which I have set out above largely accords with the version of facts deposed to in the affidavits of Kevin and Graham Read and Barbara Holden. As already noted, however, the defendant adduced evidence which differed in some significant respects. I set out therefore my reasons for preferring the plaintiff’s version of events.
The defendant’s evidence
To begin with, I reject a large part of the defendant’s testimony as improbable. Upon the objective evidence it appears to me plain that there was a sexual relationship between Ethel Read and Kyran Nicholls between about 1959 and 1961 and that it led to the breakdown of Ethel Read’s marriage to George Read and to Ethel Read leaving her father’s home to be with Kyran Nicholls at Mulberry Street. How else does one explain the shooting for which George Read was charged with attempted murder and the fact that Ethel Read left her father’s home (where presumably she could have lived rent free) in order to go to Kyran Nicholls at Mulberry Street?
Secondly, I reject a substantial part of the defendant’s testimony because, once tested in cross examination, it was shown to be speculative or exaggerated. According to the defendant’s testimony Ethel Read was only ever a boarder who paid rent to Kyran Nicholls; the two always slept in separate bedrooms; Kyran Nicholls lived the life of a bachelor; and Kyran Nicholls and Ethel Read led separate lives; Ethel Read did nothing significant by way of housework in any of the three rented houses or at Birkenhead Street; Ethel Read and George Burns had a “de facto affair” which lasted about 10 years at George Street; during the same time Kyran Nicholls had a number of girl friends; Barbara Holden (Ethel Read’s daughter) was one of the girl friends; and Kyran Nicholls had “an affair” with Barbara Holden. But upon the defendant’s own admissions she never spent a night in any of the three rented houses, or at Birkenhead Street; she only ever ate there on a few occasions; she did not see the sleeping arrangements; the only reasons she gave for alleging that Ethel Read and George Byrne had “an affair” was because she had seen them having a drink together and go out together but she did not know if they slept together; Kyran Nicholls did not discuss with her having had any girl friends, and there was no other evidence that he did; and she had no personal knowledge of any relationship between Kyran Nicholls and Barbara Holden.
When pressed as to why she had alleged that Kyran Nicholls had had a relationship with Barbara Holden, she retreated to the proposition that she had not said “a sexual relationship” but simply “an affair”. When tested as to why she had come to the conclusion that Kyran Nicholls had a number of girl friends she could provide no satisfactory answer. When pressed as to how she could square the supposed “boarder” status of Ethel Read with the fact that Ethel Read holidayed with Kyran Nicholls at Wonthaggi, she answered that Ethel had her own room at Wonthaggi. And when it was pointed out to her that there were only three bedrooms at Wonthaggi and uncontradicted evidence that on occasions when Kyran Nicholls and Ethel Read were present together, two of the rooms were occupied by other guests, she answered that there were lots of bunks in the second and third bedrooms.
Thirdly, the picture which the defendant sought to paint of the relationship between Ethel Read and Kyran Nicholls was inconsistent with the way in which the defendant behaved towards Ethel Read while Kyran Nicholls was still alive. One good example of that was the evidence extracted in cross examination that while Kyran Nicholls was alive the defendant invited Ethel Read as a matter of course to accompany Kyran Nicholls each year to the defendant’s home for the family Christmas gathering; it being an occasion almost exclusively for family members. Another significant indicator, also in evidence extracted in cross examination, was that the defendant spoke frequently if not daily with Ethel Read up to the time that she died in a way, it seems to me, that only very close friends or relatives are able to continue to do despite the irritation which it causes.
Fourthly, I suspect that some of the evidence which the defendant gave was affected by her age. She is 92 years old, and although appearing to have her wits about her, her memory was obviously not as good as it used to be.
Finally, I should say that the defendant appeared to me greatly to dislike Ethel Read’s family and, consequently, to be intent on refusing to make any concession that reflected favourably upon Ethel Read or otherwise upon the plaintiff’s chances of success.
I accept so much of the defendant’s evidence as was corroborated by objective evidence. Thus, as earlier indicated, I accept that she funded $500 of the deposit and $7200 of the monthly payments made for Wonthaggi (because there are documentary records consistent with those payments having been made). But to the extent that her evidence as to the relationship between Kyran Nicholls and Ethel Read is uncorroborated and differs to that given on behalf of the plaintiff, I prefer to accept the latter.
James Nicholls’ Evidence
Kyran Nicholls’ brother, James Nicholls, also gave evidence which differed in significant respects from the version of facts that I have set out above. I did not find Mr Nicholls to be a credible witness and I reject the bulk of what he had to say.
One example of its shortcomings is that he deposed in an affidavit that Kyran Nicholls did not drink alcohol for the last 32 years of his life, whereas it was plain from the defendant’s testimony and otherwise that Kyran Nicholls did drink; at least in moderation. Even Mr Nicholls had no hesitation in identifying a photograph of his brother sharing a drink with Ethel Read at a social function, apparently late in Kyran Nicholls’ life. Other parts of Mr Nicholl’s evidence were put forward in an affidavit as if made from personal knowledge of the facts. But upon cross examination they were exposed as having been based upon no more than what he alleged he had been told by Kyran Nicholls. Examples included assertions that Kyran Nicholls had had an affair with Barbara Holden and that Ethel Read agreed to pay rent to Kyran Nicholls in order to get away from “her partner”, George Byrne. Mr Nicholls’ denials of the extent of the relationship between Ethel and his brother were among the most unconvincing aspects of his evidence. When presented with a range of cards and other correspondence that had been sent by various people over the years to “Kyran and Ethel”, in effect as a couple, his only response was a limp observation that Ethel may have been included as an addressee in the cards and letters because she was a boarder known to be around. It is notable that one such card had been sent by Mr Nicholls’ daughter, Martine de Vries, who according to her own evidence visited the couple often.
Robert Kann’s and James Stoneman’s Evidence
Robert Kann, who is the defendant’s son in law, and James Stoneman, who was a friend of Kyran Nicholls gave evidence as to some of the events which they observed at Birkenhead Street. Mr Kann assisted Kyran Nicholls with the renovations in 1987 and deposed that he was told by Ethel Read that the front bedroom was hers and that he was not to touch anything in it. James Stoneman gave evidence that he was a friend of Kyran Nicholls and visited him at Birkenhead Street in the later years and that according to his observations, Kyran Nicholls did most if not all of the house work at that time. Both of them also spoke of Kyran Nicholls having his own bedroom at Birkenhead Street in which he slept by himself with his tools, his dogs and other possessions and that Ethel Read slept alone in the front bedroom.
I accept the evidence of both men. Each of them appeared to me to be unbiased and to do their best to tell the truth as they knew it. Each appeared ready to make concessions when concessions were properly to be made. In point of fact, however, their evidence was not significantly inconsistent with the version of the facts deposed to by the plaintiff’s witnesses. There is not much doubt that Ethel Read became frail in the later years and less able to attend to domestic chores as a consequence, and as that occurred she became increasingly dependent on Kyran Nicholls. The events to which Mr Kann and Mr Stoneman deposed are consistent with that state of affairs.
Martine de Vries’ Evidence
I put most of the evidence of Martine de Vries in the same category. Some of it was based upon observations which she said she made at the George Street property when she was nine years old. It was to the effect that Ethel Read and George Byrne shared the front bedroom and she knew that because she recalled sitting with them in that room watching television. I reject that evidence as likely to be unreliable. But she also deposed to having gone to assist Kyran Nicholls, at the end when he was sick, by which time of course Ms de Vries was an adult, and to going shopping at that time for him and Ethel Read. She recalled that she was given separate lists and separate amounts of money by each of them. I see no reason to doubt the truth of what she said about that. That said, however, I do not think that it contradicts in any significant way the evidence given on behalf of the plaintiff’s. Kyran Nicholls and Ethel Read effectively lived as man and wife from about 1961 until ill health afflicted both of them during the latter part of the 1990’s. The fact that that they may have had some separate shopping orders very late in the piece can hardly make a difference.
The parties’ contentions
Despite the death of Ethel Read, the plaintiff contends he remains entitled to an order for provision pursuant to Part IV of the Administration and Probate Act. He accepts that the amount of the provision is likely to be small - because Ethel Read is no longer in need of provision - but he submits that Ethel Read is more likely than not to have incurred some expenses for which the deceased should have provided out of his estate, and that an award should be made to compensate for those expenses. He suggests, by way of example, the taxi fares which it may be supposed Ethel Read paid when travelling to and from her dialysis treatment during the eight months that she survived Kyran Nicholls.
The plaintiff further contends that apart from the claim under Part IV, Kyran Nicholls should be taken to have held the Wonthaggi property and the Birkenhead property upon constructive trust to the extent of at least a 50% interest in favour of Ethel Read (as in effect the de facto wife of Kyran Nicholls), in accordance with the equitable precepts essayed in Muschinski v Dodds[1] and Baumgartner v Baumgartner[2] and subsequently developed in Green v Green[3] and Parij v Parij[4].
[1](1985) 60 CLR 583
[2](1987) 164 CLR 137
[3](1989) 17 NSWLR 343
[4](1997) 72 SASR 153
The defendant contends that any right of action under Part IV died with Ethel Read, or alternatively that any right of action that survived her extended only to expenses for which Kyran Nicholls should have provided and which were thrown back on Ethel Read’s estate; and she says that there is no evidence of any.
As to the constructive trust claim, the defendant says that even if Ethel Read were found to have been Kyran Nicholls’ de facto wife (and the defendant submits to the contrary) it is not open upon the evidence to conclude that Ethel Read made any or sufficient contribution to the acquisition of either property to warrant any equitable interest.
The claim under Part IV
The authorities are not all one way as to whether the court has jurisdiction to make an order under Part IV of the Administration and Property Act after the death of the applicant. In Re Shannon[5] Long Innes CJ in Eq held that there was jurisdiction to make such an order under the comparable provisions of s.3 of the Testator’s Family Maintenance Act 1916 (NSW). His Honour said that:
“The jurisdiction of the Court is based on the statute, and is limited to making such provision for the ‘maintenance, education and advancement’ of the persons entitled to the benefit of the Act as the Court thinks fit. The claimant having died before any order could be made, it is obvious that no provision could be properly made for her future maintenance, education or advancement; nor do I think that in a case where the claimant has died after having in fact maintained himself or herself without running into debt, even though on a scale less generous than he or she was entitled to require or expect, the Court ought to make an order after the claimant’s death which would merely have the effect of swelling the estate which would pass under the claimant’s will, or to his or her next-of-kin if intestate, and of benefiting persons who are not within the scope of the Act. In the present case, however, the evidence establishes that the widow died indebted in respect of board and residence to the extent of £23.8s.9d.; and …I think that an order should be made to that extent, notwithstanding that indirectly her legatee may be benefited to that extent.”
[5](1935) SR (NSW) 516
Similarly in Re Wardle[6], in a case concerning s.7 of the South Australian Inheritance (Family Provision ) Act 1972-5, Zelling J reasoned that:
“It will be seen that s.7(1)(b) speaks of ‘a person entitled to claim the benefit of this Act is left without adequate provision.’ Does that means ‘is left’ as at the date of death, as at the date of the application, or at the date of the hearing? I think it must mean on the date of application because those are the conditions precedent to an application being launched and there is no doubt that as at that date it was arguable that Mrs Wardle was left without adequate provision.
On the other hand the order only inheres in the estate when it is made: see s.9(7). As at the date of hearing there is no doubt that the deceased applicant needed nothing for maintenance, education or advancement so that even if she was left without adequate provision at the time when it mattered for the launching of her application can she demonstrate any loss as at today? The only possible head is advancement…(but) s.7 must be read with s.6 and as the persons entitled to claim the benefit of this Act under s.5 include spouses and parents and others who may well be of mature age, the Act must presumably use the word ‘advancement’ as a word capable of being employed in relation to the claims of others than the young who are being advance to set them on their way in life. The real question then is: is this form of application personal to the one making it. So that by the nature of the cause of action it is not susceptible of being made by another?…In my opinion, however, the solution proposed by Long Innes CJ in Shannon’s case is correct. The applicant therefore was entitled to have the estate which she represented reimbursed by the amount by which the estate was diminished by the deceased having to maintain or advance herself after the date of the death of her husband and before her own death in so far as that maintenance or advancement ought to have been discharged by the deceased husband if he were alive and so far as it was capable of remedy by an order made under the provisions of this Act during the lifetime of the original applicant.”
[6](1979) 22 SASR 139
Re Shannon has also been followed in New Zealand in Hawke v Public Trustee[7] and In re Shrimpton, deceased[8].
[7][1957] NZLR 152
[8][1962] NZLR 1000
On the other hand, in Coffey v Bennett[9] Sholl J doubted Re Shannon, and in McEvoy v Public Trustee[10] Powell J implied that he thought it was wrong as well as distinguishing it on the basis that it did not apply to the differently worded provisions of s.7 the Family Provision Act 1982 (NSW).
[9][1961] VR 264 at 268
[10](1989) 16 NSWLR 16 at 99
I do not share the doubts identified in Coffey and McEvoy. The reasoning of Long Innes CJ appears to me to be convincing and in any event I consider that I should follow it in the way it has been followed in South Australia and in New Zealand. I proceed on the basis that Re Shannon was correctly decided and, because of the similarity of Part IV of the Administration and Probate Act 1958 to the New South Wales Testators Family Maintenance Act 1916, that it is applicable to Part IV of the Administration and Probate Act.
But that having been said, it appears to me that the defendant is correct in the contention that the claim fails for want of evidence. For assuming without deciding that Kyran Nicholls had responsibility to make provision for the maintenance and support of Ethel Read[11], there is just no evidence that Ethel Read’s estate was diminished by obligations which ought to have been discharged by Kyran Nicholls. More specifically, there is neither direct evidence nor evidence of facts sufficient on which to base an inference that Ethel Read was unable to meet obligations out of her pension moneys or other resources without amassing any debt. To the contrary, as has been seen, she died with more than $22,000 sitting in a savings account.
[11]Administration and Probate Act, 1958, s.91(1)
Upon the evidence therefore, this is a case where the claimant died after maintaining herself without running into debt, even if perhaps on a scale less generous than she was entitled to require or expect, and the Court ought not to make an order of which the effect would be merely to swell the estate to pass under her will.
The constructive trust claim
If Ethel Read were still alive she might have applied for an order for the adjustment of property interests under Part IX of the Property Law Act 1958. If she had, the application would have fallen to be determined by reference to the factors identified in s.285 of the Act. But it has been held that Part IX of the Act does not enable a surviving partner to apply to the court after the death of the other partner, and that the right to apply does not pass to an applicant’s legal personal representative under s.29 of the Administration and Probate Act[12]. In this case the plaintiff does not seek to challenge that decision, despite such potential for challenge as may be thought to inhere in Rule 36.01(6) of the Rules of Court[13]. Consequently, this case falls to be decided in accordance with the general equitable principles of unconscionable conduct essayed in Muschinski v Dodds and Baumgartner v Baumgartner[14].
[12]Skene v Dale [1990] VR 605 at 613,per Kaye J; see also Kalejs v Minister for Justice & Customs (2001) 111 FCR 442; [2001] FCA 1769 at [20]
[13]cf Agtrack v Hatfield [2003] VSCA 6
[14]Although it has been held that it is permissible to refer to s.285 as a form of guidance in determining what is equitable: see Parij v Parij (1987) 72 SASR 153 at 166 –7, per Debelle J
In Green v Green[15] Gleeson CJ (of New South Wales, as his Honour then was) said of the application of those principles to de facto relationships:
“…it is now well settled that there are circumstances in which a court of equity will intervene to declare the existence of a proprietary interest in a family home on the part of spouse or de facto partner, and the unifying principle underlying the cases where such intervention is regarded as appropriate is that in the circumstances of the case, and in accordance with equitable doctrines, it would be unconscionable on the part of the person against whom the claim is set up to refuse to recognise the existence of the equitable interest: Baumgartner v Baumgartner (1987) 164 CLR 137 at 147 per Mason CJ, Wilson and Deane JJ.
The most common case of intervention of that kind to be found in the law reports is the case where the person in whose favour a constructive trust is found has, directly or indirectly, made a financial contribution towards the cost of acquiring, improving, or maintaining the property in question. Lord Diplock’s discussion of the principles relevant to such a case in Gissing v Gissing [1971] AC 886 at 905–10 appears now to be generally accepted by the courts in England as correctly stating the law. It is of interest to note the general proposition with which his Lordship introduced his discussion of the particular problem that arises where both spouses have contributed, directly or indirectly, to the cost of a matrimonial home…”
[15](1989) 17 NSWLR 343 at p.353.F; See also Hibberson v George (1989) 12 Fam LR 725 at p.743 per McHugh JA
The application, however, of the principles is not confined to cases in which applicants have contributed financially to the acquisition or development of the property. As Deane J stated in Mucscinski v Dodds[16]:
”As has been seen however, the relationship between the parties in the present case was not merely a commercial one. It was a mixture of the commercial and the personal. The personal relationship provided the context and explains the content of the planned commercial venture. If the personal relationship had survived for years after the collapse of the commercial venture and the property had been unmistakenly devoted to serve solely as a mutual home, any assessment of what would and would not constitute unconscionable conduct would obviously be greatly influenced by the special considerations applicable to a case where a husband and wife or persons living in a "de facto" situation contribute, financially and in a variety of other ways, over a lengthy period to the establishment of a joint home. In the forefront of those special considerations there commonly lies a need to take account of a practical equation between direct contributions in money or labour and indirect contributions in other forms such as support, home-making and family care. “(Emphasis added)
[16](1985) 160 CLR 583 at 622
The point is developed further in the judgment of Debelle J in Parij v Parij[17] :
“These decisions establish in unambiguous terms that, when determining whether it is unconscionable for one party to a de facto relationship to retain the sole beneficial ownership of property acquired in the course of the relationship, regard will be had to the manner in which the parties have conducted their relationship and the contributions each have made. When assessing their respective contributions, regard will be had to non-financial contributions as well as to financial contributions. The latter proposition is clear from the references to the ‘practical equation between direct contributions in money or labour and indirect contributions in other forms such as support, homemaking and family care’ in Muschinski v Dodds (at 622) and in the reference to ‘contributions either financially or in kind’ in Baumgartner (at 150). The principle that regard will be had to non-financial contributions when considering the division of property on the dissolution of a marriage has been affirmed on more than one occasion: see Mallet v Mallet (1984) 156 CLR 605 at 623 per Mason J and the cases there cited. In that passage Mason J noted that a wife's contribution as a homemaker should be recognised in a substantial, and not merely token, way, this being a recognition of the fact that, by her attention to the home and the children, the wife frees her husband to earn income and acquire assets: see also Deane J (at 640) and Dawson J (at 646). These observations were made when considering the effect of s79 of the Family Law Act, 1975 (Cth), which directs the Family Court, when altering interests in property, to have regard to the contribution made in the capacity of homemaker or parent. That principle was reaffirmed by Mason CJ, Deane and McHugh JJ in Singer v Berghouse [No2] (1994) 181 CLR 201 at 212-213 in these terms:
‘As recent cases in this Court have made plain (eg Mallet v Mallet (at 623), it is important that the courts do not disregard or discount the non-financial contributions made to the property and finances of the party to a marriage or marriage-like relationship, such as the contributions made by parties as homemakers and parents, which are not directly productive of a monetary return.’
As I understand them, these remarks have a general application and are not, as the trial judge believed, limited to claims for what used to be called testator's family maintenance. That is evident not only from the manner in which the observations were made but, in particular, by the reference to Mallet . The reference to recent cases stating that non-financial contributions are relevant in marriage-like relationships is plainly a reference to Muschinski v Dodds and Baumgartner. Thus, Singer v Berghouse affirms the authority of those decisions.”
[17](1997) 72 SASR 153 at 163
In this case there is no evidence that Ethel Read made a direct financial contribution to the acquisition of the Wonthaggi property or the Birkenhead Street property. According to the evidence, the Wonthaggi property was purchased for $10,000, of which the initial $500 deposit was paid by Alice Nicholls, the remaining $1,500 of the deposit was paid by Kyran Nicholls out of his savings, instalments totalling $7,200 were paid by Alice Nicholls over a period of three years and a further $5,500 was paid by Kyran Nicholls out of the deafness compensation claim payment. The Birkenhead Street property was purchased for $60,000 of which $42,000 came out of the workers compensation payment made to Kyran Nicholls in respect of a back injury and the rest appears to have been paid off over time by Kyran Nicholls.
There is also little direct evidence that Ethel Read made an indirect financial contribution to the acquisition of either of the properties. Such as there is, is confined to Alice Nicholls’ testimony that Kyran Nicholls, Ethel Read, George Byrne and Ted Gully each paid one quarter of the “rent” at the George Street and at Coppin Street properties and that Ethel Read paid $45 “rent” during the time that she lived at the Birkenhead property. It may be, as Alice Nicholls would have it, that Ethel Read kept the remainder of her pension after paying her “board” to herself.
But despite Ethel Read’s savings of $22,000 at the time of her death, I am inclined to think that she must have contributed to household expenses in each of the properties that she lived with Kyran Nicholls, and thereby contributed indirectly to the pool of funds available for the purchase of property. So long as they lived at Mulberry Street or George Street with George Byrne and Ted Gully it is probable that the four lived as a community and that each contributed as a member of the community; not only to the rent (as Alice Nicholls said was the case), but also to the cost of food and other household items. The amount of money to go round cannot have been large and it is likely to have gone a good deal further if pooled to meet those sorts of costs. The probability is that they made it go further by pooling their resources. Then once Ethel Read and Kyran Nicholls were alone at Birkenhead Street, the patterns of behaviour established by living together for the last 25 years are likely to have continued. It is hard to believe that two pensioners of their age and at their stage would not have combined resources for the benefit of each other.
It may be observed as something that counts against the likelihood of a de facto relationship that there is no evidence of Kyran Nicholls and Ethel Read having had a joint bank account or other form of joint financial arrangement. Perhaps that suggests that there was not the sort of trust and confidence that ordinarily applies between husband and wife or their de facto counterparts. But I do not regard the point as one of great significance - I imagine that there are many married couples who do not share bank accounts or financial arrangements other than perhaps at the most basic level - and given that Kyran Nicholls and Ethel Read were each claiming a single pension at one time or another, they may have chosen to avoid joint financial arrangements in order to avoid detection. The same reasoning applies to the description of Ethel’s contribution as “rent”.
The fact that they each received a single persons pension is also inconsistent with the existence of a de facto relationship. But I do not regard that point as one of great significance either. Based upon evidence given by Kevin Read, I think it probable that Ethel Read and Kyran Nicholls chose not to report their relationship, in order to avoid a reduction in their pension income.
There is then the matter of Ethel Read’s non-monetary contribution as wife and as homemaker. For reasons earlier given, I am satisfied that Ethel Read lived at George Street, Richmond and Coppin Street, Burnley as the de facto wife of Kyran Nicholls and that she continued to do so at Birkenhead Street; albeit that the pace of the relationship must have slowed markedly towards the end. For the reasons which follow, I am also persuaded that throughout the better part of the 40 years for which they so lived together, or at least until she became ill towards the end of their time together, Ethel Read shouldered the bulk of the burden of cooking and cleaning for the household.
Barbara Holden gave direct evidence, which I accept, that she visited George Street on a regular basis while her mother and Kyran Nicholls were living there and that she observed that her mother was responsible for the cooking and the cleaning and for keeping the house.
Graham Read gave direct evidence, which I also accept, that his mother undertook those roles throughout the whole of the six or seven months that he lodged at George Street following the breakdown of his first marriage in 1979. That evidence is supported by the fact that George Byrne and Ted Gully were mature single men, of a generation of men that were not as likely as men these days to be involved in domestic chores, and the fact that George Byrne and Ted Gully followed Kyran Nicholls and Ethel Read from Mulberry Street to George Street and from there to Coppin Street.
Alice Nicholls gave contrary evidence to which I have already referred, that each of Kyran Nicholls, Ethel Read, George Byrne and Ted Gully cooked and cleaned and provided for himself or herself without any sort of community or combination of effort or resources. But as I have said, I reject that evidence as improbable. It is possible that the arrangements were as the defendant asserted. But it is unlikely, especially given the age of the people involved, and the era in which the events are alleged to have occurred, and the sort of community which is suggested by the fact that all four stayed together for more than twenty years through several moves and in several locations. I think it to be more likely than not that George Byrne and Ted Gully moved and stayed with Kyran Nicholls and Ethel Read for more than twenty years because they valued the companionship of Kyran Nicholls and Ethel Read and the care and upkeep which Ethel Read provided.
I turn to the problem of how one quantifies Ethel Read’s contribution to the acquisition of the Wonthaggi and Birkenhead properties and hence the extent of any interest in those properties to which she may be entitled. The exercise is not without difficulty.
The starting point is in one sense equality[18]. As McHugh JA said in Hibberson v George:
“Equity favours equality. As Mason CJ, Wilson and Deane JJ said (at 149) in Baumgartner where the parties have lived together for years and have pooled their resources ‘there is much to be said for the view that they should share the beneficial ownership equally as tenants in common, subject to adjustment to avoid any injustice which would result if account were not taken of the disparity between the worth of their individual contributions either financially or in kind’. In Baumgartner their Honours thought an adjustment was called for. They declared the interests of the parties in the proportions of 55 per cent and 45 per cent. They also made adjustments to take account of moneys paid by the parties.”
[18]cf Black v Black (1991) 15 Fam LR 10
After the starting point, however, there are at least two routes leading to the next step in the process of assessment. Mahony JA explained them in Green v Green, as follows:
“In Muschinski, the court decided that each party should receive, from the house, the amount of their respective contributions and that the residue should be held for them in equal shares. In Baumgartner, the approach was, at least in terms, somewhat different. The approach involved three stages. First, their Honours saw the purpose of the joint relationship in that case as being or including ‘to provide accommodation for themselves and their children’: at 149. They saw their ‘earnings’ as having been ‘pooled for the purposes of that relationship’: at 149. And, the relationship having failed, they saw it as inequitable that the house, ‘financed in part through the pooled funds’: at 149; should be held by Mr Baumgartner alone.”
In this case there is also the added complexity that Ethel Read made no financial contribution, direct or indirect, apart from her “board” (and such other small sums as she may be inferred to have contributed to the household pool), and therefore that the bulk of her contribution was in the form of what Deane J described in Muschinski as indirect contributions in other forms such as support, home-making and family care. Neither Muschinski nor Baumgartner explains how one is to go about placing a value upon contributions of that kind. Gaudron J referred to the problem and other members of the court referred to contribution financially or “in kind”, but that is as far as it went.
In the result, one is left with no more certain guidance than the sorts of considerations identified by Debelle J in Parij, by analogy with the provisions of Part IX of the Property Law Act, and of which the Clarke JA said in Black v Black[19], that:
“In order to evaluate the particular contribution the court is, in my opinion, required carefully to examine the role played by the person who claims to have contributed as a homemaker and parent. Obviously, where a woman has, over a long period, assumed virtually all the responsibility of maintaining the home and bringing up the children, has done so in a responsible and energetic manner, and has devoted most of her time to doing that and thus freed her partner to earn income to be used for the general betterment of the family, her contribution would have to be regarded as substantial and significant. Whether her contribution should be regarded as less than, equal to, or greater than the financial contribution by the wage-earning partner must depend upon the circumstances of the case, which will undoubtedly include the length of the relationship, the nature of the wage-earner’s contributions and the care, devotion and services of the homemaker.”
[19](1991) 15 Fam LR 109 at 117
Plainly, that is a far cry from the sorts of circumstances which were found in Muschinski and Baumgartner to make it unconscionable for the legal owner of land not to recognise an equity in favour of a claimant who had made direct or indirect financial contributions. It also seems to be a long way from the sort of analysis that was undertaken by Gleeson CJ in Green v Green. But if I may say so with respect, it accords with the underlying principle identified by Deane J in Muschinski and for that reason alone it is likely to be correct. No less importantly, it has the imprimatur of each of the three judges who comprised the court in Parij. It is right that I should follow it.
Consistently with the sort of approach suggested in Parij, I take the view that the relationship between Ethel Read and Kyran Nicholls endured so long and that the support and comfort that she is likely to have given to him for the period of its duration were so significant that Ethel Read’s contribution should be regarded as equal to the financial contributions made by Kyran Nicholls out of his income. But I am also of the view, consistent with the sort of approach that was adopted in Baumgartner and Muschinski, that the financial contributions made by Kyran Nicholls from sources other than income should be subtracted from the purchase price of the properties before the calculation of the equal shares and the shares should be computed on the basis of the balance.
So, in the case of the Wonthaggi property, I consider that the $5,500 of purchase price which came from the workers compensation payment should be excised and treated as contributed to by Kyran Nicholls alone, as too should the $500 initial deposit and instalments totalling $7,200 paid by Alice Nicholls. Those adjustments having been made, it is then appropriate to treat Ethel Read as having contributed as to 50% to the balance of deposit of $1,500 which was paid by Kyran Nicholls out of savings. I reach that conclusion on the basis that by her house keeping and other efforts Ethel Read so freed and supported Kyran Nicholls as to enable him to earn and save those moneys.
In the result, out of a total purchase price paid of $14,700[20], Ethel Read should be taken to have contributed one half of the $1,500 balance of deposit, or 5.1% of the total.
[20]$500 + $1500 + $7,200 +$5,500 = $14,700
Similarly, in the case of the Birkenhead property, I consider that the $42,500 of purchase price which came from the second workers compensation payment should be excised and treated as having been contributed by Kyran Nicholls alone, and that it is appropriate to treat Ethel Read as having contributed as to 50%to the balance. I reach that conclusion on the basis that so long as Kyran Nicholls continued to work (which was until about 1991) Ethel Read’s housekeeping and other efforts so much freed and supported him as to enable him to earn and save the moneys which he applied to the repayment of the Westpac loan, and to work on renovating the property, and on the basis that after his retirement he and she are more likely than not to have pooled funds and may be assumed to have met expenses out of the pool.
In the result, out of a total purchase price of $60,000, Ethel Read should be taken to have contributed one half of $17,500 balance of purchase price, or 14.6%of the total.
Conclusion
For the reasons given I consider that the plaintiff’s claim under Part IV of the Administration and Probate Act 1958 should be dismissed but that upon the remainder of the plaintiff’s claim it is appropriate to declare that the defendant holds the Wonthaggi property upon constructive trust as to 5.1% for the plaintiff and that she holds the Birkenhead Street property upon constructive trust as to 14.6% for the plaintiff.
I shall hear counsel on the form of orders.
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