DISTRICT COURT OF QUEENSLAND

The Issues

1. [1]
   This unfortunate litigation is between a mother and her daughter. Mrs Taske, a widow, went to live with her daughter.  She paid her daughter $100,000.  After about two and a half years she left and went to a retirement village.  She wants her $100,000 back.  Her solicitors claim a share of her daughter’s house.  Her daughter says that the money was a gift, and should not be repaid.

2. [2]
   What are the important facts that the court has to consider? Was the $100,000 an unconditional gift?  Should Mrs Taske recover her $100,000, or a share in her daughter’s house?  If a share in her house, should her daughter’s payment of ongoing expenses be taken into account?

The $100,000

3. [3]
   Mrs Taske is now 81 years of age.  Her husband died in early 2001.  They had been married for 52 years.  She was alone in her house in Mackay.  By mid 2002 her three daughters, Robyn, Carol and Judy had all moved away.  She was lonely.  She was then 75 years of age.  She owned her house, and had the benefit of a war widow’s pension.  She had a gold health card, which covered all her medical expenses.  By the middle of 2002 she had about $20,000 in the bank.  When her husband was alive, he had looked after all of their financial affairs.  She had been busy with the children, their life on a cane farm and running a hotel.  She had left school after completing year 7, not finishing her scholarship year.  She had never worked independently for a wage. 

4. [4]
   In June 2002 Judy and her partner, David Elliott, moved to Toowoomba. (They later married, in January 2004). They rented a house in Curzon Street.  Mrs Taske visited them.  Judy could see that her mother was lonely and sad.  She and her partner agreed that she might come to live with them.  Mrs Taske was very pleased.  No money was discussed at that stage.

5. [5]
   Mrs Taske and Judy have somewhat different recollections about what was said, and how their arrangement developed as they spoke to each other at Curzon Street.  At the least, it would have taken place over a week or so. Mrs Taske was in Toowoomba for a couple of weeks at the time of Carol’s wedding on 17 August 2002. Their financial agreement was complete by 21 August 2002, according to Suncorp’s email of that date.   The background to the discussions included the wish of Judy and David Elliott to buy their own house in Toowoomba.  The three of them travelled around together, looking at houses, in which all of them could live.

6. [6]
   Mrs Taske recalled that she offered to help Judy with the purchase of a house.  Judy suggested that she contribute $100,000, after the sale of her own house, and that Mrs Taske could come down and live with them, and they would look after her.

7. [7]
   It may be accepted, as Judy says, that it was her mother’s idea to sell her Mackay house. It may be accepted, that Judy did not interfere in that sale in any way, apart from introducing her mother to a real estate agent she knew in Mackay. It should also be accepted, that once the amount of $100,000 was agreed, it was made clear to Mrs Taske that there was no prospect of the money being repaid, as they did not have enough assets to do that.

8. [8]
   Judy recalls her mother saying that she had helped Carol and Robyn before, and that she had “missed out” and that her mother wanted to “even the scales”. Her mother may well have said that, but there was no proportionality between the $100,000 and what she had done for Carol and Robyn. According to the evidence here, her husband had given three horses of no particular value to Robyn, and she believed in September 2002 that Carol had received $3,000 from him. In fact, he had not given that money to Carol. She certainly had no ability to give anything like $100,000 to Carol and Robyn.

9. [9]
   It is clear that the three of them intended that the new arrangement would be a permanent one. Mrs Taske undoubtedly thought that she had a place to live until she died.  On balance, it is probable that she did not use that literal expression as part of her arrangement with Judy and David, but there was some discussion between them about the possibility of her needing aged care in the future.  There was no suggestion that she might move to live with her other daughters.  The mutual intention was that she would sell her house, and move in with Judy and David on a permanent basis, with the possibility of a move to aged care in the future.

10. [10]
    Judy has always insisted that the $100,000 was a gift. She says that her mother described it as “an early inheritance”.

11. [11]
    This is what happened. By August 2002 Judy and David had made an arrangement with Suncorp to finance the purchase of a house. On 21 August 2002 Suncorp’s representative, Ms Sheree Thompson, noted in an internal email about their application, “… the female applicant’s mother is going to be living with them and is going to be putting $100,000 from the sale of her home into this purchase …”.  After that, Suncorp gave them a “home loan pre-approval certificate”, saying that they qualified for a loan approval up to the amount of $181,595.80.  A condition was “subject to letter stating gift of $50,000 is not repayable”.

12. [12]
    Judy and David signed a contract of sale for a house at Ballantyne Court, Highfields, on 13 September 2002.  The purchase price was $291,000.  Suncorp agreed to advance $181,090.  In an internal approval request dated 24 September 2002, Ms Thompson recorded this:

“Equity towards the purchase is $90,000, which is currently in term deposits with Suncorp Metway Limited of $53,000 and Heritage of $50,000.  The client is receiving a gift from Mrs Taske’s mother of $21,000 towards the purchase and another $79,000 on the sale of her home.  A letter is included to confirm this as a non‑repayable gift.”

That is, Judy and David had $103,000 of their own money, from their sale of an earlier house.

13. [13]
    The letter from Mrs Taske was dated 16 September 2002.  It was composed and written by Judy, to satisfy the requirement of a Suncorp officer, Mr Rob Murphy, who had spoken to her.  The letter was then signed by Mrs Taske.  Omitting the formal parts it said this:

“Dear Sir,

Re: Home Loan Application—David Charles Elliott and Judy Maree Taske—11 Ballantyne Court, Highfields

I am giving a gift of $100,000 to David Elliott and Judy Taske for the purchase of their home at 11 Ballantyne Court, Highfields.  This will consist of the deposit of $5,000, $16,000 to be paid at settlement of the contract of sale and the balance of $79,000 to be paid upon settlement of the sale of my property in Mackay.  This is not a loan and is not repayable.”

14. [14]
    On the same day, 16 September 2002, Mrs Taske paid $5,000 as the deposit on the Highfields house.

15. [15]
    It seems that Robyn and Carol knew little about these arrangements. Robyn saw her mother on Sunday 6 October 2002.  She found her reluctant to discuss details of the financial arrangements.  The next day, Robyn wrote a long letter to her mother, setting out her concerns.  Many were reasonable and practical matters, about how the arrangement would work, and what would happen in the event of various possibilities—for example, in the event of a separation between Judy and David, and the sale of the house, what would happen?  Where would she go then?  There was upset about the cash outlay her mother would be making to assist Judy and David.  There was upset about her eventual estate, and the fact that Judy was the sole executor.  Among many observations, the letter went on:

“… If you are assisting Judy and Dave in purchasing a house then they also take on all the financial responsibility for you now and in the future.  Neither I or Neil will have surplus funds and we would expect Judy and Dave to make a commitment to care for you on a long-term arrangement.  When I give up my job at Silver Lake I will be managing on what I can earn from the farm … Judy and Dave need to be aware of this and know that they must absorb all financial commitments to you if you outlay financial assistance to them.”

16. [16]
    The letter also went on to ask whether or not if her mother’s name would be on the property deeds.

17. [17]
    Robyn sent a copy of that letter to her mother and to her two sisters. Mrs Taske and Judy were both upset by it.  It is clear that their conversation did not include any sense of awareness, that Judy’s warnings and doubts might be considered.  Mrs Taske very probably did say to Judy, that once she had given her money, it was hers.  With respect to the ownership of the new house, she said that she had no interest in the home, and that Robyn’s concerns were ridiculous.

18. [18]
    Two days later, on 9 October 2002, Mrs Taske appointed an agent to sell her Mackay house.  On 15 January 2003 it was sold for $130,000.  The contract for sale was settled on 14 February 2003.  The net return to Mrs Taske was $128,800.

19. [19]
    Before that settlement, on 10 October 2002, Mrs Taske sent $16,000 to Judy and David.  They used it to pay credit card debts.

20. [20]
    After the sale of her house, she would have had cash of around $135,000. Her entire estate would have been worth around $160,000.

21. [21]
    In about mid February 2003 she made her final bus trip from Mackay to Toowoomba.  On 21 February 2003 she paid $79,000 to Judy.  Judy spent $9,000 on personal expenses, and paid $70,000 to Suncorp, in reduction of the mortgage.  So, by that date Mrs Taske had paid all of the $100,000 to Judy.  $75,000 went towards buying the house, and $25,000 went on Judy and David’s personal expenses.

22. [22]
    In substance, Judy and David paid $103,000 toward the house purchase and $75,000 of Mrs Taske’s $100,000 was paid to Suncorp. The remaining debt of $130,000 was secured by the mortgage. They owned the house as joint tenants.

23. [23]
    Overall it is clear enough that the $100,000 was a significant contribution to the mutual aim of buying a house in which the three of them would live.

Life at Highfields

24. [24]
    At first, things went well at the Highfields house. Mrs Taske paid $50.00 weekly for board, and the cost of her own phone calls.  She did her own laundry.  Her gold card paid for all of her medical expenses.  Judy and David included her on social occasions.  Judy drove her when she needed to go shopping or to the doctor.  As a joke, Mrs Taske bought Judy a medallion for her key ring, which bore the words “Mum’s taxi”.  She went on a holiday to Melbourne with them.

25. [25]
    In December 2003 Mrs Taske wanted to change her will.  She gave instructions to Messrs Wallace and Wallace, who had acted for her when her house was sold.  The solicitor was Ms Carol Sexton.  Mrs Taske spoke to her by telephone.  Ms Sexton wrote on 10 December 2003, including the new will, and some explanation of it.  The letter said this:

26. [26]
    The will said this:

27. [27]
    It should be accepted, as Judy says, that the will was designed to protect her. The result is that Carol and Robyn could expect to share the modest amount of cash owned by her mother. The exact figure is unknown, but it is probably now no more than $40,000.

28. [28]
    The will was signed and witnessed on 4 May 2004.

Mental Condition

29. [29]
    After about the middle of 2004, Judy noticed changes in her mother’s behaviour. She was 78 years old.  She became more than usually forgetful.  On one occasion she forgot to shower for three days, though she needed to do so, after working in the garden.  She became more secretive about her possessions.  Judy described her as being “paranoid”.  It seemed that she was having hallucinations.  She believed that she saw things which did not actually exist.

30. [30]
    It was difficult for Judy to deal with her. She took her to doctors. They thought that a drug she was taking, called Cipranil, may have caused the problems. She stopped taking it, and the problems with the hallucinations got better. However, she was still not her usual self. The personal relationship between the two of them started to deteriorate. Both of them became unhappy.

31. [31]
    Judy thought that her mother might have dementia, caused by Alzheimer’s’ disease. She saw her general practitioner, Dr Knott, to whom Mrs Taske had been going since April 2003.  He had an interest in geriatric medicine, and treated many elderly patients.  He said that he never saw the symptoms reported by Judy.  In his opinion, at all times, up to the present, Mrs Taske has had no dementia.

32. [32]
    A psychiatrist, Dr Joyce Arnold, saw Mrs Taske on 28 July 2005, “for the purposes of a psychiatric assessment and provision of a report to assist Mrs Taske in legal matters”.  She expressed the opinion that there was no evidence of dementia or any psychiatric illness.  She said that:  “There is no evidence of dementia or any psychiatric illness.  Short term memory deficit is minimal and may be diagnosed as benign forgetfulness of old age”.  Dr Arnold went on to explain that it was possible that the symptoms that Judy was alarmed about may have been a short-term loss of functioning, perhaps a delirium secondary to her medical condition.

33. [33]
    For whatever reason, it should be accepted that Mrs Taske had some mental disturbances after the middle of 2004, which were not permanent.  It is likely that her forgetfulness was permanent, and sufficient to cause friction between herself and Judy.  There was a crisis between them when Mrs Taske wrongly accused her of taking some of her ornaments—they were china kookaburras.  The fuss was so great that Robyn was contacted.  Robyn then rang the police, who attended the house.

Relationship Breakdown

34. [34]
    Around that time, their relationship completely broke down. Judy wanted her to leave the house. Mrs Taske wanted her $100,000 back. 

35. [35]
    Letters record some of those events. On 21 March 2005 Judy wrote a long letter.  It is not addressed to anybody—perhaps she wrote it to her solicitors.  The letter records, and it should be accepted, that Judy herself was not in good health during 2005.  She is a diabetic.  She still suffered from the after effects of serious injuries in a car accident.  Her letter concluded:

“…What has happened over the last month or so, all the attacks, abuse and vitriol, has been so distressing and just too hurtful for me to cope with any more.  In the past, I guess I would have been able to handle it with much more ease, but my doctors have made me realise that I am not as strong as I once was and much more fragile.  If I have to cut myself off to avoid more pain, then so be it, I will do what I have to do to survive.  I would rather have my health back and my sanity than any amount of money.

My only hope is that mum can understand.”

36. [36]
    In July 2005, solicitors became involved. A letter of 4 July 2005 on behalf of Mrs Taske, said this on 4 July 2005:

“We understand that you have now advised Mrs Taske that she is required to vacate the premises.

As you may appreciate, Mrs Taske is not presently in a financial position whereby she is able to obtain alternate financial accommodation for herself.  As you are also aware, Mrs Taske provided the sum of $100,000.00 to you to assist with the purchase of the property at 11 Ballantyne Court, Highfields and the agreement was that she was entitled to continue to reside in the dwelling.

Mrs Taske instructs that she is prepared to vacate the premises upon payment to her of the sum of $100,000.00 together with interest on that amount for the period that the funds have been used by you and until such payment is made.

We understand that the premises have substantially increased in value since originally purchased and Mrs Taske does not presently seek any share of the capital increase providing that payment of the moneys and interest is made to her in a timely way.

Our client appreciates that you will not necessarily have the appropriate funds available at your disposal and that alternative arrangements may need to be made to attend to such payment. …”

37. [37]
    Judy’s solicitors responded on 11 July 2005:

“Deterioration of living situation

Since drafting the enclosed document, the living arrangements have worsened.  I am instructed that Mrs Taske has been accusing my client of stealing her possessions (specifically, jewellery) and that this is placing further strain on a difficult situation.  My client does not believe your client is acting out of malice, but believes that she is suffering from dementia or other similar mental illness.

I am instructed that during a telephone conversation with your client’s other daughter (my client’s sister Robyn,) Mrs Taske found the items of jewellery that she had accused my client of stealing.  Mrs Taske then accused my client of hiding these items.

Mrs Elliott instructs that her sister Carol has also been accused of stealing the same items.  My client reiterates her concerns over your client’s mental health.

Remedy

My client cannot not allow the situation to deteriorate further.  I am instructed that a removalist company will be attending my client’s premises at 8.30 am 12 July 2005 (tomorrow) to remove Mrs Taske’s belongings and take them to a secure storage facility.  Immediate arrangements for Mrs Taske’s departure from my client’s home will need to be made.  My client suspects that Mrs Taske has made preliminary arrangements to go to Robyn’s house, however, is not sure what (if any) long term arrangements have been made for her.

Whilst my client requires immediate steps to be taken to find new accommodation for Mrs Taske, she is prepared to allow her to remain in her home until 5.00 pm, Thursday 14 July 2005.  In the event alternative arrangements cannot be made by this time, my client will have to consider having Mrs Taske hospitalised.

Whilst this may appear to be an extreme measure, my client does not feel safe leaving Mrs Taske alone at home.  Both my client and her husband have commitments to attend to on Friday 15 July that will require significant periods of absence from their home.  Given that there will be no one at home to look after or supervise Mrs Taske, it is imperative that alternative arrangements are made by this time …”

38. [38]
    On Tuesday 14 July 2005, Judy arranged a removalist, and Mrs Taske went to stay briefly at Carol’s house.  With the assistance of a social worker, she then moved into the retirement village. Mrs Taske continues to live at the retirement village.  Judy continues to refuse to repay the $100,000.  Her husband David died in April 2006, and she is the sole owner of the house.  It is agreed that the house is worth $450,000.

Discussion

39. [39]
    Mrs Taske lived with Judy and David for about two and a half years, up to 14 July 2005.  The last year became increasingly distressing for each of them.  Neither was at fault.  Judy, not in good health, did her best in increasingly difficult circumstances.  Mrs Taske’s mental condition was not her fault.  Even when that settled, the relationship continued to deteriorate.  In the end, it became inevitable that Mrs Taske would have to live somewhere else.  The intentions and expectations of each side were brought to an end much earlier than they had anticipated.

40. [40]
    (When Mrs Taske first went to live in Toowoomba, it was expected, from a statistical point of view, that she might live for about 13 ½ years.  By the end of 2005, she would have expected to live for about another 10 ½ years.)

41. [41]
    Was the $100,000 a gift, which cannot be recovered? The facts show clearly enough that it was not simply a gift. It is true that Mrs Taske never expected to have an interest in the house.  It is also clear that the $100,000 would not have been paid, but for the expectation of living permanently with Judy.  It was a payment that was far greater than any previous assistance that had been given to her sisters.  The letter to Suncorp, and the will, recognise the possibility that the money was not simply an outright gift.  In return, there was an expectation that she would continue to live with Judy.  Even if Judy and David could have bought the house without her $100,000, that fact would not have diminished the importance of the $100,000, and the central reason why Mrs Taske paid the money – to achieve a house for the years that all three of them expected that she would spend with them.

42. [42]
    It was submitted for Mrs Taske, that the arrangement was made by her, while she was vulnerable, and that Judy took an unconscionable advantage of her weaker position. If that were so then the court would have power to interfere, to protect her. However, it does seem, on balance, that Judy did not take any improper advantage of her mother. She was in good mental and physical health, understood what she was doing, and expected to receive the considerable benefit of living in Judy’s home. The court has no power to upset that arrangement. Rather, it is necessary to consider other powers which the court might exercise.

43. [43]
    The courts have often have to deal with the break up of family or de facto relationships, where a party makes a claim for the recovery of money, or other benefits, which has been contributed because of the relationship.  A leading decision in this country is that of the High Court in Muschinski v Dodds (1985) 160 CLR 583.  The court recognised that it could impose a constructive trust after the failure of a joint venture between the parties.  In that case, that was because it would be unconscionable for the man to assert his legal entitlement without recognising the considerable financial input from the woman.  The couple had been in a de facto relationship, and the woman had contributed to it.  There was no express or implied agreement, arrangement or understanding between the parties that they should hold their legal interests upon trust for themselves in shares corresponding to their respective contributions.  However, regardless of the parties’ intentions, it was held that a constructive trust might arise when the common intention of the parties was based on the expected continuation of a relationship between them, and that relationship failed without “attributable fault”.

44. [44]
    Where a relationship fails without fault, the observations of Deane J in that decision are apposite:

“Where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that other parties should so enjoy it … equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him to do so.

In circumstances where the parties neither foresaw nor attempted to provide for the double contingency of the premature collapse of both their personal relationship and their commercial venture, it is simply not to the point to say that the parties have framed that overall arrangement without attaching any condition or providing any safeguards specifically to meet the occurrence of that double contingency.  As has been seen, the relevant principle operates upon legal entitlement.  It is the assertion by Mr Dodds that his legal entitlement in the unforeseen circumstances which arose on the collapse of their relationship and planned venture which lies at the heart of the characterisation of his conduct as unconscionable.  Indeed, it is the very absence of any provision for legal defeasance or other specific and effective legal device to meet the particular circumstances which give rise to the need to call in aid the principle of equity applicable to preclude the unconscionable assertion of legal rights in a particular class of case.” (At pp 620 and 622.)

45. [45]
    That approach in principle was affirmed by all members of the High Court in Baumgartner v Baumgartner (1987) 164 CLR 137.

46. [46]
    A recent Queensland decision provides a good example of the application of those principles.  It is Sweetenham v Wild [2005] QCA 264.  Mr Sweetenham was an elderly widower who was left alone in the family house, in Victoria.  His daughter had moved to Queensland.  Mr Sweetenham sold the house, gave some gifts to his sons, and flew to Queensland to join his daughter.  They found a house which suited their purposes.  It had a separate granny flat which was suitable for Mr Sweetenham.  He could move freely between that and the main house, and enjoyed the company of his daughter, her husband, and their children.

47. [47]
    While that arrangement was still a happy one, Mr Sweetenham, in effect, gave the house to his daughter.  That is, he provided almost all the money needed to buy it, and then had it transferred into her name, subject to his right to reside in it for his lifetime.

48. [48]
    Shortly after the transfer, there was a serious family dispute. Mr Sweetenham did not wish to continue living in such a hostile environment.  He bought a unit in a retirement village elsewhere.  He had to borrow money to do that.  The court found that the relationship with his daughter had irretrievably broken down, without any attributable blame.

49. [49]
    The court noted the presumption, that a parent would intend to make a gift to a child. Justice Atkinson put the matter this way:

“… the inference of advancement of (a gift) may also be displaced where the common intention of the parties, which was consistent with the presumption of (a gift) was dependent upon a continuing state of affairs or relationship or common endeavour.  When that common endeavour breaks down, the presumption of (a gift) may no longer apply.  The difference can be seen by comparing the gift of money made to (the sons) compared with the gift made to (the daughter) of a house in which Mr Sweetenham could also reside in a granny flat while enjoying the advantages of living in a family environment and being looked after by his daughter and her family as he aged.  The gifts to (the sons) were absolutes.  However, the gift to (the daughter) was dependent upon the ongoing relationship or joint endeavour.  If the joint endeavour failed, then a constructive trust may arise.  Counsel for the respondent conceded on the appeal that this was an appropriate case to impose a constructive trust.  That concession was correctly made.”

50. [50]
    In that case, Atkinson J went on to say, that Mr Sweetenham was entitled to a proportionate share of the house property, relative to his capital contribution to the property.  However, what he sought was merely repayment of his original contribution, together with a modest rate of interest from the time of the breakdown of the relationship.  To this, he was undoubtedly entitled.  The other members of the court agreed.  It should be noted that Mr Sweetenham stayed in the granny flat from June 2000 to October 2004.  The fact that the relationship was successful for over four years did not disentitle him from recovering his money.  Interest was awarded from the time of the breakdown.

Conclusion

51. [51]
    The same result should apply in this case. Mrs Taske has always asked for the return of the $100,000. She never believed, or asserted, that she was entitled to a share in the house. That was an understandable claim by her legal advisers. She should recover the $100,000. Judy has had the use of that money, at a time when house prices in south‑east Queensland have been rising substantially.  There should be a moderate award of interest, since July 2005.  The sum of $20,000 is appropriate.

52. [52]
    These are the orders of the court (subject to any further submissions about costs):

1. (a)
   Declare that the defendant holds her legal ownership of the house properly at 11 Ballantyne Court, Highfields, Queensland, on trust to pay the plaintiff the sum of $120,000.

2. (b)
   Liberty to apply for any further orders necessary to give effect to these reasons

3. (c)
   Order that the defendant pay the costs of and incidental to these proceedings to be assessed, on the standard basis.