Livin the Dream Pty Ltd v Attorney-General & Ors

The applicant company sought a declaration that it held certain property on trust. The director of the applicant made an affidavit before the proceedings were commenced, and it was subsequently filed in the proceedings. The relevant question was whether this affidavit fulfilled the requirement in s 11(1)(b) Property Law Act 1974 that a declaration of trust in respect of land be in writing. Martin SJA held that it did, and that the requirement in s 11(1)(b) was therefore satisfied. However, his Honour nevertheless also held that a trust was not created as alleged due to the conduct of the controllers of the applicant company being inconsistent with the existence of a trust. Accordingly, the application was dismissed.

Martin SJA

17 February 2025

Background

The applicant sought a declaration that it held an 8-hectare property at Lake Moogerah on trust for the charitable purpose of the advancement of religion. [1]. In summary and at a high level, the founders and controllers of the applicant company agreed to transfer the shares in the applicant company to a registered charity, Love Your World, which was controlled by one of the applicant company’s controllers, and to pay off a mortgage on that property. The applicant company’s constitution was amended to provide that the company’s object was to pursue charitable purposes, but this amended constitution was not adopted. [30].

There was no express declaration of trust by the applicant’s director, nor was there a resolution by the applicant that it would hold the property on trust. [38]. Rather, the applicant contended that statements made by the controllers of the applicant with respect to using the property for a ministry run by Love Your World, the proposed plans to transfer the shares of the applicant to Love Your World, and a proposal to discharge the mortgage on the subject property, allowed an inference to be drawn that there was an intention to create a trust. [30]–[31], [54]. However, there was a lack of documentary evidence that would ordinarily be expected to exist if such a trust had been intended. [55].

The primary issue was whether a trust as alleged was created, although a preliminary issue was whether the requirements of s 11(1)(b) Property Law Act 1974 (“PLA”) were satisfied. That preliminary issue arose because an affidavit sworn by the applicant’s sole director sworn for use in the proceedings but sworn before the proceedings commenced was sought to be relied on as the necessary writing for the purposes of s 11(1)(b) PLA. [12]–[13].

Was s 11(1)(b) PLA satisfied?

Section 11(1)(b) PLA provides:

“(1)Subject to this Act with respect to the creation of interests in land by parol—

…

(b)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 or by the person’s will; …”

Martin SJA referred to the principle that no particular form of writing is required for the purposes of s 11(1)(b) and an affidavit may suffice: Barkworth v Young (1856) 26 LJ Ch 153; 62 ER 1. [11]. His Honour adopted the reasoning in Fletcher v Burns (1997) 12 BPR 22,937, 22,938–22,939, that:

“[An affidavit] filed after the commencement of the proceedings cannot be a sufficient memorandum because it was not in existence when the proceedings were commenced …”

His Honour concluded that because the writing relied upon by the applicant came into existence before the proceedings were commenced, the affidavit was not “sworn in the proceedings” because the proceedings did not exist until the originating application was filed. Martin SJA held that the mere fact that the “writing” relied upon was an affidavit does not disallow the applicant from relying on it if it otherwise satisfied s 11(1)(b) PLA. Because the authorities do not allow for writing in any form which is created after proceedings are commenced to be relied upon, and here the affidavit was created before the proceedings were commenced, s 11(1)(b) was satisfied. [20]–[21].

Was a trust created as alleged?

Martin SJA concluded that the conduct of the controllers of the applicant with respect to the “on and off” sale of property, together with statements made that there were negotiations with a purchaser, was inconsistent with the existence of a trust. Additionally, there was an absence of any conduct by the applicant which would comply with the duties and obligations of a trustee, and accountants engaged by the applicant’s controllers had not been told that the applicant held the property as trustee. Martin SJA found that this was not due to incompetence, but rather, because it was more likely that the arrangements in place were not indicative of a trust being created. His Honour accordingly held that based on what was said, done, and not done, a trust was not intended to be created and indeed was not created. [69]–[71].

Disposition

The application was dismissed. [72].

A Lukacs