McGhee v Churven; Churven v McGhee
[2021] QSC 212
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- McGhee v Churven; Churven v McGhee[2021] QSC 212
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McGhee v Churven; Churven v McGhee[2021] QSC 212
McGhee v Churven; Churven v McGhee[2021] QSC 212
SUPREME COURT OF QUEENSLAND
CITATION: | McGhee v Churven; Churven v McGhee [2021] QSC 212 |
PARTIES: | PAMELA MARGARET MCGHEE (AS PERSONAL REPRESENTATIVE OF THE ESTATE OF SYBIL MARGARET CHURVEN) (applicant / respondent) v PHILIP STUART CHURVEN (respondent / applicant) |
FILE NO/S: | BS 1869/20; BS 6301/20 |
DIVISION: | Trial Division |
PROCEEDING: | Civil trial |
ORIGINATING COURT: | Supreme Court at Brisbane |
REASONS: | 24 August 2021 |
ORDER: | 8 September 2021 |
DELIVERED AT: | Brisbane |
PUBLISHED: | 22 October 2021 – incorporating the reasons delivered on 24 August 2021 and the consent order made on 8 September 2021 |
HEARING DATES: | 14 – 16 October 2020 and 29 October 2020; further written submissions dated 9 and 17 November 2020; 24 August 2021; submissions as to consent orders dated 7 September 2021 |
JUDGE: | Burns J |
ORDER: | THE ORDER OF THE COURT, BY CONSENT, IS THAT:
|
CATCHWORDS: | SUCCESSION – PROBATE AND LETTERS OF ADMINISTRATION – JURISDICTION AND DISCRETION OF COURT – QUEENSLAND – where, on the death of the deceased in 2019, she was survived by a son and a daughter – where, under the terms of her last will, the deceased left her household contents and effects to her son and the balance of her estate to her daughter – where the daughter alleged that a residential unit purchased in 1992 and registered in the name of the deceased formed part of the residuary estate – where the son alleged that the residential unit was wholly purchased and maintained by him for his mother to be held on trust for him – whether the residential unit was held by the deceased on trust for her son – whether the residential unit formed part of the residuary estate of the deceased EQUITY – TRUSTS AND TRUSTEES – EXPRESS TRUSTS CONSTITUTED INTER VIVOS – DECLARATION OF TRUST – GENERALLY – where, on the death of the deceased in 2019, she was survived by a son and a daughter – where, under the terms of her last will, the deceased left her household contents and effects to her son and the balance of her estate to her daughter – where the daughter alleged that a residential unit purchased in 1992 and registered in the name of the deceased formed part of the residuary estate – where the son alleged that the residential unit was wholly purchased and maintained by him for his mother to be held on trust for him pursuant to the terms of an express trust created by Deed at the time when the residential unit was purchased – where the original Deed was not produced – whether the copy Deed that was produced was a true copy of the original Deed or, alternatively, a forgery – whether an express trust arose on execution of the Deed – whether the residential unit was held by the deceased pursuant to the terms of the express trust created by the Deed – whether the residential unit formed part of the residuary estate of the deceased Land Title Act 1994 (Qld), s 114, s 184, s 185 Property Law Act1974 (Qld), s 11 Succession Act 1981 (Qld), s 45, s 56, s 57 Uniform Civil Procedure Rules 1999 (Qld), r 69(1), r 598 Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495 Anderson v McPherson (No2) (2012) 8 ASTLR 321 Baburin v Baburin (No2) [1991] 2 Qd R 240 Baumgartner v Baumgartner (1987) 164 CLR 137 Briginshaw v Briginshaw (1938) 60 CLR 336 Calverley v Green (1984) 155 CLR 242 Chan v Zacharia (1984) 154 CLR 178 Charles Marshall v Grimsley (1956) 95 CLR 353 Commonwealth Bank of Australia v Amadio (1983) 151 CLR 447 Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614 Green v Green (1989) 17 NSWLR 343 Hagan v Waterhouse (1991) 34 NSWLR 308 Hourigan v Trustees,Executors & Agency Co Ltd (1934) 51 CLR 619 Johnson v Buttress (1936) 56 CLR 113 Leigh v Bruder Expedition Pty Ltd[2020] QCA 246 Louth v Diprose(1992) 175 CLR 621 Muschinski v Dodds(1985) 160 CLR 583 Nathan v Williams & Anor [2020] QCA 138 Queensland Nickel Pty Ltd (inliq) v QNI Metals Ltd & Ors [2021] QCA 138 Rejfek v McElroy (1965) 112 CLR 517 |
COUNSEL: | I Klevansky for the applicant/respondent (Ms McGhee) J P Hastie for the respondent/applicant (Mr Churven) |
SOLICITORS: | Robert Bax & Associates for the applicant/respondent (Ms McGhee) O'Connor Ruddy & Garrett for the respondent/applicant (Mr Churven) |
- [1]Mrs Sybil Churven died on 18 August 2019. She was 96 years of age. Her husband, Mr Nicholas Churven, died many years earlier. Their two surviving children, Ms Pamela McGhee, and her brother, Mr Philip Churven, oppose each other as parties to the applications before the court. Both applications have as their source a dispute regarding the ownership of a residential unit situated at Taringa and formerly occupied by their mother.
- [2]As it turns out, that dispute was founded on several misconceptions. Regrettably, not only did these lead to the breakdown of the relationship between the siblings, they also inspired the making of serious allegations against Mr Churven, none of which could be made out at trial.
- [3]What follows are the facts as I find them to be, my application of those facts to the applicable law and the reasons why I have reached the conclusion that Mr Churven has always been the sole beneficial owner of the Taringa unit pursuant to the terms of an express trust and is now entitled to a conveyance of the whole of the legal estate.
Some common ground
- [4]It is useful to commence with some facts that were not in issue.
- [5]Mr Nicholas Churven died on 23 March 1991. At the time, he and Mrs Churven had been residing in their matrimonial home at Chapel Hill. This property was unencumbered. On Mr Churven’s death, the property passed to Mrs Churven and she became its sole registered owner.
- [6]In 1992, Mrs Churven sold the Chapel Hill home and purchased the unit at Taringa where she lived until moving into a nursing home at New Farm in the middle of 2014. In late July 2019, she was admitted to the Wesley Hospital where she died a few weeks later from complications associated with influenza and severe Alzheimer’s dementia. Her health (including her mental acuity) had been in decline for several years.
- [7]Mrs Churven’s last will was executed on 19 March 2008. Under it, she appointed Mr Churven as sole trustee and executor, bequeathed to him her household contents and effects, and left the balance of her estate to Ms McGhee. Subsequently, by an order of this court made on 26 February 2020, Mr Churven was removed as executor and Ms McGhee was appointed sole administrator.
- [8]According to Ms McGhee, her mother’s estate is comprised of the Taringa unit, a modest sum that was held in a Commonwealth Bank of Australia savings account, household contents associated with the unit, rental income allegedly owing from the unit since 2015 and an accommodation bond referable to her time in the nursing home ($279,478.04). On the other hand, Mr Churven contends that the unit was wholly purchased by him and, thereafter, held on trust by his mother for him. He therefore maintains that the unit does not form any part of the estate.
The dispute
- [9]The ownership of the Taringa unit is the central issue for determination in these proceedings. In the absence of an order from this court, the unit is vested in Ms McGhee as administrator of her mother’s estate. [1] Furthermore, any beneficial interest Mr Churven has in the unit will be held by Ms McGhee (again, as administrator) on trust and subject to, in priority, the payment of estate debts including funeral, testamentary and administration costs (including legal costs). [2]
- [10]By her amended originating application, Ms McGhee seeks an order that she be registered as proprietor of the unit, an account of the profits (rental income less expenses) that Mr Churven has received from the property and a declaration that he holds “no beneficial or equitable interest” in it. In the alternative, Ms McGhee seeks a declaration that any interest Mr Churven has in the unit is subject to, in priority, the payment of funeral, testamentary and administration costs of the estate (including legal costs). Ms McGhee also seeks a declaration that the accommodation bond be applied first to the payment of estate debts and, thereafter, to Mr Churven.
- [11]By his amended originating application, Mr Churven seeks a declaration that the unit is held entirely on trust for him, as well as an order that the unit be conveyed to him and registered in his name. [3] Alternatively, he seeks a declaration and ancillary orders designed to recognise that the unit is held on trust for him “in a share proportionate to the contribution which [he] made towards the purchase price and … the costs of outgoings and improvements” with respect to the property. In the further alternative, he seeks an order that the estate pay equitable compensation to him in an amount reflecting his contribution to the purchase price as well as the outgoings and improvements. He also seeks, in the alternative to all of the claimed relief just mentioned, a declaration that his mother acquired the unit and held it as agent for him pursuant to a Deed dated 22 May 1992 along with a declaration that his sister (in her capacity as administrator of her mother’s estate) is obliged to convey the unit to him and an order to enforce that obligation. Finally, Mr Churven seeks an order that the estate pay the amount of the accommodation bond to him.
- [12]For Ms McGhee, she maintains that the unit forms part of her mother’s estate and then points to the terms of her mother’s last will to make out an entitlement to the relief she seeks.
- [13]For Mr Churven, three alternative cases were advanced to support the legal conclusion that the Taringa unit is held on trust for him: first, that a resulting trust arose upon his mother becoming the owner of the unit because he paid the whole of the purchase price (including stamp duty); second, that a constructive trust came into existence because his mother and he shared a common intention that the unit would be held on trust for him, and upon which intention he acted by purchasing the property and meeting outgoings and other expenditures; and, third, that the unit was held by his mother for him as beneficial owner pursuant to the terms of an express trust recorded in an agreement entitled “Deed of Nomination and Appointment of Agent” and dated 22 May 1992. As to these cases, it was submitted to be unnecessary for the court to determine the second and third because, it was submitted, the court should have little difficulty in concluding that Mr Churven paid the purchase price and, as such, a resulting trust must (in the absence of some disqualifying reason) be presumed to exist. However, while such an approach may at first glance seem attractive, Ms McGhee has alleged in response to Mr Churven’s express trust case that the copy of the Deed adduced in evidence by Mr Churven is a forgery. That is a sobering charge to level against an officer of the court (Mr Churven, like Ms McGhee, is a legal practitioner) and it is accordingly desirable that allegations of that type should be resolved if possible, so that is where I shall begin.
An express trust?
- [14]An express trust will be created where, relevantly, a person declares that specified property will be held on trust for a specified person or object. [4] Provided the person or corporation is capable of disposing of the property by way of trust, and further provided that the declaration accords with the legal requirements to make the declaration effectual, an express trust will arise. As to the last-mentioned requirement, a declaration of trust respecting any land must be “manifested and proved by some writing signed by some person who is able to declare such trust”. [5] But the “writing” need not take any particular form; there is no requirement that the declaration be incorporated in a deed or any requirement for a witness. [6] Nor is it essential that the “language of trusts” [7] be employed; the question will always be one of ascertaining as a matter of construction of the document whether the parties intended to create a trust, regardless of whether the document refers in terms to a “trust”, a “trustee” or a “beneficiary”. [8]
- [15]The burden of establishing the existence of an express trust governing the ownership of the Taringa unit was of course on Mr Churven and, for several reasons, I am satisfied on the balance of probabilities that this was so. In the first place, I had (and have) no hesitation accepting Mr Churven’s evidence on this topic, and more generally. Second, Mr Churven’s account is largely confirmed by the terms of the copy Deed which I am satisfied to the same standard is genuine. Third, and in strong support of Mr Churven’s account, I am equally satisfied that his mother did not have the means (or any other financial accommodation) to purchase the unit at the time when that conveyance settled, and so she could not have paid for it. Fourth, although Mrs Churven may well have said (and recorded) different things to different people over time regarding the ownership of the unit, I am unpersuaded that any reliance can be placed on those statements.
- [16]The original Deed has been lost and the best evidence of it is to be found in the copy Deed that is in evidence. I have no doubt that, reflecting as it does the common intention of the parties to it, the Deed took effect as a declaration of trust and otherwise complies with the legal requirements to make it enforceable. As I discuss below (at [24]), the version before the court is not witnessed although I am satisfied that the original Deed would have been. But nothing turns on this in any event because, as I have said (at [14]), the document did not need to be witnessed to be effectual. On its execution by Mr Churven and his mother, an express trust governing the ownership of the Taringa unit came into existence and, having since been stamped, [9] it is enforceable at Mr Churven’s election.
Mr Churven
- [17]Mr Churven impressed me as a witness who was truthful and, in my view, reliable in his recollection of the things that mattered to the outcome of this case. Although there were some differences between the detail he provided in his affidavit evidence and that which he gave orally, they were not such as to impact on my assessment of his credit. Nor did the findings made with respect to him in past litigation (one of which cases was settled prior to the hearing of an appeal) or the contents of a financial statement filed in Family Court proceedings cause me to doubt his veracity. Otherwise, Mr Churven is a solicitor of many years’ standing and, along the way, he seems to have enjoyed a great deal of success outside the law in commercial property investment. Although this aspect of his affairs did not assume much prominence in the context of his overall evidence, it was not without significance because his accumulated wealth meant that he had the financial wherewithal to assist his mother as and when required and this extended to the outright purchase of the Taringa unit in 1992.
- [18]Mr Churven gave a straightforward account regarding what led to the purchase of the unit along with the purchase itself. He swore that he paid the whole of the purchase price together with the stamp duty payable on the transaction, and I accept that was so. Indeed, it was never put to Mr Churven when being cross-examined that he had not paid those amounts. According to Mr Churven, he agreed to purchase the unit for his mother to live in and told her that she could reside there for as long as she wished. This followed several conversations with his mother during which she expressed concern that, if the Chapel Hill home was sold, she would not be left with enough money to purchase an apartment acceptable to her or to leave her with sufficient savings for the future. It was during these discussions that Mr Churven told her that he would purchase an apartment for her use and that she would then have available to her the net proceeds from the sale of her home for her future use. From that point on, there was never any discussion about Mrs Churven paying for the unit. Rather, it was understood by both, and clearly intended, that the unit would be purchased by Mr Churven for his mother to occupy for as long as she liked but on the basis that Mr Churven would retain the beneficial ownership of it. Then, far from the case theory advanced on behalf of Ms McGhee, when the net sale proceeds from the sale of the Chapel Hill home became available, they were subsequently invested by Mr Churven (at his mother’s request) in an interest bearing deposit which Mrs Churven then drew on from time to time as her needs dictated.
- [19]I accept also that Mr Churven prepared the Deed from precedents he had available to him in his office at 470 Queen Street, Brisbane. After it was prepared, he explained its effect to his mother in lay terms and it was then executed at his office by both in the presence of the witness to it, Mr Churven’s then secretary, Ms Toms. That all occurred prior to the contract for the purchase of the unit being entered into by Mrs Churven.
- [20]Of some wider relevance to this dispute was Mr Churven’s evidence (which I accept) that his mother asked that the unit be purchased in her name because she did not want to appear as a tenant to other residents in the complex in which the unit was located. As Mr Churven recalled, his mother’s “main concern was with the perception of clear ownership because the majority of the owners in the building and particularly her friends were all financially well-off”. It was for this reason that Mr Churven suggested that the Deed be signed to facilitate the purchase of the unit in his mother’s name but provide for him to retain the beneficial ownership of it. Mrs Churven agreed to that proposal and, as I have already found immediately above, she and Mr Churven signed the Deed. In the result, no mortgage was registered against the title and Mr Churven maintained possession of the certificate of title for the unit.
- [21]As to the purchase itself, Mr Churven explained that he likely used funds drawn by him from a company he owned and controlled, General Estates Corporation Pty Ltd, to fund the purchase. This was money in a loan account owed to him by that company, he having built “up a credit” from which he could draw for “non-company expenses”. His understanding was that the unit was his “on the books” and did not belong to General Estates.
- [22]I interpolate that the issue whether, having been the source of funds for the purchase of the unit, General Estates acquired a proprietary interest in it rose to prominence during Mr Churven’s oral evidence and was then ventilated in argument at the conclusion of the hearing. On the invitation of the court, and out of an abundance of caution, counsel for Mr Churven made an instanter application to join General Estates as an alternate applicant for relief (along with Mr Churven) and leave was given for the parties to make supplementary submissions on that topic. Subsequently, affidavit material along with submissions from the parties was received. However, having considered the evidence on the point as well as the submissions of the parties, I am satisfied that the funds Mr Churven used to purchase the unit were his and, although he probably caused General Estates to effect the relevant payment (including the payment of stamp duty), it cannot be said that the company thereby acquired any interest in the unit, whether through a resulting trust or otherwise. To be clear, though, had I come to the conclusion that General Estates was the proper applicant (rather than Mr Churven), I would have exercised my discretion in favour of the joinder. Ms McGhee could hardly be prejudiced by the addition of the company as a party given the way in which the hearing was conducted and the evidence admitted on it. Such a course would otherwise have been desirable to enable the court to “adjudicate effectually and completely on all matters in dispute connected with the proceeding”. [10]
- [23]Of course, it is to be acknowledged that there is no documentary evidence (other than the copy Deed) to support Mr Churven’s claim that he wholly funded the purchase of the unit, but that is hardly surprising given the passage of almost 30 years since the transaction took place. Nor is it surprising that the conveyancing file has long since been destroyed in accordance with the archival cycle in Mr Churven’s firm. Nonetheless, it would be a mistake to think that Mr Churven’s claim is unsupported by any other evidence because, as I have already touched on (at [15]) and will now examine in slightly more detail, his account is well-supported by much of the other evidence in this case.
The Deed
- [24]After the dispute about which these applications are concerned arose, Mr Churven searched for the Deed (along with any other documents that might bear on the issues) but had no success. Subsequently, some weeks or months prior to February 2020, he located a version of the copy document that is now in evidence. It was amongst many other precedents that had been stored electronically and it was saved in Microsoft Word format. [11] It incorporated images of the signatures that appear on the version in that which is in evidence. Then, on 21 February 2020, being two days after Ms McGhee filed an originating application to remove her brother as executor of their mother’s estate, Mr Churven converted the electronic file to a PDF document and deleted the Word Version out of habit. The PDF version was then produced and held out by Mr Churven as a true copy of the Deed entered into by his mother and him save for the absence of Ms Toms’ signature as witness. In the last-mentioned respect, Mr Churven explained that it was his practice to have multiple copies of such documents available for execution and, although he believed Ms Toms witnessed the version that would at the time have been regarded as the “original”, it is quite possible that she failed to witness all copies of the document. In the result, the only version of the Deed that could be located by him was a version that had not been witnessed. Nonetheless, I am satisfied that it was signed by Mr Churven and his mother in May 1992.
- [25]As already noted, Ms McGhee alleged that the Deed was forged by Mr Churven and, along with that, she alleged that he gave false testimony in connection with it. A high degree of proof will of course be required before any such allegations could be accepted, [12] but there was no substance in any of those contentions. To the contrary, I am satisfied as to the truthfulness of Mr Churven’s account and the authenticity of the copy Deed.
- [26]Now, that is not to say that the relatively late revelation of the copy Deed and the rather convoluted account Mr Churven gave about its provenance did not supply grounds for suspicion in Ms McGhee’s camp, because they most certainly did. Indeed, they sparked the very misconceptions to which I referred at the outset of these reasons (at [2]). Expert document examiners were commissioned on both sides – Mr Tarnaswky was retained by Ms McGhee’s solicitors and Mr Heath by Mr Churven’s solicitors. Both experts subsequently conducted an examination, produced reports and gave evidence at the hearing. A computer forensic expert, Mr Hains, was also retained by Ms McGhee’s solicitors. He also produced a report and gave evidence at the hearing. But none of that evidence gainsaid Mr Churven’s account or the authenticity of the copy Deed or, in my view, even cast doubt on either of those critical features of this case. If anything, some of the findings supported Mr Churven (such as Mr Hains’ opinion that the Deed could not have been “created” on the computer used by Mr Churven which he examined, assuming certain observations made by Mr Tarnaswky were correct).
- [27]None of that should surprise because, after all, the proposition that the copy Deed had been forged by Mr Churven does not stand up to scrutiny. If that was the case, it would make no sense for Mr Churven to even mention an antecedent Word document or to maintain that his secretary witnessed the original Deed. In short, there would have been no need for the explanation he provided in evidence and which I have described as convoluted. Likewise, he could have asserted that the document, although prepared with a witness in mind, was not witnessed by anyone. Of course, Mr Churven did neither; he provided a truthful account.
- [28]Finally on the topic of the authenticity of the copy Deed, Mr Churven was criticised for refusing to permit a forensic image to be taken of his computer. Such criticism is misplaced. It appears likely that no formal request to take an image was made although Mr Churven candidly stated in evidence that, had such a request been made, he would have declined because of his concerns about the security of the data on his computer. He explained that personal and commercially sensitive data was stored on the computer including documents that were the subject of legal professional privilege. Accepting, as I do, that was the case, his stance was not only perfectly understandable, he was also obliged to preserve the confidentiality of any privileged material.
The terms of the Deed
- [29]Accepting as I do that the copy Deed in evidence is authentic, its terms are clear as to its intended effect.
- [30]The Deed records an agreement between Mr Churven and his mother whereby Mr Churven agreed “to pay the deposit and all other monies required pursuant to the terms of the [contract for the purchase of the unit] and all other costs associated with the purchase and registration thereof” and his mother agreed “that at all times [she] shall be acting for and on behalf of [Mr Churven] and shall not claim or acquire any beneficial interest of any nature in” the unit. Otherwise, by clause 5, it was provided that Mrs Churven must, on written request by Mr Churven, “execute and deliver to [him] any transfer, assignment or other instrument relating to the transfer of ownership of the property as [he] requires from time to time”.
MrsChurven could nothavepaid fortheTaringa unit
- [31]The Chapel Hill home was sold for $192,500. After payment of commission and other outgoings, the net proceeds were estimated by Mr Churven to have been around $160,000. There is no good reason to doubt that estimate. Accepting that to be so, the purchase price of the unit was $230,000 and thus, without more, even if the net sale proceeds from the Chapel Hill home were available to be applied to the purchase of the unit, there would still be a differential of around $70,000 to be made up to complete the sale. In this regard, and as I have observed elsewhere, there was no evidence that the purchase was financed and no mortgage was registered over the title; on completion of the transaction, the unit was unencumbered.
- [32]That said, Mr Churven’s evidence to the effect that he wholly funded the purchase of the unit is not only verified by the terms of the copy Deed, it is supported by two features of the matter: first, completion of the sale of Mrs Churven’s Chapel Hill home must have occurred after the purchase of the unit was completed; and, second, Mrs Churven did not otherwise have the financial capacity to fund the purchase of the unit.
- [33]As to the first matter, Mr Bill Purcell is a well-regarded solicitor with over five decades of experience in conveyancing in Queensland. He examined what documents could be unearthed regarding the two transactions and concluded that the settlement of the purchase of the unit occurred prior to the settlement of the sale of the Chapel Hill home. If this was so, the net proceeds from the sale of the home would not have been available to contribute to the purchase price of the unit.
- [34]Mr Purcell expressed the opinion that settlement of the unit took place on 5 June 1992 and the settlement of the home at Chapel Hill was between 11 June and 18 June 1992. Critical to the formation of his opinion in these respects were documents obtained from the Freehold Land Registry as well as a form submitted to the body corporate for the unit. The latter document was signed by Mr Churven as well as the vendor and the outgoing mortgagee. It records that the date of delivery of the instrument of transfer and release of mortgage was 5 June 1992. Mr Purcell explained that such a form was invariably given to the purchaser’s solicitor and signed by the mortgagee at settlement. It should also be noted that the release of the mortgage over the unit was also signed on that day, that is to say, on 5 June 1992. He was in no doubt that this was the date on which the purchase of the unit was completed.
- [35]The Freehold Land Registry documents established the range during which the sale of the Chapel Hill home was completed in Mr Purcell’s opinion. On 11 June 1992, an Application for Certificate of Title addressed to the ANZ Bank was signed and, seven days later, the bank caused a document entitled, “Transfer” (from Mrs Churven to the purchaser of the Chapel Hill home) to be lodged for registration. In Mr Purcell’s opinion, the Application for Certificate of Title would have been lodged prior to settlement or, at least, that was the usual practice. If so, settlement of the sale could not have occurred before 11 June. It was suggested to Mr Purcell in cross-examination that the usual practice may not have been followed in which event his opinion would be wrong. A similar theme was continued in the submissions made by Ms McGhee’s counsel. However, there is no evidence that the usual practice was not followed and the documents upon which Mr Purcell’s opinions are based were executed by more than one person. On the whole of the material considered by Mr Purcell, and now by this court, the probabilities firmly tell against the conclusion that the purchase of the unit was completed after the sale of the Chapel Hill home. I cannot accept the contrary submissions made on behalf of Ms McGhee in this regard. There is no proper basis for inferring that the net proceeds of sale from the Chapel Hill home were applied to the purchase of the unit.
- [36]As to the second matter, there is simply no evidence to even suggest that Mrs Churven otherwise had the financial means to purchase the unit. It is probable that she had only modest savings. In May of 1991, a document completed by her (on her behalf) for the Department of Veteran Affairs indicated that her bank balance was $14,709. She had not been remuneratively employed since around 1980 and the only source of income was the pension she received from the Department. The fact of the matter is that Mrs Churven was never in a financial position to complete the purchase of the unit without, at least, the net sale proceeds from the Chapel Hill home. Even then, there was a sizeable differential and there is no evidence that she had accumulated savings sufficient to bridge that gap.
- [37]Once it is appreciated that the settlement of the Chapel Hill home occurred after the settlement of the purchase of the unit and that Mrs Churven had insufficient funds available to her to even meet the differential, there being no suggestion that Ms McGhee or anyone else for that matter provided any financial assistance to Mrs Churven to assist in this regard, the only rational conclusion is that her brother did so. Indeed, the evidence permits no other finding.
Mrs Churven’s statements
- [38]There is evidence regarding statements attributed to Mrs Churven regarding the ownership of the unit from a number of sources. Statements to that effect may be found in some of the prior wills executed by Mrs Churven. In addition, Mr Churven, Ms McGhee, and their cousin, Ms Philipa Houston, each gave evidence about conversations they had with Mrs Churven about that subject. Regardless of whether such statements ought to be strictly evaluated as original evidence, it is useful to say something about this evidence.
- [39]In a number of prior wills, [13] Mrs Churven purported to deal with the unit as if it was her own. In others [14] as well as the operative will, [15] there was no mention of the unit. However, there was no evidence regarding how instructions for those wills were taken or what advice Mrs Churven received regarding her planned dispositions. In that regard, there is much force in the submissions made by counsel for Mr Churven that it is entirely possible that those wills were prepared on the advice of others (such as the Public Trustee) who did not know of, or appreciate, the ownership arrangement in relation to the unit. Also, there is the distinct likelihood that, in Mrs Churven’s dealings with others, she was not prepared to disclose that she was not the owner of the unit. So much may be discerned from what Mrs Churven told her son prior to entering into the Deed and, of course, the whole rationale for the Deed was to put in place an arrangement that permitted her to hold herself out to others (or some others) as the owner.
- [40]Next, Ms McGhee deposed to various conversations with her mother to the effect that she used the sale proceeds of the Chapel Hill home together with her other moneys to purchase the unit. Despite the limited basis on which this evidence was admitted, I cannot accept that, if those statements were made, they genuinely reflected Mrs Churven’s understanding. Until she went into the nursing home, Mrs Churven operated her own bank account and, thereafter, Ms McGhee assisted her to do so. Beyond that, Ms McGhee was not privy to her mother’s sources of income and rightly conceded when questioned at the hearing that it was possible her mother did not have any sources of income apart from the pension. She also accepted as possible that Mr Churven gave his mother money from time to time. As such, it is reasonable to observe that Ms McGhee had by no means a comprehensive knowledge of her mother’s financial affairs. Indeed, the only information she possessed about her mother’s finances prior to her entering the nursing home came from what she was told by her mother. In the end, Ms McGhee accepted that it was possible that Mr Churven funded the purchase of the unit although, she added, “that was not what my mother had represented to me”.
- [41]It may be that Ms McGhee is mistaken in her recollection or, alternatively, that her mother was not prepared to reveal the true position, that is to say, that Mr Churven purchased the unit for her to live in. As I have just touched on (at [39]), it was important to Mrs Churven that she be able to hold herself out as the owner and that same sense of pride could well have infiltrated her relationship with her daughter. In the end, however, Ms McGhee was really in no position to contradict Mr Churven’s account and, to her credit, conceded that it was possible that her brother paid for the unit.
- [42]For completeness regarding my assessment of Ms McGhee as a witness, mention should be made of submissions made on behalf of Mr Churven to the effect that Ms McGhee’s conduct in offering to pay Mr Churven rent to reside in the unit after the sale of her own home might have betrayed a consciousness on her part that the unit was actually owned by her brother. I cannot agree. At best, that evidence was equivocal and, without more, does not support the conclusion that Ms McGhee understood that the unit belonged to her brother. Quite apart from anything else, such an offer is explicable on the basis that Ms McGhee understood the unit would form part of the estate to be administered by her brother.
- [43]Ms Houston was Mrs Churven’s niece and visited her regularly. There were a number of conversations between the pair regarding the unit. Ms Houston said that Mrs Churven was “very open” about it. Amongst other things, Ms Houston recalled Mrs Churven stating that Mr Churven had purchased the unit for her use, that he had “provided me with a wonderful abode” and that he had “invested in this apartment especially for me”. Ms Houston had no agenda. Her evidence was as spontaneous as it was convincing.
- [44]Ms Houston’s evidence provided solid support for Mr Churven’s account. Taken together with Mr Churven’s evidence and the other features that support his account (summarised above at [15]), any statements attributed to Mrs Churven regarding the ownership of the unit that do not align with that account must be disregarded.
Alternate bases for finding in Mr Churven’s favour
- [45]Even if I am wrong in concluding that the Taringa unit was held on an express trust for Mr Churven, there are other bases for deciding that he was at all times (and remains) the beneficial owner.
A resulting trust?
- [46]It is settled law that where a person purchases property in the name of another, the question whether that other person acquires a beneficial interest in the property depends on the intention of the purchaser. However, in any such case, unless there is a relationship between the purchaser and the other person such as to give rise to a presumption of advancement or evidence to rebut that presumption, there will arise a resulting trust in favour of the person who funded the purchase. [16] A presumption of advancement will arise in certain recognised categories of relationships, for example, “a husband making a purchase in the name of his wife, a father in the name of his child or other person to whom he stands in loco parentis”. [17] But not every relationship “where the ties of love and affection might give rise to a probability, or expectation based on common experience, that a gift was intended” [18] will give rise to the presumption; there is a recognised list of relationships and the purchase of property by a child for his or her parent would not appear to be one of them. Furthermore, even if the purchase was made in the context of one of the recognised categories of relationship, the presumption will fall away if there is evidence that the purchase was not intended to “advance” the other person. [19]
- [47]For the reasons I have already expressed, I am satisfied that Mr Churven paid the purchase price and associated stamp duty for the Taringa unit with the express intention that it would be held by his mother on trust for him but available for her occupation during her lifetime. In the proven circumstances, there could be no presumption of advancement. Furthermore, it was no part of Ms McGhee’s pleaded case, and nor was it put to Mr Churven, that he gifted the unit to his mother or advanced the purchase price to her by way of loan. Rather, Ms McGhee’s case was that the unit was acquired by her mother using the net proceeds of sale of the Chapel Hill home and some other unknown source of money to complete the purchase.
- [48]It follows that, had I not found that the unit was acquired and held by Mrs Churven pursuant to the terms of the express trust recorded in the copy Deed, I would have been compelled to find that a resulting trust arose to the same effect. To the extent that it was submitted on behalf of Ms McGhee that a resulting trust could only arise in respect of the difference between the net proceeds received from the Chapel Hill home and the purchase price of the unit, that submission must be rejected because the two transactions were entirely separate. The position might have been different if the net proceeds of sale were applied to the purchase of the unit, [20] but that is a proposition I have specifically rejected.
A constructive trust?
- [49]Where it would be unconscionable to permit a person to deny another person’s beneficial interest in a property, a constructive trust may be imposed by the court. [21] That will sometimes be so where it is proved that the parties to the transaction intended that the subject property be held beneficially (or partly so) and the party claiming the beneficial interest has acted to his or her detriment on the faith of that common intention. [22] Proof of such a common intention may come directly from statements made by the parties or inferentially from their conduct, including contributions to the maintenance or upkeep of the property. [23]
- [50]Here, as I have found above (at [47]), there was a common intention between Mr Churven and his mother that the unit be purchased in her name but on the basis that Mr Churven retained the beneficial ownership in it. Further, there was a significant body of evidence admitted during the hearing to support Mr Churven’s claim that he acted to his detriment by expending a considerable sum of money with reference to the unit including the cost of maintenance and improvements as well as paying outgoings such as Council rates, water charges and body corporate levies. This included the evidence of Mr Howard, a registered builder, who deposed that he had performed maintenance work on the unit on numerous occasions as well as what he described as “more major building works” at different times, all of which Mr Churven paid for. Although the invoices rendered by Mr Howard were addressed to General Estates, in all probability the invoices were (like the purchase money for the unit) paid on behalf of Mr Churven from money due to him by that company.
- [51]Again, it follows that, had I not found that the unit was acquired and held by Mrs Churven pursuant to the terms of the express trust recorded in the copy Deed or, alternatively, that a resulting trust arose, it would have been open to me to conclude that a constructive trust should be imposed to prevent the unconscionable denial of Mr Churven’s beneficial ownership of the unit.
Defences and discretionary factors
- [52]Counsel for Ms McGhee raised a number of issues that were said to tell against any grant of relief to Mr Churven. I deal with each below.
Undue influence?
- [53]It was contended on behalf of Ms McGhee that the arrangement between her mother and brother was vitiated by undue influence. The onus of proof of such a contention rests with Ms McGhee. [24] There is no substance to it. At the time when she entered into the agreement reflected by the copy Deed, Mrs Churven was more than capable of managing her own affairs and acting independently. Furthermore, she suffered no detriment because of the arrangement. [25] To the contrary, she benefited considerably from the arrangement by having the unit to occupy for as long as she wished while at the same time retaining the net proceeds of the sale of the Chapel Hill home.
Unconscionable dealing?
- [54]For Ms McGhee, it was also contended that the arrangement should be regarded as unconscionable. [26] For the same reasons the arrangement cannot in my view be regarded as having come about through undue influence, this contention must also fail. Mrs Churven was not in any position of special disadvantage and nor could it be seriously suggested that Mr Churven exploited his relationship with his mother, were that even possible.
Breach of fiduciary duty?
- [55]It was also submitted on behalf of Ms McGhee that Mr Churven owed his mother a fiduciary duty by reason of him having acted as her solicitor on the sale of her home and, while that may have been so, [27] it was further submitted that he wrongly derived benefit from that relationship because his mother went from “an unencumbered matrimonial home to … having no interest in the subsequent unit”. That submission overlooks that the net sale proceeds were invested entirely for Mrs Churven’s benefit and misunderstands the true nature of the trust arrangement under which the unit was purchased.
Laches? A stale demand?
- [56]Ms McGhee also complained about what was described in submissions as an “extraordinary delay” of over 28 years before Mr Churven took steps to have the unit registered in his name. This, it was submitted, gave rise to laches [28] and, separately was submitted, as a basis to refuse relief on discretionary grounds. [29] I cannot agree. True it is that Mr Churven could have taken steps pursuant to clause 5 of the Deed to require his mother to transfer the legal title of the unit to him but that would have defeated the purpose of the whole arrangement and run counter to the reason why it was entered into in the first place. Simply, there was no need for him to be registered as the owner. It was only when the subject dispute arose that any such need could have been said to have arisen but, by then, his mother’s health had significantly declined. Laches is not established. Nor is there any proper basis to conclude that Mr Churven should be denied relief on discretionary grounds.
Unclean hands?
- [57]Lastly, Ms McGhee contended that the court should decline any relief because Mr Churven has been guilty of improper conduct. In particular, it was submitted that he acted “in a position of conflict” and then “obfuscated the court during the proceedings” by “not allowing a forensic examination of his computer”. I have dealt with both of these allegations already. They are misconceived.
Conclusion
- [58]None of the issues raised on behalf of Ms McGhee can stand in the way of the principal relief sought by Mr Churven.
The accommodation bond
- [59]It is uncontroversial that an aged care accommodation bond in the sum of $279,478.09 was paid by Mr Churven in connection with his mother’s admission to the nursing home at New Farm. The full amount of that bond was paid to the estate following Mrs Churven’s death. The parties are agreed that this sum of money forms part of the estate and should be paid to Mr Churven after the payment of priority expenses by the estate. Given the consensus on this issue, it is difficult to understand why an order of the court is required but if one is, it can be made.
Relief
- [60]On the primary issue, I have concluded that Mr Churven has always been the sole beneficial owner of the Taringa unit pursuant to the terms of an express trust and is now entitled to a conveyance of the whole of the legal estate. Amongst the wide range of relief pursued in his amended application, an order to that effect is sought. Leaving to one side the accommodation bond, the making of such an order should be all that is necessary to dispose of the application apart from the issue of costs. Put another way, it is not clear to me why there is any need (or utility) for a declaration in the terms sought by Mr Churven.
- [61]Ms McGhee’s amended application largely fails although there may still be an argument that rental income generated from the unit between August 2015 and today should be accounted for to the estate. In this regard, it is uncontroversial that Mr Churven has not accounted to the estate with respect to any of the rental income from the unit and nor has he been prepared to inform Ms McGhee in her capacity as administrator of the amount received in that regard. In that regard, his position is that the unit cannot be regarded as having been vested in the administrator because it was held by his mother on trust [30] and, if that is so, the estate can lay no claim to the income, but this is an aspect of the matter which may require further consideration by the parties.
- [62]There is also the question of costs. Ordinarily they ought follow the event but, again, it may be argued that they should be paid from the estate.
- [63]Given these outstanding questions, the parties will be directed to bring in minutes of order to reflect these reasons.
Addendum
- [64]On 24 August 2021, reasons (consisting of the preceding 63 paragraphs) were handed down and the parties were directed to bring in minutes of order to reflect those reasons.
- [65]On 7 September 2021, the parties furnished the court with the terms of a proposed order to reflect the reasons. On 8 September an order was made in those terms, a copy of which is reproduced in the coversheet to this judgment.
Footnotes
[1] Succession Act 1981 (Qld), s 45; Land Title Act 1994 (Qld), ss 184 and 185.
[2]Succession Act 1981 (Qld), ss 56 and 57.
[3]Land Title Act 1994 (Qld), s 114.
[4]Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614, 621-622.
[5]Property Law Act 1974 (Qld), s 11(1)(b).
[6]Hagan v Waterhouse (1991) 34 NSWLR 308, 385-386.
[7]Queensland Nickel Pty Ltd (in liq) v QNI Metals Ltd & Ors [2021] QCA 138, [72].
[8] Ibid, [73].
[9] On 18 August 2020; exhibit 7. Nil duty was payable.
[10]Uniform Civil Procedure Rules 1999 (Qld), r 69(1)(b)(ii).
[11]Another version of the same document was subsequently located by Mr Churven in a computer folder entitled “SM Churven”.
[12]See: Briginshaw v Briginshaw (1938) 60 CLR 336, 362; Rejfek v McElroy (1965) 112 CLR 517, 521; Leigh v Bruder Expedition Pty Ltd [2020] QCA 246, [14]-[16].
[13] Executed on 22 December 1992, 14 December 2004 and 13 September 2006.
[14] Executed on 17 October 1994 and 22 December 1995.
[15] Executed on 19 March 2008.
[16]Calverley v Green (1984) 155 CLR 242, 246-247, 256, 268.
[17] Ibid, 247, 268.
[18]Anderson v McPherson (No 2) (2012) 8 ASTLR 321, [131].
[19]Charles Marshall v Grimsley (1956) 95 CLR 353, 365; Calverley v Green (1984) 155 CLR 242, 262.
[20]See Amit Laundry Pty Ltd v Jain [2017] NSWSC 1495, [165]-[167].
[21]Muschinski v Dodds (1985) 160 CLR 583, 614, 620; Baumgartner v Baumgartner (1987) 164 CLR 137, 146-148.
[22]Nathan v Williams & Anor [2020] QCA 138, [24].
[23]Green v Green (1989) 17 NSWLR 343, 355.
[24]Johnson v Buttress (1936) 56 CLR 113, 134.
[25]Louth v Diprose (1992) 175 CLR 621, 654.
[26]As to which, see Commonwealth Bank of Australia v Amadio (1983) 151 CLR 447, 459-462.
[27]Chan v Zacharia (1984) 154 CLR 178, 20-21.
[28]Baburin v Baburin (No 2) [1991] 2 Qd R 240.
[29]Hourigan v Trustees, Executors & Agency Co Ltd (1934) 51 CLR 619, 648-651.
[30]Succession Act 1981 (Qld), s 45(1).