Peterson v Hottes[2012] QSC 50

SUPREME COURT OF QUEENSLAND

1. The plaintiff is the mother of the defendant. The plaintiff claims that she provided $76,143.33 to the defendant in 2001 to assist her daughter in purchasing a house at Bridgeman Downs (the property). It is not in issue that at least $70,911.01 was put by the plaintiff towards the purchase of the property, but the defendant asserts that it was a gift. The plaintiff claims a beneficial interest in the property to reflect the contribution she made to the purchase price on the basis of either a resulting trust or a constructive trust. In the alternative, the plaintiff seeks either equitable compensation or an equitable charge. The defendant alleges the plaintiff is estopped from asserting either that the sum of $70,911.01 is repayable by the defendant to the plaintiff or that the plaintiff has an interest in the property.

2. There is also a claim by the plaintiff for the return of specified chattels (the cedar chest of drawers and the cedar wardrobe) which she claims to own. The defendant admits to possession of them, but claims she was given them by the plaintiff in the early 1990s. The claim in respect of other chattels was not pursued.

Witnesses

3. The main witnesses were the plaintiff and the defendant. Each of them holds strong views about the validity of her claim and that her perspective of the critical transaction is the right one. I consider, however, that each party has been guilty of some rationalisation of the events that were covered in the evidence, including the critical transaction. I gained the clear impression as I listened to both the plaintiff and the defendant that at the time the plaintiff provided the money that the defendant used in purchasing the property neither of them had given a lot of thought to the legal effect of what occurred or discussed with each other the implications for them of the payment either at that time or for the future. There were aspects of the evidence of each of the plaintiff and the defendant that I found difficult to accept, and the defendant particularly had a tendency to exaggerate or overstate her contributions to the joint household and to offer explanations or justifications for her conduct, rather than answering the questions that she was asked. Despite these reservations about the defendant’s evidence, I am not satisfied that this should result in simply rejecting the defendant’s evidence in preference for the plaintiff’s evidence. Where it is necessary to do so, I will therefore indicate which evidence I accept or reject, when making specific findings on issues of fact.

Family background

4. The plaintiff was born in 1930. She had two children, the defendant born in 1955 and another daughter Ranna born in 1953. The plaintiff trained as a chiropractor in about 1971 and thereafter worked as a chiropractor. She was widowed in 1980. After the statutory regime for registration of chiropractors was established, the plaintiff passed the examinations that enabled her to register as a chiropractor on 10 June 1982.

5. The plaintiff and her husband had lived in Mareeba. The plaintiff moved to Townsville in 1983 where Ranna and her husband were living. Neither the plaintiff nor her husband had ever owned a home. Ranna and her husband assisted the plaintiff to buy a house property (the Townsville property). Ranna and her husband were registered as owners with the plaintiff and organised the finance for the purchase.

6. After the plaintiff’s practice grew, the plaintiff took over making the repayments under the mortgage and also repaid Ranna and her husband the money they had put into the Townsville property. When the plaintiff had finished paying them back, the Townsville property was transferred into her name solely in February 1987.

7. When the defendant was pregnant in 1990, she and her partner commenced living at the Townsville property with the plaintiff. The defendant’s son was born in 1991. The defendant and her partner separated and the defendant and her son remained at the Townsville property.

8. The defendant did not return to paid employment after her son’s birth and received the sole parent’s benefit. The defendant undertook university studies and obtained her PhD in 1997.

9. The defendant did not pay rent or board to the plaintiff, but paid for half of the electricity and the telephone. The defendant shopped for her and her son’s groceries. The plaintiff and the defendant shared the cleaning and cooking of the evening meals. The defendant created some gardens and tended to them.

10. The mortgage over the Townsville property was paid out by the plaintiff in 1998.

11. The defendant had a contract as a teacher in the second half of 1998. She was then involved in a government project training indigenous artists and assisted in the setting up of a gallery for the artists.

12. In October 2000 the plaintiff suffered an injury to her right shoulder that impeded her work as a chiropractor. The plaintiff reduced her working hours and started receiving age pension payments from December 2000. She retired completely by 30 June 2001 and was reliant thereafter on the age pension as her primary source of income.

13. In May 2001 the defendant met Mr Szep when her employment at the gallery was about to end. Mr Szep suggested to the defendant that she move to Brisbane as there was a job available in the company that employed him.  The defendant visited Brisbane in June 2001 to check out the job and decided to accept the position.  The defendant suggested to the plaintiff that she go to Brisbane with the defendant and her son.  The plaintiff declined at that stage.  Although the defendant had offered for the plaintiff to relocate, there was no detailed proposal discussed by them at this time.

14. In early August 2001 the defendant and her son relocated to Bridgeman Downs to reside with Mr Szep and his two children. The defendant drove the plaintiff’s vehicle to Brisbane and had the use of it in Brisbane.

15. The defendant seeks a finding that the parties received benefits from one another during the 11 years that the defendant (and her son) lived with the plaintiff in the Townsville property, such that their contributions to the joint household should be considered equal at that stage. The relationship between the parties in Townsville provides the background to the transaction and subsequent events that are the subject of this proceeding. The issues in this proceeding do not require an accounting to be taken of all contributions by the plaintiff and the defendant in money and kind to the joint household in Townsville. In any case, the defendant overvalued her contributions to the joint household in Townsville.

Purchase of the property and sale of the Townsville property

16. A relationship developed between the defendant and Mr Szep. Soon after relocating to Bridgeman Downs, the defendant decided to purchase the property which adjoined Mr Szep’s property. She paid a part deposit of $200 on 12 August 2001. She entered into a contract dated 20 August 2001 for the purchase price of $278,000 with a settlement date of 14 November 2001.

17. The date for obtaining finance in the contract was 3 September 2001. The defendant did not apply for finance by that date.

18. The parties have different versions of how the arrangements came about for the plaintiff to sell the Townsville property and move to Brisbane.  It is uncontentious that the plaintiff missed the defendant and her son when they moved to Brisbane.  She spoke to them frequently on the telephone.  The defendant told the plaintiff that her son was unhappy and, when the plaintiff spoke to her grandson, he was subdued and did not say much at all.

19. The plaintiff states (at Transcript 1-30) that her daughter asked her during telephone calls to sell the house and explains “Well, as I said she had been mentioning in phone calls what a nice area Bridgeman Downs was and how it was a new development and the houses were really nice with very nice floor plans and she was sure I would like it, and then introduced the fact that she would like to buy the place next door to Paul Szep.” The defendant states (at Transcript 2-108) that she did not discuss the purchase with her mother until late August or early September 2001 after she had signed the contract.

20. The plaintiff states that her daughter asked her in a telephone call to sell her house to Mr Szep and that her daughter and Mr Szep visited Townsville for about three weekends, so that the plaintiff could meet him and they could discuss her selling her house to Mr Szep. The plaintiff states (at Transcript 1-30) that the defendant asked her if she would sell her house to Mr Szep and say that $25,000 had been paid as a deposit, so that he only needed to borrow $100,000.

21. The plaintiff recalls other statements made to her by the defendant (at Transcript 1-32):

“What was that?-- That she would pay me - she wanted me to put the whole hundred thousand dollars in the Bridgeman Downs house as a deposit, and I refused. I said I wanted to keep 50 thousand of that for my elder daughter Rana, and she said she couldn't do it for that.

Did she mention why she needed the hundred thousand dollars?--So she could meet the repayments. She said that the repayments of the mortgage would be too high if she didn't have the hundred thousand, and so I relented to a certain extent and said I would lend her the 70 thousand.

And was that the end of the discussion?-- No.

What else did she say?-- She said she would pay me back so that I could - if I didn't like Bridgeman Downs I could buy my house back. Paul only bought it to facilitate the Bridgeman Downs house and he would hold it for six months and if I wanted to buy it back and that I could, but that was predicated on Heidi paying me back the 70 thousand so that I would have the money to buy the house back.

What timeframe was that?-- Six months.

Six months? Was there any discussion as to what would happen if you didn't?-- Yes, if I liked Bridgeman Downs and stayed there Heidi said that she would have my name put on the title of the next house after she sold this present house.

Did she tell you why at all you couldn't have your name on this place?-- Because she wanted the first home owners grant and apparently that would have voided her getting it because I already owned a home.”

22. In relation to the discussion where the plaintiff states that the defendant said that if another property was purchased (after Bridgeman Downs) the plaintiff’s name could go on the title, the plaintiff concedes (at Transcript 1-33) that they did not discuss in what proportions they would share the ownership of such a property and the plaintiff “assumed it would be 50/50.” The plaintiff also concedes that no details were ever discussed between the defendant and her about how the defendant would unravel the arrangement with Mr Szep and put the plaintiff back as the owner of the Townsville property. The plaintiff is adamant that there was never any discussion between the defendant and her to the effect the money that she was putting into the property was a gift or an early inheritance.

23. This evidence of the plaintiff about her discussions with her daughter forms the basis of the allegation in paragraph 6 of the statement of claim that the parties had a common intention that if the plaintiff sold the Townsville property to Mr Szep and contributed $70,000 of the proceeds of sale to the purchase of the property, the defendant and the plaintiff would purchase the property and the plaintiff would live at the property with the defendant and her son, but if after living there for six months the plaintiff wished to return to Townsville, the defendant would repay the plaintiff and the plaintiff could repurchase the Townsville property from Mr Szep at the same price she had sold it and, otherwise, upon disposing of the property, the plaintiff and the defendant would purchase another residence in both names. I will use the expression “the claimed arrangement” to refer to the plaintiff’s pleaded claim as to what the parties’ common intention was at the time the plaintiff sold her property to Mr Szep and paid part of the proceeds of sale to the defendant to assist in the purchase of the property.

24. The defendant states that when she returned to Townsville she noticed that her mother did not seem very happy and that her mother said to her (at Transcript 2-109) “that she had changed her mind and that she wanted to come to Brisbane.”  The defendant states that she then suggested to her mother that she rent out her Townsville house and her mother responded that she did not want to rent out the house, because there were maintenance and repairs that needed to be done and it would affect her pension if she received rental from her house, so that she would prefer to sell her house.  The defendant states that her mother then said that if she sold her house that she wanted to give her some money, initially $50,000 and that she described that as “an early inheritance.” The defendant states (at Transcript 3-2) that her mother rang her between September and the settlement of the purchase of the property and said that she was going to give her a greater amount of $70,000, but did not give a reason for increasing the amount.  The defendant states (at Transcript 3-6) that she was not aware of the arrangements that her mother had made with Mr Szep about the sale of the Townsville property.  In fact, the defendant states that she did not become aware of the plaintiff’s arrangements with Mr Szep about recording a deposit of $25,000 in the written contract that was not to be paid, the costs of the floor sanding, and the plaintiff’s agreement with Mr Szep to buy back the Townsville property, until the plaintiff told her in 2002 when the defendant’s relationship with Mr Szep had broken down.  The defendant states (at Transcript 3-73) that Mr Szep was pressuring her to “go ahead” with the purchase of the property.   

25. The plaintiff sold the Townsville property to Mr Szep by contract dated 8 October 2001 that was in the standard form where most of the particulars of the transaction were written in by the defendant, although the defendant asserts she completed the form of contract at the direction of her mother. The plaintiff attended on her solicitor to sign the contract on 24 September 2001. The sale price was shown in the contract as $125,000 and there was provision for a $25,000 deposit. The plaintiff accepts that it was never intended that any deposit be paid. The true sale price was $100,000 and the plaintiff cooperated in showing the higher sale price to assist Mr Szep in obtaining a loan for the full amount of the true sale price. The contract also provided for a tenancy whereby the plaintiff was to lease the property for six months after settlement at a rent of $180 per week, but that was also not intended by the plaintiff and Mr Szep to be implemented.

26. Mrs Floyd had been employed as a chiropractic assistant by the plaintiff and was friends with both the plaintiff and the defendant. She visited the Townsville property a few weeks before the plaintiff left Townsville and was present with the plaintiff and the defendant when there was a conversation to the effect that they were selling the house and moving to Brisbane.  There was a second occasion when Mrs Floyd went back to see them, when Mr Szep was also present, and she states (at Transcript 2-78) both the plaintiff and the defendant told her that Mr Szep was going to buy the house, and they were moving to Brisbane, and the defendant said she was going to use some funds from the sale of the Townsville house to help her buy the house at Bridgeman Downs and she had received the first home owner’s grant.  Mrs Floyd states (at Transcript 2-79) that when she asked the defendant how she got that grant, the defendant told her that she was buying the house in her name and “that at a later stage … that would be then changed to compensate Diana” and “That she would be looking after Diana.”  The defendant does not recall any discussions of this nature with Mrs Floyd and denies (at Transcript 3-66) making any statement to Mrs Floyd about “compensating” her mother. 

27. The conversations with Mrs Floyd took place on social occasions and were mainly in general terms and superficial. Although Mrs Floyd must have been given the information by the defendant that she was buying the property in Brisbane in her own name and had obtained the first home owner’s grant, I am not satisfied that the terms of the conversation recalled by Mrs Floyd are clear or unambiguous enough to amount to evidence of a declaration made by the defendant against her interest.

28. At the defendant’s request in order to satisfy a requirement of her bank and at the defendant’s direction, the plaintiff wrote a letter addressed to “To Whom It May Concern” which stated:

“My house is under contract, & as soon as payment is made, I will gift $70,000 to my daughter Dr JH Hottes PhD, to assist in the purchase of a house in Brisbane.” 

The letter was sent by facsimile by the plaintiff to the defendant on 23 October 2001.  The plaintiff states (at Transcript 1-39) that the defendant told her not to worry about it, it did not mean anything, and it was just for the bank, which I accept it is likely in the circumstances that the defendant did say to her mother.  

29. The defendant made a written application for finance on 1 November 2001. In completing the list of assets, the defendant showed that she had a 1998 Ford Laser valued at $14,000 (which was a car registered in Mr Szep’s name, but which the defendant justified as showing as her asset as she says she had lent Mr Szep the money to pay out the loan on the car) and she described a further asset of $70,000 as “Distribution from Estate.” The application was accompanied by a letter from the defendant’s employer dated 18 October 2001 and signed by Mr Szep as general manager. The letter confirmed that the defendant had commenced employment on 20 August 2001 for a salary of $4,400 per month with mobile phone and car allowance provided and a bonus payment of $150,000 on reaching sales targets within 18 months. The defendant printed out from the internet a list of transactions from her bank account that showed $4,400 deposited on 11 October 2001 and that she had a balance in that account that accorded with what was shown in the application for finance of $25,000.

30. The defendant’s finance application was processed through a mortgage brokerage business conducted by Mr Spiers. He gave evidence that the property was purchased on the basis of a 70 per cent loan to valuation ratio and that if the defendant had not had the benefit of the sum of $70,000 provided by her mother, she would have been able to borrow on the basis of a 90 per cent loan to valuation ratio which would have increased her monthly payments by about $260 per month. Although the defendant may have been able to obtain a loan to purchase the property without receiving the payment from her mother, the resultant reduction in the amount she borrowed made the loan a more feasible proposition for the defendant.

31. On 12 November 2001 the plaintiff at the defendant’s request signed a statutory declaration addressed to the defendant’s bank in the bank’s standard form in which she acknowledged making a cash advance of $70,000 to the defendant to assist her in acquiring the property and that while any moneys remained owing to the bank under the home loan to be advanced to the defendant for the purchase of the property the cash advance was not repayable by the defendant, nor was any interest payable to the plaintiff in respect of the cash advance, and that the plaintiff has no claim upon or interest in the property for repayment of the cash advance or as security for the cash advance whilst the property was mortgaged to the bank. Again, the plaintiff states (at Transcript 1-41) that the defendant told her not to worry about the documents, as it was just for the bank, which I accept is likely to have occurred, when the defendant was so keen to secure the loan.

32. When the defendant was cross-examined as to why she did not request her mother to give her something in writing to confirm the payment was a gift, the defendant states (at Transcript 3-65) that she believed that her mother had “gifted” her that money and the following exchange occurred:

“You were saying why you didn’t ask her for something in writing?--  She was my mother.  I believed she was giving me a gift.  We were happy together in Townsville and I wanted to offer her – I wanted – yeah, I wanted to offer her somewhere to live in her retirement.  I was very proud of what I was offering to her.

Your mother never made the contribution towards Dicaprio Circuit on the basis that she would ever live anywhere else, did she?-- We never actually discussed that.

She-----?--  We didn’t look at any contingencies and obviously we should have but we didn’t.”

33. The sale of the Townsville property settled on 11 December 2001 and from the proceeds the sum of $70,911.01 was applied towards the purchase of the property, in accordance with the authority given by the plaintiff to her solicitors. The plaintiff deposited the sum of $23,856.67 from the sale proceeds to her own account. The plaintiff paid Mr Szep’s stamp duty, fees and outlays of $3,586.12 and gave him a further sum of $1,171.51. The plaintiff had a verbal agreement with Mr Szep that she would pay his legal costs of his purchase of the Townsville property, and that if she did not buy the house back, he would repay the amount for costs when he sold the house. The plaintiff concedes (at Transcript 2-29) that she had made the arrangements directly with Mr Szep about payment of his legal costs and payment of the cost of sanding and polishing the floors of the Townsville property.

34. The defendant’s purchase of the property settled on 14 December 2001.

35. On or about 16 December 2001 the plaintiff moved into the property to live with the defendant and her son. The defendant arranged and paid for the removal of the plaintiff’s furniture and chattels from Townsville to the property.

The plaintiff’s period of residence at the property

36. The plaintiff’s furniture and chattels were used at the property. The plaintiff chose to live in the downstairs bedroom at the property that had been converted from an office by building in a wardrobe that the defendant arranged with the vendor’s builder before completion of her purchase of the property. It was a large house with the living areas downstairs and four bedrooms and two bathrooms upstairs. The plaintiff paid for the telephone and contributed to the food purchases. The plaintiff initially took responsibility for the cleaning of the home, but did not clean upstairs after one or two years, because of her arthritis. She also did some of the cooking for the household at night up until the end of 2006. The plaintiff paid $2,190.10 for the security screens for the house in March 2002. The defendant paid the rates, electricity and the other expenses of home ownership. The plaintiff went on outings regularly with the defendant and her son. Apart from her arthritis, the plaintiff suffered from hypertension, cardiovascular problems and bronchiectasis, but these medical conditions did not prevent the plaintiff from looking after herself and contributing to the cleaning and cooking for the household until the end of 2006.

37. By July 2002 the defendant’s relationship with Mr Szep had broken down. He sent her an email dated 13 July 2002 giving her an opportunity to purchase the Townsville property, as he was proposing to sell it. He sent another email to the defendant on 23 July 2002, alleging that “The property was purchased from you and your mother for the sole purpose of facilitating a first home owners Government Grant of $14,000 for you.”

38. Around the time the defendant broke up with Mr Szep, she gave her mother an unsigned statutory declaration in which the defendant had inserted her name and address. The typed contents in the form stated:

“My mother, Diana Peterson, lent me seventy thousand dollars from the sale of her house in Townsville.  It is my intention to repay this money.” 

39. The plaintiff supported the defendant in her disputes with Mr Szep. The plaintiff lodged a caveat over the Townsville property. There is a draft of a letter that is largely handwritten by the plaintiff that was sent to a solicitor Mr Martinez in early October 2002. That letter alleged that Mr Szep had an agreement with the plaintiff and the defendant that when he sold the Townsville property, they could have the proceeds on the basis that they had met the expenses that were not covered by the rent from the Townsville property. This letter raised the possibility that the plaintiff could claim the deposit of $25,000 that was never paid under the contract. The letter finished with this statement:

“Mr Szep emailed Heidi that she was not entitled to the first home owners grant – again not true.  I gifted her some money so she could afford to buy the house next to him which was his desire.  I am not part owner.”

40. The plaintiff conceded that she wrote that letter, but claimed that she did because the defendant asked her to. In view of the circumstances in which the letter came to be written, little weight can be attached to the assertions in the letter. I find that the contents of the letter were a joint effort by the plaintiff and the defendant for the purpose of their disputes with Mr Szep and the assertions are not reliable for the purpose of deciding issues between the plaintiff and the defendant. I also place little weight on the unsigned statutory declaration in the defendant’s name which can also be attributed to the defendant’s dispute with Mr Szep. The plaintiff initiated small claims proceedings against Mr Szep for the amount of the legal costs and the costs of sanding and polishing the floors, but did not sue for the deposit of $25,000.

41. The defendant was retrenched from her employment in July 2005. The defendant asserts (at Transcript 3-10) that when she expressed her concern to her mother about meeting the mortgage payments, her mother said to her that at least she did not have to pay back the money that she had given to her. That is denied by the plaintiff. To the extent that such statement is relied on by the defendant as a statement made by the plaintiff against her interest, I prefer the plaintiff’s recollection, as any conversation was addressing the defendant’s immediate financial problems and it is unlikely at that time that the plaintiff made any unequivocal declaration that conveyed the money was never to be repaid in any circumstance.

42. On 2 September 2005 the plaintiff signed a form to authorise the release of her medical information to Centrelink in connection with an assessment for a carer payment and/or carer allowance claimed by the defendant as the plaintiff’s carer (exhibit 4). The plaintiff was not, however, in need of such care at this stage, as she continued to be largely independent in her care for herself and her contributions to the household.

43. The plaintiff was being treated for a problem hip that had deteriorated significantly by January 2007. In the few weeks before she was admitted to hospital she could hardly walk. In February 2007 the plaintiff was receiving help at home from Southern Cross Care.

44. The plaintiff was admitted to hospital for six weeks between February and April 2007 with an infected hip joint and septicaemia. The defendant visited her daily. While in hospital on 26 March 2007 the plaintiff signed another form for the release of her medical information to Centrelink for the assessment for a carer payment/allowance claimed by the defendant as the plaintiff’s carer (exhibit 5).

45. On discharge from hospital the plaintiff received daily visits from a person from Spiritus, which were then reduced to three days per week, who assisted her with a shower and dressing. After an ACAT assessment was done on 10 July 2007, Southern Cross Care provided care and assistance to the plaintiff at home three days per week from 30 July 2007.

46. In early 2007 the defendant had a new partner and in the second half of 2007, the possibility was raised by the defendant with the plaintiff that the defendant may relocate interstate or overseas. The defendant was looking at fulltime job opportunities and her partner also had a desire to relocate. For whatever reason the relationship between the plaintiff and the defendant deteriorated in the latter part of 2007.

47. Although Centrelink records show telephone contact with the plaintiff in October 2007, the plaintiff does not recall those calls. Centrelink records advice from the plaintiff that “the funds given to daughter were not actually a gift,” but “were to establish a life interest (right to life) to live with her daughter on her property” and “were provided to her daughter to establish this life interest many years ago.” Around the same time the defendant was contacted by Centrelink in respect of the payment of $70,000 that she had received from her mother. There is a draft letter in the plaintiff’s handwriting that is dated October 2007 (exhibit 6) that the plaintiff claims she wrote at the request of the defendant. In view of its contents, I accept that the letter was written at the defendant’s request. It states:

“In 2000 (sic) I lent my daughter $70,000 to use as a deposit on a house, and she has been paying it off since then.  In 2001 (sic) she broke up with her partner and then in (mth) 200? the co. she worked for was sold and she lost her job.  As I had been living with her rent free since Dec 2000 (sic) I told her she could have the $70,000 as an early inheritance.  Unfortunately I didn’t realise I should have advised Centrelink of that decision.”       

48. The plaintiff was re-admitted to hospital on 11 November 2007 for hip replacement surgery and finally released on 4 December 2007. Whilst in hospital, she was visited by representatives from Caxton Legal Centre and a letter was sent to her at the hospital dated 30 November 2007 (exhibit 7) from the Seniors’ Legal and Support Service that referred to a social worker in Cairns looking for appropriate accommodation for the plaintiff in Cairns.  The plaintiff explains (at Transcript 2-68) that she told the representatives who visited her that she would like to live in Cairns, but she did not have any plans to leave the property, as she had no money to go anywhere.  Southern Cross Care resumed providing care at home for the plaintiff.  In December 2007 the plaintiff and the defendant had discussions with respect to an offer that the defendant anticipated receiving for a teaching position in the United Kingdom.

49. The defendant overheard some of the plaintiff’s telephone conversations in December 2007 of which the defendant immediately made notes. The first conversation was on 15 December 2007. The defendant had picked up the telephone to answer it at the same time as her son and recognised the caller’s voice as her sister. After the defendant’s son had called the plaintiff to the telephone, the defendant had not replaced the telephone, so that it was properly on the hook, and could hear the conversation. The gist of the conversation suggested that the plaintiff was looking at other properties in the area. The defendant then overheard another telephone conversation on 17 December 2007, because the plaintiff was speaking loudly, in which a comment was made about Taigum as a possible place where the plaintiff might find suitable accommodation and that the defendant “might get a job and be gone quickly” or “might never get a job.” There was a further telephone conversation between the plaintiff and her other daughter on 18 December 2007 which the defendant overheard which suggested that the defendant’s sister was referring to the possibility of litigation by the plaintiff. The defendant heard some comments of her mother made in another telephone conversation on 19 December 2007 when reference was made to the defendant’s partner’s application for a job in Tasmania.     

50. The defendant conveyed to the plaintiff that she had heard some of the plaintiff’s telephone conversations with Ranna and she was concerned about what her sister would do. This was the subject of discussion between the plaintiff and the defendant on 31 December 2007, when the defendant told the plaintiff (at Transcript 3-18) that she “felt that she was being wicked.” On 31 December 2007, the defendant wrote a note on a piece of cardboard (exhibit 16) that she put in front of her mother, as she was speaking to Ranna on the telephone:

“How much will she contribute to rent?  Does she plan legal action?  Put her off so I can hear.  Tell her u need the airfare for rent instead if she wants to help.”

51. The plaintiff and the defendant then argued. During the course of the argument, the defendant asked the plaintiff to write out a document that stated “I will not sue you” which the plaintiff did and signed it. After the plaintiff had done that, she scrunched the note into a ball and threw it at the defendant.

52. After the argument, the plaintiff left the home for a nearby park. The police attended and assisted her to collect some of her personal belongings. The plaintiff moved to a motel. The plaintiff therefore ceased living in the property on 31 December 2007. The relationship between the plaintiff and the defendant broke down irretrievably. This proceeding was commenced on 4 April 2008.

Issues in respect of the property

53. The parties agreed on a joint statement of issues for determination at the trial (exhibit 18). These are:

(a)whether the payment made by the plaintiff towards the purchase of the property was $76,143.33 or $70,911.01;

(b)whether the plaintiff can rebut the presumption of advancement in favour of the defendant;

(c)whether the payment made by the plaintiff to the defendant that was used to acquire the property was a gift to the defendant or whether the plaintiff paid the money pursuant to and in reliance upon the arrangement;

(d)whether it is unconscionable for the defendant to retain the beneficial interest in the whole of the property;

(e)if it is unconscionable, whether a constructive trust or some other measure of equitable compensation or equitable charge should be applied by reference to the proportion which the plaintiff’s payment represented of the overall acquisition cost of the property, and either of the profit made by the defendant in respect of the property since January 2008 or the costs incurred by the plaintiff on account of accommodation since January 2008.

The quantum of the payment

54. In view of the plaintiff’s concession about her direct arrangement with Mr Szep in relation to some aspects of the sale of the Townsville property, the plaintiff has not discharged the onus of showing that the defendant was privy to the arrangement the plaintiff made with Mr Szep that she would meet the expenses in relation to the Townsville property that he would otherwise have incurred for legal costs and outlays and sanding and polishing the floors. I therefore find that the amount that was paid by the plaintiff towards the purchase of the property was $70,911.01.

The presumption of advancement, the presumption of a resulting trust, and the intention of the plaintiff

55. The joint statement of issues reflects the positions adopted by the parties in the proceeding about the operation of presumptions that may apply when property is purchased using funds contributed by a person who is not recorded as a legal owner. The plaintiff contends that the presumption of advancement was rebutted and the presumption of a resulting trust applied. The defendant contends that the presumption of advancement was not rebutted and the payment was a gift. The operation of these presumptions was explained in Calverley v Green (1984) 155 CLR 242, 246-247 (Calverley):

“Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, i.e., a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser. Similarly, if the purchase money is provided by two or more persons jointly, and the property is put into the name of one only, there is, in the absence of any such relationship, presumed to be a resulting trust in favour of the other or others. For the presumption to apply the money must have been provided by the purchaser in his character as such - not, e.g., as a loan. Consistently with these principles it has been held that if two persons have contributed the purchase money in unequal shares, and the property is purchased in their joint names, there is, again in the absence of a relationship that gives rise to a presumption of advancement, a presumption that the property is held by the purchasers in trust for themselves as tenants in common in the proportions in which they contributed the purchase money ….”

56. It is common ground that the starting point is the presumption of advancement in favour of the defendant in respect of the payment of $70,911.01 arising by reason of the relationship of mother and adult child: Nelson v Nelson (1995) 184 CLR 538, 548-549, 576, 585-586 and 601.

57. The presumption of advancement may be rebutted by evidence of actual intention of the plaintiff before or at the time of making the subject payment to the defendant, but any subsequent acts or declarations of the plaintiff may be used only if they were against the interest of the plaintiff: Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353, 364-366.   As the plaintiff’s payment went towards the purchase of the property in the defendant’s name, any evidence of the defendant’s actual intention before or at the time of the purchase may also be of use in determining whether the presumption of advancement can be rebutted: Calverley at 251.

58. The importance to the plaintiff of having acquired the Townsville property from her own hard work and resources and that it comprised most of her assets when it was sold is significant: Brown v Brown (1993) 31 NSWLR 582, 591.  It is also relevant that the Townsville property was sold when the plaintiff was retired and no longer able to earn income from personal exertion.

59. The defendant seeks to separate the payment by the plaintiff of the sum of $70.911.01 to the defendant to assist in the purchase from the earlier offer of the defendant to the plaintiff to relocate with the defendant and her son to Brisbane.  Even though there had been that offer before there was any discussion about the plaintiff selling the Townsville property, the transaction that was implemented was the move by the plaintiff to Brisbane in conjunction with selling her property.  The plaintiff may have been motivated by her concern about the defendant’s son and made the decision herself to relocate and sell her house, but I accept the plaintiff’s evidence that this decision was in response to a specific request by the defendant that she do so and put some of the proceeds towards the defendant’s purchase.

60. From the outset when the defendant advised the plaintiff that she had entered into a contract to buy the property, the plaintiff understood that the purchase was to be in the defendant’s name solely, so that the defendant could obtain the first home owner’s grant. The defendant was reliant on the additional sum of $14,000 from this grant. The plaintiff was willing to and did support the defendant in her desire to purchase the property in her own name.

61. It was a big step for the defendant to purchase her first home in 2001, when she had re-entered the workforce only from the second half of 1998 and had moved to Brisbane for a new job.  She was under pressure from Mr Szep to proceed with the purchase and was single-minded herself about achieving the purchase.  I consider that it is much more likely that it was the defendant who asked the plaintiff to sell the Townsville property to Mr Szep, rather than the defendant’s version that the plaintiff made the arrangement direct with Mr Szep to sell her house to him. The purpose of Mr Szep purchasing the Townsville property was to assist the defendant in purchasing the property.   Because of the relationship between the defendant and Mr Szep, I prefer the plaintiff’s evidence that the request for her to show the inflated sale price in the contract to allow Mr Szep to borrow the entire amount of the real sale price came from the defendant.  I was unconvinced by the defendant’s evidence that she was a mere scribe in writing out the particulars of the contract and did not know the amounts to be inserted until she filled out the contract form.  The importance to the defendant in being able to use funds from the plaintiff for the purchase of the property is supported by the fact that the defendant did not apply for finance until she was confident of how much her mother would put towards the purchase of the property.

62. I found the plaintiff’s evidence of how the amount in round terms of $70,000 (rather than $50,000 or $100,000) was fixed upon more credible than the defendant’s evidence that her mother did not offer a reason for increasing the amount that she was putting towards the purchase from $50,000 to $70,000.

63. The plaintiff’s decision to relocate to Brisbane and sell the Townsville property to Mr Szep was implemented in a relatively short period of less than three months to coincide with the completion of the defendant’s purchase of the property.  Apart from the fact that the plaintiff acknowledged that the purchase of the property was by the defendant solely and that it was the parties’ intention that the plaintiff would live with the defendant and her son at the property, it is clear that there was no meeting of the minds of the parties as to the true nature of the payment of $70,911.01.  Because the proceeds of sale of the Townsville property comprised most of the plaintiff’s assets and represented what she had managed to acquire over her lifetime, I accept the plaintiff’s evidence that she did not state to the defendant that she was giving her those funds outright.  To the extent that the defendant suggests otherwise, I have concluded that it was wishful thinking on the defendant’s part at the time the transaction occurred.  The characterisation of the payment as “an early inheritance” was the defendant’s description and not the plaintiff’s description.  As the defendant herself concedes, she and her mother did not look at the contingencies at the time of the transaction.  To the extent that the plaintiff suggests that there was an arrangement whereby she would be included as an owner when there was a subsequent purchase, that was her rationalisation of how any future transaction should proceed, but I am not satisfied that she conveyed that idea to the defendant at the time of making the payment of $70,911.01.  I do not accept the plaintiff’s evidence that any statement to that effect was made by the defendant, as the focus of the parties was on the immediate purchase of the property.  

64. I am also not satisfied that the other condition of the claimed arrangement that if, after living with the defendant for six months the plaintiff wished to return to Townsville, the defendant would repay the plaintiff and the plaintiff could repurchase the Townsville property from Mr Szep at the same price she had sold it, was a matter that was agreed upon or discussed between the plaintiff and the defendant. As the plaintiff knew that Mr Szep did not intend to hold onto the Townsville property as an investment, but intended to resell it, the plaintiff may have considered that it was open for her to repurchase that property from Mr Szep. The reality of the situation was that upon the defendant using the sum of $70,911.01 to purchase the property, there were not funds readily available to the defendant to be able to repay the plaintiff for an immediate repurchase of the Townsville property.

65. I am satisfied that the plaintiff has rebutted the presumption of advancement as a result of her circumstances at the time she made the payment and that she intended to make the payment (to the defendant’s knowledge and with the defendant’s acquiescence) to secure a continuing arrangement to reside with the defendant. The payment was more in the nature of a conditional gift, rather than an absolute gift. After the defendant had resided for 11 years in the plaintiff’s home, the payment of $70,911.01 by the plaintiff to the defendant to enable the defendant to purchase the property in which it was proposed that the plaintiff would also reside means that the payment of that sum was conditional on the arrangement for a joint household in the property to be a continuing arrangement. This is in the nature of a joint endeavour to which the equitable remedy of a constructive trust may be invoked: cf Swettenham v Wild [2005] QCA 264 at [42].

66. The plaintiff therefore has not succeeded in showing the claimed arrangement existed at the time of making the payment, but I am satisfied that the plaintiff has shown that her actual intention was for an arrangement in the nature of a conditional gift without intending to share a proportionate interest in the property. This conclusion about the plaintiff’s actual intention also rebuts the presumption of a resulting trust. This is a case where the plaintiff’s actual intention rebuts both presumptions. The defendant has not established the factual basis for the estoppel that she pleads against the plaintiff.

Is it unconscionable for the defendant to assert beneficial ownership in the property against the plaintiff?

67. It is relevant that, apart from the payment for the security screens for the property, the plaintiff did not make any financial contribution towards the expenses of the property that were expenses associated with ownership while she resided there which was consistent with her willingness to support the defendant’s sole ownership of the property.

68. In view of what I have found to be the nature of the joint endeavour between the plaintiff and the defendant that proceeded on the basis that ownership of the property was for the defendant alone, it is only unconscionable for the defendant to assert her beneficial ownership in the property against the plaintiff to the extent of refusing to acknowledge that the payment that was made by the plaintiff to assist in the purchase was a conditional gift where the condition subsequently failed.

69. Although the defendant attempted to make out a case that the relationship between the plaintiff and the defendant broke down due to the plaintiff’s considering legal action against the defendant and looking to relocate, the break down of the relationship was much more complicated than that, was also contributed to be the defendant’s desire to relocate, and developed over several months in the latter part of 2007. The courts are slow in the family context in attributing blame to a particular party when a relationship that involves a joint household breaks down: McKay v McKay [2008] NSWSC 177 at [16].  This case is no different.  The care provided to the plaintiff by the defendant in 2007 was not so out of the ordinary, as to require some allowance in the defendant’s favour :  McKay at [43]. 

70. It is unconscionable for the defendant to retain the sum of $70,911.01 when the relationship between the plaintiff and the defendant broke down irretrievably on 31 December 2007, where the parties had originally envisaged a continuing arrangement. Any interest on that sum should accrue only from 1 January 2008, as the plaintiff had the benefit of residing at the property from the time she made the payment until the relationship broke down on 31 December 2007. On the basis of this finding of unconscionability, in the normal course it would follow that the plaintiff would be entitled to the benefit of an equitable charge against the property to secure repayment of the sum of $70,911.01 and interest.

71. The circumstance that accrued on the breakdown of the parties’ relationship from 31 December 2007 was that anticipated by the statutory declaration made by the plaintiff in favour of the defendant’s bank on 12 November 2001. I propose making a declaration that, upon the relationship between the plaintiff and the defendant breaking down irretrievably on 31 December 2007, the defendant became liable to repay the sum of $70,911.01 to the plaintiff. Whether that liability is presently enforceable will need to be the subject of submissions from the parties on whether that statutory declaration remains applicable and precludes judgment for the plaintiff against the defendant for the sum of $70,911.01 and statutory interest and an equitable charge against the property for repayment of the sum and interest.

The chattels

72. The cedar wardrobe and cedar chest of drawers had sentimental value for the plaintiff. The plaintiff was using them herself when she occupied the main bedroom in the Townsville property. She generously vacated that bedroom when the defendant gave birth to her son and that is how the defendant came to use those chattels when she lived in Townsville. Those chattels did not fit into the bedroom occupied by the plaintiff at the property. When her furniture and other chattels were brought from Townsville to Brisbane, the cedar chest of drawers and wardrobe continued to be used by the plaintiff.  Despite the plaintiff’s allowing the defendant to use those chattels for over 16 years, before a demand was made to return them to her in January 2008, I accept the plaintiff’s evidence that she never gave or abandoned those goods in favour of the defendant or made statements acknowledging that she had given those items to the defendant.

73. The plaintiff’s claim in detinue succeeds and an order should be made that the defendant deliver to the plaintiff the cedar chest of drawers and the cedar wardrobe described in paragraph 18 of the further amended statement of claim.

Orders

74. It follows that the orders which I will make on the publication of these reasons are:

1.It is declared that, upon the relationship between the plaintiff and the defendant breaking down irretrievably from 31 December 2007, the defendant became liable to repay the sum of $70,911.01 to the plaintiff.

2.It is ordered that the defendant deliver to the plaintiff the cedar chest of drawers and the cedar wardrobe described in paragraph 18 of the further amended statement of claim.

3.The proceeding is adjourned to a date to be fixed to enable the parties to make submissions on what further orders should be made to give effect to these reasons, including whether any further orders should be made in relation to the repayment of the sum of $70,911.01 and interest on that sum, and what orders should be made for the costs of the proceeding.

75. If the parties can agree between themselves on a timetable for the filing of further submissions to finalise the orders and costs and that those questions can be decided on the papers, it will not be necessary for the matter to be listed for a further hearing.