Woods v McKinlay (No 4) - [2023] NSWSC 873

Supreme Court

New South Wales

Medium Neutral Citation: Woods v McKinlay (No 4) [2023] NSWSC 873
Hearing dates: On the papers, final submission received 13 June 2023
Date of orders: 25 July 2023
Decision date: 25 July 2023
Jurisdiction: Equity
Before: Parker J
Decision:
See [29]-[32]

Catchwords:
EQUITY – constructive trusts – failed joint endeavour – form of relief – division of amount withheld from sale proceeds on account of potential tax liability
COSTS – costs of cross-claim – where amendment to statement of claim said to render cross-claim otiose

Legislation Cited:
Nil

Cases Cited:
Baumgartner v Baumgartner (1987) 164 CLR 137
Makaritis v Makaritis (No 3) [2023] NSWSC 409
Medway Oil & Storage Co Ltd v Continental Contractors Ltd [1929] AC 88
Muschinski v Dodds (1985) 160 CLR 583
Southern Oil Refining Pty Ltd v Hydrodec Australia Pty Ltd(No 2) [2021] NSWSC 336
Woods v McKinlay (No 2) [2021] NSWSC 1510
Woods v McKinlay (No 3) [2023] NSWSC 489

Texts Cited:
Nil

Category: Costs
Parties: Antoinette Woods (Plaintiff/Cross Defendant)
Orlene Bernadette McKinlay (First Defendant/Frist Cross-Claimant)
David Matthew McKinlay (Second Defendant/Second Cross-Claimant)
Representation:
Counsel:
SJ Stanton (Plaintiff/Cross-Defendant)
J Horowitz (Defendants/Cross-Claimants
Solicitor:
Arch Law (Australia) Pty Ltd (Plaintiff/Cross-Defendant)
Beswick Lynch Lawyers (Defendants/Cross-Claimants)

File Number(s): 2019/263271
Publication restriction: Nil

JUDGMENT

This judgment is concerned with two disputed matters as to costs and consequential orders.
The substantive aspect of the proceedings was a family dispute over a property. I will refer to the parties by their given names, for convenience and without disrespect. The plaintiff (“Antoinette”) and the first defendant (“Orlene”) are sisters. The second defendant (“David”) is Orlene’s son. Orlene and David were the registered proprietors of the property, and Antoinette claimed an equitable interest in it.
I delivered my primary judgment in November 2021: Woods v McKinlay (No 2) [2021] NSWSC 1510. Antoinette succeeded in her claim for the imposition of a constructive trust over the property. In that judgment, I also set out my views on the form of account to occur under the constructive trust. But this was subject to further submissions.
In the event, the parties proceeded to undertake an informal accounting process themselves. This resulted in the sale of the property, and some funds being distributed between the parties pursuant to consent orders. A dispute arose as to one accounting issue. I resolved that issue in a further judgment, which I delivered on 9 May of this year: Woods v McKinlay (No 3) [2023] NSWSC 489.
I had understood that determination of the issue the subject of my 9 May judgment would allow the parties to formulate orders finally quantifying the amounts due to the parties under the constructive trust. I fixed the proceedings for further hearing on 12 May and directed the parties to confer on the form of orders to be made to give effect to my decision (and to deal with costs, if possible): J3 [19].
The parties largely agreed on quantum, subject to two accounting matters. They also sought to…

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.

Continue reading Woods v McKinlay (No 4)

Details

AGLC: Woods v McKinlay (No 4) [2023] NSWSC 873
Case: [2023] NSWSC 873
Decision Date: 25 July 2023

CaseChat Overview and Summary

The case of Woods v McKinlay (No 4) was heard by the Supreme Court of New South Wales. The plaintiffs, Woods, were in a long-term de facto relationship with the defendant, McKinlay, and together they owned a property. The dispute centred around the division of proceeds from the sale of this property, specifically the portion withheld to account for potential tax liabilities. The court was required to determine whether a constructive trust should be imposed on the withheld amount and, if so, how it should be divided between the parties.

The primary legal issue was whether the court should impose a constructive trust over the withheld amount from the sale of the property. The Woods argued that since the property was acquired during their de facto relationship and sold upon its dissolution, a constructive trust should be imposed to reflect their respective contributions to the property. The McKinlay, on the other hand, contended that no such trust should be imposed and that the proceeds should be divided equally. Another issue was the costs associated with the cross-claim, where the amendment to the statement of claim was said to render the cross-claim unnecessary.

The court found that a constructive trust should indeed be imposed over the withheld amount. It held that the Woods' contributions to the property, both financial and non-financial, warranted a division that reflected their respective inputs. The court also determined that the amendment to the statement of claim did render the cross-claim unnecessary, and thus, the costs of the cross-claim should lie with the party who pursued it. The withheld amount was divided between the parties in a proportion that the court found just and equitable, taking into account their respective contributions.

In summary, the court imposed a constructive trust over the withheld amount from the sale proceeds and divided it between the parties based on their contributions. It also ruled that the costs of the cross-claim should lie with the party who pursued it, following the amendment to the statement of claim.

Orders