Queensland Judgments


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Mackay v Pearce


[2007] QSC 195





Mackay v Pearce [2007] QSC 195






(first defendant)



(second defendant)


10718 of 2005






Supreme Court


27 July 2007




19 April 2007


Atkinson J


Claim dismissed. 


REAL PROPERTY -- GENERAL PRINCIPLES -- INCIDENTS OF ESTATES AND INTERESTS IN LAND -- OWNERSHIP - Where land registered in name of Queensland Housing Commission - Where defendant had paid purchase price and all other costs associated with land and house for almost 40 years - Where defendant had continuous occupation of house for almost 40 years - Whether doctrine of part performance applied.



EQUITY -- TRUSTS AND TRUSTEES -- CONSTITUTION AND CLASSIFICATION OF TRUSTS GENERALLY -- CLASSIFICATION OF TRUSTS IN GENERAL -- IMPLIED TRUSTS -- RESULTING TRUSTS WHERE INTENTION PRESUMED -- GENERALLY -- WHEN ARISING -- OTHER CASES - Where defendant paid for all outgoings on property - Where applicant had not contributed to property but sought ownership of it pursuant to an asserted interest in the property bequeathed to her by will.

Evidence Act 1977 (Qld) s 92, s 102

Limitation of Actions Act 1974 (Qld) s 10, s 27(1)

Property Law Act 1974 (Qld) s 6, s 10, s 11, s 12, s 38, s 59

State Housing Act 1945 (Qld) s 21, s 23, s 23A, s 24, s 26A

Baumgartner v Baumgartner (1987) 164 CLR 137, cited

Delehunt v Carmody (1986) 161 CLR 464, cited

Gillett v Holt (2003) 3 WLR 815, cited

McBride v Sandland (1918) 25 CLR 69, cited

Maddison v Alderson (1883) App Cas 467, cited

Muschinski v Dodds (1985) 160 CLR 583, cited

Raffaele v F & G Raffaele [1962] WAR 29, cited

Ramsden v Dyson (1866) LR 1 HL 129, cited

Regent v Millett (1976) 133 CLR 679, applied

Riches v Hogben [1985] 2 Qd R 292, applied

Riches v Hogben [1986] 1 QR 315, cited

Sullivan v Sullivan [2006] NSW CA 312, cited

Swettenham v Wild [2005] QCA 264, cited

JC Williamson Ltd v Lukey and Mulholland (1931) 45 CLR 282, considered


L Bowden for the first respondent


Quinn & Scattini for the applicant

Angelo Cominos & Associates for the first respondent

  1. This case involved a dispute between Valerie Ann Pearce and Cheryl Denise Mackay as to the ownership of a home at 25 Fitzsimmons Street, Grovely (more particularly described as Lot 27 on Registered Plan No. 78492, County of Stanley Parish of Enoggera being the land contained in Certificate of Title Reference No. 13634107) (“the Grovely home”). The registered owner is the Queensland Housing Commission (the “Housing Commission”) and the latest valuation, dated 18 October 2005, shows it to be worth $275,000 to $285,000. It is a modest suburban home.
  1. The plaintiff, Ms Mackay, sought the appointment of a trustee for sale pursuant to s 38 of the Property Law Act (“PLA”) so that the Grovely home could be sold.
  1. The application arose after the death of Brian Herbert Pearce (“Brian”). I shall refer to members of the Pearce family by their given names not out of any sense of disrespect but for ease of identification. The plaintiff was Brian’s de facto wife from January 1998 until he died on 25 August 2005. By will dated 22 November 2004, Brian appointed Ms Mackay as his executor and left the whole of his estate to her. Ms Mackay claimed an interest in the Grovely home as a result of the bequest under Brian’s will. To determine whether or not Ms Mackay has an interest in the Grovely home it is necessary to look at the history of the ownership of and dealings in that home.

The Grovely home

  1. The Pearce family’s relationship with the Grovely home began on 25 June 1956 when Alexander Frederick Pearce (“Alexander”) became a tenant of the Housing Commission at the Grovely home for a weekly rental of £3.2.6. He lived there with his wife Florence Josephine Pearce (known as “Josie”) and their four children Kevin, then aged 18 years, William, then aged 15 years, Barry, then aged 13 years and Brian, then aged 10 years. Over the ensuing years the rent was often substantially in arrears and Alexander received a number of notices to quit. The rent was increased from time to time.
  1. On 28 July 1962, Kevin married Valerie, the first defendant. William also left home and married. Brian remained living in the Grovely home with his parents.[1]
  1. The Housing Commission introduced a scheme to sell homes to tenants who occupied them. On 3 April 1964 and on 8 July 1965 Alexander applied to the Housing Commission for advice as to the purchase price and deposit payable as he wished to purchase the Grovely home.
  1. On 19 June 1965, Brian married Hazel and they moved into the Grovely home. Alexander and Josie moved to a home at 177 Lutwyche Road, Windsor (“the Windsor home”). The Windsor home was more convenient for public transport and closer to Alexander’s job in the railways at Mayne.
  1. On 20 August 1965, Alexander was informed that the purchase price of the Grovely home was £3145.0.0, less cash deposit of £157.5.0 and an allowance on account of repayment of principal in his rent of £210.19.0. He was told that monthly instalments would be on terms of 30 or 45 years. The required deposit was £157.5.0. Alexander advised the Housing Commission on about 16 September 1965 that he intended to proceed to purchase the Grovely home and enclosed a sum of £25 being an initial payment towards the required cash deposit of £175.5.0 and agreed to pay not less than £1 per week above his rental towards the deposit. This was called the Progressive Purchase Plan.
  1. On 14 February 1967, Alexander, Brian and Hazel applied to purchase the Grovely home from the Housing Commission. Alexander had by then paid the deposit of $314.50 in full. On 11 April 1967, Alexander filled out a declaration including the declaration that he intended to use it “solely as a home for myself, my family, and my other dependants, as abovementioned and not for speculation or any other purpose.” The declaration was also signed by his wife, Josie. Brian made a similar declaration on the same date, and it was also signed by his wife, Hazel.
  1. On 5 June 1967, the Housing Commission by a Contract of Sale agreed to sell the Grovely home to Alexander, Brian and Hazel as joint tenants for $6,250. The purchasers were credited with the sum of $504 being repayment of principal paid by Alexander as tenant and $314.50 paid as a deposit. The rest of the purchase price was to be paid by instalments of $30.85 at the beginning of each month until 28 February 1997. The sale by instalments was effected pursuant to s 24 of the State Housing Act 1945 (Qld) (SHA).  The sale was to date from 1 March 1967 so the repayments were to be made over a period of 30 years.  The purchasers were to be responsible for insurance.
  1. Unfortunately, the marriage between Brian and Hazel did not last and on 29 December 1967 they separated and moved out of the Grovely home. After the separation, Brian went to live with his parents, Alexander and Josie, at the Windsor home. The Grovely home was vacant. Not long after that, Kevin and Valerie were looking for alternative accommodation. They were living in Kedron and the lease on their house/flat was due to expire in February 1968. By this time they had three small children: Anthony (born on 14 September 1963), Paul (born on 11 October 1964) and Maria (born on 29 November 1965).
  1. Josie was concerned about the Grovely home not being occupied and asked Kevin and Valerie to move into it. The conversation occurred at the Windsor home and I infer from the surrounding circumstances that it occurred in January 1968. The persons present for the conversation were Josie, Kevin, Valerie and Brian. Valerie is the only person who was present for the conversation who is still alive. She gave evidence by affidavit and was also cross-examined. She was an impressive witness, careful in her recollections and candid and truthful in her evidence. I accept her evidence as to what occurred. She thinks that Alexander was probably also present but cannot now recall with certainty. In any event, Josie acted as a spokesperson for the family and, as Valerie deposed, at times would tell her husband and her sons what to do or how things would be done. Valerie asked Josie “Why don’t you sell it?” but Josie said they did not want to.
  1. Valerie expressed concern to Josie that she did not want mere temporary accommodation as she did not want her children to have to change schools. Anthony was due to start school in 1969. Josie told Valerie that when Valerie had saved the transfer fee and could pay for it, the house would be transferred to Kevin and Valerie. Josie said to Valerie, “You pay the house off and we will transfer the house to you”. Josie repeated that statement to Valerie several times over the ensuing years and also made comments such as “You treat the house as if it is your own. One day it will be yours.” In keeping with Josie’s role in the family, Valerie took it that Josie was speaking on behalf of herself, Alexander and Brian when she said that the house would be transferred to herself and Kevin.
  1. They discussed the matter in detail and further agreed that Kevin and Valerie were to pay $40 per month for the Grovely home to cover the Housing Commission repayments, rates and insurance. It was arranged that Valerie was to pay the money directly to Josie. Josie also told Valerie that Kevin and Valerie would have to repay Brian the money that he had already paid to the Housing Commission by way of instalments. Valerie cannot remember the precise sum of money but it was between $200 and $300. As Kevin and Valerie did not have capital of that amount available to them they agreed to repay Brian by instalments, as much as they could afford each fortnight. This payment was in addition to the $40 per month.
  1. As a result of this conversation Kevin and Valerie decided to move into the Grovely home with their children. At about the time they moved into the Grovely home, Brian said in Valerie’s presence, “I don’t want the house. I don’t care what happens to it. You’re welcome to it.” That comment was made by Brian when Valerie asked him if he was sure that Kevin and Valerie and their children’s moving into the Grovely home was in accordance with his wishes. She knew that he had already agreed in the conversation that had occurred earlier and he responded adamantly to her question. Brian then continued to live with his parents where his mother continued to look after him and gave him money whenever he wanted it.
  1. Valerie made sure that the arrangements were complied with. She went to see Josie at about the time that the first $40 was due and paid it to her. After a few months, Josie decided that there was no particular reason for her to keep the Housing Commission deposit book and that Kevin and Valerie should take possession of the book for the purpose of making the repayments themselves. As a result Josie gave Valerie the Housing Commission payment booklets and Valerie took on responsibility for making all the housing repayments direct to the Housing Commission itself.
  1. Josie also suggested that Kevin and Valerie should be directly responsible for the payment of rates, insurance, utilities, maintenance and all the other expenses on the property. They agreed to do this and subsequently did so. Josie said to Valerie, “You treat the house as your own. You want it, you pay for it.”
  1. William confirmed in his sworn evidence, that what Valerie said in her affidavit sworn 31 May 2006 was consistent with his recollection and knowledge of events concerning the occupation of the Grovely home. He was aware of the arrangements made for Kevin and Valerie to take over all responsibility for the Grovely home pursuant to an agreement made with Josie. Like Valerie, he was an impressive witness appearing to be a decent man endeavouring to be as honest in his recollection as possible. Josie told William that Kevin and Valerie would make all the payments on the Grovely home and it would eventually be theirs.
  1. Valerie repaid the $200 or $300 which was owing to Brian for payments previously made by him. The money was paid to Brian by Valerie paying Josie such amount as Kevin and Valerie could afford every fortnight until the money was repaid in full.
  1. Valerie deposed that she would never have entered into the arrangements without the promises or statements that were made to her. She was concerned to have the most secure accommodation for her children. She and Kevin abandoned all prospects of obtaining their own Housing Commission house when they went to live in the Grovely home. Thereafter none of Alexander, Josie or Brian showed any interest in the Grovely home whatsoever. Brian did not at any time suggest that he had changed his mind and regarded the Grovely home as his own. If he had, Valerie deposes that she would have left the Grovely home and would not have spent the money she did maintaining and improving it. Valerie has lived in the Grovely home continuously from January 1968, a period of almost forty years.
  1. The records of the Housing Commission show that in or about April 1969, Hazel told the Housing Commission that neither Alexander nor Brian were living at the Grovely home and they had installed tenants. An employee of the Housing Commission appears to have then visited the property. He reported that it was “sub-let” to Kevin, his wife and three children, paying $10 a week to the purchaser “BH Pearce”. He said “They seemed to be first class tenants”. The file notes that Josie rang and said that the Grovely home was let to their son, Kevin. She was told that the arrangement could continue for six months to enable their personal affairs to be resolved. Later file notes show that Josie said that the amount paid by Kevin was “enough to cover instalments, rates and insurance.” The file records that she said that her son Kevin was interested in buying the Grovely home, which would solve the problem, but that the others did not wish to make payment to Hazel. The next notation was obliterated on the copy filed in court.
  1. On 10 July 1970 Hazel entered into a contract with Brian whereby she sold all her interest in the Grovely home to Brian for the sum of $124. The contract of sale was subject to the marriage being dissolved and the Housing Commission agreeing to the contract of sale. The marriage between Hazel and Brian was dissolved on 17 July 1970. The transfer of Hazel’s share in the Grovely home to Brian was a term of the settlement of their divorce petition. The Housing Commission agreed to the transfer from Alexander, Brian and Hazel as joint tenants to Alexander and Brian as tenants in common in the shares of one-third and two-thirds respectively. The Housing Commission’s internal report on the “Home Purchase Application” shows that the Commission understood that this was necessary to effect the divorce settlement. An Assignment of Contract of Sale was signed on 28 October 1970. On 5 December 1970 Alexander and Brian, as transferees, and the Housing Commission entered into an indenture. The transferees undertook to assume the indebtedness to the Housing Commission of $5,167.29 as at 21 July 1970 in place of the original purchasers, Alexander, Brian and Hazel.
  1. In January 1971, Josie told the Housing Commission that the transfer had not yet been finalised and the Grovely home was being occupied by Kevin and his family who were paying $10 a week, as well as by Brian. She said that when the transfer was completed, the matter of occupancy would be considered. In April 1971, the Housing Commission advised the solicitors acting for Brian in the divorce proceedings and the property transfer that the assignment had proceeded to registration. Brian advised the Housing Commission that he was living in the Grovely home with Kevin and his family. The Housing Commission accepted this situation as permanent. There was no further communication on the matter with the Housing Commission.
  1. The contract of sale dated 5 June 1967 then had a note attached to it by the Housing Commission saying:

“By virtue of an assignment dated the 28th day of October 1970 the within contract of sale is now deemed to be between the Queensland Housing Commission and Alexander Frederick Pearce and Brian Herbert Pearce, as tenants in common in shares of one-third and two-thirds, respectively.”

That dealing was registered on 19 April 1971.

  1. In about 1972, Valerie discovered that the rates were in arrears so she took a part-time position in the office of her local parish school and earned the money to pay the arrears in rates. By 1976, she was earning a full-time wage and therefore she took care of the household finances and made the repayments to the Housing Commission and payment of utilities. She later also paid for maintenance and repairs to the house. She paid for a dividing fence and accounts for house insurance were sent to her work address. Over the years after they moved into the house, Kevin and Valerie installed a gas hot water system, a new toilet, painted the outside and inside of the house, paid for a half share of the dividing fences, rewired the house, installed a stove on two occasions and paid for a new water pipe from the footpath to the front fence.
  1. Brian executed a will with the Public Curator (as the Public Trustee was then known) on 18 September 1984 in which he devised:

“Whatever right, title, state and interest I may have at the time of my death in the Land Dwelling and Improvements at and known as number 25 Fitzsimmon Street, Grovely Brisbane aforesaid together with all the household furniture and household effects (other than motor vehicles) therein and thereon at my death UNTO such of them my brother KEVIN BRIAN PEARCE and his wife VALERIE ANN PEARCE as shall be living at my death and if both as joint tenants.”

William had seen that will and knew of the disposition of the Grovely home to Kevin and Valerie.

  1. Alexander died on 18 September 1990. By his will, which was dated 8 December 1980, he appointed the Public Trustee as his executor and devised and bequeathed the whole of his estate to his wife, Josie; and should she predecease him, whatever interest he had at his death in the Grovely home to Kevin and Valerie as joint tenants, his caravan to Brian, and the residue to be divided equally amongst those of his three sons, Kevin, William and Brian, as were living at his death. Brian’s will also devised his interest in the Grovely home to Kevin and Valerie. As Josie survived her husband, the effect of his will was that whatever interest he had in the Grovely home passed to his wife, Josie.
  1. Josie survived Alexander, dying on 12 May 1991. Her will, also dated 8 December 1980, appointed the Public Trustee as executor and bequeathed her entire estate to her husband; and if he predeceased her, her caravan to Brian and the residue to be divided equally between those of her three sons, Kevin, William and Brian as were living at her death. There is no explanation in the will as to why a clause leaving the Grovely home to Kevin and Valerie was not included in her will. I assume that she co-owned the caravan with her husband and therefore thought it was hers to bequeath. She did not own the Grovely home and probably assumed it had been taken care of by Alexander’s will. The notes of her instructions kept on the file of the Public Trustee confirm that she did not regard her entitlement under her husband’s will as part of her estate. It appears she attempted to remedy the situation by writing and signing a note on 31 January 1991, indicating an intention that the third share of the Grovely home left to her after her husband’s death should go to Kevin and Valerie. She signed a note saying that Brian should have all the furniture he needed for a house or flat and various other listed household items. The note was not sufficient to be considered a will and so was not effective to carry out the wishes she expressed in it.
  1. Kevin and Valerie continued to live in the Grovely home and met all the repayments. Some time in 1994, Brian told Valerie that he was changing his will, because a relationship he had been in for a long time had recently ended; but that he would not be changing anything about the Grovely home – “It will still go to you and Kevin.” Kevin died intestate on 16 June 1994 and Valerie remained in the Grovely home making the repayments. It appears that Kevin and Valerie were joint tenants of whatever interest they had in the Grovely home and Kevin’s interest passed to Valerie by survivorship. This is consistent with the presumption in equity of joint tenancy where two persons contribute equally to the purchase price.[2]  In this case, the payments for the Grovely home were a joint endeavour carried out equally by Kevin and Valerie.
  1. The final payment of $30.85 was made on 24 February 1997, however the Grovely home remained registered in the name of the Housing Commission. Kevin and Valerie, and Valerie alone after Kevin’s death, had paid all of the instalments of the purchase price by meeting all of the instalments due since February 1968 and repaying Brian the instalments he and Hazel had paid.
  1. Valerie continued to repair and maintain the Grovely home, rejuvenating the roofing tiles, replacing guttering, down pipes and drainage, installing new front and back stairs and repairing the front and back doors. She replaced casement windows with sliding windows and installed security screens to all windows. She replaced all the cold water pipes, refurbished the bathroom, put asphalt on the driveway and painted inside and outside the house.
  1. On 6 August 1999, Brian executed a new will giving the Grovely home to Valerie absolutely and, if she predeceased him, her children. He left his residuary estate to Ms Mackay. William confirmed in his evidence that he had seen Brian’s will in which the Grovely home was left to Valerie.
  1. On 4 September 2003, the Housing Commission wrote to “A & B Pearce” at 25 Fitzsimmons Street, Grovely telling them that the loan had been finalised, but as the security documents had not been collected, the Grovely home remained registered in the name of the Housing Commission. It was suggested that they take steps to have the Grovely home transferred into their names. In response, on 16 September 2003, Valerie rang the Housing Commission and told them that she and Kevin had lived in the Grovely home since February 1968; that Brian had moved out of the Grovely home in January 1968 and that she had not seen him for a number of years and did not know his whereabouts; and that Alexander had died in the late 1980. She asserted a moral entitlement to the Grovely home.
  1. The Housing Commission required the transmission of the interest of Alexander in the Grovely home to be registered prior to transfer of the title. William said that in late 2003 and early 2004 he spoke to Valerie several times in relation to the position with respect of the Grovely home and the proposal that it be transferred to her. He said that he had no objection to the house being transferred to her but was unwilling to contribute financially to the cost of the administration of his parents’ estates because he did not stand to benefit from them. William told the court that he is prepared to relinquish to Valerie any legal entitlement he has in the Grovely home by reason of the operation of Josie’s will.
  1. Over the next few months William had several conversations with Brian about finalising the paper work as William understood that Brian was the only person who could effect a transfer of the Grovely home out of the name of the Housing Commission. In May 2004 Brian said to William that he had been into the Housing Commission and said “I don’t know what she’s worrying about. She is getting the house anyway.” William said that Brian made a comment to him about Valerie getting the house on several other occasions.
  1. Valerie retained solicitors who wrote to Brian on a number of occasions requesting that he consent to an application to record the title of the Grovely home in Valerie’s name. They received no reply. The Housing Commission had communications about these matters with Valerie and with Brian but nothing was finalised before his death in August 2005.
  1. Without informing any of the other parties with an interest in the Grovely home, Brian made a new will on 22 November 2004, the will referred to earlier in these reasons, leaving the whole of his estate to the applicant, Ms Pearce, who has, in these proceedings, sought the sale of the Grovely home. She claims an entitlement to and an interest in seven-ninths of the Grovely home.
  1. The legal estate remains with the Housing Commission. The Housing Commission has indicated its intention to abide by the order of the court. The question to be decided in this case is who is entitled to the equitable estate in the Grovely home.

The plaintiff’s claim to ownership

  1. The plaintiff argued that the interests in the Grovely home should be determined as follows. The purchasers under the 1967 contract with the Housing Commission were Alexander, Brian and Hazel as joint tenants. From 28 October 1970, the purchasers under the contract with the Housing Commission became Alexander as to one-third and Brian as to two-thirds as tenants in common. After Alexander’s death, Josie became entitled to one-third and Brian remained entitled to two-thirds as tenants in common. After Josie’s death William was entitled to one-ninth, Kevin to one-ninth and Brian to seven-ninths as tenants in common. After Kevin’s death, Valerie became entitled to Kevin’s share and after Brian’s death, Ms Mackay became entitled to his share so the interests would be one-ninth to William, one-ninth to Valerie and seven-ninths to Ms Mackay. That is the interest which Ms Mackay seeks in this case.

Was there an oral agreement with acts of part performance?

  1. However, one cannot ignore the effect on equitable ownership of the Grovely home of any agreement made with regard to its ownership and the payment of the purchase price. The evidence shows that in January 1968, an arrangement was reached between Josie and Brian, acting expressly or ostensibly on behalf of the joint purchasers of the Grovely home, and Kevin and Valerie. Was that merely a “family arrangement” or was it a legally binding contract? As McPherson J held in Riches v Hogben:[3]

“Whether the agreement is intended to be legally binding in the end depends, as Devlin J said in Parker v Clarke [1960] 1 All ER 93, 100, on the intention of the parties to be inferred from the language which they use and from the circumstances in which they use it.”

  1. There are a number of factors which point to the arrangement being a legally binding contract:-
  1. Alexander and Josie no longer lived in the Grovely home;
  1. The marriage between Brian and Hazel had broken down;
  1. Brian told Kevin and Valerie that he did not want the Grovely home;
  1. Valerie made it clear that she wanted permanent not temporary accommodation given that her eldest child would be starting primary school about a year later;
  1. Josie, acting on behalf of the joint tenants, told Valerie that if she and Kevin paid for the Grovely home, it would be transferred to them;
  1. Kevin and Valerie agreed to cover the cost of repayments, rates and insurance in return for the eventual transfer of the Grovely home to them;
  1. Kevin and Valerie also agreed to repay Brian the money he and Hazel had already paid by instalments;
  1. Kevin and Valerie gave up the opportunity to obtain another Housing Commission home for themselves;
  1. Kevin and Valerie and their children moved into the Grovely home.
  1. The promise made by Josie on behalf of the joint tenants that if Valerie and Kevin paid off the Grovely home it would be transferred to them was an offer that was accepted by Kevin and Valerie when they acted on it and moved into the Grovely home and commenced the repayments. The consideration was the making of payments to the Housing Commission, taking on a liability that would otherwise have been borne by Alexander and Brian and the repayment to Brian of the instalments paid by him. Kevin and Valerie also suffered the detriment of not being able to seek their own Housing Commission home.
  1. The oral agreement was followed by unequivocal acts of part performance of the contract. The effect of part performance was considered by the High Court in Regent v Millett:[4]

“The principle upon which the doctrine of part performance rests was stated by Lord Cranworth, Lord Chancellor in Caton v Caton (1866) LR 1 Ch App 137, at p 148 in words which appear to have a direct application to the present case.  He said:

‘… when one of two contracting parties has been induced, or allowed by the other, to alter his position on the faith of the contract, as for instance by taking possession of land, and expending money in building or other like acts, there it would be a fraud in the other party to set up the legal invalidity of the contract on the faith of which he induced, or allowed, the person contracting with him to act, and expend his money.’

The books are full of cases in which it has been held that the entry into possession alone, or the taking of possession coupled with the expenditure of money by one party on the improvement of property, with the cognizance of the other party to the contract, may amount to part performance (see the cases cited in Halsbury’s Laws of England, 3rd ed., vol. 36, par. 416). (at p682).”

  1. In this case, Kevin and Valerie and their children moved into the Grovely home and lived there to the exclusion of all others and Valerie, now widowed, remains living there to this day. There were many other unequivocal acts of part performance:-
  1. Kevin and Valerie paid the whole of the remaining instalments until the Grovely home was completely paid for;
  1. Kevin and Valerie repaid Brian the instalments he and Hazel had paid (and he paid Hazel for her share);
  1. Kevin and Valerie paid for all the rates, insurance, utilities, repairs, maintenance and improvements;
  1. Wills were made by Alexander and Brian that reflected these arrangements.
  1. The only contraindication was that Josie apparently told the Housing Commission: that Kevin and Valerie were “renting” the Grovely home. This information is only recorded in the Housing Commission files and was admissible pursuant to s 92 of the Evidence Act 1977 (Qld) but by its very nature it would not be tested by cross-examination.  This in itself would be sufficient to give it little weight.  However there are further reasons to discount it pursuant to s 102(b) of the Evidence Act.  Josie and Brian told the Housing Commission that Brian was living in the Grovely home with Kevin and Valerie, which was not true.  They, as well as Alexander and Hazel, had signed a declaration that the Grovely home was to be used as a home for themselves, their family and dependents.  They may well have been concerned about the attitude the Housing Commission would have taken if it knew that none of Josie, Alexander, Hazel or Brian was living there.  There was accordingly a reason for them to tell the Housing Commission that Brian was living there and Kevin and Valerie were renting the Grovely home even though neither of those things were true.
  1. There was, I conclude, an oral agreement which was intended to be legally binding for Kevin and Valerie to acquire all of the interest in the Grovely home once they had paid all of the instalments and unequivocal acts of part performance to give effect to that agreement. It was a contract for the sale or other disposition of land.
  1. The plaintiff argued that there could not have been any agreement to transfer Hazel’s interest in the Grovely home. However the circumstances show that this was in fact what happened. Josie (acting on behalf of Alexander) and Brian made the agreement to transfer the Grovely home to Kevin and Valerie once they had paid the instalments (and repaid Brian for the instalments he and Hazel had paid). Brian then acquired Hazel’s interest so that when the time came to transfer the property she had no interest in it and he would have been able to make good his bargain.[5]
  1. Sections 10 to 12 and s 59 of the PLA, prima facie, prevent a legally enforceable contract for the sale of land being made orally.  However, s 6(d) of the PLA provides that nothing in ss 10 to 12 or s 59 PLA affects the law relating to part performance.  In other words, an oral agreement may be enforced if it is supported by unequivocal acts of part performance.[6]
  1. Where there is an oral agreement and unequivocal acts of part performance the party who claims an interest in land may invoke the equitable remedy of specific performance. As Dixon J held in JC Williamson Ltd v Lukey and Mulholland:[7]

“In cases of specific performance, the party is said to be charged upon the equities arising out of the acts of part performance and not merely upon the contract.  The acts of part performance must be such as to be consistent only with the existence of a contract between the parties, and to have been done in actual performance of that which in fact existed.  But in such a case the equity which so arises is to have the entire contract carried into execution by both sides.  Because the acts done upon the faith of the contract could not have taken place if it had not been made, and the contract is of a kind which it is considered equitable to enforce in specie, a party who has so acted in partial execution of the contract obtains an equity to its complete performance.”

  1. There was an enforceable agreement to transfer the Grovely home to Kevin and Valerie once they had repaid the instalments.

Is the agreement void or unenforceable?

  1. Contrary to the plaintiff’s submissions, the defendant’s counterclaim is not defeated by any limitation period because if the relevant limitation period was for an action in contract, then the period, pursuant to s 10 of the Limitation of Actions Act 1974 (Qld), is six years and that limitation period did not commence to run until Brian was in breach of contract by purporting to devise his interest in the Grovely home to the applicant in November 2004 and failing to transfer the Grovely home to Kevin and Valerie.  That breach is ongoing.  In any event, the defendant’s counterclaim relies on the equitable doctrine of part performance and s 10(6)(b) provides that the limitation period in s 10 “does not apply to a claim for specific performance of a contract or for an injunction or other equitable relief.”  The counterclaim is not statute barred.
  1. The plaintiff further argued that any agreement is void by reason of the second paragraph of clause 21(1)(i) of the SHA as it was in February 1968 when Kevin and Valerie took possession of the property. The SHA has since been repealed. Clause 21 of the Schedule to the SHA as at January 1968 provided:

“21.Conditions annexed to land whilst subject to advances.

As between the Commission and the owner or occupier for the time being of any land with respect to which an advance has been made, the following conditions shall be imposed so long as such land is subject to any charge in respect of any periodical payment in favour of the Commission, namely:-

(i)Such land or any part thereof shall not be transferred, subdivided, or let, or abandoned by such owner or occupier or agreed to be so transferred, subdivided, or let without the written consent of the Commission.

Every agreement for transfer or letting contrary to this subsection shall be void and of no effect.

If the owner or occupier transfers, subdivides, or lets such land or any part thereof, or abandons such land, in contravention of this subsection, the Commission may cause the land to be sold.

(ii)When on the death of the owner or occupier the land would by reason of any demise, bequest, intestacy, or otherwise become subdivided, the Commission may require the land to be sold within twelve months after the death of the owner or occupier to some one person, and if default is made in selling the same the Commission may cause the same to be sold.

The provision of this Act, as to sale and application of the proceeds of sale, shall apply to every sale made under this clause.”

  1. The clause applies to land “with respect to which an advance has been made.” Advances were made under the SHA for various purposes: under s 23 to erect or renovate houses; under 23A to purchase houses; under s 26A for employers to provide housing for employees. However there was no such advance in this case. The Housing Commission entered into a contract for the sale of the Grovely home pursuant to its powers under s 24 of the SHA. The sale was a sale by instalments. There was no “advance” and so clause 21 of the Schedule to the SHA has no application. The contract is not void.

Resulting trust

  1. Furthermore, whether the agreement was enforceable or not, the promise that the Grovely home would belong to Valerie and Kevin if they paid the instalments gives rise to the presumption of a resulting trust in their favour once the condition has been satisfied. A resulting trust is presumed to arise in favour of the person or persons who has paid the purchase price. The presumption of a resulting trust may be rebutted if the person who provides the purchase price intends to confer an immediate beneficial interest on another party.[8]  That was not the case here, so there is a resulting trust in favour of the person who made the payments, in this case, Kevin and Valerie, and, after Kevin’s death, Valerie alone.  The Housing Commission therefore holds the legal estate in the Grovely property on resulting trust for Valerie.  Because of the effect of s 27(1) of the Limitation of Actions Act 1974, no limitation period applies to an action by a beneficiary under a trust to recover trust property from the trustee.

Constructive trust

  1. It is not strictly necessary to consider the operation of a constructive trust as explained by the High Court in Muschinski v Dodds[9] and Baumgartner v Baumgartner[10].  If it were relevant, I would hold that it would be unconscionable for Brian’s personal representative to assert that she was entitled to an interest in the property when neither she nor Brian made any contribution to the purchase price and Kevin and Valerie made all of the instalment payments.  This would give rise to a constructive trust over the Grovely home in favour of Kevin and Valerie, and after his death, to Valerie alone.

Proprietary estoppel

  1. Nor is it necessary to consider the doctrine of proprietary estoppel, particularly estoppel by encouragement considered most recently by the New South Wales Court of Appeal in Sullivan v Sullivan[11] applying Ramsden v Dyson.[12]  In explaining this type of estoppel Handley JA said at [14] – [15]:

“In cases such as this equity does not enforce the promise as such.  In Giumelli v Giumelli (1999) 196 CLR 101, 121 the joint judgment of Gleeson CJ, Gummow, McHugh and Callinan JJ quoted with approval the statement of McPherson J in Riches v Hogben [1985] 2 Qd R 292, 301:

‘… what attracts the principle is not the promise itself, but the expectation which it creates …  It is not the … unperformed promise that invites the intervention of equity but the conduct of the plaintiff in acting upon the expectation to which it give rise.’

McPherson J, having cited the judgment of Kitto J in Olsson v Dyson (1969) 120 CLR 365, 379, said (300) that: ‘The critical element is the conduct of the defendant after the [promise] in encouraging the plaintiff to act upon it’, and this passage was also approved in the joint judgment in Giumelli (at 121).”

  1. However, were it necessary to consider it, there is no doubt in my mind that there was a promise made to transfer the Grovely home upon payment of the instalments, Kevin and Valerie relied on that promise (or the expectation to which it gave rise) and acted to their detriment in doing so.[13]  True it is that they did not have to pay rent; but they did make all the repayments due on the Grovely home, they repaid Brian the instalment payments he and Hazel had made, they paid for rates, repairs, maintenance and improvements which are not usually the responsibility of a tenant and they lost the opportunity to obtain another Housing Commission house in their own name.  If the applicant were allowed to repudiate the promise, Valerie would be left with only a one-ninth interest in a property of which she has paid the purchase price.  I am satisfied that proprietary estoppel would be made out and the equity arising from that estoppel could only be satisfied by the transfer of the freehold title in the Grovely home to Valerie.[14]


  1. In this case there was a contract with acts of part performance, and the plaintiff is, to use the classic statement of Lord Selborne LC in Maddison v Alderson,[15] “charged with the equities resulting from the acts done in execution of the contract”[16] and the contract has become specifically enforceable.  Once all of the payments were made to the Housing Commission, Valerie was entitled to have the Grovely home transferred to her.
  1. Because the Housing Commission holds the Grovely home on resulting trust for Valerie, there is no need to require any transmission on death, whether of Alexander, Josie or Brian, to occur. The Housing Commission should transfer all right, title and interest in the Grovely home to Valerie. I will hear the parties as to the precise form of the order and as to costs.


[1] Although it is not specifically mentioned in the material, it appears that Barry died prior to adulthood.

[2] Delehunt v Carmody (1986) 161 CLR 464 per Gibbs CJ.

[3] [1985] 2 Qd R 292 at 297.

[4] (1976) 133 CLR 679 at 682.

[5] See Riches v Hogben [1986] 1 Qd R 315 at 318.

[6] See for example Raffaele v F & G Raffaele [1962] WAR 29.

[7] (1931) 45 CLR 282 at 300.

[8] Swettenham v Wild [2005] QCA 264 at [32].

[9] (1985) 160 CLR 583.

[10] (1987) 164 CLR 137.

[11] [2006] NSW CA 312.

[12] (1866) LR 1 HL 129 at 170 per Lord Kingsdown; see also Giumelli v Giumelli (1999) 196 CLR 101 at 112.

[13] Gillett v Holt (2000) 3 WLR 815 at 836 per Robert Walker LJ.

[14] cf the relief granted in Gillett v Holt (supra) at 39-841.

[15] (1883) App Cas 467.

[16] See McBride v Sandland (1918) 25 CLR 69.


Editorial Notes

  • Published Case Name:

    Mackay v Pearce

  • Shortened Case Name:

    Mackay v Pearce

  • MNC:

    [2007] QSC 195

  • Court:


  • Judge(s):

    Atkinson J

  • Date:

    27 Jul 2007

  • White Star Case:


Litigation History

No Litigation History

Appeal Status

No Status