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- Rogers-Falk v Gurney & Ors[2017] QDC 131
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Rogers-Falk v Gurney & Ors[2017] QDC 131
Rogers-Falk v Gurney & Ors[2017] QDC 131
DISTRICT COURT OF QUEENSLAND
CITATION: | Rogers-Falk v Gurney & Ors [2017] QDC 131 |
PARTIES: | ANTHONY ROGERS-FALK (plaintiff) v BRIAN GURNEY (first defendant) RENEE GURNEY (second defendant) CHRISTOPHER GURNEY (third defendant) STEVEN BECKER (fourth defendant) |
FILE NO: | 4611/14 |
DIVISION: | Civil |
PROCEEDING: | Claim |
ORIGINATING COURT: | District Court at Brisbane |
DELIVERED ON: | 19 May 2017 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 15-17 May 2017 |
JUDGE: | Kent QC DCJ |
ORDER: | The action is dismissed. |
CATCHWORDS: | EQUITY – EQUITABLE REMEDIES – SPECIFIC PERFORMANCE – where the parties contracted to purchase a large parcel of land consisting of four lots over two titles – where, due to the plaintiff’s inability to obtain finance, the written agreement, which listed the plaintiff as a buyer, was terminated – where it was alleged by the plaintiff that an oral agreement was formed between the parties – where the property was then purchased by the defendants, pursuant to a written agreement – where it was alleged by the plaintiff that, under the oral agreement, he was entitled to a beneficial interest in the property – where the defendants then sold one lot to the plaintiff pursuant to a contract subsequently terminated for the plaintiff’s inability to raise finance – whether the plaintiff was entitled to specific performance of that contract – whether the plaintiff was, in lieu of specific performance, entitled to equitable damages EQUITY – TRUSTS AND TRUSTEES – IMPLIED TRUSTS – CONSTRUCTIVE TRUSTS – where it was alleged the plaintiff had made contributions to a mortgage relating to property purchased by the defendants – where the plaintiff had paid a small deposit relating to the purchase of the property – where the plaintiff had contributed to mortgage repayments – where the later contributions had been held in a trust account of the defendants’ lawyers – whether a constructive trust should be imposed over the property, to reflect the plaintiff’s alleged contribution EQUITY – TRUSTS AND TRUSTEES – IMPLIED TRUSTS – RESULTING TRUSTS – WHEN ARISING – CONTRIBUTIONS – where the parties contracted to purchase a large parcel of land consisting of four lots over two titles – where, due to the plaintiff’s inability to obtain finance, the written agreement, with the plaintiff as a buyer, was terminated – where the property was then purchased by the defendants, pursuant to a written agreement – where the plaintiff had paid a small deposit relating to the purchase of the property – where the plaintiff had made contributions to mortgage repayments – where the later contributions had been held in a trust account of the defendants’ lawyers – whether a resulting trust arose in favour of the plaintiff, under which he had a beneficial interest EQUITY – TRUSTS AND TRUSTEES – EXPRESS TRUSTS CONSTITUTED INTER VIVOS – DECLARATION OF TRUST – NECESSITY FOR INTENTION – where the parties contracted to purchase a large parcel of land – where, due to the plaintiff’s inability to obtain finance, the written agreement, with the plaintiff as a buyer, was terminated – where it was alleged by the plaintiff that an oral agreement was formed between the parties – where the property was then purchased by the defendants, pursuant to a written agreement – whether there was an intention, on the behalf of the defendants, to create a trust in favour of the plaintiff – whether there was an express trust, under which the plaintiff had a beneficial interest in the property Property Law Act 1974 (Qld), s 11 Calverly v Green (1984) 155 CLR 242; [1984] HCA 81, cited Canehire Pty Ltd v Themis Holdings Pty Ltd [2014] QCA 296, considered Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78, considered Peterson v Hottes [2012] QCA 292, considered Turner v Dunne [1996] QCA 272, considered |
COUNSEL: | B Hall for the plaintiff R Anderson QC for the defendants |
SOLICITORS: | Robinson Locke Litigation Lawyers for the plaintiff McInnes Wilson Lawyers for the defendants |
Nature of the Claim
- [1]This action concerns the parties’ interests in real property comprising approximately 30 hectares of rural land at 146 Musch Road, Stockleigh, a rural locality within Logan City in Queensland (“the property”). The land is comprised of four lots on two titles (lots 371 to 374).
- [2]The plaintiff claims a declaration that the defendants hold on trust in his favour a beneficial interest in one-sixth of the property, together with consequential orders that the interest be transferred to him; alternatively, an entitlement to specific performance of a contract to purchase one of those lots (lot 372), comprising 8.09 hectares. In lieu thereof, he seeks equitable damages in the amount of $172,056.
- [3]Alternatively, the plaintiff seeks a declaration that the defendants hold certain money on trust for the plaintiff; and consequently, the defendants’ holding of the disputed property is subject to a constructive trust in favour of the plaintiff to reflect the proportion of the plaintiff’s contribution (presumably, to its acquisition).
- [4]The parties helpfully tendered a bundle of documents by consent, which were received and marked collectively as Exhibit 1. The bundle contains the pleadings as well as relevant documentary exhibits. The plaintiff and defendants all gave evidence and were cross examined. Ms Hilton, a witness referred to below, was called by the defendants.
Background
The First Contract
- [5]During late 2013, the plaintiff was in the process of arranging settlement of his affairs with his previous spouse, he having separated prior to divorce. This involved coming to an agreement about their financial arrangements, during which period he had restricted access to liquid funds. He had entered into a new relationship with Lenka Hilton, who is the daughter of Brian Gurney (the first defendant). The three people were interested in purchasing real property. The plaintiff’s business is as a brick-laying contractor, and he had regular income from that source, although he was not without financial difficulties.
- [6]Thus, on the evidence, the plaintiff, Ms Hilton and the first defendant discussed purchasing such a property and it was agreed to make an offer to purchase the land outlined above. The plaintiff conducted negotiations with the seller (the Public Trustee). The contract price was $950,000. However, the plaintiff and Ms Hilton were not able to obtain finance and thus the contract could not proceed. Therefore, the parties discussed alternative means of going ahead with the purchase.
The Second Contract – Meeting, Shearer’s Arms
- [7]The first defendant spoke with the second to fourth defendants (his daughter, son and son-in-law) with a view to involving them in the transaction and it was decided that the matter could proceed in that way.
- [8]The parties met at the Shearer’s Arms Tavern in Logan City on 13 February 2014 to discuss the matter. It seems the defendants had already had private discussions.[1]All of the parties (the parties to the action, together with Ms Hilton) were present.
- [9]The plaintiff claims that the agreement from that meeting was that the defendants would purchase the land for the benefit of all of the parties, but would hold one-third of it on trust for the plaintiff and Ms Hilton. The purchase was to be financed by a loan, to which all parties would contribute equally. Further, there was agreement as to how to treat the deposit that had been paid under the first contract. This had been paid initially by the plaintiff, half of which ($5,000) was later paid to him by the first defendant.
- [10]The way in which the plaintiff describes these arrangements is that he and Ms Hilton were styled as “silent partners”. On the plaintiff’s case, this refers to he and Ms Hilton being entitled to a one-third share in the property, reflective of their one-third of responsibilities, despite not being contracting parties and not being mentioned in any legal documentation concerning the purchase. The details of these arrangements are contested by the defendants. Unfortunately, there is no written evidence of whatever agreement was reached on that occasion. It is this meeting at which, on the plaintiff’s case, his interest in the property arose.
Deed of Rescission/Replacement Contract
- [11]Because of the plaintiff and Ms Hilton’s inability to raise finance, they were not able to remain as contracting parties. Therefore, subsequently, the first contract was, by consent of all parties, rescinded pursuant to a deed of rescission produced by the Public Trustee. The plaintiff, Ms Hilton and Mr Gurney signed the deed, in which they were described as “the buyer”. The deed attached an unsigned copy of the new contract naming the defendants as purchasers, dated 21 February 2014. The deposit for the first contract was assigned to the replacement contract.[2]The deed is also signed by all of the defendants under the collective description of “new buyer”. Subsequently, the replacement contract was settled and the defendants became the registered proprietors.
- [12]The plaintiff always had a primary interest in eventually taking ownership of a single lot, primarily lot 372. This was intended to have occurred jointly with Ms Hilton, by way of a subsequent sale to them by the defendants. However, a number of weeks after the contract settled, in mid to late April 2014, the plaintiff and Ms Hilton separated, which brought to an end the intention for them to jointly purchase lot 372. The plaintiff, however, sought to reach agreement with the defendants to continue with their arrangements. He had been contributing a one-third share to the payment of the mortgage in the interim.
Second Meeting
- [13]A second meeting therefore took place at the defendants’ family business, Uwin Wholesale Cars, in late April or early May. The plaintiff and the first, second and third defendants were present, although Christopher Gurney took little part in proceedings. An oral agreement was reached. The plaintiff contends that this was to the effect that, Ms Hilton having apparently ceased to be part of the scheme, he would now hold a one-sixth interest in the land on trust; he would continue to make contributions to his share of the mortgage repayments; and the defendants would enter into a contract for the sale to him of lot 372 for $375,000 to realise his beneficial interest. This price was said to reflect his participation in the arrangements up to that time; the appraised value of lot 372 was in the order of $550,000, but the price to him was reduced by $200,000 initially to reflect his interest, however this was altered to a reduction of $175,000.[3]This version is contested by the defendants, as to whether there was ever any intent for any of the property to be held for the plaintiff on trust such as to explain the price reduction. They explain the reduction in price by (a) a desire to sell a lot to reduce their mortgage; and (b) the reduction was to minimise capital gains tax, rather than as compensating him for his contribution or to recognise any proprietary interest.
Contract for Lot 372
- [14]A contract for the sale of lot 372 to the plaintiff was executed on 10 June 2014, subject to finance. The plaintiff was again unable to obtain finance. He sought and obtained from the defendants an extension to the time for him to do so, but was still unsuccessful and thus the contract was terminated by the defendants in writing on 27 August 2014. The termination was lawful.
- [15]As at the trial, the plaintiff had contributed significant amounts of money to the mortgage, said to reflect his share, or almost his share of the mortgage obligations. However, the more recent payments had been made to the defendants’ solicitors’ trust account rather than to the mortgagee. He made contributions initially until 2 May 2014 (around the time of the second meeting), then recommenced after these proceedings were on foot.
Section 11 of the Property Law Act 1974 (Qld)
- [16]Pursuant to section 11 of the Property Law Act 1974 (Qld), a declaration of trust concerning land must be manifested and proved in writing, however this does not extend to resulting, implied, or constructive trusts. One of the points in issue, therefore, between the parties is the correct styling of whatever arrangements may be found to have existed between the parties. The plaintiff contends the relevant beneficial interest is within the exception in s 11(2), either a constructive or resulting trust. The defendants contend the reverse and say that s 11, together with the lack of any writing signed by any of the defendants declaring the trust, is a complete answer to the plaintiff’s action if, for example, an express trust were found to exist.
Issues
- [17]The issues in dispute therefore include the identification of the terms of the oral agreement reached between the parties in February 2014; if the terms of that agreement amounted to a trust in respect of land, is s 11 an obstacle thereto; what were the terms of any agreement reached at the meeting at the car sales yard in May 2014; what was the effect of the termination of the lot 372 contract; is the plaintiff entitled to specific performance thereof; and have the defendants ever held one-sixth of the property on trust for the plaintiff?
First agreement
- [18]The plaintiff says that he and Ms Hilton were “silent partners” in the initial purchase to the extent of a one-third interest held by the defendants on trust for them. This emerges from the effect of the meeting on 13 February 2014. The defendants contend there was never any intention that the plaintiff’s interest was held for him on trust. Rather, it is said the outcome of that first meeting was that it was agreed the first contract would be rescinded; that the defendants would purchase the land; and the plaintiff and Ms Hilton could subsequently purchase lot 372 from them, originally for the discounted price of $250,000 (although it is not clear whether that price was agreed at the first meeting).[4]
- [19]The defendants submit that it is clear the plaintiff was not to be given any interest in the overall property. The plaintiff was well aware that he was not able to obtain finance at that stage.[5]He needed the assistance of the first defendant.[6]Conversely the defendants, by the time of the first agreement, had agreed amongst themselves to purchase the land without involving the plaintiff or Ms Hilton.[7]The evidence of Ms Hilton was that:
“Renee basically told us that our names would have to come off the contract for them to secure the block. And I know, myself, personally, I was quite happy to do that. And then we discussed buying a block after the property had settled… Dad and Renee said that after everything is settled, then if you want to buy a block off us then, you can do that, once you get finance.”
The plaintiff “was a bit annoyed that he had to sign himself off the contract.”[8]
- [20]The plaintiff gave evidence about the first meeting and the circumstances of the defendants becoming the new purchasers of the land. He said
“I wasn’t overly concerned at the time. I thought, you know, I just wanted my block at the end of the day”.[9]
He referred several times to the fact that he and Lenka wanted “the block”.[10]Thus, the defendant submits that the plaintiff was in truth focussed on obtaining the particular block he was interested in, rather than considering he was entitled to an equitable interest in the overall property. As detailed below, this is a powerful submission.
- [21]The plaintiff set out the effect of the discussion at the meeting as follows:
“Well we both sort of come up with the idea that we wanted the block and then we’d sort of worked off what we thought the block was worth. We were – we’d agreed that we’d opt out at a lesser price to buy the block and then we were off and then whatever was made from thereon was between the other parties.” (emphasis added)
This is said by the defendants to represent a concession that the plaintiff was really only attempting to achieve an interest in the block he was interested in, and runs counter to the idea that there was a wider interest in the totality of the land, or any entitlement thereto.
- [22]The plaintiff described the discussions with the first defendant after the inability to get finance as follows:
“…with that Brian came back, Brian had basically said that ‘it’s easier if we – I finance it with the kids, because everything’s tied up with them.’ He said, ‘you hop off as – you and Lenka hop of as a silent partner. We all just pay our one-sixth share or one-third shares at the time, and, you know, you’ll still get your block. Don’t worry about it.’ And I said, ‘well, ok. Well I’m not really happy about it.’ But you know, we’d agreed on, well, ok, that was the only way it was going to happen, that’s the way we went with it.”[11]
The defendants submit, correctly in my view, that this is what occurred, i.e. the plaintiff and Ms Hilton withdrew from the contract on the understanding of an offer to later buy a block. This is consistent with the evidence of the second defendant who, in my view, was the most precise historian of what had occurred at the two meetings. She said that the effect of the meeting was that the plaintiff and Lenka could buy a block of land for $250,000; the defendants would not entertain Tony’s other ideas; Tony was not happy but the defendants were not agreeable to his requests. The requests referred to were along the lines that, firstly, he wanted the three groups of two[12]to have one block each and then split the fourth, sell it and split the profits; or he wanted a one-third share of the entire land. These were the proposals which had been rejected and the second defendant said “when I left that meeting, it was clear in my mind that they were going to buy the block together for $250,000 and that was it.”[13]
- [23]The plaintiff submits there was a background of an obligation to give the plaintiff fairness in the lead up to the first meeting,[14]however, when this proposition was put to the second defendant, she flatly denied it.[15]It was also denied by Mr Becker.[16]When the first defendant was asked about fairness, he indicated a desire to sell Lenka a block, because family members help each other, and further, the plaintiff was Lenka’s partner at the time.[17]
- [24]The plaintiff submits the conclusion as to the effect of the first meeting at the Shearer’s Arms Tavern was, that by the end of the meeting he had not committed to purchasing lot 372 and there was no agreement he was tied to from this point, although he did have a particular interest in that lot. He submits that he understood the first contract had to come to an end with the deed of rescission, but he and Ms Hilton were still “in” on the transaction.[18]The plaintiff submits, in effect, that he had paid the initial deposit on the property and agreed to pay mortgage payments into the future. The property was thus acquired partly by the plaintiff’s efforts and he wanted to be part of the ongoing venture. The indications that the plaintiff was paying one-third of the mortgage repayments (on behalf of himself and Ms Hilton) as one-third, collectively, of the enterprise is indicative, so it is submitted, of an intention both he and Ms Hilton were entitled to a one-third share in the property.
- [25]In my view, this is a difficult proposition for the plaintiff to succeed on, particularly in light of the passages of evidence referred to above. It seems to have been the plaintiff’s view that he would get a particular block and at that stage, himself and Ms Hilton would be removed from the venture. This is, in my view, simply not consistent with the idea that the parties who were to become the registered proprietors would hold the property on trust for themselves and the plaintiff and Ms Hilton in shares of one-sixth each. I note that the allegation that the first defendant had told the plaintiff he could be a “silent partner” in the transaction is denied by the first defendant.[19]When asked to explain what being a “silent partner” meant, he did not assert an equitable interest in the whole of the land.[20]
- [26]The plaintiff submits that, if it is established that after the first meeting he had a one-sixth interest in the property then that interest is not liable to be extinguished by subsequent events. He submits such an interest does arise as a result of a constructive trust imposed on the parties by the circumstances.
Discussion
- [27]In my view, as set out in the narrative above, the plaintiff cannot discharge his onus of proof to establish the factual circumstances for which he contends. As outlined above, the proper findings, in my view, are that the plaintiff, the first defendant and Ms Hilton were parties to the first contract; this failed for lack of finance; the other defendants were then brought into the transaction; and the other defendants indicated clearly that they did not wish to be part of a transaction involving participation by the plaintiff and Ms Hilton, partly because of the unlikelihood of being successful in an application for finance, particularly with Ms Hilton involved.[21]
- [28]Thereafter, the defendants, in particular the second defendant, took the view that as the legal contracting parties, the four defendants were the people taking the risk of incurring a mortgage debt and any other risks associated with the property, and thus it was owned by them to the exclusion of the plaintiff and Ms Hilton.[22]Moreover, the participation of the plaintiff and Ms Hilton to that point, and, indeed, the status of Ms Hilton as a family member, drove the defendants to the position that, as at the conclusion of the first meeting at the Shearer’s Arms Tavern, the defendants would continue as the contracting parties, but after the transaction was concluded, the plaintiff and Ms Hilton would be entitled to buy one of the blocks of land at a discounted price. From the defendants’ point of view, this would be advantageous because it would be a way to easily reduce the defendants’ mortgage obligation; and the discounted price was satisfactory, because it avoided a capital gains tax obligation. I accept this version of events and thus do not accept that there was an agreement that the plaintiff would have an ongoing equitable interest in the whole parcel of land, whether as silent partner or otherwise.
- [29]In order to make good his argument as to a constructive trust, the plaintiff submits that such a trust can be applied retrospectively and irrespective of the parties’ intentions. The plaintiff’s counsel referred to Canehire Pty Ltd v Themis Holdings Pty Ltd[23] and Turner v Dunne.[24]The plaintiff also refers to Peterson v Hottes,[25]per Muir JA, to the effect that a constructive trust may be imposed:
“… regardless of actual or presumed agreement or intention ‘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.’”[26]
He notes passages from Muschinski v Dodds,[27]whereby in an appropriate case a constructive trust may be imposed because equity will not permit a party to assert or retain the benefit of relevant property to the extent that it would be unconscionable for him to do so. Muir JA also referred to unconscionability.
- [30]Thus, in order for the plaintiff to make good his submission that a constructive trust arises, he must be able to point to some unconscionable behaviour by the defendants. In essence, he must make good the submission that it would be unconscionable for the defendants to retain the entire legal and equitable estate to the subject land and thus deny him any interest therein. In my view, given the findings I have made as to the content of the agreement reached on the first occasion at the Shearer’s Arms Tavern, it is not demonstrated that this course of conduct by the defendants would be unconscionable. In my view, the most cogent evidence as to the true effect of the arrangements from the first meeting is that of Ms Gurney where she said that in return for paying the mortgage contribution, after the property was acquired by the defendants, he was (at the second meeting) given a cheap price, that is, the right to buy lot 372 for $375,000 when its value was between $500,000 and $550,000. The benefit to the defendants was the ability to reduce the mortgage while avoiding any capital gains tax liability.[28]
- [31]What is submitted by the defendants is that the parties came to a commercial arrangement which was fair. The plaintiff was simply not in a position to achieve a finance approval. Thus, he and Ms Hilton could not be part of the replacement contract. Nevertheless, the defendants offered them, and ultimately the plaintiff alone, the opportunity to buy one of the blocks at a reduced price. There were advantages for both sides in this arrangement. The price of this advantage to the plaintiff was his ongoing contribution to the mortgage payments on the property in the meantime. This is logical – the plaintiff continued to contribute to the mortgage until the point where the amount of the repayments was reduced because of the sale; and the consideration he received for that contribution was the reduction in price on the lot with which he was concerned.
- [32]In my view, the plaintiff has not demonstrated that there is anything in these arrangements which is unfair. There is thus nothing that amounts to unconscionable conduct. It follows that the plaintiff is not able to demonstrate that a constructive trust should be imposed such as to avoid the consequences of unconscionable behaviour by the defendants.
- [33]As I have not found that a trust arises in the relevant circumstances, it is not necessary to further consider s 11 of the Property Law Act.
Second agreement
- [34]The second agreement was reached at the meeting in late April or early May at the first defendant’s business premises. It followed the breakup of the plaintiff’s relationship with Ms Hilton, which had occurred at Easter in 2014; that is, apparently, sometime after 21 April 2014. The defendants correctly submit that, after that separation there was no further intention for the plaintiff and Ms Hilton to jointly purchase lot 372. The plaintiff understandably approached the defendants to see what effect this change in circumstances would have to the arrangements he had in place. The plaintiff contends that the effect of that discussion was that the defendants would now hold a one-sixth interest in the land on trust for him; he would continue to make contributions in respect of his share of the repayments; and the defendants would enter into a contract for the sale to him of lot 372 for $375,000 to realise his beneficial interest.
- [35]The defendants contend that there was no such intention concerning the plaintiff’s alleged interest. Rather, as Ms Hilton was no longer part of the arrangements, the property would be offered to him alone on the basis that he continue to meet one-sixth of the repayments until the proposed contract was completed. As outlined above, I accept the defendants’ submissions on this point.
Effect of the termination of the lot 372 contract
- [36]As outlined above, the contract was entered into on 10 June 2014 subject to finance. The plaintiff made attempts to achieve a finance approval but was unsuccessful. An extension of time was given to him, however, to no avail and by 27 August 2014 the contract was terminated by the representative of the defendants.[29]There is no suggestion that this was not a lawful and proper termination in reliance on the defendants’ contractual rights. It may well be, as the plaintiff’s counsel submits, that this incident, that is, the entering into of a contract for lot 372, which was then terminated as outlined above, would not have had the effect of extinguishing existing equitable interests in the subject property. However, the question is academic as I have found that the plaintiff had no such rights in the property.
Specific performance
- [37]The plaintiff then contends that, since his existing rights were not extinguished, specific performance of that contract is available. The difficulties with this proposition are that, firstly, the contract was properly terminated. Any rights thereunder were bought to an end by its lawful termination. There is simply no contract available to specifically enforce. In any case, I have found that there was no interest in the property created in the plaintiff’s favour, and therefore there are no persisting rights at equity to found such a remedy.
- [38]Further, it is, in my view, not established that the plaintiff has been and remains ready, willing and able to complete the contract. He was not ready, willing and able at the time, because he could not obtain finance. There is a letter, Exhibit 1, p 267, setting out a loan approval in principle as at 28 July 2016. That is, as the defendants’ counsel submits, somewhat broad and vague in its terms. There is no evidence that that circumstance persists to the present time other than the plaintiff’s somewhat broad oral evidence to similar effect at the trial. He also said he had bought another property that is about to settle; presumably this affects his financial position, but no details are given. There is no documentary evidence of any current finance approval. I am thus not satisfied that the plaintiff is ready, willing and able to complete the contract. This is, however, somewhat academic because, for the reasons I have outlined above, in my view, the plaintiff is not entitled to specific performance.
Did the defendants ever hold one-sixth of the property on trust for the plaintiff?
- [39]For the reasons outlined above, I find that there has never been such an interest created.
Relevant findings
- [40]I make the following findings relevant to the pleaded causes of action:
- (a)the plaintiff has not established any requisite intention for an express trust in his favour concerning a one-sixth interest in the property, whether on the occasion of the meeting of 13 February 2014 or at any other time;
- (b)a constructive trust does not arise unless it can be shown that it is necessary because the assertion by the defendants of their legal title to the property to the exclusion of the plaintiff is unconscionable, and in this case, there is no unconscionable behaviour such that the constructive trust contended for does not arise;
- (c)relevant circumstances to the conclusion in (b) above include the following:
- (i)the plaintiff’s contribution to the purchase price of the property was approximately .5 percent thereof, that is, a minimal contribution. Further, this contribution was later regarded by the parties as attributed to contributions to the mortgage payments, which entitled the plaintiff to purchase lot 372 at a discounted price, a contract which he indeed was able enter into;
- (ii)the mortgage repayments do not represent a contribution to the purchase price;[30]
- (iii)the arrangements at the Shearer’s Arms meeting did not include an agreement that the plaintiff had an interest in the whole property, as outlined above. Although it was unclear that the plaintiff and Ms Hilton were definitely to contract for lot 372, for a price of $250,000, the evidence is clear that the plaintiff would receive “the block”; see the references to the evidence outlined above;
- (iv)the arrangement that was agreed upon was as the second defendant outlined, and I accept her evidence in this regard. The plaintiff and Ms Hilton, later the plaintiff alone, contributed to the mortgage payments in return for the opportunity to purchase a lot at a discount price;
- (v)the plaintiff continued to have that opportunity after the second meeting, however, I again accept that there was no express indication of a one-sixth share of the property in his favour, nor is it unconscionable for the defendants to assert that position;
- (vi)pursuant to the arrangements, the plaintiff was given the opportunity to purchase lot 372 at a discounted price. It was no fault of the defendants that he was not able to and the contract was terminated lawfully;
- (vii)there was, in the premises, no unconscionable behaviour such as to require the intervention of equity;
- (viii)the discount offered to the plaintiff in the contract of 10 June was considerable. The parties were operating on estimates of value that resulted in the discount being between $125,000 and $175,000.[31]This was a potential benefit that far outweighed the plaintiff’s contribution to that point. This does not, however, compel any inference that the defendants were recognising a proprietary interest at that stage. The second defendant explained the advantages to the defendants in those arrangements;
- (ix)it is thus in the circumstances, not unconscionable for the defendants to retain the first three payments made by the plaintiff which secured the June contract. It would be unconscionable for them to retain the payments made later, from 2015 onwards. I note, however, that the defendants have retained those payments in their solicitor’s trust account and indicated a preparedness to return them;
- (x)Ms Hilton has been treated somewhat differently by the defendants and has continued to pay towards the mortgage on the understanding she would have a “share in the family investment”. In my view, this circumstance does not assist the plaintiff. She is treated differently as a family member, and her circumstances have been different from the plaintiff’s from the time of the second meeting onwards. It is not clear that the defendants recognise any proprietary interest for Ms Hilton; she is simply continuing to participate in the investment in an informal way.
- (d)As to a resulting trust; a resulting trust is imposed where a non-owner contributes to the acquisition of property;
- (i)in this case the proportion of the contribution was tiny, in the order of .5 per cent;
- (ii)this contribution to the acquisition was dealt with in any case when the parties treated it as being assigned to the payment of the mortgage;
- (iii)a resulting trust does not therefore arise.
- (e)specific performance is not available;
- (i)the contract was properly terminated and no longer exists;
- (ii)there are no persisting proprietary rights at equity founding such a remedy, that is, no one-sixth interest in the property attributable to the plaintiff;
- (iii)in any case, it is not established that the plaintiff is ready, willing and able to complete the contract;
- (iv)the matters set out above also produce the result that there is no occasion for an alternative award of equitable damages.
Other Matters
- [41]The defendant made submissions that the plaintiff was not a credible witness, for several reasons[32].These points have merit, but in the result it has not been necessary to make specific findings as to credit where the plaintiff’s evidence does not at its highest prove his case. I do accept the evidence of the defendants, particularly the second defendant.
Conclusion
- [42]In conclusion, for the reasons I have outlined above, the plaintiff has failed to demonstrate that he is entitled to any of the pleaded relief and in the circumstances, the action is dismissed. I will hear the parties as to any consequential orders.
Footnotes
[1] Exhibit 1, p244; evidence of the second defendant, T2-96 L5-15; evidence of the fourth defendant T2-46 L20-30.
[2] Exhibit 1, p165.
[3] T1-31 ll15-32
[4] See generally the evidence particularly of the second defendant, e.g. at T2-75.
[5] T1-21, l 28.
[6] T1-16, l 47.
[7] See the evidence of the second defendant, T2-75, ll 20-46; fourth defendant, T2-43, ll 20-35.
[8] T2-59, ll 20-36.
[9] T1-23, ll 14-15.
[10] T1-23, ll 30-46.
[11] T1-24, ll37-42.
[12] i.e. Tony (the plaintiff) and Lenka; Brian and Chris; and Renee and Steven
[13] T2-82, ll 1-35.
[14] Plaintiff’s submissions, paragraph 27.
[15] T2-81, ll 35-40.
[16] T2-47, l 16.
[17] T2-37, l 40 – T2-38, l 5.
[18] Plaintiff’s submissions, paragraph 33.
[19] T2-37, l 20.
[20] T1-38 ll10-20.
[21] E.g. evidence of Mr Becker at T2-43 ll20-31.
[22] Evidence of Ms Gurney at T2-74 ll33-40.
[23] [2014] QCA 296, [55].
[24] [1996] QCA 272, [9]-[10] and [18].
[25] [2012] QCA 292.
[26] At [31] quoting from Baumgartner v Baumgartner (1987) 114 CLR 137, 148.
[27] (1985) 160 CLR 583, 620.
[28] T2-87, ll 1-21.
[29] See Exhibit 1, pp 215-222.
[30] Calverly v Green (1984) 155 CLR 242.
[31] Although this may have been somewhat optimistic; see Exhibit 1, p258.
[32] Defendant’s written submissions, paragraph 28