Shepherd v Doolan - [2005] NSWSC 42

No judgment structure available for this case.

CITATION:
Shepherd v Doolan & OrsShepherd v Doolan & Anor; Est. Doolan [2005] NSWSC 42

HEARING DATE(S): 31/01/05, 01/02/05, 02/02/05, 07/02/05

JUDGMENT DATE :

10 August 2005

JUDGMENT OF:
White J

DECISION:
Direct counsel for the plaintiff to bring in short minutes of order in accordance with reasons.

CATCHWORDS:
TRUSTS AND TRUSTEES - Plaintiff claims a beneficial interest in property forming part of deceased estate on the basis of either a resulting or constructive trust - Whether money contributed to the acquisition of a weekend lease from the Crown was part of cost acquiring title in fee simple - Whether plaintiff and deceased had a common intention that the former have a beneficial interest in property - Whether plaintiff acted to her detriment in reliance upon this common intention - Held that common intention need not extend to quantum of beneficial interest and plaintiff had a beneficial interest under a Grant v Edwards constructive trust - SUCCESSION - Wills - Family Provision - Application by de facto wife - Family Provision Act s 7 - Provision made.

LEGISLATION CITED:
Family Provision Act 1982 (NSW)
Crown Lands Consolidation Act 1913 (NSW)
Property (Relationships) Act 1984 (NSW)

CASES CITED:
Grant v Edwards [1986] Ch 638
Green v Green (1989) 17 NSWLR 343
Baumgartner v Baumgartner (1987) 164 CLR 137
Hibberson v George (1989) 12 Fam LR 725
Currie v Hamilton [1984] 1 NSWLR 687
Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060
Napier v Public Trustee (WA) (1980) 55 ALJR 1; 32 ALR 153
Bloch v Bloch (1981) 55 ALJR 701
Calverley v Green (1984) 155 CLR 242
Anson v Anson [2004] NSWSC 766
Ryan v Dries (2002) 10 BPR 19,947; [2002] NSWCA 3
Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd [2005] HCA 3; (2005) 79 ALJR 550; 213 ALR 230
Little v Little (1988) 15 NSWLR 43
Muschinski v Dodds (1985) 160 CLR 583
Maharaj v Chand [1986] AC 898
West v Mead [2003] NSWSC 161
Pettitt v Pettitt [1970] AC 777
Gissing v Gissing [1971] AC 886
Allen v Snyder [1977] 2 NSWLR 685
Brandling v Weir [2003] NSWSC 723
Parianos v Melluish (Trustee) (2003) 30 Fam LR 524
Burns v Burns [1984] Ch 317
Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353
Bryson v Bryant (1992) 29 NSWLR 188
Austin v Keele (1987) 10 NSWLR 283
Carruthers v Manning [2001] NSWSC 1130
Singer v Berghouse (No. 2) (1994) 181 CLR 201
Bladwell v Davis [2004] NSWCA 170
ERS Engines Pty Ltd v Wilson (1994) 35 NSWLR 193

PARTIES:
Joyce Edith Shepherd
v
Laurence Patrick Doolan & Ors;
Joyce Edith Shepherd
v
Laurence Patrick Doolan & 1 Or; Estate of William Daniel Doolan

FILE NUMBER(S):
SC 1269/03; 3186/04

COUNSEL:
Plaintiff: Mr D Williams
Defendants: Mr P Glissan

SOLICITORS:
Plaintiff: Herbert Weller Solicitor
Defendants: Mervyn J Cathers & Co Solicitors

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
FPA LIST

WHITE J

Wednesday, 10 August 2005

1269/03 JOYCE EDITH SHEPHERD v LAURENCE PATRICK DOOLAN & 1 Or; Estate of the Late WILLIAM PATRICK DOOLAN
3186/04 JOYCE EDITH SHEPHERD v LAURENCE PATRICK DOOLAN & 1 Or

JUDGMENT

The Issues

1 HIS HONOUR: William Daniel Doolan died on 18 July 2002. He was the registered proprietor of a property situated at 14 Mitchell Street, Norah Head. That property was sold by his executors for $600,000.

2 The deceased acquired a weekend lease of the property on 20 July 1966. In 1969 he purchased the land comprised in the weekend lease from the Crown. The plaintiff contends that she has a beneficial interest under a resulting or constructive trust in the land and its net proceeds of sale.

3 The land was the only substantial asset in the deceased’s estate. The plaintiff also claims an order for provision out of the estate of the deceased pursuant to s 7 of the Family Provision Act 1982 (NSW). She claims to be an eligible person by reason of having lived in a domestic relationship with the deceased at the time of his death. The defendants, who are the executors of the deceased’s estate, deny that the land was held on trust for the plaintiff, deny that she is eligible to make an application for provision under the Family Provision Act, and contend that even if she is entitled to apply for provision under the Act, the circumstances do not warrant an order for provision to be made for her having regard to the size of the estate, her financial position, and the competing claims on it.

4 The plaintiff claims that she is entitled to a beneficial interest in the property pursuant to a resulting trust, because she paid the deceased £100 for him to buy and build the house on the land at Norah Head. She claims an interest as a beneficiary under a constructive trust on two bases. First, she contends that it was the common intention of the deceased and her that she should have a beneficial interest in the property and she acted to her detriment on the basis of that common intention. (Grant v Edwards [1986] Ch 638; Green v Green (1989) 17 NSWLR 343). Alternatively, she contends that it is unconscionable for the executors to retain the full beneficial ownership of the property for the benefit of the estate based on principles said to be derived from Baumgartner v Baumgartner (1987) 164 CLR 137 and Hibberson v George (1989) 12 Fam LR 725 having regard to the contributions which she made to the acquisition, improvement and conservation of the property, and welfare of the deceased, during the course of what was said to be a thirty-eight year de facto relationship.

Background to the Trust Claims

5 The plaintiff had married Kevin David Shepherd on 2 October 1949. In 1956 they adopted a son, Rodney, who was then aged three. In 1962 she and Mr Shepherd jointly purchased a house at 46 Railway Terrace, Riverstone. That remains her house. In August 1962, Mr Shepherd was killed in a railway accident. The plaintiff was then thirty-five. The plaintiff and the deceased had known each other for some time. He lived with his parents at 5 Castlereagh Street, Riverstone which is about two and a half blocks from 46 Railway Terrace. He was unmarried. From 1963 the plaintiff and the deceased struck up a relationship. He took her out on social occasions. They commenced a sexual relationship, which continued until a couple of years before his death in 2002. He continued to live in his parents’ property and told the plaintiff that he would marry her, but his mother wanted him to help her at home. He had most of his meals with the plaintiff and spent most of his nights with her. The plaintiff and the deceased inspected the area at Norah Head offered for weekend lease and selected the block of land which he ultimately acquired.

6 The plaintiff recalled that the deceased purchased the land at Norah Head in a ballot from the Crown in 1964. That is not quite accurate, but the inaccuracy is not such as necessarily to require the rejection the balance of her evidence in relation to the acquisition of the land and the work done on it. She recalled that at the time he made the application, or acquired the land, he had to put in £200 or £300. She said that she contributed £100 of this amount. She gave him that sum of money in one lump sum. She said that when she paid the £100 to the deceased he told her, “This is for our block. It will be yours one day.” She also said that at the time she contributed this sum of money she said to the deceased “Don’t worry about the engagement ring. Put it into the house.”

7 There was no record to corroborate the plaintiff’s evidence that she had contributed £100. That is hardly surprising given the lapse of time. It was suggested to her in cross-examination that she had confused contributing £100 of her own money, with the deceased putting his own money into the house instead of buying an engagement ring for her. She denied this. The effect of her evidence was that she paid £100 and told the deceased to put the available money he had into the house, rather than spend it on an engagement ring for her. The parties did not engage to marry.

The Weekend Lease

8 The Minister for Lands notified in the Government Gazette of 21 May 1965 that an area of land at Norah Head had been set apart as Crown Land for weekend leases and invited applications for weekend leases. A weekend lease was a lease in perpetuity. (Crown Lands Consolidation Act 1913 (NSW) s 136F). It could be subject to such conditions as the Minister notified in the Gazette relating, amongst other things, to improvements or other matters as were required to be regulated in the public interest. (s 136A(4)). The holder of a weekend lease could be required to make payment towards the cost of making roads in the area. (s 136DD). The annual rent was to be 2.5% of the capital value of the lease for the first ten years and thereafter as re-determined by the local land board. (s 136C). Section 136H of the Crown Lands Consolidation Act provided that the holder might apply to purchase the land comprised in the weekend lease, and the Minister might grant or refuse any such application at his discretion. The section also provided that the price of the land should be the capital value as at the date of the application to purchase and should be determined by the local land board whose determination should be irrespective of the value of any improvements effected by the holder or paid for by him.

9 The notification in the Gazette stipulated that no deposit of rent or survey fee was required to accompany an application, but that such rent and survey fee should be payable upon confirmation of an application. It also stipulated that the weekend leases would be subject to conditions, including that the holder erect a dwelling on the land leased within one year from the confirmation of his application, or such further period as the Minister might allow, in accordance with plans and specifications approved by the Wyong Shire Council. The persons who could apply for a weekend lease were limited. Except with the Minister’s consent, no person owning land in the Wyong Shire and within one mile of the South Pacific Ocean was competent to apply. There were other restrictions. The notification in the Gazette included a stipulation that:

Application must be made in good faith, that is to say, the sole object of the applicant in making the application must be to obtain the land in order that he may hold and use it for his own exclusive benefit according to law.

10 The plaintiff said that the reason the land was put in the deceased’s name was because at that stage he did not own a house.

11 The notification in the Gazette also stipulated the capital value of the various portions or blocks which were to be made available. The deceased was successful in securing the block which was allotment 7 in section 7. The Gazette stated its capital value to be £476, at an annual rent of £11 8s, and that the successful applicant was required to pay £83 as the proportionate part of the cost of road construction. A survey fee of £10 was also payable. The sum of the three notified figures for annual rent, proportionate part of cost of road construction and survey fee, totalled £104 18s. It was suggested that this bore a close relationship to the £100 which the plaintiff testified to having paid the deceased to enable him to acquire the land. However the moneys were payable in instalments.

12 On 18 August 1966, the deceased was advised by the Department of Lands that he should pay a deposit, being the rent for the first half-year of $11.90 and the first instalment of the survey fee of $2. The road construction costs totalling $166 plus interest were payable by fifteen instalments, between 20 July 1967 and 20 July 1981. It appears from later correspondence from the Department of Lands that he took up the opportunity to pay the road construction costs by instalments. As at 6 May 1969, there was a principal balance of $143.91 outstanding for road construction costs and a principal balance of $14 outstanding for survey fees. Therefore, I do not regard the claimed similarity between the £100 which the plaintiff said she contributed, and the sum of the required payments for annual rent, road construction costs and the survey fee, as corroborating the plaintiff’s evidence.

Contribution of £100

13 The defendant submitted that the plaintiff’s evidence that she contributed £100 should not be accepted, because by the time the deceased was required to pay money to acquire the weekend lease, or construct the house on the property, Australia had converted to decimal currency. His application was not confirmed until 20 July 1966. Australia introduced decimal currency on 14 February 1966. However, the fact that decimal currency was introduced before the deceased was required to make any payment for the weekend lease, does not mean that the plaintiff could not have paid him £100 from sometime around July 1966 or later. There was no evidence that it was not possible to use Australian pounds as lawful currency after 14 February 1966, and her savings in pounds could surely have been used by the deceased and converted into dollars if that were necessary.

14 The deceased kept a cashbook of his expenditure upon building work for the property. It was submitted for the defendants that if the plaintiff had paid £100 to him, it is likely that the contribution would have been recorded in the book which he kept. However, the book records expenditures. It does not record the sources of the funds expended.

15 The plaintiff’s credit was not seriously shaken in cross-examination. I accept her evidence that she paid £100 to the deceased to help him pay the costs associated with the acquisition and holding of the weekend lease, or the costs of building the house on the land.

Work on the House and Garden

16 The house, which the deceased built, was a single bedroom fibro house. A number of his friends and relatives helped in the building. The plaintiff and her son Rodney also went to the property with the deceased on a number of weekends to help as they could. She did not carry out the heavy manual labour, but provided food and refreshment and assistance with the lighter tasks. The plaintiff says that during the period of construction the deceased said to her on more than one occasion, “the shack will be yours one day”. The plaintiff helped the deceased line the internal walls and ceilings with a plaster-like substance. She helped the deceased paint the ceiling, internal walls, and skirting boards. She scrubbed the floors, tidied up, and helped get rid of the old building materials. She also established the garden on the property. When the building was finished, she and the deceased maintained the house and garden until the deceased’s death. She did most of the work in the garden. They visited the property regularly.

17 The records kept by the deceased of his expenditure on the building of the property show that he outlaid $826.94, mostly in materials, in the construction of the house up to its completion in late 1968 or 1969.

Purchase of the Fee Simple

18 On 6 May 1969, the deceased was advised by the Department of Lands that his application to purchase the holding had been granted on 26 March 1969. The price of the land was $1,134. There were further adjustments for outstanding rent on the weekend lease, costs, stamp duty, the balance of the survey fee, and the balance of the road construction costs. The total sum payable was $1,334.72. That amount was paid on 6 June 1969.

19 The £100 contributed by the plaintiff was not part of the moneys paid in June 1969. Her evidence was that she paid the £100 at about the time the deceased first succeeded in acquiring the land in the ballot from the Crown. She said that the deceased put in the rest. She said that she paid £100 of the price required for the weekend lease. In her oral evidence she denied that the payment of £100 was made before any construction had started and said that she thought it was “about the time either of the weekend lease or he was buying the land.” Having regard to her affidavit evidence, I am satisfied that the £100 was paid as a contribution to the payment of rent, road construction costs and survey fees payable as conditions of the weekend lease, and towards the payment of building costs for the construction of the house. It is not possible to say to which of these the plaintiff’s £100 was applied, or how much was applied to each component. The plaintiff has not established that any part of the £100 formed part of the purchase price paid by the deceased in 1969 to acquire the freehold title.

The Resulting Trust Claim

20 The initial presumption which arises from the fact that the deceased was the registered proprietor of the Norah Head property is that he had full ownership of it, and there is no beneficial interest in favour of someone else which was imposed on his legal title. (Currie v Hamilton [1984] 1 NSWLR 687 at 690; Black Uhlans Inc v New South Wales Crime Commission& Ors [2002] NSWSC 1060 at [128]).

21 However, where two persons jointly provide the purchase money for property and the property is put into the name of one of them, then, unless the relationship between the parties gives rise to a presumption of advancement, it is presumed that the beneficial ownership of the property is held in the proportions in which they each contributed the purchase money. (Calverley v Green (1984) 155 CLR 242 at 246-247, 258-259). There is no presumption of advancement as between de facto partners. (Napier v Public Trustee (WA) (1980) 55 ALJR 1 at 3; 32 ALR 153 at 158; Calverley v Green at 260, 268-269; cp Calverley v Green at 250-251,264-265). The presumption can be rebutted by evidence of actual intention.

22 It was submitted for the defendants that the plaintiff’s evidence rebutted any presumption of a resulting trust. It was submitted that her payment of £100 was a gift, and that the reason which she gave for the property being purchased in the deceased’s name only, when it could have been purchased in their joint names, indicated that he should have the entire beneficial ownership commensurate with the legal title. The plaintiff said that the property was put in the deceased’s name because at that time he did not own a house. I do not think that the evidence displaces the presumption of a resulting trust, if that presumption otherwise arises. There were no words of gift, assuming, which I doubt, that any reliance could be placed upon professed recollections of conversations occurring almost forty years ago.

23 Ordinarily, the presumption of a resulting trust arises at the time the property is acquired. If the presumption is not displaced, then, unless there is a later agreement to alter the equitable interests in the property acquired, or the beneficial interests arising under the resulting trust are displaced by an interest arising under a constructive trust, the interests are not changed by later contributions to the conservation or improvement of the property. (Currie v Hamilton [1984] 1 NSWLR 687 at 691; Calverley v Green at 262-3). If the evidence establishes that it was the intention of the parties that their respective interests should be in accordance with something other than their contributions to the purchase price, such as their contributions to the purchase of the land and discharge of a mortgage, effect will be given to that intention so that although the trust will arise at the time of purchase, the quantum of their interests will fluctuate in accordance with that intention. (Bloch v Bloch (1981) 55 ALJR 701 at 704; Currie v Hamilton at 692; Calverley v Green at 262-263). There is no such evidence in this case.

24 The plaintiff’s difficulty in establishing a beneficial interest from the principles of resulting trusts, is that the £100 which she contributed did not form any part of the purchase price of the relevant property. The relevant property was the deceased’s estate in fee simple as registered proprietor of the land. It was not his interest as lessee under the weekend lease. It is now established that the concept of what constitutes the “purchase price” for the purpose of calculating beneficial interests under resulting trusts includes the incidental costs of purchase, such as legal expenses, stamp duty and registration fees. (Ryan v Dries (2002) 10 BPR 19,947; [2002] NSWCA 3 at [52]-[53]). But the evidence does not show that the plaintiff’s £100 was a contribution to the payment of such incidental costs either.

25 In a letter from the Department of Lands of 6 May 1969, the Under Secretary stated that the Crown grant on purchase could not issue until payment of all of the amounts set out in the letter. Those amounts comprised the price of the land of $1,134 together with outstanding rent on the weekend lease, balance of the survey fee, and balance of the road construction costs as well as stamp duty and other incidental costs. There is no evidence that the plaintiff’s £100 was used to pay for the purchase price or for any of the amounts paid on 6 June 1969. Nor does it appear that the purchase price of $1,134 was reduced to take account of rental payments already made under the weekend lease. Section 136H of the Crown Lands Consolidation Act provided that the price of the land should be its capital value as at the date of the application to purchase. There was nothing in the Act which allowed for a reduction of the price by reference to the annual rent paid under the weekend lease. It may be that the costs of the survey fee and the deceased’s proportionate share of the road construction costs should be regarded as part of the purchase costs in accordance with the principle established in Ryan v Dries. If that were so, then one could perhaps regard payments of the instalments of the survey fee and the road construction costs made before the confirmation of the application to purchase as being part of the purchase costs in the same way as the payment of the outstanding moneys for survey fees and road construction costs would be part of the purchase cost. However, it is not possible to say whether any part of the £100 contributed by the plaintiff, let alone what part, was used to pay the survey fees or the deceased’s proportionate share of the road construction costs. Clearly the money spent on building the house was not part of the purchase costs.

26 The presumption of resulting trusts has an historical basis explained by Campbell J in Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060 at [130]-[134]; and the High Court in Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd [2005] HCA 3; (2005) 79 ALJR 550; 213 ALR 230 at [24]). Equity presumes that parties intended that land be held beneficially otherwise than in accordance with the legal title, where, there being no presumption of advancement, land was transferred by one to another for no sufficient consideration, or a party paid the whole or part of the purchase price of a property conveyed to another, or the parties contributed in unequal proportions to the payment of the purchase price and took a conveyance of the property into their joint names. As Bryson J (as his Honour then was) demonstrated in Little v Little (1988) 15 NSWLR 43, the circumstances in which the presumption of a resulting trust arises are all referable to persons paying the whole or part of the purchase price of property. In Currie v Hamilton McLelland J (as his Honour then was) held (at 691) that it was the aggregate cost of the purchase price and incidental costs, fees and disbursements which should form the basis of a calculation. This view was upheld in the Court of Appeal in Ryan v Dries (2002) 10 BPR 19,947; [2002] NSWCA 3 at [53] where Hodgson JA said:

“….on balance, consistently with McLelland J’s view, I prefer the view that equity, dealing with presumed intentions and preferring substance to form, would have regard to the totality of the money which purchasers have in truth outlaid to obtain the property. That means that normally the proportion should be determined with reference to the proportions of payments for both the purchase price and the incidental expenses that had to be incurred in order to obtain the property.”

27 In my view, moneys spent on complying with the obligations to pay rent, survey fees and road construction costs under the weekend lease, and to build the house as required by the terms of the weekend lease, and not within a wider concept of what constitutes the “purchase price” as expounded in Ryan v Dries. There is no presumption that the parties intended that the beneficial title to the property would be held in accordance with their respective contributions to amounts which the deceased had to pay in order to apply successfully to the Minister for the purchase of the land which he then held on a weekend lease. The observations of Hodgson JA were directed to the particular question as to whether incidental expenses of purchase were to be taken into account in the calculation, and in my view they do not go wider than that.

28 Nor, if it be relevant, did the plaintiff acquire a beneficial interest in the weekend lease under a resulting trust. I express no view on the question of whether the payments towards the annual rent, road construction costs, and survey fees could be regarded as payment towards a “purchase price” for the lease. Having regard to the statutory provision which tied the annual rent to a fixed proportion of the capital value of the land, it is at least arguable that such required amounts were analogous to the purchase price of a lease, and that the rent was in substance an amortised purchase price. However it was a condition of the deceased applying for the weekend lease that it be his sole object to “obtain the land in order that he may hold and use it for his own exclusive benefit according to law”. Given that there were restrictions on those persons who were qualified to become holders of weekend leases, it is readily understandable that the Minister imposed such a condition in the public interest to seek to preclude persons acquiring a beneficial interest in a weekend lease. The presumption of a resulting trust is a presumption as to the actual intention of the parties who contribute towards the purchase price of the property. As the Minister had stipulated that the applicant for a lease should hold it for his own exclusive benefit, I do not think there can be a presumption that the parties intended that he hold the weekend lease partly for the benefit of the plaintiff. On the other hand, there was no restriction on the owner of the fee simple holding the land for the benefit of another, after purchase from the Crown.

29 There is no presumption of a resulting trust from the making of capital contributions to the improvement of the property. For these reasons, I do not regard the contribution of £100 which the plaintiff made towards the compliance with the conditions of the weekend lease, or the building costs of the house, as giving rise to a presumption that she held a beneficial interest in the estate obtained by the deceased by purchase from the Crown in the proportion which that payment bore to the total moneys expended by the deceased in connection with the weekend lease, the building of the house and the purchase.

Constructive Trust Claim

30 The ultimate basis for the imposition of a constructive trust is that it would be unconscionable for the holder of the legal title to the property to assert that he holds it free of any beneficial interest in the claimant. However, although “unconscionability” is the underlying basis upon which equity will intervene, it is not itself a sufficient description of the principles upon which equity does so. Equitable rights do not arise merely because the Court considers it fair in all the proven circumstances that the legal owner of property should hold it, or a portion of it, for the benefit of another. (Muschinski v Dodds (1985) 160 CLR 583 at 615-616).

31 One class of case where equity will intervene to prevent the unconscientious denial by the legal owner of another party’s rights, is where the parties agreed, or it was their common intention, that the claimant should have an interest in the property owned by the other, and the claimant acted to his or her detriment on the basis of that agreement or common intention. (e.g Grant v Edwards [1986] Ch 638; Green v Green (1989) 17 NSWLR 343; Maharaj v Chand [1986] AC 898 at 907).

32 Another class of case where equity will intervene is to “…[restore] to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them.” (Baumgartner v Baumgartner (1987) 164 CLR 137 at 148). The characteristics of a constructive trust which arises on this basis were explained by Campbell J in West v Mead [2003] NSWSC 161 at [52]-[64]. His Honour said (at [59]):

… a plaintiff needs to establish there is indeed a joint endeavour between the parties, in which expenditure is shared for the common benefit. It is also necessary to identify what the scope of that joint endeavour is. … Further, for any couple, the scope of the joint endeavour they are engaged in might change from time to time. If, within the scope of a joint endeavour … an asset is acquired, as a result of contributions both parties have made, and for a purpose of the ongoing joint endeavour of the parties, this gives rise to the presumption that the beneficial interest ought be shared equally. That presumption can be displaced if one party is able to show that the contributions, both financial and non-financial, to that asset should be regarded as unequal.

33 The imposition of such a trust does not depend on the actual or presumed intention on the part of the prospective trustee to hold property on trust. Baumgartner v Baumgartner was significant for its expansion of the nature of the contributions which may be taken into account in determining the parties’ proprietary interests to include non-financial contributions. (Green v Green at 369; West v Mead at [56]). The plaintiff says that the acquisition of the Nora Head property was a joint endeavour between her and the deceased to which each made financial and non-financial contributions. However, more is required to impose a constructive trust on these principles. The joint endeavour must fail, or there must be a premature termination of the parties’ joint relationship. (Baumgartner v Baumgartner at 148-149; West v Mead at [64]). In the present case there was no premature termination of the parties’ joint relationship or failure of their joint endeavour. I do not consider that the principles established in Baumgartner v Baumgartner and applied in Hibberson v George (1989) 12 Fam LR 725 apply directly in this case. I turn to the claim based on a “common intention” constructive trust.

34 Where a constructive trust is imposed, based upon the parties’ common intention as to the ownership of property upon which the claimant has acted to his or her detriment, the inquiry is as to the actual intention of the parties. The law does not impute a presumed intention to the parties based upon what the Court considers fair and reasonable persons in the position of the parties would have intended had they turned their minds to the issue. (Pettitt v Pettitt [1970] AC 777 at 804, 810, 816-817; Gissing v Gissing [1971] AC 886 at 900, 902, 905-909; Allen v Snyder [1977] 2 NSWLR 685 at 690, 698, 701).

35 It is unnecessary to enter the debate as to whether a trust based on the parties’ common intention is properly characterised as a constructive trust, or whether it should be characterised as an express trust which is enforceable notwithstanding the want of writing as it would be an equitable fraud for the legal owner to rely on the absence of writing to deny the beneficiary’s interest. (Allen v Snyder at 692-3; 699). In later cases, eg Grant v Edwards [1989] Ch 638; Maharaj v Chand [1986] AC 898 at 907; Green v Green (1989) 17 NSWLR 343; Brandling v Weir [2003] NSWSC 723; Parianos v Melluish (2003) 30 Fam LR 524, this class of trust has been classified as a constructive trust, even though it is based on the parties’ actual intentions, rather than imposed despite their intentions.

36 The intention to be established need not be that the parties have a specific share of the property. It is sufficient that they intend that the claimant should have a beneficial interest or “some form of proprietary interest”. (Green v Green at 355, 356; Grant v Edwards at 654; Parianos v Melluish at [31], [39]).

37 The intention may be established in various ways. There may be an agreement between the parties as to how the property should be held. There may be express statements as to their intention. Their intention may be inferred from their conduct. The question of what acts demonstrate an agreement or common intention referable to the beneficial enjoyment of the property is one of evidence, not law. (Allen v Snyder at 691; Green v Green at 355). A common intention that a party have a beneficial interest in a property owned by another will not be inferred merely from their joint occupation of property, nor the carrying out of household duties, nor the bringing up of children on the property, nor the doing of repairs, renovations, maintenance, decoration or improvement, nor the provision of furniture. (Pettitt v Pettitt [1970] AC 777 at 805-6, 811, 818, 826; Gissing v Gissing [1971] AC 886 at 900, 910; Burns v Burns [1984] Ch 317 at 326, 328, 342).

38 The intention may be inferred from financial contributions, direct or indirect, to the acquisition of property, including the paying off of mortgages, or the payment of expenses which free up funds for that purpose. (Burns v Burns at 328–329; Gissing v Gissing at 900, 902-3, 906-907; Grant v Edwards at 647, 648-9, 653-4, 655; Green v Green at 355). This is a wider enquiry than whether a contribution was made to the purchase money such as to give rise to a presumption of a resulting trust. Whilst both enquiries address the inferences to be drawn as to the parties’ actual intentions, a contribution to the purchase price creates a presumption of beneficial ownership in the proportion which the amount contributed bears to the price. For a “common intention” constructive trust, a contribution, direct or indirect, to the costs of acquisition of the property is a matter from which an intention that the claimant have a beneficial interest in the property might be inferred. There is a difference between a fact from which an inference can be drawn, and a fact from which a rebuttable presumption arises. The significance of the difference will depend upon the strength of the presumption. In the case of the “common intention” constructive trust, there is no presumption that the beneficial interest is in proportion with the contribution to the purchase price.

39 Other evidence from which conclusions may be drawn about the intentions of the parties include declarations of the parties before or at the time of the transaction or so close in time after the transaction as to constitute a part of it. Subsequent declarations of intention are only admissible against interest. (Calverley v Green (1984) 155 CLR 242 at 262 and 269; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365; Bryson v Bryant (1992) 29 NSWLR 188 at 215).

40 The plaintiff must also show that she acted to her detriment in a way referable to the agreement or intention that she have an interest in the property. (Austin v Keele (1987) 10 NSWLR 283 at 291; Grant v Edwards at 648; Carruthers v Manning [2001] NSWSC 1130 at [124]). Conduct which is insufficient to establish a common intention as to the ownership of the property may be sufficient to constitute relevant actions to the plaintiff’s detriment to establish a trust if the common intention is established otherwise. Conduct may be both the evidence from which an intention that the plaintiff have a beneficial interest can be inferred and the act of detrimental reliance. (Green v Green at 355; Grant v Edwards at 647, 652, 655). In Grant v Edwards Nourse LJ said (at 648) that to qualify as acting on the common intention, the conduct must be such that the plaintiff could not reasonably have been expected to embark upon it unless she were to have an interest in the property. In Green v Green (at 357) Gleeson CJ, with whom Priestley JA agreed, approved a less stringent test taken from the judgment of Sir Nicholas Browne-Wilkinson VC in Grant v Edwards (at 657) that:

“... once it has been shown that there was a common intention that the claimant should have an interest in the house, any act done by her to her detriment relating to the joint lives of the parties is, in my judgment, sufficient detriment to qualify. The acts do not have to be inherently referable to the house. … The holding out to the claimant that she had a beneficial interest in the house is an act of such a nature as to be part of the inducement to her to do the acts relied on. Accordingly in the absence of evidence to the contrary, the right inference is that the claimant acted in reliance on such holding out and the burden lies on the legal owner to show that she did not do so...”

41 The quantum of the claimant’s beneficial interest will be that which the parties agreed upon or intended, if that can be established. In Green v Green and in Parianos v Melluish it was held that although the parties did not turn their minds to the particular form of title which they intended the claimant to have, the conclusion which best gave effect to the intentions of the parties was that they were beneficially entitled to the property as joint tenants, so that upon the death of the respondent, the claimant became the absolute beneficial owner by survivorship.

42 If the evidence does not permit of a finding as to the precise size, nature and extent of the beneficial interest the parties intended the claimant to have, one starts with the maxim that equality is equity. (Green v Green at 355). But that standard can and should be departed from where the parties make disproportionate contributions to the acquisition of the property. In Baumgartner v Baumgartner, Mason CJ, Wilson and Deane JJ said (at 149-150):

Equity favours equality and, in circumstances where the parties have lived together for years and have pooled their resources and their efforts to create a joint home, 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.

Gissing v Gissing

I think also that the decision of cases of this kind has been made more difficult by excessive application of the maxim ‘

.’ No doubt it is reasonable to apply the maxim in a case where there have been very substantial contributions (otherwise than by way of advancement) by one spouse to the purchase of property in the name of the other spouse but the proportion borne by the contributions to the total price or cost is difficult to fix. But if it is plain that the contributing spouse has contributed about one-quarter, I do not think it is helpful or right for the court to feel obliged to award either one-half or nothing.

43 In this case, unusually, the parties also made non-financial contributions to the acquisition of the property, because the house had to be built before the land could be purchased. In my view, by analogy to Baumgartner v Baumgartner at 149-150 and West v Mead at [59], non-financial contributions to the acquisition of the property must also be taken into account to determine whether to depart from the presumption of equality.

44 Unlike the presumption of a resulting trust, there is no reason that the beneficial interest cannot change over time. (Green v Green at 356; Austin v Keele at 290).

45 However, if there are to be changes to the proprietary interests of the parties after the property was acquired, the changes must occur according to the same principles as those upon which a constructive trust may arise for the first time. (Pettitt v Pettitt at 816). Where the parties make continuing but different contributions to the maintenance and improvement of the property, I do not accept that the beneficial interests which arose on acquisition of the property are changed merely because the parties later make disproportionate contributions of that kind. If the parties agreed or intended that they should vary their beneficial interests in the property, and one party acted to his detriment, then their beneficial interests could change during the course of the relationship. It may be possible to infer such an agreement or intention from what the parties did as well as what they said. The parties’ later conduct may also provide a basis for inferring their intentions at the time the property was acquired. It might also be inferred that the parties intended at the time the property was acquired that their respective beneficial shares would be left to be determined at a future date, eg when the property is sold, based on their contributions to that time. (Gissing v Gissing at 909 per Lord Diplock; Burns v Burns per Fox LJ at 327).

46 A constructive trust in different proportions might also arise by other means, such as on the principles of Baumgartner v Baumgartner. In the case of a premature termination of a joint endeavour, if the presumption that equality is equity is displaced, the Court will consider the financial and non-financial contributions made by the parties during the course of the relationship or the endeavour. Such a trust arises when the relationship or endeavour comes to a premature end. (Anson v Anson [2004] NSWSC 766 at [34]-[37]). This is not such a case.

47 I apply these principles to the plaintiff’s claim that the property is held on a constructive trust for her. She disclaimed a 100% beneficial interest which could have arisen, as in Green v Green and Parianos v Melluish if she held the beneficial ownership of the property as joint tenant with the deceased. She claimed a 50% interest in the property, in accordance with the maxim that equality is equity. She also submitted that that would be a just division having regard to her financial and non-financial contributions in acquiring the land and building, the house, and in establishing and maintaining the garden for many years.

Intentions as to Beneficial Ownership

48 In my view, both parties intended that the plaintiff have a beneficial interest in the property. I draw that inference primarily from the fact that she paid £100 towards the costs of acquisition of the property or the house on it, in the broad sense that I infer that the money she paid went towards meeting the rent, survey fees and road construction costs payable under the weekend lease, or the building costs of the house. At the time this payment was made the parties had separate residences and the deceased had told the plaintiff that he did not intend to marry her. I infer that in those circumstances she paid £100 towards the costs associated with the weekend lease, and the construction of the house, with the intention of acquiring a beneficial interest in the house. I infer that the deceased also accepted that she should have such an interest. In reaching this conclusion, I do not rely upon her evidence that the deceased told her that “it is our block”, or “the shack will be yours one day”. That is not because I do not accept the plaintiff as a witness of truth, but because I regard such evidence of oral conversations so many years ago as being quite unreliable. However, nothing was adduced in evidence to contradict the inference that the plaintiff should have a beneficial interest in the property. The inference is confirmed by the work the plaintiff did in helping in the construction of the house and the establishment of the garden prior to the deceased acquiring the fee simple. Their continuing to visit the property jointly and regularly over the next three decades is consistent with it.

49 The plaintiff’s monetary contribution and the work she did in helping in the construction of the house and establishing the garden are also sufficient actions to her detriment in a way which is referable to the parties’ common intention that she have an interest in the property.

50 There is no evidence that the parties specifically considered what would be the nature or quantum of the plaintiff’s beneficial interest in the property. As I have said, the plaintiff did not contend that it was their intention to hold the property beneficially as joint tenants. As I have also said, where parties make disproportionate contributions to the acquisition of a property, the presumption that equality is equity is displaced. The cost of construction of the house was $826.94. The total sum payable to the Department of Lands on the purchase was $1,334.72. This was made up of the price of the land ($1,134), outstanding rent on the weekend lease as at 6 May 1969 of $4.24, the balance of the survey fee, ($14), balance of the road construction costs ($143.91), together with the costs of the purchase, stamp duty and interest on outstanding moneys. I infer that $22.09 had been paid towards the road construction costs, $6 towards the survey fee, and that save for the deficiency of $4.24, rent of $23.80 per annum was paid for the period from 20 July 1966 to 26 March 1969, a period of 2 years and 249 days. I conclude that the deceased paid rent of $63.83.

51 I therefore calculate that the total cost of acquisition of the property, including the cost of building, was the sum of $1,334.72, $22.09, $6, $63.83 and $826.94: a total of $2,253.58. The plaintiff contributed £100 ($200), or about nine percent of these costs. To recognise a constructive trust in favour of the plaintiff to the extent of a fifty percent beneficial ownership of the property would be disproportionate to the financial contributions which she made. That disproportion is not ameliorated by her and the deceased’s non-financial contributions. Although she worked on the property, the deceased and his friends did the bulk of the construction. The proper approach is to:

… seek a result which will most closely give effect to the common intention of the parties bearing in mind, first, that they did not themselves specifically address the matter of the legal form which would be conducted to give effect to their intention, and secondly, that this is an area in which equity is at its most flexible.

Green v Green

52 The common intention of the parties was only that the plaintiff should have some proprietary interest. The quantum was not specified. It would be sufficient to satisfy the requirements of conscientious conduct that the deceased hold the property on trust for the plaintiff to the extent of a 9% share.

53 It might be said, that this is to apply the presumption of a resulting trust, even though the plaintiff’s £100 was not shown to have been a contribution to the purchase price of the land. There are inevitably some similarities between a resulting trust, under which a presumption is made about the parties’ intentions according to their contributions to the purchase price, and a constructive trust, based upon what is inferred about the parties’ intentions from their contributions to the acquisition of the property. In this case the principles of resulting trusts do not apply, because the plaintiff did not contribute to the purchase price. But she did contribute less directly to the acquisition of the property, from which I infer it was intended by both parties that she have a beneficial interest in it. As the quantum of that interest was not agreed, and an equal interest would be disproportionate to her contribution, I see no reason the quantum should not be determined in the same way as equity would presume the parties intended to hold their beneficial interests if the contributions had been made to the purchase price.

54 I do not consider that that beneficial interest is disturbed by events after the acquisition of the property. The principal event was that in 1975 the property was connected to the sewer and extensions were added. The deceased recorded expenditure in 1975 of $1,250.31, most of which comprised the cost of materials used in construction. These sums were paid by the deceased. However, I do not infer that the parties agreed or intended that these payments, and the work done by the deceased in connecting the sewer and extending the house, would change the extent of the parties’ beneficial ownership of the property. Nor do I infer from the subsequent work that each put into the house for its maintenance and the improvement of its furnishings and its garden, nor the subsequent financial contributions by the deceased, such as payment of water, rates and electricity, that the parties intended to change their beneficial interests. It would be very difficult to quantify any such change in any event.

55 I do not infer that the parties intended that the quantum of the plaintiff’s beneficial interest should be determined at the date the property was disposed of, or at any other later date based on their contributions to that time. In my view, the parties simply did not turn their minds to how the plaintiff’s beneficial interest in the property should be quantified. They did not intend that whatever interest the plaintiff had should change over time as the defendant paid the expenses of ownership, or as both parties did work on the house and in the garden or otherwise contributed to their relationship. In my view, the plaintiff remained entitled to a nine per cent beneficial interest in the property at the deceased’s death and is entitled to nine per cent of the net proceeds of sale of the property.

56 Those net proceeds of sale are to be determined by deducting from the sale price of $600,000, vendor tax, the solicitors’ costs and disbursements on the sale, the agent’s commission on sale, and the costs of obtaining a valuation of the property for the purpose of sale. On my calculation the net proceeds are $567,175.50, but I will direct the parties to bring in their calculations for the purpose of making final orders. However, on the assumption that my calculation is correct, the plaintiff is beneficially entitled to $51,046 of the proceeds of sale, plus the interest earned on that sum. Her entitlement to those moneys must be taken into account when dealing with her claim under the Family Provision Act, if she is an eligible applicant under that Act.

Family Provision Act

57 Only an “eligible person” is entitled to an order for provision under the Act. The plaintiff claims to be an eligible person in relation to the deceased under para (a)(ii) of the definition of “eligible person”, being:

a person … with whom the deceased person was living in a domestic relationship at the time of the deceased person’s death.

58 A “domestic relationship” has the same meaning as in the Property (Relationships) Act 1984.

59 Section 5 of that Act defines a domestic relationship as follows:

5 Domestic relationships

(1) For the purposes of this Act, a domestic relationship is:

(a) a de facto relationship, or

(b) a close personal relationship (other than a marriage or a de facto relationship) between two adult persons, whether or not related by family, who are living together, one or each of whom provides the other with domestic support and personal care.

(2) For the purposes of subsection (1) (b), a close personal relationship is taken not to exist between two persons where one of them provides the other with domestic support and personal care:

(a) for fee or reward, or

(b) on behalf of another person or an organisation (including a government or government agency, a body corporate or a charitable or benevolent organisation).

60 A “de facto relationship” is defined and dealt with by s 4 of the Property (Relationships) Act as follows:

“ 4 De facto relationships
(1) For the purposes of this Act, a de facto relationship is a relationship between two adult persons:

(a) who live together as a couple, and
(b) who are not married to one another or related by family.

(2) In determining whether two persons are in a de facto relationship, all the circumstances of the relationship are to be taken into account, including such of the following matters as may be relevant in a particular case:

(a) the duration of the relationship,
(b) the nature and extent of common residence,
(c) whether or not a sexual relationship exists,
(d) the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties,
(e) the ownership, use and acquisition of property,
(f) the degree of mutual commitment to a shared life,
(g) the care and support of children,
(h) the performance of household duties,
(i) the reputation and public aspects of the relationship.

(3) No finding in respect of any of the matters mentioned in subsection (2) (a)–(i), or in respect of any combination of them, is to be regarded as necessary for the existence of a de facto relationship, and a court determining whether such a relationship exists is entitled to have regard to such matters, and to attach such weight to any matter, as may seem appropriate to the court in the circumstances of the case. ”

61 The plaintiff is an “eligible person” under both limbs of the definition of a “domestic relationship” in s 5(1) of the Property (Relationships) Act.

62 From the mid 1960s, the deceased had most of his meals with the plaintiff in her house and with her son, Rodney. She did his washing. On many and probably most nights he stayed overnight and slept with the plaintiff, although he also spent considerable time in his mother’s house at 5 Castlereagh Street, Riverstone. The two houses were in close proximity to each other. The evidence that the deceased slept at the plaintiff’s house on most nights came not only from the plaintiff, but was corroborated by her son Rodney, and by a nephew, Mr Ramsay, who lived at 46 Railway Terrace from 1951 to 1978. It was also corroborated by a neighbour, Mr Rich, who lived at the adjacent property at 44 Railway Terrace from 1992. He observed that the deceased usually stayed with the plaintiff overnight.

63 However, the deceased also lived with his parents, (or after 1971 his mother), at 5 Castlereagh Street, until his mother was admitted to a nursing home in 1982. The plaintiff gave evidence, which I accept, that the reason she and the deceased did not marry after their relationship started in the 1960s, was that the deceased’s mother wanted him to continue to live in the family house at 5 Castlereagh Street and to look after her. The plaintiff said in evidence, in a passage which I accept, that:

His mother didn’t want him to marry while she was alive and she wanted [him] to be there and she used to say to us, ‘Now if you two want to get married you can put me in a home and you can get married’. How can you get married when a woman says that?

64 The deceased’s mother died in 1992. The plaintiff said, and I accept, that she and the deceased took the view that they were happy with the relationship which they then had. They had a sexual relationship, and after 1992, the deceased stayed with the plaintiff at 46 Railway Terrace for nearly all of his meals and they slept together nearly every night.

65 In this respect, I prefer the evidence of the plaintiff to the evidence of the deceased’s brother, Mr Laurence Doolan, who deposed to seeing the deceased almost every day between 7.00 pm and 8.00 pm at night or between 7.00 am and 8.00 am in the morning, at 5 Castlereagh Street, Riverstone. Mr Laurence Doolan also lived nearby, at 36 Railway Terrace, Riverstone, so that he had the opportunity to make the observations about which he gave evidence. But on this question I prefer the plaintiff’s evidence, which had some direct corroboration, albeit from witnesses who were related to the plaintiff, but which is also corroborated in a more general way by the evidence of Mr Rich and by evidence of the closeness of their relationship as perceived by others. One of Mr Laurence Doolan’s daughters is a Ms Kim Griffin. She and her family called the deceased and the plaintiff Uncle Bill and Auntie Joy. The deceased and the plaintiff received Christmas cards from friends and family addressed to “Bill and Joy” or to “Joy, Bill and Rodney”. They attended family functions for the Doolan family together. This is not how one would expect two people to be perceived if they kept their separate houses and were just good friends, as Mr Laurence Doolan portrayed them.

66 In 1988, the deceased moved into the plaintiff’s house at 46 Railway Terrace. He moved because of his health. He resided at 46 Railway Terrace until he was admitted to St Vincent’s Hospital on 4 June 2002. For much of the period, in particular in the latter years, he was confined to his bed. The defendants contended that the deceased stayed at 46 Railway Terrace as the plaintiff’s boarder and that he had his own room in the sunroom. The plaintiff’s evidence was that whilst the deceased stayed in the sunroom during the day, they shared the bedroom at night, except when the deceased’s medical condition made him too restless for them to share the same bed. I accept that evidence.

67 For the four years in which the deceased stayed at 46 Railway Terrace, he was looked after by the plaintiff. In the last year of his residence there he was totally bedridden. The plaintiff showered him and assisted him with his toilet and personal hygiene. On any view, there was a close personal relationship between the plaintiff and the deceased who were living together, with the plaintiff providing him with domestic support and personal care. Accordingly, even if the parties were not in a de facto relationship, they were in a domestic relationship under s 5(1)(b) of the Property (Relationships) Act 1984 unless the domestic support and personal care provided by the plaintiff to the deceased was for fee or reward. (s 5(2)).

68 The defendants contended that the arrangement between the deceased and the plaintiff was that he boarded with her and that the domestic support and personal care which she provided to him was given for fee or reward in cash. The plaintiff gave evidence that initially when the deceased moved into her house they went shopping together and he provided money towards food and groceries and the like. Later, as he became more bedridden, he provided her with $50 per fortnight towards food. During the last years of his life, the deceased was not able to go to the bank. The plaintiff and the deceased never held a joint bank account. They kept their money separate. The deceased signed withdrawal slips so that the plaintiff or her son, Rodney, could withdraw money from the bank for him. The deceased received a fortnightly pension. There were fortnightly withdrawals of cash of about $200 to $350. Although there was no direct evidence that the deceased paid these sums to the plaintiff as board, or as a reward for the care she provided to him, it was submitted that I should infer that that was how the money withdrawn from the deceased’s account was applied. In support of that contention the defendants relied on evidence that the deceased told his brother and friends that he was boarding with the plaintiff. However, much of that evidence was not satisfactory.

69 Mr Brian Doolan was the deceased’s cousin. He swore an affidavit that a couple of years before his death, the deceased said to him words to the effect:

I am going to board at Joyce Shepherd’s house at 46 Railway Terrace, Riverstone. I am too sick to live on my own.

70 When asked about that sentence in his affidavit, Mr Doolan’s response was “Did I say that?”. He said he did not remember the deceased using the word “board” but that,

He just said he was going down to Joy’s house and that he couldn’t look after himself; he was unwell

71 Mr Brian Doolan’s affidavit was witnessed by a Mr Graham. Mr Graham also witnessed another affidavit which was not read. He lived on the corner of Castlereagh Street and Railway Terrace, Riverstone. He was cross-examined on a statement apparently contained in an affidavit, by a Mr Woods, which was not read, that the deceased said to Mr Woods:

I am unwell, very weak, I am going to board with Joyce Shepherd.

72 There remains a question about the fate of the balance of the money withdrawn from the deceased’s account. There is a number of possibilities. The deceased may have used it to pay board to the plaintiff. He may have paid more than $50 per fortnight as a contribution to food and groceries. He may have used the money to pay other expenses, for example those associated with the property at 5 Castlereagh Street or the Nora Head property. He may have given money away. He may have saved it and the money may have been taken by a person or persons unknown after his death. The evidence does not permit of any definite finding. However, I accept the plaintiff’s denial that she was paid board. The contributions which the deceased made towards food and groceries, even if they were more than the $50 per fortnight the plaintiff deposed to, were not payments for the domestic care and support which the plaintiff provided to him. Therefore the parties were in a domestic relationship, even if they were not also in a de facto relationship.

73 I consider that the parties were also in a de facto relationship. They had a public reputation as a married couple. Their friends included Mr and Mrs Helyard, their neighbours at the Nora Head property. Mrs Helyard gave evidence, which I accept, that the plaintiff and the deceased came up to the Nora Head property on weekends with Rodney Shepherd or other children. Both the deceased and the plaintiff told her on a number of occasions that they intended to retire to Nora Head. Mr and Mrs Helyard regularly visited the deceased and the plaintiff at 46 Railway Terrace during the early 1980s. They regularly had lunch there with both the plaintiff and the deceased. It was on one of those occasions, more than twelve years after they had known the plaintiff and the deceased, that Mrs Helyard learned, to her surprise, that the plaintiff and the deceased were not married.

74 Mrs Helyard referred to the deceased and the plaintiff visiting the Nora Head house with other children. In February 1986, the plaintiff successfully applied to be admitted into a program called the “Aunties and Uncles Co-operative Family Project”. This was a program designed to provide an extended family for children of disturbed families. The defendants rightly pointed out that the deceased did not apply to be an Uncle in the program and that he was given as one of the plaintiff’s referees on her application at his address at 5 Castlereagh Street, Riverstone. Nonetheless, he participated in the program as the plaintiff’s partner. The chief executive officer and regional co-ordinator of the program provided a reference, which was admitted without objection, that:

Joyce Shepherd and her partner, Bill Doolan, of 46 Railway Terrace Riverstone have been actively involved in our extended family program form (sic) the 25th May 1986.

Over the years Joyce and Bill have assisted 12 children in their capacity as ‘stable grandparent figures’ …

At our group picnics it was always a welcome sight to see Joyce, Bill and their ‘extended aunties and uncles family’ so obviously enjoying each other’s company …

75 There are countervailing factors which point against there having been a de facto relationship between the parties. They kept their money separate. Until 1998 they did not permanently share a common residence, although, as I have found, the deceased spent the majority of his time at the plaintiff’s house. The deceased often gave 5 Castlereagh Street as his address. Importantly, they each received a pension at the single rate for the whole period of their relationship after the plaintiff turned 50. Notwithstanding these matters, I consider that at least from 1998, the plaintiff and the deceased were in a de facto relationship. From 1998 they lived together. I accept the plaintiff’s evidence that where his health permitted it, the deceased and the plaintiff shared a bedroom at night and they had a continuing sexual relationship. She also cared for him as a wife for an ailing husband. The deceased’s doctor, Dr Milliken, had assumed from his observation of the plaintiff and the deceased, and the way they dealt with each other and she cared for him, that they were married. It is unnecessary to decide for how long their relationship should properly be characterised as a de facto relationship. I am satisfied that they were in a de facto relationship at the time of the deceased’s death.

Claim for Provision

76 Sections 7 and 9 of the Family Provision Act establish a two-stage process for dealing with applications under the Act. The Court may not make any order for provision in favour of an eligible applicant unless it is satisfied that the provision, if any, made in favour of the applicant by the deceased person either during his lifetime or out of his estate is, at the time the Court is determining whether or not to make such an order, inadequate for the proper maintenance, education and advancement in life of the applicant. (Section 9(2)). If the Court is satisfied that the provision, if any, so made for the applicant is inadequate for his or her proper maintenance, education and advancement in life, it has a discretion under s 7 to order such provision out of the estate or notional estate of the deceased person, as in its opinion, having regard to the circumstances at the time the order is made, ought to be made for the maintenance, education or advancement in life of the applicant.

77 At both stages in determining what is the proper level of maintenance or provision for education or advancement in life, regard must be had, amongst other things, to the “applicant’s financial position, the size and nature of the deceased’s estate, the totality of the relationship between the applicant and the deceased, and the relationship between the deceased and other persons who have legitimate claims upon his or her bounty.” (Singer v Berghouse (No. 2) (1994) 181 CLR 201 at 209-210).

78 The applicant owns her house at 46 Railway Terrace, Riverstone, which at the date of hearing had a market value of $325,000. Otherwise, the plaintiff only had a few hundred dollars in a bank account and her household furniture and whitegoods which are of only very modest value. Many of these need replacing. She owned no motorcar. She had few liabilities. Her only income was her age pension, which was fully expended in supporting herself. Her son Rodney boarded at her home and she received $50 per fortnight from him. He is on a disability pension. The property at 46 Railway Terrace is a timber cottage in need of extensive repair. The cost of needed repairs is agreed to be $62,500.

79 The deceased left a bank account containing $2,350 and the house at Nora Head which was sold for $600,000. After meeting liabilities of the estate, including costs incurred in the current litigation up to 13 December 2004, the estate held assets totalling $507,161. However, this included the plaintiff’s 9% beneficial share of the net proceeds of the sale of the Nora Head property, which I have assessed at $51,046, which would reduce the value of the estate to $456,115 before allowance is made for the further costs of the defendants and for so much of the plaintiff’s costs as might be recoverable from the estate. The further costs of the defendants are estimated to be some $35,000, thus reducing the available estate to about $420,000, before allowance is made for the plaintiff’s costs. The plaintiff’s costs, on a solicitor and client basis for both proceedings, are estimated to be in the order of $93,000. I am not in a position to say that an arbitrary cap should be placed on how much of these costs should be allowed from the estate. The present hearing concerned not just the claim for provision under the Family Provision Act, but the plaintiff’s claim, upon which she has succeeded, to a beneficial interest in the proceeds of sale of the Nora Head property. The hearing took four days. Over twenty witnesses were called and there were more deponents whose affidavits were read and who were not were required, or in some cases, were not available, for cross-examination. If the plaintiff is allowed her costs on a party and party basis in respect of both proceedings, I shall assume that her assessed costs will be in the order of $80,000 and that the value of the estate available for distribution will be approximately $340,000.

80 The deceased’s will admitted to probate, was made on 11 February 1993. The deceased had no children. He left his estate in equal shares to his nieces Kim Griffin and Joanne Riley, his nephew Michael Doolan, and to Rodney Shepherd, whom he described as his friend. Kim Griffin, Joanne Riley and Michael Doolan are children of Mr Laurence Doolan. Mr Rodney Shepherd did not object to his mother’s claim to provision from the estate. His financial position was modest. His only income is from a disability pension. He resides with his mother and contributes $50 board each fortnight to her. The rest of his pension is expended on daily living expenses. He is illiterate, and has poor prospects of finding employment. He can, however, expect to be supported by his mother while she is able to do so, and it is probable that he will inherit her property after her death.

81 The other beneficiaries of the estate did not file affidavits of their financial circumstances until shortly before the hearing. Two of them, Ms Joanne Riley and Mr Michael Doolan, were unavailable to be cross-examined. The plaintiff was unable to test the accuracy of their evidence as to their financial position. Ms Joanne Riley lives in Perth. Her assets are modest. They include a half-share of her family home. I infer that she and her husband are separated. She assesses her total assets as being $148,150 and her total liabilities as to $75,300. She earns $900 net per week as a nurse. She has weekly expenses of about the same order.

82 At the time of the hearing Mr Michael Doolan was married with two children and his wife was expecting a third. His wife and children live in the Philippines and are awaiting approval for a permanent residence visa in Australia. He owns a home and has a half share in another parcel of land. He assessed the value of his assets at $429,000 and had a mortgage of $150,000. His expenses for himself and his family in the Philippines are about $900 per week. He earns about $1,000 net per week from his employment as a merchant seaman.

83 Ms Kim Griffin is currently unemployed. She receives a carer allowance and a family allowance of $326 per week. At the time of the hearing her husband was unemployed. He had a trade certificate as a carpenter and joiner and had worked for about fourteen years in the building industry. In 2004 he was employed as a teacher at TAFE and was hoping to be re-employed in 2005. Mr and Mrs Griffin own an unencumbered house on thirty-seven acres of land at Wilberforce valued at $700,000, and two cars. They say that they need $64,600 to complete fencing, complete building work on the property, and to demolish an old farmhouse on the property.

84 The deceased and Mr Laurence Doolan inherited their mother’s property at 5 Castlereagh Street after her death in 1992. On 26 August 1993, they transferred the property to Ms Griffin, subject to a life tenancy in favour of the deceased. Following the deceased’s death in 2002, Ms Griffin sold 5 Castlereagh Street. She received $210,000 from the sale which was used to finish building the house at Wilberforce.

Basis for Plaintiff’s Claim

85 The plaintiff and the deceased had a relationship for almost forty years. Initially the deceased shared residences between the plaintiff’s home and his mother’s home. After his mother was admitted into a nursing home, the extent to which he shared a residence with the plaintiff increased and from 1998 he was wholly cared for by the plaintiff. Throughout the period of their relationship the plaintiff provided him with meals. For much of the period she did his washing. From 1998 she gave him devoted care and nursing. She and the deceased both looked after the house at Nora Head and they intended to retire there. I infer that the reason they did not retire to Nora Head after 1992 was due to the defendant’s health and his need for medical attention.

86 Counsel for the plaintiff submitted that as the deceased and the plaintiff were in a de facto relationship, the plaintiff was in the position of being the deceased’s widow. Counsel submitted that as the deceased’s widow, the plaintiff had a paramount claim on his testamentary bounty. That approach is mistaken. (Bladwell v Davis [2004] NSWCA 170 at [18]-[19]). Nonetheless, having regard to the plaintiff’s financial position, the size of the deceased’s estate, the totality of the relationship between the plaintiff and the deceased, the relationship between the deceased and other persons with claims on his bounty, and their financial position, I do consider that the failure of the deceased to make any provision for the plaintiff in his will meant that she was left without adequate provision for her proper maintenance and advancement in life. I do not consider that the provision made for the plaintiff’s son under the deceased’s 1993 will made adequate provision for the plaintiff. It can reasonably be expected that the plaintiff is likely to obtain some indirect benefit from the provision made for her son. He may, for example, be in a position to pay a greater sum towards his own board, or to provide some furniture or household goods which would be of benefit to them both. However, the plaintiff cannot rely upon such support.

87 The deceased recognised that the plaintiff had a claim on his testamentary bounty. In 1999 he told a neighbour, Mrs Ferguson, that he had been to the Neighbourhood Centre to see about having a new will made. He told her that he had to think of Joy. The plaintiff gave evidence that when he was in hospital in June 2002, the deceased told her that he had made a second will leaving everything to her, and that the will and some money was in a box hanging on the wall of the back shed. This was a reference to the shed at 5 Castlereagh Street. She gave evidence that she and Rodney went to the Castlereagh Street property the following day. She had a key to the shed. However, she found that the locks had been changed. Two of the plaintiff’s nieces, Mrs Rowe and Mrs Glover, testified to having visited the deceased in hospital in the presence of the plaintiff and Rodney Shepherd, when the deceased asked whether the plaintiff had got the blue box and told her to make sure she did get it. Both these witnesses appeared to be reliable. Rodney Shepherd and the plaintiff gave evidence to the same effect.

88 The evidence adduced by the defendants on this topic was not satisfactory. The defendants read an affidavit from a Mr Vissochi, a community development officer at the Riverstone Neighbourhood Centre. He swore that there was no record of any will being made by the deceased at the Centre. He confirmed that the Neighbourhood Centre did provide a free service of preparing wills. In his oral evidence, he also said that as a matter of practice, copies of the wills which were prepared in that way were not kept at the Neighbourhood Centre. He acknowledged that if a will had been prepared for the deceased he would not have expected the Neighbourhood Centre to have any record of having done so. I do not understand how this fact came to be omitted from Mr Vissochi’s affidavit. It made his evidence that there was no record of the Neighbourhood Centre having prepared a will for the deceased completely irrelevant. As Young J (as his Honour then was), said in ERS Engines Pty Ltd v Wilson (1994) 35 NSWLR 193 at 197:

It cannot be emphasised too greatly that one’s obligation in making an affidavit is the same as when one is giving evidence in the witness box. One is to tell the truth and the whole truth. It is completely unacceptable for a solicitor to prepare an affidavit in which a witness gives a half truth and it is completely unacceptable for a witness … to only give the Court a half truth.

89 Mr Laurence Doolan admitted to changing the locks on the shed. He knew that his brother had left a key to the shed with the plaintiff. Shortly before the deceased’s death, when he was in hospital, the deceased told him that Rodney Shepherd could borrow an electric welder. Mr Doolan visited the shed and found that the electric welder was missing. He assumed that it had been taken by Rodney. This was in accordance with the deceased’s wishes as explained to Mr Doolan. Nothing else was missing. He then changed the locks in order to prevent the plaintiff or Rodney getting access to the shed. He said that the reason he did that was in case other property of the deceased went missing. Given that the deceased had left keys with the plaintiff and Rodney, and that the only item which Mr Doolan noticed was missing was the welder which the deceased told him Rodney was to borrow, it is difficult to see what basis there was for any concern by Mr Doolan that the plaintiff or Rodney would take any of the deceased’s property, or why he changed the locks.

90 The evidence does not justify a finding that the deceased made a new will leaving some or all of his property to the plaintiff and that the will was destroyed, although there are grounds for suspicion that that may have been the case. However, the evidence does warrant a finding that in the last years of his life the deceased recognised an obligation to make provision for the plaintiff, and intended to make a will which would make some provision for her. I consider that is a relevant circumstance to be taken into account in accordance with s 9(3)(d) in determining what provision ought to be made in favour of the plaintiff out of the estate of the deceased.

91 The plaintiff gave evidence that she wanted to move from Riverstone and purchase a property in the Richmond area. There was some rather inconclusive evidence about the cost of houses and single-storey townhouses in the Richmond area. Counsel submitted that provision of the order of $156,000 should be provided to enable the plaintiff to purchase a suitable home in the Richmond area, and in addition she should be provided with a sum to cover contingencies of $50,000 to $100,000, and a further $20,000 to pay her existing liabilities, obtain replacement furniture and electrical items, and to provide her with funds to pay for her own funeral and headstone.

92 Of course it must be recognised that the plaintiff is in any event entitled to nine per cent of the net proceeds of sale of the Nora Head property, that is, about $51,000. If the plaintiff were to receive the additional provision for which she has asked, that would cause considerable hardship to at least two of the beneficiaries of the will, Ms Riley and Mr Michael Doolan, depending, of course, on what orders are made in relation to how the burden of the provision should be borne by the beneficiaries.

93 The plaintiff’s nine per cent beneficial interest in the net proceeds of sale of the Nora Head property will provide her with a modest fund for contingencies in life. In my view, a provision out of the estate of $80,000 would be adequate for her proper maintenance and advancement in life, having regard to the competing claims on the estate. That amount would be sufficient to bring her property to a reasonable state of repair, to provide a small sum to provide her with furniture and whitegoods which need replacing, and to top up the fund for contingencies. Of course, how she spends the provision will be entirely a matter for her. It will leave about $260,000 available for distribution to the beneficiaries under the will.

94 Although I doubt that the plaintiff would be liable to make any payment to the estate in respect of expenses associated with the holding or sale of the Nora Head property, it is also appropriate to make provision by way of orders that the executors release her from any claim which the estate might have on her, arising from her having had a beneficial interest in that property.

95 On my calculation, the consequence of these orders is that there will be about $260,000 available for distribution between the beneficiaries under the will. The next question is whether I should specify the beneficial entitlements in the estate which should bear the burden of the provision to be made in favour of the plaintiff. In my view, none of the burden of that provision should be borne by Ms Riley, whose financial circumstances appear to be precarious. Ms Griffin is the beneficiary best able to bear the burden of the provision in favour of the plaintiff. Mr Michael Doolan also has the capacity to meet a share of that burden. Mr Rodney Shepherd also has the capacity to meet a share of that burden as he is supported by his mother. In my view, the appropriate order to be made under s 13 of the Act is that the burden of the provision of $80,000 from the estate of the deceased which I will order for the plaintiff, is to be borne as to 50% by Ms Kim Griffin, as to 25% by Mr Michael Doolan, and as to 25% by Mr Rodney Shepherd.

96 The plaintiff is entitled to an order in both proceedings that the defendants pay her costs. In both proceedings the defendants will be entitled to be indemnified from the estate in respect of costs and disbursements properly incurred.

97 I direct counsel for the plaintiff to bring in short minutes of order in accordance with these reasons.

******

Citations

Shepherd v Doolan [2005] NSWSC 42

Most Recent Citation

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Statutory Material Cited

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Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060

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CITATION:	Shepherd v Doolan & OrsShepherd v Doolan & Anor; Est. Doolan [2005] NSWSC 42
HEARING DATE(S):	31/01/05, 01/02/05, 02/02/05, 07/02/05
JUDGMENT DATE :	10 August 2005
JUDGMENT OF:	White J
DECISION:	Direct counsel for the plaintiff to bring in short minutes of order in accordance with reasons.

CATCHWORDS:	TRUSTS AND TRUSTEES - Plaintiff claims a beneficial interest in property forming part of deceased estate on the basis of either a resulting or constructive trust - Whether money contributed to the acquisition of a weekend lease from the Crown was part of cost acquiring title in fee simple - Whether plaintiff and deceased had a common intention that the former have a beneficial interest in property - Whether plaintiff acted to her detriment in reliance upon this common intention - Held that common intention need not extend to quantum of beneficial interest and plaintiff had a beneficial interest under a Grant v Edwards constructive trust - SUCCESSION - Wills - Family Provision - Application by de facto wife - Family Provision Act s 7 - Provision made.
LEGISLATION CITED:	Family Provision Act 1982 (NSW) Crown Lands Consolidation Act 1913 (NSW) Property (Relationships) Act 1984 (NSW)
CASES CITED:	Grant v Edwards [1986] Ch 638 Green v Green (1989) 17 NSWLR 343 Baumgartner v Baumgartner (1987) 164 CLR 137 Hibberson v George (1989) 12 Fam LR 725 Currie v Hamilton [1984] 1 NSWLR 687 Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060 Napier v Public Trustee (WA) (1980) 55 ALJR 1; 32 ALR 153 Bloch v Bloch (1981) 55 ALJR 701 Calverley v Green (1984) 155 CLR 242 Anson v Anson [2004] NSWSC 766 Ryan v Dries (2002) 10 BPR 19,947; [2002] NSWCA 3 Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd [2005] HCA 3; (2005) 79 ALJR 550; 213 ALR 230 Little v Little (1988) 15 NSWLR 43 Muschinski v Dodds (1985) 160 CLR 583 Maharaj v Chand [1986] AC 898 West v Mead [2003] NSWSC 161 Pettitt v Pettitt [1970] AC 777 Gissing v Gissing [1971] AC 886 Allen v Snyder [1977] 2 NSWLR 685 Brandling v Weir [2003] NSWSC 723 Parianos v Melluish (Trustee) (2003) 30 Fam LR 524 Burns v Burns [1984] Ch 317 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 Bryson v Bryant (1992) 29 NSWLR 188 Austin v Keele (1987) 10 NSWLR 283 Carruthers v Manning [2001] NSWSC 1130 Singer v Berghouse (No. 2) (1994) 181 CLR 201 Bladwell v Davis [2004] NSWCA 170 ERS Engines Pty Ltd v Wilson (1994) 35 NSWLR 193
PARTIES:	Joyce Edith Shepherd v Laurence Patrick Doolan & Ors; Joyce Edith Shepherd v Laurence Patrick Doolan & 1 Or; Estate of William Daniel Doolan
FILE NUMBER(S):	SC 1269/03; 3186/04
COUNSEL:	Plaintiff: Mr D Williams Defendants: Mr P Glissan
SOLICITORS:	Plaintiff: Herbert Weller Solicitor Defendants: Mervyn J Cathers & Co Solicitors