Cone v Burch

[2010] NSWCA 168

Court of Appeal (NSW)|2010-06-25|Before: Beazley JA, Giles JA, Macfarlan JA, Barrett J, MacFarlan JA

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At a glance

Source facts

Court

Court of Appeal (NSW)

Decision date

2010-06-25

Before

Beazley JA, Giles JA, Macfarlan JA, Barrett J, MacFarlan JA

Source

Original judgment source is linked above.

Judgment (25 paragraphs)

[1]

Background 6 The plaintiff owned a property at Cedar Creek in Queensland ("the Cedar Creek property"). In about April 2004 the defendant and three of his children became boarders or lodgers at the Cedar Creek property. 7 In October 2005 the plaintiff sold the Cedar Creek property. In November 2005 she and the defendant entered into a contract for the purchase of the Coutts Crossing property. The purchase was completed on 16 December 2005, with the plaintiff and the defendant taking title as joint tenants. All the purchase money was provided by the plaintiff from the proceeds of sale of the Cedar Creek property. The defendant and his children continued as boarders or lodgers, now at the Coutts Crossing property. 8 In February 2006 the plaintiff and the defendant borrowed $50,000 on mortgage of the property. In January 2007 the mortgage loan was increased to $80,000. Over time the money was spent as to $24,090.42 for the joint purposes of the plaintiff and the defendant, as to $16,554.00 for the plaintiff's separate and exclusive purposes, and as to $18,355.58 for the defendant's separate and exclusive purposes. The usage of a further $20,997.50 of the money was disputed. 9 Also in February 2006 the machinery was bought for about $15,000. In the statement of claim it was alleged that it was bought by the defendant and the second defendant, his brother Mr David Cone, and the defendant admitted the allegation in his defence. $10,000 of the purchase money was provided by the plaintiff. The remaining $5,000 came from the mortgage loan. 10 In November 2007 the plaintiff caused conversion of the title to the Coutts Crossing property to tenancy in common. 11 In late 2007 the plaintiff moved from the Coutts Crossing property to Pottsville in New South Wales. The defendant and his children remained at the Coutts Crossing property . 12 The plaintiff and the defendant were not married to each other or in a defacto relationship, and there was no familial relationship.

[2]

[3]

The judge's reasons 15 The plaintiff tendered admissions by the defendant, taken from his affidavits, including that he had not paid rent or board to the plaintiff while he and his children were living at the Cedar Creek property. The admissions were admitted without objection. The defendant later applied for leave to withdraw the admission as to non-payment of rent or board, and gave oral evidence on the voir dire that he had paid $100 per week. The judge refused leave to withdraw the admission. 16 Grounds of appeal that the judge erred in refusing leave and disregarding the oral evidence, which in debate enlarged to whether leave to withdraw an admission was required, were not maintained 17 His Honour accepted that the defendant attended to repairs and maintenance at the Cedar Creek property, and also made some improvements. He said that there was "a dispute as to exactly what he did and the extent, if any, to which it enhanced the property" (at [11]), but that he did not need to decide. 18 It was common ground, and remained so on appeal, that it was necessary for the defendant to rebut a trust in favour of the plaintiff arising from her provision of the whole of the purchase money for the Coutts Crossing property. The judge considered two bases for a claim by the defendant to an interest in the property. 19 The first was a constructive trust in favour of a person who improves the property of another person, for which the judge cited Giumelli v Giumelli (1999) 196 CLR 101. His Honour held that this required a finding that it would be unconscionable for the owner of the property to retain unqualified enjoyment of the improved property, usually because of inducement or encouragement by the property owner and reliance thereon in undertaking the improvements. His Honour said - "13 No such findings can be made in this case. The defendant was an unemployed pensioner with time on his hands while living at Cedar Creek. Because the plaintiff's house had become the home of himself and three of his children, he had an incentive of his own to make it a more pleasant place to live. Because he paid no rent or board to the plaintiff, it was reasonable that he give her benefits in kind by way of work on repairs, maintenance and improvements. There is nothing in the evidence to suggest any basis for an expectation on his part that he should, by his labours, earn an interest in the property." 20 The second was described as an oral contract. The judge recounted the competing positions - "14 … I quote from [the defendant's] second affidavit:

[11]

The grounds of appeal 23 Counsel for the defendant, who had appeared below, said that the Giumelli v Giumelli basis had not been part of his case at trial. He said that his case had been that the defendant had a half interest in the property "as a reward for doing the work at Queensland". 24 So far as the pleaded defence involved a contract ("owed to him"), it was a contract for doing work on the Cedar Creek property. What the judge described as the oral contract may have been different, perhaps not a contract at all, and an enforceable contract may not have been necessary. It was a question of the plaintiff's intention. Nothing turns on the label. 25 On appeal the defendant cast his net more widely than the conversations in his affidavit. After excluding those concerned with the admission, the grounds of appeal in relation to the Coutts Crossing property were - "3. His Honour erred in disregarding evidence that the Appellant performed substantial work at Cedar Creek, for which the Respondent did not pay any money to him. 4. His Honour erred in disregarding evidence by the Respondent that she intended to purchase the land in the joint names of herself and the Appellant as tenants in common, with each acquiring a distinct and separate share or interest in the land, and that the Appellant was going to receive some benefit from having his interest in his name. 5. His Honour erred in admitting and accepting oral evidence in reply by the Respondent that if she sold Cedar Creek and purchased the land and the Appellant built a mud brick house for her on the land, when she saw how good the house was she intended to give him some of the land, and that she purchased the land with his name on the title to avoid the expense of putting his name on the title later on - because that explanation had not been given in an Affidavit and was not put to the Appellant in cross-examination. 6. His Honour erred in not accepting evidence by the Appellant that the Respondent intended to give to him a half interest in Lot 184 Kangaroo Creek Road Coutts Crossing ('the land') when they purchased it in joint names. 7. Accordingly, his Honour erred in not finding that the presumption of a resulting trust in favour of the Respondent was rebutted by evidence of her intention that the Appellant acquire a distinct and separate beneficial share or interest in the land as a tenant in common with her when they purchased the land in joint names."

[13]

Ground 4 - error in disregarding the plaintiff's evidence of her intention 29 The defendant relied on a number of passages in the cross-examination of the plaintiff. The plaintiff agreed that she knew that the Coutts Crossing property was being purchased in joint names. In answer to the question that it was her intention "that the two of you purchase that property" she said, "It was my intention for me to buy the property, yes", and in answer to the succeeding question she agreed that it was her intention "[t]o have it in the name of [the defendant] as well". She agreed that she intended that each would have "a distinct and separate share", although she did not agree that it was her intention that they each have "half the land" and said that the shares were "going to all depend". She agreed that it was her intention that the defendant "be on the title". The defendant particularly relied on the plaintiff's evidence, referring to signing the contract at Mr Flynn's office - "Q. You'd already worked out very clearly in your mind that you were going to put the title into both names, you took Mr Cone along with you for that purpose and you carried out that purpose into effect when you both signed the contract? A. Yes. Q. And I put it to you that you knew when the title was going into both names that he was acquiring an interest in the land? A. Yes. Q. You knew that. And that was in accordance with your intention? A. Yes. Q. And he was going to get some benefit from having that interest in his name? A. He would have yes." 30 The admissibility and relevance of the uncommunicated intention of the plaintiff is not clear: see Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 364-6; Martin v Martin (1959) 110 CLR 297 at 303-5; Calverley v Green at 261-2 (Mason and Brennan JJ); 269-70 (Deane J). It need not be investigated. 31 The passages to which the defendant referred were all consistent with, and (in the contemplation that the shares "were going to all depend") explanatory of, the arrangement summarised by the judge in para [16] of his reasons earlier set out. The plaintiff's evidence must be read as a whole, The plaintiff did intend the defendant to have an interest in the Coutts Crossing property, but it was not an intention that he have it then and there as joint purchaser. His gaining an interest depended on the defendant building a mud brick house for the plaintiff, and the shares depended on how matters turned out. The necessary events did not occur. 32 The passages did not establish an intention that the defendant would have an interest in the Coutts Crossing property, a half share or otherwise, at the time and by virtue of the title going into both names. Reading the plaintiff's evidence as a whole, I do not think that the defendant gains support for rebuttal of the trust arising from the plaintiff's provision of the whole of the purchase money for the Coutts Creek property.

[14]

Ground 5 - error in admitting and accepting the evidence of the plaintiff 33 The evidence was the plaintiff's explanation recounted by the judge in para [16], and implicitly accepted by his Honour. 34 The plaintiff's case in chief was the tender of the admissions. The defendant's affidavits were then read, his evidence concerning payment of rent or board was taken on the voir dire and the ruling was given, and after some further evidence in chief he was cross-examined generally. An arrangement as summarised in para [16] was not put to the defendant in cross-examination. 35 Some plaintiff's affidavits were read in a case in reply. They did not include evidence of the arrangement. The plaintiff was cross-examined, during which the explanation was given. It was not thrust upon the cross-examiner; in particular, a question sought "the nature of the discussion you had about acquiring Kangaroo Creek in joint names … the substance of that conversation". 36 There was no error in admitting the evidence so elicited by the defendant in cross-examination. 37 No application was made to recall the defendant in order to meet the plaintiff's explanation. The defendant submitted to the judge that - "[t]he fact that she did come out with some sort of an explanation in cross-examination shouldn't be given any weight given what your Honour has already said about the timetable for affidavits and the like, and the fact that that version she gave was not put to my client in cross-examination, not at all, he wasn't recalled and that wasn't put to him in the witness box, it wouldn't be fair that your Honour should place any weight on that." 38 On appeal, the plaintiff submitted that the judge had rejected the defendant's evidence, as distinct from accepting the plaintiff's evidence. I doubt the distinction is sound; as earlier noted, there was implicit acceptance of the plaintiff's explanation. 39 The defendant submitted that non-compliance with the so-called rule in Browne v Dunn (1894) 6 R 67, as explained in Allied Pastoral Holdings Pty Ltd v Commissioner of Taxation (1983) 1 NSWLR 1, precluded reliance on the evidence. The rule in Browne v Dunn is essentially one of fairness. There is nothing unfair in the plaintiff relying on the evidence elicited by the defendant in cross-examination. It was not for the plaintiff to seek recall of the defendant, and the defendant's counsel did not recall him. The judge was entitled to give weight to, and accept, the plaintiff's evidence notwithstanding the way it had come before him.

[22]

Ground 10 - error in not admitting evidence of an exchange 54 After objection to evidence on the "topic", on the ground that it had not been dealt with in the affidavits, the evidence was taken on the voir dire. It was not quite as summarised in the ground of appeal. According to the defendant, in a conversation with the plaintiff she got the Hilux in return for her $10,000, so he could pay off the machinery. 55 The plaintiff's objection was then renewed, on the ground that " … it is just too late in the context of these proceedings to be revisiting and requiring factual investigations which may be necessarily undertaken to deal with those issues." 56 The defendant said nothing to justify the lateness. Counsel for the defendant said, rather plaintively, "I am just doing the best I can with the information that's coming to me. I can't do anything more than that." 57 The judge ruled - "The evidence that has been led orally from the first defendant on the voir dire will not be admitted. At the pre-trial directions hearing on 10 November no provision was made for further affidavits. The position must be taken to have been that the evidence was complete. The evidence that has been led gives rise to a need for factual investigation on the part of the plaintiff. It is unreasonable to expect the plaintiff to undertake that investigation at this point when the trial has started." 58 On appeal, the defendant submitted that the plaintiff had been allowed to read affidavits sworn by her a week before and on the day of the hearing, and that it would have been easy for the plaintiff to respond to the evidence as she would have known whether or not the arrangement for an exchange was made. 59 There was no objection to the reading of the plaintiff's affidavits, and no question of her being "allowed" to read them. In any event, tit for tat is not a principle of evidence. Responding to the defendant's evidence was not necessarily only a matter of the plaintiff's say-so - for example, the time or even existence of the underlying purchase of the Hilux might have been in question. Counsel for the plaintiff did not at the time contest that factual investigations might be necessary. No error has been shown in the exercise of his Honour's discretion. 60 The submissions under this ground of appeal went beyond it. The defendant submitted that in any event there was error in the judge's finding, pointing to an answer in the plaintiff's cross-examination - "Q. So it was not ever your intention that you would have any beneficial interest or any ownership of the brick-making machine or the generator was it? A. No." 61 Again, the admissibility and relevance of the uncommunicated intention (or lack of intention) of the plaintiff is not clear. The question and answer followed a series of questions concerned with the defendant's experience in making mud bricks, including with acceptance (now displaced) that the machinery was purchased in the names of the defendant and Mr David Cone. From the "so" at the beginning of the question, it could have been taken to refer to use of the machinery. The question and answer were not followed up by putting to the plaintiff that that her $10,000 was provided way of loan. In the unsatisfactory state in which the evidence was left, I do not think it was sufficient to rebut the presumption arising from the plaintiff's provision of two-thirds of the purchase price.