Windt v Carabelas No. Scciv-02-861 - [2002] SASC 418

WINDT V CARABELAS
[2002] SASC 418
Full Court: Doyle CJ, Lander and Bleby JJ

DOYLE CJ. I would dismiss the appeal. I agree with the reasons given by Lander J.
LANDER J. This is an appeal by an unsuccessful plaintiff in proceedings heard in the District Court. I will continue to refer to the parties as they were described in the court below.
The plaintiff’s claim was that the defendant held a property situated at 4 Amherst Avenue, Trinity Gardens on trust for her. The plaintiff claims that the defendant entered into an express trust or in the alternative that the defendant held the property on constructive trust for the plaintiff. Apart from seeking a declaration of her interest in the property the plaintiff sought an order directing the defendant to transfer the property to the plaintiff. She sought damages and consequential accounts.
After a trial before a judge of the District Court the action was dismissed.
On this appeal the plaintiff does not complain of the trial judge’s failure to find an express trust. Such a concession was rightly made. There was no evidence before the trial judge that would have supported a finding of an express trust. Moreover there was nothing in writing to that effect and in those circumstances no interest of that kind could have been created: Law of Property Act 1936 (SA) s 29.
The trial judge made adverse findings on the plaintiff’s reliability and credibility. Those adverse findings are not challenged on this appeal.
In fact none of the trial judge’s findings are challenged.
The only issue on this appeal is whether, upon the findings made by the trial judge, it was appropriate to dismiss the plaintiff’s claim. On this appeal it is the plaintiff’s contention that on the trial judge’s findings he should have proceeded to have determined the respective contributions made by the plaintiff and the defendant in a joint endeavour in which they were involved and imposed a constructive trust in proportion to those contributions.
The plaintiff says that if her contentions are accepted on appeal the matter will have to be remitted to the trial judge for an assessment of those contributions.
The Trial Judge’s Findings
The defendant is a solicitor who was born in 1944 and married his wife in 1967. They have lived together since their marriage. They have three children.
The defendant met the plaintiff in 1972 at the office where they were then both employed. He was a professional person and she was a receptionist/secretary. Shortly after meeting a sexual relationship commenced.
In October 1972 the plaintiff leased a flat in which she continued to live until April 1975. The defendant regularly visited her at the flat and on occasions took her to dinner. Their sexual relationship continued.
In April 1975 the plaintiff moved to a unit owned by the defendant where she remained for about nine months. The defendant provided the plaintiff with money to pay rent to his wife. By this time the plaintiff…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2002] SASC 418
Decision Date: 13 December 2002

CaseChat Overview and Summary

In the case of Windt v Carabelas, the plaintiff, Windt, sought to establish a proprietary interest in a property she claimed was acquired as part of a joint endeavour with the defendant, Carabelas. The dispute arose from their alleged joint intentions regarding the property, which were not fulfilled, leading Windt to claim a constructive trust over the property. The case was heard in the Supreme Court of South Australia. The primary legal issue the court had to address was whether a constructive trust could be imposed based on a perceived joint endeavour, where one party contributed financially to the acquisition of the property and the other agreed to undertake renovations that were never completed. The court also considered whether such an arrangement, in the absence of a formal agreement, could give rise to a proprietary interest in the property.

The court ruled that the absence of any formal agreement or evidence of a joint endeavour between Windt and Carabelas precluded the imposition of a constructive trust. It was noted that a constructive trust is not imposed merely because the court finds it fair and just to do so. The court referred to the authoritative decision in Muschinski v Dodds, which established that in Australia, a constructive trust is not imposed on abstract notions of fairness but requires clear evidence of a joint intention and an understanding that contributions would result in a shared beneficial interest. Given that Windt and Carabelas had not demonstrated such a clear intention and understanding, the court found that Windt could not claim a proprietary interest in the property.

The court further emphasised that the law requires more than mere fairness to impose a constructive trust; it necessitates a demonstrable joint endeavour with clear terms and understandings regarding the sharing of benefits and burdens. As such, the court concluded that Windt's claim was not supported by the evidence and that the trial judge's finding that there was no joint endeavour was correct. The appeal was dismissed, and the original decision in favour of Carabelas was upheld.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

DOYLE CJ (dissent) LANDER J (dissent) BLEBY J

On the trial judge’s finding there was no joint endeavour of any kind and therefore, for reasons which I will mention, the plaintiff’s claim was bound to fail.Conclusion On Appeal In my view even if the trial judge had found that there was a joint endeavour of the kind contended for by the plaintiff the result would have been the same because the joint endeavour contended for by the plaintiff could not have given rise to a proprietary interest of any kind in the property.The Law If the law were simply that a constructive trust could be imposed at any time where a trial judge believed it to be fair and just then this plaintiff would have a much stronger claim, but unfortunately, from her point of view that is not the law. The law in England and Australia in relation to the imposition of a constructive trust where parties have undertaken a joint endeavour in relation to the acquisition or maintenance or improvement of property has diverged: Muschinski v Dodds (1985) 160 CLR 583 per Gibbs CJ at 595 per Deane J at 615. Gibbs CJ said at 594-595:“However the view that the court can disregard legal and equitable rights and simply do what is fair is ... contrary to the established doctrine in Australia: Wirth v Wirth (1956) 98 CLR 228; Hepworth v Hepworth (1963) 110 CLR 309; Bloch v Bloch (1981) 55 ALJR 701.” In this country, a constructive trust is not imposed simply because the imposition of such trust “... is fair and just as a matter of abstract morality”; per Deane J at 621. In Muschinski v Dodds (supra) the parties were living in a de facto relationship. They purchased a property as tenants in common in equal shares upon the basis that although the woman paid for the property the man would carry out renovations. Shortly thereafter the parties separated and the renovations were never carried out. The woman claimed sole beneficial ownership of the property. Of the five judges sitting in that case three were of the opinion that the parties held their respective legal interest as tenants in common upon trust after payment of any joint debts incurred in the improvement of the property to repay to each of them their contributions and as to the residue for them both in equal shares. Gibbs CJ reached that conclusion because the parties were jointly and severally liable to pay the purchase price and because the woman had paid all of it she was entitled to contribution as to one half from the man. Mason and Deane JJ reached their conclusion because it was unconscionable after the failure of the joint venture between the parties for the man to assert his legal entitlement without recognising the woman’s payment. Brennan and Dawson JJ were of the opinion that the woman intended that the man should receive his beneficial interest in one half of the property immediately but that the gift of that half created a personal obligation upon the man. Therefore when the man failed to fulfil his obligation to carry out the renovations he was not liable to forfeit the beneficial interest in the property but might have been liable to pay any compensation sought by the woman. However, they were of the opinion that any proprietary interest in the land claimed by the woman failed.

Ratio Decidendi

Legal Principle Established

Established by: BLEBY J

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