Stillisano v Adami - [2010] SASC 351

SUPREME COURT OF SOUTH AUSTRALIA
(Civil)
STILLISANO v ADAMI
[2010] SASC 351
Judgment of The Honourable Justice White
22 December 2010
EQUITY - TRUSTS AND TRUSTEES - CONSTITUTION AND CLASSIFICATION OF TRUSTS GENERALLY - CLASSIFICATION OF TRUSTS IN GENERAL - IMPLIED TRUSTS - CONSTRUCTIVE TRUSTS
EQUITY - TRUSTS AND TRUSTEES - POWERS, DUTIES, RIGHTS AND LIABILITIES OF TRUSTEES - GENERAL MATTERS
Plaintiff transferred property originally purchased in his name to his mother - plaintiff's mother later transferred the property to the defendant, the plaintiff's sister - plaintiff contended that mother had always intended the property to be his and that the defendant held the property on trust for him - defendant denied existence of any trust - defendant further contended that if such a trust existed, the plaintiff was required to reimburse her for maintenance costs of the property.
Held: the plaintiff's mother did not hold the property on trust for him - the defendant did not take the transfer of the property subject to a constructive trust in favour of the plaintiff - Accordingly, the issue of whether the plaintiff would have been required, if a constructive trust had been found, to reimburse the defendant's expenditure did not, strictly speaking, require determination.
Law of Property Act 1936 (SA) s 29; Law of Property Act 1925 (UK) s 53, referred to.
Hodgson v Marks [1971] Ch 892, discussed.
Muschinski v Dodds (1985) 160 CLR 583; Baumgartner v Baumgartner (1987) 164 CLR 137; Parij v Parij (1997) 72 SASR 153; Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145; Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1988) 165 CLR 107; Calverley v Green (1984) 155 CLR 242; Miller Street Pty Ltd v Parker [2007] FCA 1830, considered.

STILLISANO v ADAMI
[2010] SASC 351
Civil

WHITE J. These proceedings arise out of a dispute between a brother and a sister as to the ownership of the property at 16 Sabina Street, Salisbury. The property has been registered in the name of the defendant (Teresa) since August 2003. The plaintiff (Giorgio) contends that Teresa holds the legal interest in the Sabina Street property subject to a constructive trust in his favour and he seeks orders from this Court to that effect. Teresa denies Giorgio’s claim. In the event that this Court upholds the claim, Teresa seeks reimbursement of the sums which she has spent on utilities and in maintaining the Sabina Street property.
Non-Contentious Background
Giorgio, Teresa and their sister, Caterina, are the children of Domenica Stillisano. Each was born in Italy: Giorgio in 1951, Caterina in 1958 and Teresa in 1960. Their father died in Italy when they were all quite young. Giorgio emigrated to Australia at 14 years of age in 1965. Domenica and the two girls emigrated in 1968. Giorgio has had no schooling in Australia but both Caterina and Teresa completed their education here.
The Stillisano family has been involved in the purchase of five properties in South Australia which are relevant in these proceedings.
16 Sabina Street, Salisbury
The first is the property at 16 Sabina Street, Salisbury. This property was purchased on 13 September 1972 for $14,150. The Commonwealth Savings Bank advanced a loan of $4,300, secured by a mortgage, and the balance of the purchase price was provided from savings. There is a dispute between the parties as to the source of those savings and also as to the source of the funds used to pay the monthly mortgage instalment of $49.
Giorgio was the named purchaser of the property and became its registered proprietor. The Sabina Street house became the family home, with all children living there until moving out on their marriage or to commence their own domestic arrangements. Giorgio lived at Sabina Street until 1975 when he went to live with his future wife. The mortgage on the property was discharged in September 1976. The early discharge of the mortgage was achieved by additional repayments of principal from time to time.
On 26 October 1982, Giorgio transferred the Sabina Street property to his mother. The transfer (signed by Giorgio on 21 July 1982) states the consideration as “love and affection”. The circumstances in which Giorgio transferred the property to his mother are at the heart of the dispute in these proceedings.
Caterina and Teresa lived with their mother at Sabina Street until their marriages in June 1975 and February 1980 respectively.
Domenica continued living at Sabina Street until 1985 when she moved to West Lakes to live with Teresa and her husband. Since then the Sabina Street home has for the most part been unoccupied.
On 11 August 2003, Domenica transferred the Sabina Street property to Teresa. The consideration stated on the transfer was as follows:
Desire to transfer to the within daughter for love and affection and without any monetary consideration.
Teresa continues to own the property. However, on 19 May 2008 Giorgio lodged a caveat on the title asserting an interest in the following terms:
An equitable interest or estate as beneficiary of a trust created on 26 October 1982 when the Caveator did transfer the whole of the land for no monetary consideration to DOMENICA STILLISANO mother of the Caveator by Memorandum of Transfer No 4959673 to be held on trust by her notwithstanding that the said DOMENICA STILLISANO did transfer the whole of the land for no monetary consideration to TERESA ADAMI sister of the Caveator by Memorandum of Transfer No 9658816 against her obligations as trustee, and despite the fact that the said DOMENICA STILLISANO lacked legal capacity to execute such second Memorandum of Transfer.
18 Beltana Street, Salisbury
In September 1974, the property at 18 Beltana Street, Salisbury was bought. Domenica (the mother) and Giorgio were the purchasers and became the registered proprietors. However, Giorgio did not make any payment at all towards the purchase of Beltana Street. Domenica paid the deposit from accumulated savings and also the initial mortgage repayments. When Caterina and her husband commenced living in Beltana Street after their marriage, they took over making the mortgage repayments.
Although Teresa expressed a different view in her evidence, I am satisfied that the Beltana Street property was purchased with the intention that it should be Caterina’s. It was purchased in the names of Domenica and Giorgio because Caterina was at that time still a minor. Giorgio transferred his interest in Beltana Street to Caterina in about 1979. As I understand it, Domenica and Caterina continued to be the registered proprietors of Beltana Street until about 2006, when Domenica transferred her interest to Caterina. Caterina and her husband lived in the Beltana Street property between 1975 and 1990. Since then, it has been rented out and Caterina has retained the proceeds. Caterina has had the control and management of the property since 1975.
18 William Street, Salisbury
A third property was purchased in 1977 for about $22,000. This is at William Street, Salisbury. This unit was purchased by Domenica and a person named Bivone. It seems that the intention was that this unit should be Teresa’s. However, at the time of purchase she was still a minor and that is why it was purchased in the names of Domenica and Mr Bivone. Domenica paid the whole of the deposit and also at least the initial mortgage payments. Teresa is now the registered proprietor of the William Street property. The evidence did not disclose when that occurred, nor the circumstances in which it occurred.
22 Malcolm Street, Salisbury
A fourth property, at 22 Malcolm Street, Salisbury, was purchased on 2 April 1979 for $22,000, of which $16,000 was borrowed. This property was purchased in Teresa’s name. Despite this, the family intention was that this property should be Giorgio’s. The house was bought in Teresa’s name because in 1979 Giorgio was unemployed (or at least not in full-time employment) and had difficulty in obtaining a bank loan in his own name.
There is a dispute about who paid the balance of $6,000: Giorgio says he paid that sum from his own savings, whereas Teresa says it was paid by Domenica. It seemed to be common ground that Giorgio had paid the mortgage repayments from his own resources.
Giorgio and his family lived in the Malcolm Street property. Teresa remained the registered proprietor of this property until it was transferred in 2002 or 2003 at Giorgio’s request into the name of his wife.
The Burton Land
In 1987 Domenica purchased a block of commercial land at Burton. The evidence did not disclose the purchase price of this land, nor the source of the funds used by Domenica for its purchase. Caterina and Teresa were registered as the proprietors of that land. In about 1986, Caterina and Teresa constructed a warehouse on the Burton land and it has since been rented out so as to produce a rental income. It seems that Domenica’s intention was that Caterina and Teresa should hold the Burton land in trust for Giorgio and themselves in equal shares.
In about 2003, a dispute arose between Caterina and Teresa concerning the Burton land, or the rental derived from it, and Caterina commenced proceedings in the District Court. Those proceedings were resolved by agreement and each of Caterina, Teresa and Domenica executed a settlement deed. It is not necessary for present purposes to outline the terms of the Deed.
Giorgio’s Claim of a Constructive Trust
Giorgio claims that Teresa holds the Sabina Street property subject to a constructive trust in his favour. The circumstances which he contends give rise to the constructive trust can be summarised as follows.
Sabina Street was purchased using his savings and the mortgage repayments were derived from his earnings. Giorgio says that this was recognised and accepted within the Stillisano family.
In 1982 Giorgio was planning to marry. His mother, Domenica, did not approve of his wife and was fearful that if the property remained in Giorgio’s name, his wife may prevail upon him to deal with it in some way which was adverse to the family’s interest and to the property continuing as the family home. There was also the prospect of the property becoming subject to property settlement orders in the event that the marriage failed. Accordingly, in order to protect the family home, Domenica asked Giorgio to transfer the property into her name. Giorgio agreed with his mother to do so. He said, however, that his agreement was subject to his mother’s express agreement that, as registered proprietor, she would hold the property on trust for his sole benefit.
The circumstances recounted above are derived from the evidence of Giorgio and Caterina. As those circumstances are in dispute, it will be necessary to make findings about them.
Giorgio also said that at or about the time transfer, he told both Caterina and Teresa of the transfer to Domenica and that she was holding the property on trust for him.
Giorgio’s claim was that, in breach of trust, Domenica transferred the Sabina Street property to Teresa in August 2003. Teresa was not a purchaser for value and was, in any event, aware of the breach of trust involved in the transfer. In those circumstances, Teresa’s legal ownership of the Sabina Street property was subject to a constructive trust in his favour.
Teresa disputed nearly all of the factual elements of Giorgio’s claim to a constructive trust.
Relevant Legal Principles
Counsel for Giorgio referred to the discussion of constructive trusts in Muschinski v Dodds,[1] Baumgartner v Baumgartner[2] and in Parij v Parij.[3] I do not consider that the resolution of the present case requires a detailed discussion of the nature of a constructive trust. It is sufficient to note that the law will impose a constructive trust, irrespective of the intention of the parties, when it considers it unconscionable for the party holding the legal interest in question to deny the interest of the other. Deane J in Muschinski v Dodds described a constructive trust as follows:
Viewed in its modern context, the constructive trust can properly be described as a remedial institution which equity imposes regardless of actual or presumed agreement or intention (and subsequently protects) to preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle.[4]
[1] (1985) 160 CLR 583.
[2] (1987) 164 CLR 137.
[3] (1997) 72 SASR 153.
[4] (1985) 160 CLR 583 at 614.
Counsel for Teresa accepted that if the Court was satisfied that Domenica had taken the transfer of the Sabina Street property in August 1982 subject to an express oral trust in Giorgio’s favour, and that Teresa was aware of that trust, the circumstances of the transfer by Domenica to Teresa in October 2003 were such as to make the imposition of a constructive trust appropriate. In other words, counsel accepted that Giorgio’s claim of a constructive trust should be determined by the resolution of the factual issues between the parties, rather than by a consideration of whether or not the circumstances claimed by Giorgio could give rise to the imposition of a constructive trust.
The trust which Giorgio relies upon as the foundation for his claim, that is, his mother’s agreement in August 1982, is an express oral trust. Domenica’s agreement was never reduced to writing. This attracts the operation of s 29 of the Law of Property Act 1936 (SA). Section 29 provides:
(1)Subject to the provisions hereinafter contained with respect to the creation of interests in land by parol—
(a)     no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorised in writing, or by will, or by operation of law;
(b)     a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will;
(c)     a disposition of an equitable interest or trust subsisting at the time of the disposition must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will.
(2)This section shall not affect the creation or operation of resulting, implied, or constructive trusts.
It can be seen that by s 29(1)(b), a declaration of trust of land must be evidenced in writing signed by the person who is to be subject to the trust. Subject to subs (2), an oral declaration of trust concerning land is unenforceable. However, subs (2) provides that s 29 does not affect the creation or operation of resulting, implied, or constructive trusts.
A resulting trust may arise by operation of the law when an express trust fails because of non-compliance with the provisions of the Statute of Frauds or its modern counterparts (such as s 29(1)). The English decision of Hodgson v Marks[5] provides an example of this proposition in circumstances which are analogous to the present. In that case, the owner of a house executed a voluntary transfer of the house to her lodger who agreed orally that the beneficial ownership should remain with her. Subsequently, however, the lodger sold the house to a third party, giving rise later to a dispute between the owner and the third party as to the ownership of the beneficial interest. The Court of Appeal held that s 53(1) of the Law of Property Act 1925 (UK) (the counterpart of s 29 of the Law or Property Act 1936 (SA)) did not have the effect of making the declaration of trust unenforceable. Russell LJ said:
[T]he evidence is clear that the transfer was not intended to operate as a gift, and, in those circumstances, I do not see why there was not a resulting trust of the beneficial interest to the plaintiff, which would not, of course, be affected by section 53(1). It was argued that a resulting trust is based upon implied intention, and that where there is an express trust for the transferor intended and declared – albeit ineffectively – there is no reason for such an implication. I do not accept that. If an attempted express trust fails, that seems to me just the occasion for implication of a resulting trust, whether the failure be due to uncertainty, or perpetuity, or lack of form.[6]
I understood that counsel for Teresa accepted that a resulting trust in favour of Giorgio could arise from the circumstances claimed by him. This makes it unnecessary to consider whether the oral evidence is admissible to prove a resulting trust arising from a transaction which fails for want of compliance with the formalities, or is permitted by the law only when it is necessary to prevent the “fraud” which may occur if the transferee could rely on the absence of the formalities in order to defeat the trust.[7]
[5] [1971] Ch 892.
[6] Ibid at 933.
[7] See Davies, JD “Constructive Trusts, Contracts and Estoppels: Proprietary and Non Proprietary Remedies for Informal Arrangements Affecting Land” (1980-1981) 7 (2) Adel LR 200 at 206.
The Issues at Trial
In these circumstances, the issues in the case are these:
1.Did Domenica agree with Giorgio in July 2002 that upon his transfer of the Sabina Street property to her, she would hold the property on trust for his sole benefit?
2.If so, is that trust enforceable even in the absence of any writing signed by Domenica as required by s 29 of the Law of Property Act 1936 (SA)?
3.If both these issues are resolved in Giorgio’s favour, is Teresa’s ownership of Sabina Street since October 2003 impressed with a constructive trust in favour of Giorgio?
The first issue involves two distinct elements. The first is whether Domenica did in 1982 use words of the kind which Giorgio now attributes to her. Secondly, if so, did Domenica intend thereby to create a trust in Giorgio’s favour?
An intention to create a trust does not require the use of any particular words, including use of the word “trust” itself. A trust may be created without use of the word “trust”.[8] The intention to create a trust may be inferred from an examination of all the circumstances. Mason CJ and Wilson J described the position in Trident General Insurance Co Ltd v McNiece Bros Pty Ltd:
[T]he courts will recognize the existence of a trust when it appears from the language of the parties, construed in its context, including the matrix of circumstances, that the parties so intended. We are speaking of express trusts, the existence of which depends upon intention. In divining intention from the language which the parties have employed the courts may look to the nature of the transaction and the circumstances, including commercial necessity, in order to infer or impute intention …[9]
[8] Registrar of the Accident Compensation Tribunal v Federal Commissioner of Taxation (1993) 178 CLR 145 at 165.
[9] (1988) 165 CLR 107 at 121.
The authors of Jacobs’ Law of Trusts in Australia (7^th ed 2006) described the position as follows:
The overall question is whether in the circumstances of the case, and on the true construction of what was said and written, a sufficient intention to create a trust has been manifested. It is not necessary that the creator of the trust should know that the particular relationship intended to be created is in law a trust. A trust will be created, whether or not the creator thereof is precisely aware of so doing, provided that in substance the creator intends that his or her action should have the legal effect of creating the relationship which is known in law as a trust. If the language is such that an intention to create such a legal effect is manifested, then a trust will be created whether the words “trust” or “trustee” are used, or not.[10]
(Footnote omitted)
[10] At [501].

The evidence at trial canvassed a number of other issues, some of which related directly to the resolution of these principal issues. However, I am satisfied that if Giorgio fails on the first issue, then his claim of a constructive trust against Teresa will fail altogether. On the other hand, if Giorgio succeeds on that issue, he will be well placed to succeed on the remaining issues.
The parties did address some submission to the nature of Giorgio’s legal ownership of Sabina Street from the time of its purchase until he transferred it to Domenica on 26 October 1982. In particular, the parties’ submissions addressed the question of whether Giorgio owned both the legal and beneficial interests in the property in that period or whether, because it was Domenica who was the immediate provider of the monies used for its purchase, Giorgio owned Sabina Street subject to a resulting trust in her favour. The latter alternative also involved the possible application of the presumption of advancement.[11] However, in the end, I have not thought it necessary to resolve these issues. I consider that it is reasonably plain that although Sabina Street was purchased in Giorgio’s name, it was the common understanding of Domenica and Giorgio that it was purchased as the family home of the Stillisano family. In other words, I am satisfied that Sabina Street was not purchased by Giorgio as the legal and beneficial owner but with him then allowing his family to reside in it.
[11] Calverley v Green (1984) 155 CLR 242.
The Evidence at the Trial
Giorgio gave evidence himself and led evidence from his sister, Caterina. Teresa gave evidence in her own defence and also led evidence from her husband, Robert, and from her brother‑in‑law, Rocco Adami. Domenica was not called by either party to give evidence. Although Domenica may once have been able to have cast considerable light on the issues in dispute, it was common ground that she is now too frail to give evidence. It was not suggested that any adverse inference should be drawn because of the failure of either sibling to call her to give evidence.
Giorgio was the only person who gave evidence as to his conversation with his mother in 1982 which he relied upon for the creation of the resulting trust at that time. Having referred to his mother’s concerns about her security in the house, Giorgio said that he said to Domenica:
You can live here in the house … for the rest of your life if you want to. But if you ever move out I want the papers, all right. … Remember that the house is still always mine.[12]
Giorgio did not give evidence of his mother’s response to that statement but, on his account, it was at least implicit that his mother acknowledged his stipulated conditions.
[12] Transcript p 43.
In addition to this express evidence of an oral trust, Giorgio gave evidence of other circumstances to support the plausibility of his account. Each of the other witnesses also gave evidence of a circumstantial kind. I summarise the circumstantial evidence relied upon by Giorgio as follows:
1.As the only male in a family adhering to “traditional Italian family values”, he had accepted the responsibility at an early age of providing for his mother and sisters. This included the responsibility of providing a house for them. Once Sabina Street was purchased, it was his intention that his mother be able to reside there as long as she wished and that his sisters would reside there until their marriages.
2.After his mother and sisters came to Australia, it was his practice to give to Domenica unopened his pay packet from GMH. He intended that his mother should be able to use and distribute the contents of his pay packet as she saw fit.
3.Until Caterina started work in mid 1975 and did the same thing, his wages were the principal source of income for the family. Domenica’s only other source of income was a pension (presumably an Australian Social Security Pension) as she did not work in paid employment in Australia.
4.For the purchase of Sabina Street, his mother used $10,000 in cash which she had accumulated from his pay packets. The inference was that this made it even more understandable that he was the true purchaser of Sabina Street.
5.Giorgio said that he was able to give his mother his complete pay packets because he had additional work in market gardens and the like at weekends and he used the earnings from those jobs for his own purposes.
6.Giorgio continued to give his mother his pay packets unopened after Sabina Street was purchased and he understood that Domenica used those monies to meet the monthly mortgage instalment of $49.
7.Even after he moved out of the Sabina Street in 1975 to live with his future wife before their marriage (something of which Domenica disapproved) he continued to provide his mother with the money for the mortgage repayments.
8.Domenica’s insistence that he transfer Sabina Street to her coincided with his foreshadowed marriage to his wife in November 1982. The inference was that it was only his mother’s concerns about the marriage which prompted her request to him to transfer the property to her.
In addition, Giorgio referred to some subsequent conduct, namely his request to his mother in 1985 or 1986, after she moved to live with Teresa at West Lakes, for Sabina Street to be transferred to him. He said that Domenica declined to make the re-transfer because she wished to retain a home to which she could return in the event that living with Teresa and her husband did not work out. The inference seemed to be that Domenica had not denied his underlying entitlement to Sabina Street.
A solicitor, Mr Carbone, at the firm of Carbone Polvere & Co, prepared the transfer documents and attended to the transfer in October 1982. Giorgio said that he and his mother had attended together at Mr Carbone’s office and that while there, his mother had acknowledged, in the presence of Mr Carbone, that, despite the transfer, the house was really to remain his. As Mr Carbone is now deceased, no evidence could be led from him at the trial. Neither party tendered any document containing a record of Mr Carbone’s instructions. However, the parties did tender a letter dated 30 August 1982 from Carbone Polvere & Co to Domenica. The substantive part of the letter is in the following terms:
Dear Madam,
Re: Gift from Son
We refer to your instructions regarding the preparation of a Deed of Gift and Memorandum of Transfer for the property situated at 16 Sabina Street, Salisbury and advise that the Commissioner of Stamp Duties has assessed duty on a value of $32,000. We hereby advise of the following charges in order to complete this transaction:
Stamp Duty on Deed   $4.00
Stamp Duty on Transfer   $640.00
Registration Fees (LTO)  $35.00
Brokerage: Transferee’s share  $158.00
Transferor’s share  $134.50
Preparation of Deed say :  $50.00
Total  $1,021.50
======
The letter went on to ask for payment of the sum of $1,021.50 into the firm’s trust account. Handwritten notations on the letter indicate that the sum of $640 was paid on 29 August 1982 and the balance of $382.50 paid on 21 March 1983.
Although this letter referred to the subject matter of the transaction as “Gift from Son” and to a “Deed of Gift”, neither party tendered such a deed. Teresa said, and I accept, that she had searched among her mother’s papers for such a document, but had been unable to locate it.
Caterina supported Giorgio’s evidence in a number of respects. She said that Domenica did not have any paid employment in Australia but was in receipt of two pensions: one Australian and one Italian. Caterina left school and commenced work in mid 1973 and, from that time until her marriage in June 1975, she too gave her mother her weekly pay packet, unopened. She also said that from time to time she saw Giorgio doing the same.
Caterina confirmed that Domenica disapproved of Giorgio’s choice of wife, because she had wished him to marry a girl of Italian descent. She said that she had heard Domenica express concern about the security of Sabina Street in the event that Giorgio did marry his wife and that Domenica had “begged [Giorgio] to turn the house over under her name”.
In relation to the oral trust asserted by Giorgio, Caterina said that Domenica had “always” said to Giorgio that “the house was always his”. However, she did not claim to have witnessed any conversation in 1982 now relied upon by Giorgio for the bringing into existence of a resulting trust.
Caterina said that she was present at West Lakes when Giorgio discussed with Domenica the possible return of Sabina Street into his name. Caterina said that Domenica said, in response to Giorgio’s request, that she needed to keep open the option of returning to live at Sabina Street (and by inference, did not wish to sign the property back). In addition, Caterina said that Domenica said, in the course of that discussion:
The house is always yours Giorgio, you’re my son, the house is always yours.[13]
Given my later findings, it is not necessary to consider the purposes for which evidence of subsequent conduct of this kind may be used.
[13] Transcript p 98.
Teresa’s evidence contradicted much of the evidence of Giorgio and Caterina. Contrary to their evidence, she said that Domenica had worked regularly in Australia, commencing shortly after her arrival in 1968. Her mother had worked hard in market gardening or packing work, sometimes commencing at 5.00 or 6.00 am in the morning and sometimes working seven days each week. She said that her mother had, in addition, been in receipt of a widow’s pension. Teresa disputed that either Giorgio or Caterina had given their pay packets to Domenica and said that it was she, and never Giorgio or Caterina, who had gone to the bank to make the mortgage instalments. For this purpose she had used cash which her mother had given to her.
Teresa also said that she had been present at Mr Carbone’s office in July 1982 when her mother and Giorgio had signed the Memorandum of Transfer. She denied that there had been any mention of her mother holding Sabina Street for Giorgio, or that the property would still always be his.
Each of Teresa’s husband and brother-in-law gave evidence which supported Teresa’s evidence that her mother had worked regularly and long hours as market gardens and packing sheds at Virginia and Angle Vale. Rocco Adami, the brother-in-law, had seen Domenica working at the Zerella Farms’ packing shed when he attended at that property in the course of his employment at Singleton Transport. This was in the period from approximately 1975 to 1983.
Robert Adami said that when Domenica came to live with him and Teresa at West Lakes in 1985, it was his practice to drop her off at a pick-up point each morning and then to pick her up from that point in the evening. This was so that Domenica could travel to Angle Vale or Virginia in a van with other workers. He saw Domenica in working clothes and described her as a “workaholic”.
Assessment of the Witnesses
Teresa was the least impressive of the witnesses in the trial. She is very much emotionally involved in the matter, and had little detachment about the issues. Teresa tended on several occasions to give long-winded answers which had little connection with the question to which they purported to respond. On several occasions she seemed intent on giving answers which were gratuitously denigratory of Giorgio and Caterina, or which emphasised her own virtue as a dutiful daughter. At other times Teresa maintained answers which were inherently implausible, and it seemed that she was unwilling to make any concessions which were favourable to either Giorgio or Caterina. Teresa has come to see herself as Domenica’s sole protector and to perceive that Giorgio and Caterina have abandoned their mother.
The manner in which Giorgio and Caterina gave their evidence was much more impressive. Giorgio’s evidence had an air of despondency or resignation about it, but at least in its manner, it appeared more reliable. This does not mean that I accept Giorgio’s and Caterina’s evidence to be reliable: only that I regarded their evidence as having a greater appearance of reliability. As will be seen, there are significant aspects of their evidence which I do not accept. The relationship between Caterina and Teresa has fractured, and there is considerable antipathy between the two sisters. As noted earlier, in 2003, Caterina commenced proceedings in the District Court against Teresa. I consider that the antipathy between the sisters coloured the evidence of both Caterina and of Teresa.
I consider that the evidence of both Rocco and Robert Adami was generally reliable.
Consideration of First Issue
The issue of whether Domenica had engaged in paid employment in Australia related to the source of the funds used to purchase Sabina Street. That in turn related to the claim of Giorgio that Sabina Street was his, because he had been the source of the funds used to acquire it and had provided those funds in the discharge of his obligation as the only male to provide a home for his family.
Given the straight out conflict between the parties as to whether Domenica had engaged in any paid employment, it is surprising how little evidence was led on the topic. Counsel for Teresa said that he was unaware until Giorgio and Caterina gave their evidence that there was any dispute about the matter. This left him and his instructors with little time to gather evidence on the issue and explained the lack of any documentary materials which may have evidenced Domenica’s work. It also explained the absence of evidence led by Teresa from persons unconnected with either party, such as the persons for whom, or with whom, Domenica was said to work, or neighbours who may have been able to cast light on Domenica’s daily activities. If Domenica was not working at all, this must have been known by many people associated with the Stillisano family. It is not clear why Giorgio did not lead any evidence, apart from Caterina, as to his mother not having engaged in paid work. Perhaps counsel for Giorgio was also taken by surprise to find that there was disagreement about this issue. In any event, the Court must assess the oral evidence without having available to it all the evidence which may possibly have been led.
I am satisfied that each of Giorgio and Caterina was wrong in saying that Domenica did not engage in paid employment in Australia. In reaching that conclusion I rely particularly on the evidence of Rocco and Robert Adami who, as indicated above, I considered to be generally reliable witnesses. As noted earlier, from time to time Rocco saw Domenica at work at Zerella Farms in the period 1975 to 1983 and Robert assisted in her transport to and from work after she moved to West Lakes in 1985. Although both these periods are after the time when Sabina Street was bought, they do indicate that Domenica was a participant in the workforce. There is no reason to suppose that that participation commenced only in 1975.
In addition, I think it significant that, despite Domenica and the two girls having arrived in Australia only in 1968, between July 1972 and March 1979 the Stillisano family was able to purchase four separate properties. Without Domenica’s earnings, I doubt that the family could, by 1982, have accumulated the $10,000 in savings which was used in part payment of Sabina Street. On the evidence of Giorgio and Caterina, in the period from 1968 until mid 1973 when Caterina started work, the family would have been relying solely on Giorgio’s earnings together with Domenica’s pension. When one bears in mind that in 1968, Giorgio was only 17 years of age and probably not earning a full adult wage, and had purchased and was paying the running costs of a car, it seems quite unlikely that his income would have allowed the family, after deduction of ordinary living expenses, to accumulate $10,000 in savings over a four year period. I add that Giorgio himself thought that between 1968 and 1972 he was receiving between $20 and $40 net each week in his pay packet. This may well have been an underestimate. Nevertheless, it indicates the difficulties the family would have had, if reliant only upon his income and a pension, to sustain themselves.
Caterina entered the paid workforce in mid 1973, but her earnings ceased to be available to the family upon her marriage in June 1975. It is unclear when Teresa entered the paid workforce but that is not likely to have been before 1975 or 1976 at the earliest.
I also consider that Domenica’s participation in the paid workforce shortly after her arrival in 1968 would have been consistent with the practice of many recently arrived migrant families at that time.
There was a suggestion in the evidence that the Burton land may have been acquired using the proceeds received by Domenica from the sale of properties in Italy. However, it seems unlikely that those properties were sold until the mid 1980s. It was not suggested that the purchase of any of the first four properties referred to above were funded from the proceeds of the sale of Italian properties or from money which Domenica had brought with her from Italy.
My satisfaction that Domenica did engage in the paid workforce is significant. This is not a matter about which Giorgio or Caterina could have been mistaken or which can be attributed to the frailty of human memory. They must have been well aware that Domenica was going to work. She must have been absent from the home for long periods. Accordingly, my satisfaction that Domenica did work undermines considerably any confidence in the reliability of their evidence more generally.
There are other features of Giorgio’s evidence which I consider to be implausible. He said that in March 1979, he provided from his own savings a total of $6,000 of the $22,000 purchase price for 22 Malcolm Street, Salisbury. However, Giorgio acknowledged that he had ceased regular full-time work in 1975 when he injured his back at GMH. He did not make any compensation claim in relation to that injury, and did not receive any insurance pay out. Giorgio said that he had only intermittent or short-term casual work between 1975 and 1979. In addition, he and his wife had had four children during the 1970s: the first born in 1972 and the last in the late 1970s. During this period he was supporting his wife and family and was, at one stage, paying for rental accommodation. I consider it quite unlikely that in these circumstances Giorgio was able to accumulate $6,000 in savings by March 1979.
I am, however, prepared to accept the evidence of Giorgio and Caterina that until each left the Sabina Street home, it was their practice to give their pay packets, unopened, to their mother for her to use as she saw fit. I consider that that evidence had a plausibility about it and is probably consistent with the practice in many other migrant households at the time. The circumstances of the Stillisano family in 1968 cannot have been easy. Domenica was widowed with two children still at school, and she was endeavouring to establish herself and her family in Adelaide. I consider it probable that both Giorgio and Caterina would have accepted a responsibility to the family. Each probably accepted that the family was living frugally, that their mother was not wasting the money and indeed, intended investing the money wherever possible in real estate.
I accept therefore that much of Giorgio’s earnings may have been used by Domenica in the accumulation of the savings used to purchase Sabina Street and later in the payment of the mortgage instalments and in the early repayments of principal. It is natural that this could have given rise in Giorgio to a sense of moral entitlement to the Sabina Street property. It is also quite possible that at least until the purchase of the Malcolm Street property for Giorgio in 1979, Domenica too recognised that moral entitlement. I accept that that may have led Domenica to say from time to time to Giorgio that the Sabina Street property was his. Of course, if Giorgio had been the true purchaser of Sabina Street there would have been no need for such statements by Domenica.

Although I consider that the manner in which Giorgio and Caterina gave their evidence was more impressive than that of Teresa, the fact that I have rejected their evidence concerning their mother’s participation in the workforce causes me to have considerable reservations about the statements which Giorgio attributes to Domenica at the time of the transfer of Sabina Street to her in July 1982. I am conscious that the Court has not heard evidence from Domenica. It is being asked to act on the evidence of Giorgio who clearly has a self-interest and, as noted, I regard his evidence on a significant matter to be unreliable. Similarly, it is well apparent that Caterina has an emotional commitment to Giorgio’s cause and an antipathy towards Teresa. In these circumstances, I am not persuaded, on the balance of probabilities, to accept their evidence about Domenica’s statements in July 1982. In short, I do not accept that in relation to the transfer of Sabina Street in 1982 Domenica made statements of the kind now attributed to her, namely, that the house was still Giorgio’s, or words to that effect.
For similar reasons, I am not prepared to accept as reliable the evidence of Giorgio and Caterina about the conversation with Domenica in 1985 or 1986 in which Giorgio is said to have sought the re-transfer of Sabina Street to him.
Even if the evidence of Giorgio and Caterina about what Domenica said in 1982 is accepted at face value, I doubt that it, in conjunction with all the other evidence, indicates an intention by Domenica to create, in effect, a trust in Giorgio’s favour.
In this respect I regard the following features as important. First, Domenica retained Mr Carbone to give effect to the transfer in 1982. Mr Carbone prepared not only a transfer but a Deed of Gift. It is reasonable to suppose that in doing so, Mr Carbone had Domenica and Giorgio’s instructions conveyed to him. It seems unlikely that Mr Carbone would have thought the execution of a Deed of Gift to be appropriate if he had been told that the property was, despite the transfer, still to be regarded as Giorgio’s. If Mr Carbone had been instructed to that effect, he is likely to have recognised that Giorgio was retaining a beneficial interest in the property. In that circumstance it is likely that he would have wished to document the arrangements in some other way.
Secondly, I am satisfied that at least one significant purpose for the transfer of Sabina Street to Domenica was to protect it from possible claims by Giorgio’s wife, and from property settlement orders in the event of dissolution of their marriage. That purpose would not have been achieved by a transfer to Domenica of the legal interest subject to a trust in favour of Giorgio.
Thirdly, the property arrangements within the family appear to be relevant. By 1982, Domenica had arranged the purchase of a property for each of her children: Beltana Street for Caterina; William Street for Teresa; and Malcolm Street for Giorgio. In relation to Beltana Street, Caterina had taken over the responsibility for the mortgage repayments upon her marriage. The evidence did not disclose whether the same occurred upon Teresa’s marriage in 1980, but it is reasonable to suppose that it did. Similarly, Giorgio was given assistance in the purchase of Malcolm Street, and then left to make the mortgage payments himself. There was accordingly a symmetry in the family arrangements. I think it unlikely that Domenica would have intended to provide Giorgio with Malcolm Street and, in addition, to the whole of the beneficial interest in Sabina Street. This would have provided him with a considerable advantage over his two sisters. It is not impossible that Domenica may have intended this, but it seems unlikely given her disapproval of Giorgio’s wife and of his domestic arrangements.
It is also possible that the acquisition of Malcolm Street came to be seen as discharging any moral obligation felt by Domenica to Giorgio in relation to Sabina Street.
Fourthly, the words which Giorgio and Caterina attribute to Domenica are equivocal. They do not bespeak, self-evidently, the creation of a trust. The words used by Giorgio, quoted earlier in these reasons, are just are consistent with an assertion by Giorgio of his interest in receiving the property on his mother’s death, or with a reminder to her of his moral claim for the property bearing in mind her use of at least some of his earnings in the acquisition of the property. Alternatively Giorgio may have appreciated in 1982 that there was the prospect of his mother acquiring still further properties which would ultimately devolve to her children. His words can be understood as a claim to the Sabina Street property rather than to any subsequent property which his mother may acquire.
Finally, I consider that it is appropriate to have regard to Giorgio’s subsequent conduct for the purposes of determining whether Domenica did create a trust in his favour in 1982. Giorgio acknowledged that he became aware in 2003 of the transfer of Sabina Street from Domenica to Teresa. He did not take steps to lodge a caveat until 19 May 2008, and did not commence the present proceedings until 6 March 2009. His inaction for such a long period seems inconsistent with a belief on his part in 2003 or before that his mother had agreed to hold Sabina Street for him. One would have thought that, had his mother made the agreement in 1982 which he now claims, he would have recognised, immediately upon hearing of the transfer to Teresa, that his mother was acting in breach of that agreement.
For these reasons I am not satisfied that Domenica did agree with Giorgio in July 1982 that upon his transfer of the Sabina Street property, she would hold the property on trust for his benefit.
Issue 2: The Enforceability of an Oral Trust
Strictly speaking my finding on the first issue means that this issue does not arise. It is apparent, however, from what I have said above that had I found that Domenica did agree in 1982 to hold the Sabina Street property for Giorgio’s benefit, I would not have found that that trust failed for want of being evidenced in writing, as required by s 29 of the Law of Property Act.
Issue 3
My finding on the first issue also indicates that I am not satisfied that Teresa’s ownership of Sabina Street since October 2003 has been impressed with a constructive trust in favour of Giorgio.
Conclusion on the Claim of Constructive Trust
For these reasons, Giorgio’s claim fails.
The Cross-claim
As noted at the outset of these reasons, Teresa’s Cross-claim was made in the alternative. The fact that I have rejected Giorgio’s claim means that the issues raised by the cross-claim do not arise.
However, in case this matter goes further, I will state my conclusions briefly.
In the event that Teresa did hold Sabina Street subject to a constructive trust, she claimed from Giorgio reimbursement of various expenses which she had incurred. In respect of some of these expenses the parties agreed that Teresa would in any event be entitled to reimbursement. In respect of other expenses, the parties agreed the quantum only, leaving to the Court to determine whether, as a matter of law, Teresa had the entitlement she claimed. Giorgio’s argument was that, since October 2003, Teresa had taken no steps to rent Sabina Street so as to obtain an income which may offset the expenses she was incurring.[14]
[14] Cf Miller Street Pty Ltd v Porter [2007] FCA 1830 at [21].
Teresa acknowledged that Sabina Street had remained unoccupied and that she had not taken steps to rent it out. She said that she had refrained from doing so because she still regarded the property as her mother’s and considered that it was in some way inconsistent with her mother’s interests for the property to be rented.
I do not regard this explanation as particularly satisfactory. It seems to me that Teresa has chosen, somewhat irrationally, to leave Sabina Street unoccupied even though its upkeep required the incurring of expense. In this way, if Teresa had been a trustee, it could not be said that she had acted reasonably. It could be said that if Teresa is liable on a constructive trust, that would be because she was aware in 2003, when she took the transfer of Sabina Street, of Giorgio’s equitable interest. There would accordingly be no unfairness in imposing on her now the consequences of having failed to act as a reasonable trustee. In those circumstances, I do not consider that Teresa should be able to recover the sum of $20,000 which the parties agreed was the appropriate quantum for items 10-27 in Part 2 of the Cross-claim.
As the parties agreed Teresa’s entitlement in relation to the first eight items at $8,000, I would, had it been necessary to do so, have allowed Teresa to recover that sum.
Conclusion
For the reasons given above, I dismiss Giorgio’s claim. I will hear from the parties as to the appropriate order to be made in relation to the cross-action.