Downey v Doyle [2025] VSC 315

3 The second defendant, the Registrar of Titles, wrote to the Court on 6 July 2023 indicating she does not intend to appear in the proceeding.

4 The plaintiff relied upon three affidavits of Mr Downey sworn 10 May 2023, 11 July 2023 and 28 July 2023. Mr Downey also gave oral evidence at trial and was cross-examined.

5 Ms Doyle gave evidence at trial and was cross-examined. As part of her evidence in chief she adopted a witness outline of evidence and tendered a number of exhibits. Ms Doyle further relied upon affidavits sworn by her on 4 July 2023 and 9 September 2023.

7 Ms Doyle initially purchased the property in 2006.

8 By transfer of land dated 8 October 2007, Ms Doyle transferred her interest in the property to Mr Bourne. The transfer was registered at the Land Titles Office on 16 October 2007.

9 On 7 March 2014, Ms Doyle caused to be registered on the title to the property a caveat numbered AK952741L, claiming that the registered proprietor holds his interest as trustee for the caveator pursuant to a constructive trust and/or a declaration of trust from the registered proprietor made on 16 October 2007.

10 The plaintiff is trustee of the bankrupt estate of Robert Henry Bourne, having been appointed on 10 July 2014. The property became vested in the plaintiff under sections 58 and 116 of the Bankruptcy Act 1966 (Cth) upon his appointment as trustee of the bankrupt estate of Mr Bourne.

11 On 22 July 2014, the plaintiff wrote to Ms Doyle seeking details of the claims made by her as caveator in respect of the property.[1]

12 By letter dated 15 August 2014, Ms Doyle responded by claiming:

Robert Bourne holds the properties at 42 Ardcloney Drive, Sunbury & 2 Powlett Street, Sunbury on Trust for myself (&/or my children).

I paid the deposit on 42 Ardcloney Dr in 2006 with proceeds from my Family Law property settlement. The balance of the purchase price was funded by a mortgage in my own name. I had relocated from Albury to Sunbury with my children in 2006 for education reasons.

In 2007 after obtaining quotes for repairs and renovations to Ardcloney Dr, I was advised the costs would be prohibitive due to structural problems & poor workmanship of the previous owner builder. I decided my best option would be to purchase another property (Powlett St) with the view to moving there when my youngest daughter finished year 12.

Due to serious illness and protracted Family Law proceedings, I had difficulty accessing funds for the Powlett St purchase. In order to use my equity in Ardcloney Dr to complete the purchase, Robert agreed to assist me with obtaining finance. This involved Robert becoming the "legal title holder" & Mortgagor for both properties.

As Robert was my Power of Attorney and as we had previously entered into other financial agreements on Trust, he agreed he would never "claim" the properties as his own. Robert's previous background was as a Chartered Accountant & Auditor. In the event of my illness or death, I required a trusted professional to be able to carry out the duties of a POA or executor for the benefit of my children.

Our written Agreement is that I am solely responsible for the mortgage repayments, rates outgoings etc & that whenever I or my children are in a position to obtain loan finance in our own names, he will re-convey the titles of the properties to myself &/or my children & the existing mortgages will be re-financed.

13 On 2 September 2014 the plaintiff wrote again to Ms Doyle seeking further information and details in support of her claim, including the written agreement referred to in Ms Doyle's correspondence indicating that she was solely responsible for mortgage repayments, rates, outgoings et cetera in relation to the property. Ms Doyle did not respond to that letter.

14 On 4 October 2016, the Official Trustee was appointed trustee of the bankrupt estate of Ms Doyle and remains as trustee. The Official Trustee has not sought to intervene in this proceeding.

15 The plaintiff has never granted Ms Doyle a licence to occupy the premises, nor has the plaintiff ever extended any informal licence.

16 In April 2020 Ms Doyle issued an application in the Victorian Civil and Administrative Tribunal, seeking that Mr Bourne carry out repairs at the property. Her claim was based on an assertion that she had leased the property pursuant to a residential tenancy agreement. On 3 July 2020, in respect of that proceeding, Member Ussher found that the purported tenancy agreement was a sham.[2] In the current proceeding, and despite that finding, Ms Doyle continues to assert that she has occupancy rights pursuant to the purported tenancy agreement, but concedes that she has never paid rent to the plaintiff.

17 On or about 8 March 2023, the plaintiff served on Mr Bourne a written notice under s 129AA of the Bankruptcy Act 1966 (Cth) extending the vesting period in relation to the property to 6 August 2026.

18 On 28 March 2023 the plaintiff's solicitors wrote to Ms Doyle demanding that she vacate the property and served on her a notice to vacate.

19 The plaintiff became registered as proprietor of the property on 3 May 2023 pursuant to the registration of a transmission application.

20 On 4 May 2023 the plaintiff's solicitors wrote to the 'occupiers' of the property demanding that they vacate the property and served on the occupiers a notice to vacate.

21 Ms Doyle did not vacate the property. Ms Doyle remains in occupation of the property without the plaintiff's licence or consent.

22 The plaintiff commenced this proceeding by Originating Motion filed on 10 May 2023, seeking orders:

(a) for recovery of possession of the property under Order 53 of the Supreme Court (General Civil Procedure) Rules 2015; and

(b) under s 90(3) of the Transfer of Land Act 1958 that the Registrar of Titles remove a caveat on the title to the property lodged by the first defendant on 7 March 2014.

23 On 17 November 2023, Irving AsJ granted the plaintiff's application for orders that the caveat be removed, but decided that the plaintiff's application for an order for possession should be referred for a full hearing on the merits.

Based on the material before the Court on the hearing of the application I have reservations about the strength of the defendant's case. Notwithstanding those reservations, having regard to the principles relevant to an application under Order 53, I am satisfied that it would be inappropriate to determine the issues in dispute without a full hearing on the merits. I have reached this view because in the course of submissions, the defendant asserted she had further documentary evidence she wished to place before the court and because it appeared to me that a final resolution of the dispute may well involve an assessment of the credibility of any witnesses. Mindful that the power to make orders for possession should be exercised with great care, it is appropriate that I make orders for the orderly preparation of the dispute for trial.[3]

25 On 16 October 2024, in separate proceedings, the County Court ordered that Westpac Banking Corporation (Westpac) recover possession of the property. Westpac has been notified of the existence of the proceedings in this Court.

26 The plaintiff has offered to provide an undertaking to this Court that upon the Court making an order that the plaintiff recover possession of the property, the plaintiff will surrender his possession of the property to Westpac as mortgagee.

27 Although Ms Doyle sought to raise a number of issues in defence of the proceeding, the outcome of this proceeding turns on whether there is a trust in existence in respect of the property, which in turn would mean that the property is not included in the divisible assets of Mr Bourne.

28 As to determining whether there is a trust in existence, the following passage from LL UP Pty Ltd v Kegland Distribution Pty Ltd[4] is relevant.

There are two methods of creating a non-testamentary trust: (1) a trust arising from a transfer of property by a person having power to transfer it to another person to hold that property on trust (whether the transferee is an owner, donee of a power or otherwise); or (2) a declaration of trust in which a person declares that he or she holds, or will hold, property on trust and thereby assumes, or proposes to assume the obligations of a trustee. Such a declaration is as much a declaration of trust as one made by the beneficial owner of the property to be subjected to the trust. The existence of an express trust depends on three things (1) certainty as to the subject matter of the trust; (2) certainty as to the beneficiaries, the objects of the trust; and (3) certainty as to intention.[5]

29 Because the relevant interest in this case is an interest in land, s 53 of the Property Law Act 1958 applies. Section 53 provides as follows:

(1) Subject to the provisions hereinafter contained with respect to the creation of interest in land by parol -

(a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by his agent thereunto lawfully authorized in writing, or by will, or by operation of law;

(b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will;

(c) a disposition of an equitable interest or trust subsisting at the time of the disposition must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will.

(2) This section shall not affect the creation or operation of resulting, implied or constructive trusts.

30 As such, section 53 draws a distinction between:

(a) an interest in land being created or disposed of (which must be in writing to convey the legal interest in the land); and

(b) a declaration of trust in relation to land (which just has to be manifested and proved in writing).

31 This was elaborated on in Re McGowan & Valentini Trusts[6] ('Re McGowan'):

The prevailing view in the authorities is that, in order to avoid sub-section (b) being seen as otiose or imposing requirements additional to sub-section (a), sub-section (a) is construed as not extending to declarations of trust land. Unlike the creation of a trust in land, which must be in writing, a declaration of trust respecting land, however, need only be "manifested and proved by some writing signed by some person who is able to declare such trust". In addition, it has been held that these requirements may -

... be satisfied by a combination of documents capable of being read together. Any informal writing may stand as evidence of the existence of a trust including correspondence from third parties, a telegram, an affidavit or an answer to interrogatories.

The date of creation of the writing is not material. It may come into existence at any time after the declaration of the trust.

Nevertheless, careful attention needs to be paid to whether the documents or combination of documents signed by the person able to declare the trust actually manifest and prove the trust of land claimed to have been declared, including the salient terms of the trust. Whereas oral evidence may be capable of persuading a tribunal of fact that a declaration of trust was made, that oral evidence cannot also be used to fill gaps in the written record for the purpose of manifesting and proving the declaration and the terms of the trust that is sought to be enforced.[7]

32 In respect of documentary evidence so as to prove that there has been a declaration of trust in respect of the property, Ms Doyle relied on a photocopy of a one page handwritten document titled 'acknowledgement of trust', purportedly signed by Mr Bourne on 27 July 2014. This was 17 days after the commencement of Mr Bourne's bankruptcy and 5 days after the plaintiff's letter to Ms Doyle seeking details of the claims she made.

I, ROBERT HENRY BOURNE, AS TRUSTEE HEREBY ACKNOWLEDGES THAT HE HOLDS THE PROPERTY LOCATED AT 42 ARDCLONEY DRIVE SUNBURY VIC 3429 (BEING THE WHOLE OF THE LAND IN CERTIFICATE OF TITLE VOLUME 9064 FOLIO 573) ON TRUST FOR THE BENEFIT OF THE BENEFICIARIES ERIN HABERMANN, JESSIE HABERMANN, BETH HABERMANN & AMY HABERMANN.[8]

34 Presumably, this was the further documentary evidence that Ms Doyle wished to place before the Court, as noted by Irving AsJ in his reasons for judgment.[9]

35 The document had not been produced as part of discovery in this proceeding or even as part of the material sought to be tendered by Ms Doyle on the first day of the trial. Ms Doyle produced the document on the second day of the trial, after being given a final opportunity to locate and provide any further documentation in support of her defence. Mr Bourne was not called as a witness by either party.

36 Ms Doyle herself gave oral evidence about this document and also gave evidence more generally about the existence of a trust or trusts. However, I have reached the conclusion that the evidence called by Ms Doyle as to the purported existence and nature of a trust is conflicting, unreliable, and does not satisfy the evidentiary requirements elaborated on in Re McGowan.

37 First, I am not satisfied that there is any trust manifested and proved in writing. I am not at all satisfied as to the legitimacy of the purported acknowledgement of trust by Mr Bourne. Even if it was signed by Mr Bourne, it was signed 17 days after the commencement of Mr Bourne's bankruptcy and might be thought to be an attempt to avoid the property being part of Mr Bourne's divisible assets.

38 More significantly, the timing of its production to the Court suggests a belated attempt by Ms Doyle to produce material to resist the claim made by the plaintiff. It was never produced to the plaintiff in response to his queries for information and documentation. It was not produced in any discovered material by Ms Doyle in this proceeding. The original was never produced.

39 Ms Doyle was at pains to point out in her evidence that Mr Bourne has over the years changed his signature. No other witnesses were called by Ms Doyle to support the legitimacy of the document. Even if Ms Doyle can be said to have an explanation for not calling Mr Bourne as a witness, the same cannot be said in respect of not calling any of her four daughters, who on one version of Ms Doyle's evidence, are the beneficiaries of the trust.

40 It is simply not possible for me to place any reliance on this document.

41 Secondly, Ms Doyle's evidence as to the existence of and nature of the trust, was inconsistent, with differing versions including:

(a) that she purchased the property on trust for her four children in 2006;

(b) that Mr Bourne became a bare trustee in 2007, and his only obligation was to hold the legal title and reconvey the property on repayment of the Westpac loan;

(c) that she and Mr Bourne were co-trustees;

(d) that the caveat she lodged was in her capacity as trustee for her children; and

(e) that Mr Bourne holds the property on trust for herself and/or her children.

42 In respect of making a declaration of trust in 2006 when she first purchased the property, she said it was for the purpose of ensuring that her children would have a home to live in, but she refused to produce a copy of the relevant declaration of trust claiming it was not relevant.

43 In respect of what occurred in 2007, Ms Doyle said she had no bank statements or other documents because the loan taken out at that time was not in her name.

44 Ms Doyle said she had a recollection of another document handwritten by Mr Bourne acknowledging the existence of a trust, but it was damaged or lost in a storm. Ms Doyle could not say exactly what its contents were, other than that it was the same or similar to the document signed by Mr Bourne on 27 July 2014.

45 Taking all of the above matters into account, I accept the plaintiff's submissions that the Court does not have sufficient evidence to making a finding as to:

(a) whether or not there was the requisite intention to create a trust or trusts by any person or persons;

(b) when the alleged trust or trusts were in fact created;

(c) who the trustee or the trustees of the alleged trust or trusts were;

(d) what comprised the trust property of the alleged trust or trusts;

(e) who the beneficiaries of the alleged trust or trusts were; or

(f) what the terms of the alleged trust or trusts were.

46 Accordingly, I conclude that there is no trust in existence in respect of the property. Specifically, I conclude that neither Mr Bourne, nor Ms Doyle, hold the property on trust for Ms Doyle or her children.

47 There are a number of other matters raised by Ms Doyle that can be briefly disposed of.

48 First, the existence of an order that Westpac recover possession of the property does not preclude this Court from making an order for possession in favour of the plaintiff, particularly in circumstances where Westpac has been notified of the existence of the proceedings in this Court and the plaintiff has agreed to surrender his possession of the property to Westpac as mortgagee.

49 Secondly, there is no substance to Ms Doyle's assertions that the plaintiff has no vested interest in the property because it was not disclosed in Mr Bourne's statement of affairs. The assertion by Ms Doyle is based on the proposition that the extension notice given by the plaintiff under s 129AA of the Bankruptcy Act 1966 (Cth)[10] only applied to property disclosed in a statement of affairs. However, a bankrupt cannot avoid the consequences of bankruptcy by simply not including property in a statement of affairs. Where property has not been disclosed in a statement of affairs, as was the case here, the property remained vested in the plaintiff as bankruptcy trustee as an undisclosed asset, irrespective of the s 129AA extension notice.

50 Thirdly, I reject Ms Doyle claims that she has the benefit of a residential tenancy agreement, initially entered in 2007 with Mr Bourne, that has the consequence:

(a) that this Court does not have jurisdiction to make the orders sought; and

(b) that permits her to remain as a tenant on the property.

51 I am not satisfied as a matter of fact that there is any residential tenancy agreement in existence, for the following reasons:

(a) Ms Doyle did not produce the residential tenancy agreement that she said was initially signed in 2007;

(b) although Ms Doyle produced a copy of part of a document headed Residential Tenancy Agreement dated 1 November 2012 requiring her to pay $1500 on the 10th of each month and said to continue for an indefinite period with no expiry date, the pages produced are insufficient to establish the existence of a current tenancy agreement;

(c) Ms Doyle did not produce any proof of payment pursuant to the purported agreement and indeed confirmed that she has not paid any rent to the plaintiff under the terms of the purported agreement;

(d) the existence of a tenancy agreement is inconsistent with the content of Ms Doyle's letter of 15 August 2014 and her other correspondence and communication with the plaintiff.

52 My findings are consistent with the decision of Member Ussher of the Victorian Civil and Administrative Tribunal to the effect that, in respect of that proceeding, 'a sham tenancy agreement was created by Ms Doyle and Mr Bourne'.[11] It is unnecessary for me to deal with the plaintiff's estoppel submissions or rely to any extent on the findings of the Victorian Civil and Administrative Tribunal, as I have concluded that the evidence in the current proceeding falls well short of establishing any tenancy agreement.

53 In conclusion, subject to the plaintiff giving an undertaking in the terms referred to in paragraph 26 of these reasons, I am satisfied that there should be an order that the plaintiff recover possession of the property.

JAMES PATRICK DOWNEY as Trustee of the Bankrupt Estate of ROBERT HENRY BOURNE

[1] And in respect of a property at 2 Powlett Street, Sunbury.

[2] Doyle v Bourne (Residential Tenancies) [2020] VCAT 758, [84].

[3] Downey as Trustee of the Bankrupt Estate of Robert Henry Bourne v Doyle [2023] VSC 664, [51] (Irving AsJ).

[4] [2024] VSC 651.

[5] LL UP Pty Ltd v Kegland Distribution Pty Ltd [2024] VSC 651, [28] (Croft J).

[6] [2021] VSC 154.

[7] Re McGowan & Valentini Trusts [2021] VSC 154, [67]-[68] (Macaulay J).

[9] Downey as Trustee of the Bankrupt Estate of Robert Henry Bourne v Doyle [2023] VSC 664, [51] (Irving AsJ).

[10] Which the plaintiff said was a 'belt and braces' extension because, in reality, the effect of the property not being declared was that it remained vested until declared, and that once declared the processes under s 129AA became applicable.

[11] Doyle v Bourne (Residential Tenancies) [2020] VCAT 758, [84].