Foundas v Arambatzis

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] The appellant challenged a decision of a judge of the Equity Division who dismissed the appellant's notice of motion to set aside orders made in her absence. The proceedings concerned two properties which were held by the appellant and first respondent in equal shares as tenants in common. These properties were located at Stanwell Crescent, Ashcroft and Magee Street, Ashcroft. The second respondents in the proceedings were the court appointed trustees for sale of the Magee Street property and took no active part in the appeal. On 1 October 2014 the mortgagee of the Stanwell Crescent property exercised its power of sale and, after satisfying the mortgage debt, deposited the remaining sum in an unrelated solicitor's trust account. These funds were ultimately distributed to the appellant alone. On 15 October 2018 the primary judge gave judgment for the respondent for half of the funds received by the appellant from the sale of the Stanwell Crescent property less $1,340. It was further ordered that trustees for sale be appointed under s 66G Conveyancing Act 1919 (NSW) to the Magee Street property with the proceeds of that sale to be distributed equally between the parties after accounting for the trustees' charges and expenses and the first respondent's costs before the primary judge. Subsequent to this, the appellant became aware of the orders made in her absence and filed a notice of motion seeking those orders be set aside. This motion was heard and dismissed by the primary judge on 6 September 2019. There were three issues: 1. whether the appellant had an arguable defence that the first respondent's interest in either property was held on trust for the appellant and to the application for the appointment of trustees for sale of the Magee Street property; 2. whether the appellant had an arguable defence to the first respondent's claim for his share of the proceeds of sale of the Stanwell Crescent property; 3. whether the appellant had an arguable claim to a greater proportion of the net proceeds of sale of the Magee Street property.

The Court of Appeal (Bell P, Basten and White JJA) unanimously allowed the appeal in part holding:

Per White JA (Bell P and Basten JA agreeing at [1] and [2] respectively):

As to issue (i): There was no evidence for the appellant's assertion that the first respondent held his interest in either property on trust for the appellant. The contrary would be inconsistent with the position taken by the appellant in past communications with the first respondent: [32], [45], [66], [67], [68]. There was no arguable defence to the application for the appointment of trustees for sale of the Magee Street property: [65], [66], [71], [72]. Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411;Tory v Tory [2007] NSWSC 1078: referred to.

As to issue (ii): The appellant and first respondent did not contribute equally to the purchase of the Stanwell Crescent property: [55], [58], [59].The appellant had an arguable claim that the presumption of resulting trust was not rebutted: [56], [60]. Calverley v Green (1984) 155 CLR 242; [1984] HCA 81; Currie v Hamilton [1984] 1 NSWLR 68; Jain v Amit Laundry Pty Ltd [2019] NSWCA 20; Ryan v Dries [2002] NSWCA 3; (2002) 10 BPR 19,947: applied. Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353; [1956] HCA 28; Shepherd v Cartwright [1955] AC 431; Black Uhlans Inc v New South Wales Crime Commission & Ors [2002] NSWSC 1060: referred to. In accordance with the concession made by counsel for the first respondent the orders of the primary judge should be varied to reflect the parties' contributions: [61].

As to issue (iii): The appellant and first respondent did not contribute equally to the purchase of the Magee Street property: [81] [82], [86].The appellant had an arguable claim to more than half of the net proceeds of sale in that it was arguable that the presumption of resulting trust was not rebutted [83]. In accordance with the concession made by counsel for the first respondent the orders of the primary judge should be varied to reflect the parties' contributions: [89] It was not arguable that the appellant would be entitled to a greater proportion of the proceeds of sale due to past expenditure on improvements and mortgage payments made: [91], [92], [93]. In order for the appellant to be entitled to contribution for these expenses she would have to account for an occupation rent for the period she had exclusive occupation of the property. There was no evidence the former sum would exceed the latter: [94]. Calverley v Green (1984) 155 CLR 242; Ryan v Dries [2002] NSWCA 3; (2002) 10 BPR 19,947; Maio v Sacco [2009] NSWSC 413: applied

Judgment

1. BELL P: I agree with White JA.
2. BASTEN JA: I agree with White JA.
3. WHITE JA: This is an appeal from orders of the Equity Division (Darke J) made on 15 October 2018 and 6 September 2019.
4. The orders of 15 October 2018 were made in the appellant's absence. On 10 August 2018 the primary judge had made orders for substituted service on the appellant. Service had been effected in accordance with those orders. The appellant did not appear on the return of the summons. On a later hearing of the appellant's application to set aside the orders made on 15 October 2018 the primary judge accepted her evidence that it was not until after the orders had been made that she became aware of the proceedings.
5. The appellant and first respondent are sister and brother. The appeal concerns two properties of which they were co-owners, one at Stanwell Crescent, Ashcroft and the other at Magee Street, Ashcroft.
6. The orders made on 15 October 2018 were: "The Court: 1. Orders pursuant to s 66G of the Conveyancing Act 1919 (NSW) ("the Conveyancing Act") that Messrs Sean Magnus Wengel and Robert William Whitton, Chartered Accountants, of William Buck, Level 29, 66 Goulburn Street, Sydney, in the State of New South Wales ("Trustees") be appointed jointly and severally as trustees for the sale of 12 Magee Street, Ashcroft, in the State of New South Wales, 2168 ("the Property"); 2. Orders that the Property be vested in the Trustees on the statutory trust for sale under Division 6 of Part IV of the Conveyancing Act. 3. Orders that upon completion of the sale of the Property pursuant to order 2 the Trustees distribute the proceeds in the following manner: (a) in payment of the Trustees' commission and costs for time in attendance up to completion of the sales on an indemnity basis, including (and without any limitation intended), costs for seeking vacant possession of the Property and dealing with any caveats or other registered dealings over the Property; (b) in payment of the other costs of sale including, but not limited to legal costs, advertising costs and agent's commission; (c) in payment of expenses incurred by the Trustees for the purpose of bringing the Property up to a condition which would facilitate sale; (d) in payment of all rates, taxes and insurances and other outgoings on the Property; (e) in payment of the plaintiff's costs of the proceedings as agreed or assessed; and (f) the balance to be paid half each to the Plaintiff and the Defendant. 4. Orders that the Trustees shall be at liberty to execute any and all necessary conveyance or other documents and to do all such things as are necessary in relation to the performance of these orders; 5. Orders that judgment be entered for the plaintiff against the defendant in respect of the proceeds of sale of 1 Stanwell Crescent, Ashcroft, in the State of New South Wales in the sum of $108,983.93 together with interest under s 100 of the Civil Procedure Act from 12 August 2016. 6. Grants liberty to the Trustees to apply."
7. On 2 March 2020 the trustees for sale were joined as the second respondents to the appeal. They took no part in the hearing of the appeal but have an interest in the orders to be made. Except in proposing formal orders I will refer to the first respondent, Mr Peter Arambatzis, as "the respondent".
8. At the hearing on 15 October 2018 counsel for the respondent submitted that in relation to his proposed order 5 the respondent sought judgment for half of the net proceeds of sale of the property in Stanwell Crescent, Ashcroft, of which the appellant and respondent had been registered proprietors as tenants in common in equal shares, less $1,000 that the respondent acknowledged the appellant had paid in 1999. The property had been sold by the Commonwealth Bank in exercise of its powers of sale as mortgagee. The net proceeds had been paid into a solicitor's trust account and were paid out by a manager appointed to the solicitor's practice to the appellant. The net proceeds of sale were $220,647.85. In his written submissions counsel for the respondent stated that judgment was sought for $109,323.93. The $340 difference between the judgment sought and the judgment given is unexplained.
9. The appellant and respondent were also the registered proprietors as tenants in common in equal shares of the Magee Street property referred to in orders 1-3.
10. On 24 April 2019 the appellant filed a notice of motion seeking the setting aside of the orders made on 15 October 2018. She sought "sufficient time to file a defence".
11. The matter came before the primary judge as the Real Property List Judge on 10 May 2019, 28 June 2019 and 2 August 2019 before the appellant's notice of motion was listed for hearing on 6 September 2019, together with a notice of motion filed by the respondent on 12 July 2019 seeking an order for removal of a caveat lodged by the appellant.
12. The appellant did not have legal representation. The primary judge told the appellant on 10 May that she needed to demonstrate that she may have a "good basis to defend the claim". On 28 June 2019 the primary judge asked the appellant what her defence was. She stated that she would need legal advice, but "would be stating [definitely] that I would have put more of a contribution towards the property". The primary judge told the appellant that it would be relevant to consider the extent to which she could show that she had an arguable defence and that the question was not simply one of setting aside the judgment so that she could try to find a defence, but she would need to identify a reasonably arguable defence.
13. On 6 September 2019 the primary judge dismissed the appellant's application to set aside the orders of 15 October 2018. His Honour ordered that a caveat lodged by the appellant in respect of the Magee Street property be removed and ordered that the appellant deliver vacant possession of the Magee Street property to the trustees for sale by 15 November 2019. His Honour ordered the appellant to pay the respondent's costs of both applications and the trustees' costs of the application for removal of the caveat.
14. The appellant's application to set aside the orders of 15 October 2018 was made under r 36.16(2)(b) of the Uniform Civil Procedure Rules 2005 (NSW). The orders of 15 October 2018 were made regularly. The appellant is not entitled ex debito justitiae to have the orders set aside because they were made in her absence and without her having notice of the proceeding. It was incumbent on her to show by evidence a reasonably arguable defence (Vacuum Oil Co Pty Ltd v Stockdale (1942) 42 SR (NSW) 239 at 243; Magnate Projects Pty Ltdv Youma Constructions Pty Ltd (No. 2) [2005] NSWCA 331 at [52]).
15. The following questions arose on appeal. First, whether the primary judge erred in finding that the appellant had not shown an arguable defence to the respondent's claim for judgment for $108,983.93 plus interest from 12 August 2016, being the share he claims of the proceeds of sale of the Stanwell Crescent property (order 5).
16. Secondly, whether the primary judge erred in finding that the appellant did not have an arguable defence to orders 1 and 2 appointing trustees for sale of the Magee Street property. She submitted that the respondent held his interest in that property on trust for her.
17. Thirdly, whether the primary judge erred in not finding that the appellant has an arguable answer to order 3(f) of 15 October 2018 that the net proceeds of sale of the Magee Street property be distributed equally between the appellant and the respondent after payment of the trustees' costs and expenses, rates, taxes, insurances and other outgoings and expenses, and the respondent's costs of the proceedings.
18. The third question in turn raises two issues.
19. First, whether it is reasonably arguable that the beneficial ownership of the Magee Street property was not held in accordance with the legal title, but on a resulting trust in accordance with each party's contributions to the cost of purchase, including stamp duty and conveyancing costs.
20. Secondly whether it is reasonably arguable that on an account in equity the appellant might be entitled to a credit in her favour for improvements or repairs she effected to the property, expenses she paid in relation to the property for rates, taxes, insurances and the like, or payments towards mortgage debt for which the appellant and respondent were jointly and severally liable, in excess of her half share of that debt.
21. For the reasons which follow I conclude: 1. The appellant has a reasonably arguable defence that the beneficial ownership of the Stanwell Crescent property was not held in accordance with the legal title but on a resulting trust in accordance with the parties' contributions to the purchase price and costs of acquisition. If that defence succeeded, instead of being entitled to judgment for $108,983.93 plus interest from 12 August 2016, the respondent would be entitled to judgment for $103,704.49, and interest from 12 August 2016. The respondent accepted that if that conclusion were reached the judgment should be varied accordingly rather than there being a trial of that issue. 2. The appellant does not otherwise have an arguable defence to the respondent's claim for his share of the net proceeds of sale of the Stanwell Crescent property. 3. The primary judge was correct in finding that the appellant does not have an arguable defence to the order appointing trustees for the sale of the Magee Street property. 4. The appellant has not shown an arguable claim that all of the respondent's interest in the Magee Street property was held on trust for her. 5. The appellant has an arguable claim that notwithstanding the legal title to the Magee Street property is held by the parties equally as tenants in common the legal title is held by them on a resulting trust in accordance with their contributions to the purchase price and other costs of acquisition of the property. On that basis the appellant has an arguable claim to a 51.3 per cent beneficial interest in the property. The respondent accepted that if the Court so concluded, the matter should not be remitted for further hearing but the appellant's arguable defence should be accepted. 6. The appellant has not shown an arguable claim that on the taking of accounts she might be entitled to a credit for the cost or value of repairs or improvements, or for payment of more than her share of expenses relating to the property or any payments towards mortgage debt, having regard to her occupation of the property since late 2014 or at least February 2015 without payment of an occupation fee. 7. For these reasons the appeal should be allowed in part. But the respondent is the substantially successful party. The costs order below was generous to the appellant and may not have been what was intended, but there was no cross-appeal. The respondent is entitled to his costs on appeal, notwithstanding the appellant's limited success. 8. On 19 November 2019 the appellant filed a notice of motion seeking an urgent stay of the orders of 15 October 2018 and the orders of 6 September 2019. On 2 December 2019 a stay was ordered by consent. The order did not provide for its automatic discharge on resolution of the appeal. That stay should be discharged. 9. The orders disposing of the appeal require adjustment of the orders of 15 October 2018 and 6 September 2019 in two respects: 1. first, a new time for the appellant to deliver vacant possession of the Magee Street property should be fixed. A period of four weeks is appropriate; 2. secondly, the appellant has remained in possession after the appointment of trustees for sale. Prior to their appointment, the appellant was entitled to occupy the property by virtue of her legal title as co-owner. After the appointment of trustees for sale the appellant had no right to possession and should account for an occupation rent from the time the trustees demanded vacant possession until possession is delivered.

Judgment in respect of proceeds of sale of Stanwell Crescent

1. The Stanwell Crescent property was purchased for $119,000. Settlement occurred in February 1999. Most of the purchase price was borrowed by both the appellant and the respondent from the Commonwealth Bank. They gave a mortgage to the Commonwealth Bank stamped to $108,000.
2. The respondent deposed that the deposit of $11,900 was paid in part by him and the appellant in amounts of $3,000 each and that the balance was provided by way of gift from their father, Abraham Arambatzis. He deposed that the stamp duty of $2,659 was paid by the appellant from money provided by their father and he deposed that the appellant paid legal costs of approximately $1,000.
3. The respondent deposed that after settlement he and his parents carried out repairs and improvements to the property for about a month so that the property could be let. He also deposed that although not certain, he believed his father contributed $8,000 to pay a shortfall between the interest and principal on the borrowings whilst the property was being repaired and improved. He deposed that after the property was renovated it was rented out and that the monthly rental was sufficient to cover the payments of interest and principal on the loan from the Commonwealth Bank. He deposed that he understood that all of the outgoings on the property were paid out of the rent.
4. In an affidavit made on 23 August 2019 the appellant submitted that the respondent did not produce any evidence to prove his assertion that he contributed $3,000 to the purchase price. It can be inferred that she disputed that evidence. In relation to the respondent's evidence referred to above the appellant deposed: "It mentions in item 4. of the same Affidavit page 2 that 'father' placed an amount of money and that the Plaintiff placed money as well but have no way of showing that to be true. Just as the Plaintiff has no way of confirming that a friend, Mr. Nick Giannopoulos was the person who gifted the 'father' money. Which friend gifts money? I knew of 'fathers' story to being a different person altogether and Not Mr. Giannopoulos. I would like to challenge this point and to be granted the time to ask the question to the person of interest. ... [T]he Plaintiff mentions 'although I am not certain, I believe that my father contributed $8,000 for the purposes [of] paying any shortfall between the interest and principle [sic] on the Borrowings whilst Stanwell Crescent was being repaired and improved.' To that I say where is the evidence that such an event happened? This was back when the Plaintiff had no job and no income and for all intent and purpose still relies on 'father' to support him. This was back when I wasn't mentioned as 'fixing' the Stanwell Crescent property as I was working 6 days a week."
5. The appellant then made various attacks on her father which are irrelevant to the issues on the appeal.
6. The appellant did not depose that she paid more towards the deposit on the Stanwell Crescent property than the respondent or that she made any additional contributions to the acquisition of that property than those to which the respondent deposed.
7. On 6 September 2013 the appellant lodged a caveat in respect of both the Stanwell Crescent property and the Magee Street property. The caveat identified the particulars of the estate or interest she claimed as follows: "A restriction on sale of properties. Verbal agreement between both parties that Peter Arambatzis acquired these properties for tax concessions only and Peter is not to gain financially from the sale of the properties."
8. This asserted estate or interest was said to arise by virtue of the following facts: "Agreement made in presence of father Abraham Arambatzis and at the time of negotiations re acquisition of properties".
9. The appellant did not give evidence of the asserted agreement.
10. The appellant referred to text messages exchanged with the respondent on 10 and 13 November 2013 as follows: "Peter Arambatzis 10/11/2013 2:10:34 PM The houses are yours when you Wanna go to the solicitor Me 10/11/2013 2:14:30 PM Explain yourself. What you mean? Both houses??? You what nothing from them and nothing for them? Is this right?? Peter Arambatzis 10/11/2013 2:30:12 PM Yes Me 10/11/2013 2:40:18 PM Please send me a letter that this is what u wish to do. With ur full name address and signature verified by a jp. Send it to [xx] david rd castle hill nsw 2154. Peter Arambatzis 13/11/2013 7:11:22 PM No letter just by solicitor change the paperwork and that's it"
11. These text messages demonstrate that at that time the respondent was content to make a gift of his interest in the properties to the appellant. But nothing was done to give effect to that intention. The appellant's response to the respondent's first statement is inconsistent with her believing that she was the beneficial owner of the whole of either property.
12. On 1 October 2014 the Stanwell Crescent property was sold by the Commonwealth Bank in exercise of its power of sale as mortgagee. The property was sold for $510,000. After discharging the mortgage debt, $220,647.85 was paid into the trust account of a firm of solicitors called Leader Law Group. That firm did not act for either party. It issued a trust account receipt on 20 November 2014 addressed to the appellant. The receipt recorded that the sum of $220,647.85 was "proceeds held in trust during dispute resolution and mediation".
13. In February and March 2015 correspondence was exchanged between the respondent's solicitor, Mr Frank Cutri of Cutri & Associates and the appellant's then solicitor, Mr Dean Wright of Wright Lawyers & Associates. Mr Cutri pressed Mr Wright to identify whether there was a dispute in relation to the proceeds of sale of the Stanwell Crescent property and if so the basis for it. No such particular dispute was identified.
14. On 30 November 2015 a manager was appointed by the Law Society Council to the practice of Leader Law Group. On 24 March 2016 the respondent's solicitor, Mr Cutri, received an email from Mr Wright. Mr Wright attached correspondence Wright Lawyers had with the manager, Mr Richard Savage, on 25 February 2016. On 24 February 2016 Mr Savage had sought Mr Wright's urgent instructions regarding "funds held in trust for one Cassiani Foundas". Mr Wright responded the following day to Mr Savage advising that he no longer acted for the appellant and that after his retainer had been terminated he was informed that she had approached a Mr McLaughlin of McLaughlin & Riordan. Mr Wright advised Mr Savage that the funds held in trust were "currently joint funds held on behalf of Cassiani Foundas and her brother, Peter Arambatzis, who were in dispute at the time." He advised that Mr Arambatzis was represented by Mr Cutri and that he had advised his former client of the position.
15. On 11 August 2016, Mr Cutri wrote to the Law Society requesting information about the whereabouts of the proceeds of $220,647.85.
16. Mr Savage replied on 12 August 2016 stating: "On the information, records and file made available to me: I did not find a file in the name of your client (Mr Peter Arambatzis); I did not find any trust moneys held by the law practice in the name of your client; and All trust moneys that were held by the law practice at the time of my appointment have been disbursed pursuant to s 138 of the Legal Profession Uniform Law (NSW). There are no longer any trust moneys held by the law practice."
17. How Mr Savage could have ignored Mr Wright's advice and the terms of the trust receipt is a mystery.
18. Section 138 of the Legal Profession Uniform Law relevantly provides: "138 Holding, disbursing and accounting for trust money in general trust account (1) Except as otherwise provided in this Part, a law practice must - (a) hold trust money deposited in the law practice's general trust account exclusively for the person on whose behalf it is received; and (b) disburse the trust money only in accordance with a direction given by the person. Civil penalty: 50 penalty units."
19. It can be inferred that the moneys were disbursed on the direction of the appellant or her agent.
20. The appellant did not deny that she received the whole of the net proceeds of sale of the Stanwell Crescent property or advance any reason as to why she was entitled to more than half of those proceeds. She contented herself with saying: "... because my name is only on the receipt I am accused. I was represented at the time in 2014 by Mr Dean Wright from Wright Lawyers. Mr Cutri representing Peter Arambatzis. Both lawyers dealing with the issue of Trust Money. I was as much involved as Peter was. So why am I accused of anything?"
21. In his ex tempore judgment of 6 September 2019 (Peter Arambatzis v Cassiani Foundas (no medium neutral citation)) the primary judge held that the appellant had not shown a reasonably arguable defence.
22. In relation to the money judgment entered on 15 October 2018 the primary judge stated: "There is evidence which indicates that the balance of the proceeds of the sale of that property, which were being held in a solicitor's trust account, were paid out to the defendant by a receiver appointed to the solicitor's practice. The defendant does not deny that she received the funds that remained in the solicitor's trust account."
23. Both statements were correct. Indeed, before the primary judge the appellant refused to engage on the issue. She was asked: "HIS HONOUR: But you received the funds from, I think it is Mr Savage, didn't you, the manager of the practice?" She responded: "Mr Savage - there was an email between Mr Savage and Mr Cutri and it did actually say I had nothing else to do with it. I mean the solicitors between themselves were dealing with it, so that's all I'm going to say on that."
24. There is no evidence to support the appellant's assertion that the respondent had held his fifty per cent interest in the Stanwell Crescent property on trust for her. It is inconsistent with the position taken by the appellant through her then solicitors, Jackson Lalic of 15 December 2010 in which they, on her behalf, wrote to the respondent referring to both the Magee Street and Stanwell Crescent properties and stating: "Our client owns the above properties with you as tenants in common. Each of you owns a one-half share in each property. Each property is separately mortgaged to the Commonwealth Bank of Australia with a separate loan. Each property has a tenant."
25. However, it is arguable that notwithstanding the position taken by Jackson Lalic in 2010, and although legal title to the Stanwell Crescent property was held by the parties in equal shares, the beneficial title was held in the proportions to which they contributed to the payment of the purchase price and the costs of acquisition (stamp duty and legal costs). (There was no evidence as to how other costs, such as registration fees or bank fees, were paid or their amounts.)
26. The initial presumption arising from the fact that the appellant and the respondent were registered as tenants in common of the Stanwell Crescent property in equal shares is that the beneficial interest in the property was held in accordance with the legal title (Currie v Hamilton [1984] 1 NSWLR 687 at 690; Black Uhlans Inc v New South Wales Crime Commission & Ors [2002] NSWSC 1060 at [128]).
27. Where two persons jointly provide the purchase money for the property and the property is put into the name of one of them, then, unless the relationship between the parties gives rise to a presumption of advancement, it is presumed that the beneficial ownership of the property is held in the proportions in which they each contributed the purchase money (Calverley v Green (1984) 155 CLR 242 at 246-247, 258, 269; [1984] HCA 81). The presumption can be rebutted by evidence of actual intention.
28. Likewise, if two purchasers contribute to the purchase price and the property is conveyed to them as joint tenants, there is a presumption that the beneficial interest in the property is held in shares proportionate to their contribution (Calverley v Green at 246-247, 258 and 269; Jain v Amit Laundry Pty Ltd [2019] NSWCA 20 at [89(2)]).
29. This presumption of a resulting trust also applies where two purchasers contribute in unequal shares to the purchase price and the land is conveyed to them as tenants in common (Ryan v Dries [2002] NSWCA 3; (2002) 10 BPR 19,947). In Ryan v Dries land was conveyed to the parties as tenants in common in shares of one-seventh and six-sevenths, but it was held that the presumption of a resulting trust arose and was not rebutted leading to a conclusion that the beneficial ownership was held in the proportions of 57 per cent and 43 per cent.
30. The presumption of a resulting trust may be rebutted by evidence as to the parties' actual intentions, but does not yield to slight circumstances (Shepherd v Cartwright [1955] AC 431 at 445; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365; [1956] HCA 28; Brown v Brown (1993) 31 NSWLR 582 at 596). In principle, the presumption should be less strong where land is conveyed to the purchasers as tenants in common in defined shares. Nonetheless, the decision of this court in Ryan v Dries shows that the presumption of a resulting trust applies, whether the land is transferred to one party only, or to both parties as joint tenants, or to both parties as tenants in common.
31. In Ryan v Dries Hodgson JA (with whose reasons in this respect both Sheller and Giles JJA agreed) held that in calculating the proportions in which each party contributed to the purchase, incidental expenses that had to be incurred in order to obtain the property should be taken into account. That included not only the expenses necessarily incurred in order to acquire the property (stamp duty and registration fees (Sivritas v Sivritas (2008) 23 VR 349; [2008] VSC 374 at [126] (Kyrou J)), but also solicitor's fees, bank fees and adjustment of rates (at [25], [52]-[53])).
32. It is not arguable that the respondent made no contribution to the purchase price even if, as the appellant asserted, he made no financial contribution to the purchase and made no payment towards the mortgage. In Jain v Amit Laundry Pty Ltd Beazley P summarised the principles derived from Calverley v Green as follows: "[89] It is convenient to summarise the principles, relevant to this case, to be derived from Calverley v Green as follows: (1) Where property has been purchased in joint names, equity presumes a trust in favour of the party who has contributed the whole of the purchase price: per Gibbs J at 255. (2) Where two purchasers contribute to the purchase price and the property is conveyed to them as joint tenants, equity presumes that they hold the equitable interest in the property in shares proportionate to their contribution: per Gibbs CJ at 246-247; Mason and Brennan JJ at 258; Deane J at 269. (3) The material time for determining the beneficial ownership of property is at the time of acquisition: per Gibbs CJ at 252; Mason and Brennan JJ at 262. The same point was made in Bloch v Bloch per Wilson J at 398. (4) The purchase price is what is paid to the vendor to acquire the property. Mortgage instalments, being paid not to the vendor but to the lender, do not constitute a payment of the purchase price: per Mason and Brennan JJ at 257. (5) The entry into a mortgage constitutes a contribution to the purchase of the property as, under a mortgage, each mortgagor undertakes a joint and several liability in respect of the repayment of the mortgage: per Mason and Brennan JJ at 257-258. (6) The equitable presumptions may be displaced, rebutted or qualified by evidence of a contrary intention that is common to all contributors to the purchase price: per Gibbs CJ at 251; Mason and Brennan JJ at 261; Deane J at 269. (7) Usually, the common intention of the contributors to the purchase price is to be inferred from what the parties do or say, not their own uncommunicated state of mind: per Mason and Brennan JJ at 261; Deane J at 269-270; see also Gissing v Gissing [1971] AC 886 at 906."
33. It appears that substantially, if not wholly, the mortgage debt of both properties was paid from the rental income derived from those properties. The appellant's evidence did not disclose an arguable case that the material time for determining the beneficial interest of the parties in the property should be any time other than the time of its acquisition. If the appellant made payments towards the mortgage debt, she would be entitled to contribution either at common law (subject to the operation of the Limitation Act 1969 (NSW)) or on an equitable account in these proceedings (a matter discussed at paras [91]-[94] below). But this does not affect the shares in which the beneficial ownership of the property is held.
34. The parties jointly borrowed $108,000 for the purchase. The respondent's evidence that was queried but not contradicted by the appellant is that they also each contributed $4,250 to the purchase price (partly funded by gift from their father) and the balance of the purchase price was paid by their father. But the respondent also said that the appellant paid the legal costs for the acquisition of the property of $1,000 and paid stamp duty of $2,569. The respondent's evidence that the appellant was given the amount for stamp duty by their father would not mean that, as between the parties, it was not her contribution.
35. It is arguable that the beneficial ownership of the Stanwell Crescent properly was held in the proportion in which the appellant and respondent contributed to the purchase price and cost of acquisition.
36. The evidence is that the total cost of acquisition including stamp duty and legal costs was $122,569.
37. The respondent's evidence is that $3,569 was paid by the appellant and $108,000 was borrowed jointly and that they each otherwise contributed $4,250 partly from their own resources and partly from gifts from their father. These sums total $123,569. Presumably either only $107,000 of the moneys borrowed from the Commonwealth Bank was applied in the purchase, or, which amounts to the same thing, their equal contributions were only $3,750, not $4,250.
38. I infer from the respondent's evidence that the respondent contributed $57,750 to the total acquisition costs of $122,659 and the appellant contributed the difference of $64,909 ($57,750 + $2659 + $1,000). On that basis the beneficial title to the Stanwell Crescent property was held in the proportions of 47 per cent for the respondent and 53 per cent for the appellant.
39. The appellant was at least arguably entitled to 53 per cent of the $220,647.85 paid to her and the respondent was entitled to 47 per cent of that sum. The appellant has not demonstrated an arguable claim to a greater sum.
40. In accordance with the respondent's concession that if such an arguable defence were shown it should be given effect, rather than remitting the issue for trial, order 5 of the orders of 15 October 2018 should be varied by substituting the sum of $103,704.49 for the sum of $108,983.93. Interest was only sought from 12 August 2016, apparently because the respondent did not ascertain precisely when Mr Savage paid $220,647.85 to the appellant.

Appointment of trustees for sale to the Magee Street property

1. The primary judge observed that the grounds upon which a court may decline to make an order under s 66G are limited (citing Ferella v Official Trustee in Bankruptcy [2015] NSWCA 411 at [36] and Tory v Tory [2007] NSWSC 1078 at [42]).
2. Although an order under s 66G is discretionary, such an order is almost as of right, unless on settled principles it would be inequitable to make the order. An order may be refused if the appointment of trustees for sale would be inconsistent with a proprietary right, or the applicant for the order is acting in breach of contract or fiduciary duty, or is estopped from seeking or obtaining the order (Re McNamara and the Conveyancing Act (1961) 78 WN (NSW) 1068 at 1068; Ngatoa v Ford (1990) 19 NSWLR 72 at 77; Williams v Legg (1993) 29 NSWLR 687 at 693; Hogan v Baseden (1997) 8 BPR 15,723 at 15,726-15,727; Tory v Tory at [42]). Hardship or general unfairness is not a sufficient ground for declining relief under s 66G (Hogan v Baseden (1997) 8 BPR 15,723 at 723; Ferella v Official Trustee in Bankruptcy at [36]-[40]).
3. The only arguable defence to the making of a s 66G order identified in the appellant's evidence and submissions was that the respondent held his 50 per cent interest on trust for her. If so, she could put an end to their co-ownership by calling for a transfer of the legal title. However, there was no evidence to support that contention.
4. The appellant deposed that she was unaware that the respondent's name had been added as a purchaser of the Magee Street property. The contract for purchase was entered into on 10 September 2001. The purchase price was $181,500. The contract shows the respondent's name as purchaser as having been entered in handwriting next to the appellant's name. The appellant did not initial the amendment and says she had no knowledge of it. The transfer to the appellant and the respondent as transferees was signed by their solicitor. But they both applied to the Commonwealth Bank for a loan of $180,000. The loan was approved and they both gave a mortgage to the Commonwealth Bank. It is not plausible that prior to the completion of the purchase the appellant was not aware that she was buying the property with her brother. They were both registered as proprietors as tenants in common in equal shares.
5. In any event, it is not apparent how any such lack of awareness would affect the beneficial ownership of the property. It could not affect the respondent's legal title.
6. As noted above, on 15 December 2010 the appellant's then solicitors stated that each of the appellant and respondent owned a half share in both the Stanwell Crescent and Magee Street properties.
7. The appellant's caveat referred to at [11] above does not assert that she is beneficially entitled to the respondent's interest in the Magee Street property because she was unaware of his involvement in the purchase of the property. Such a contention would be untenable given the loan application to the Commonwealth Bank and their signatures to the mortgage.
8. On 19 October 2015 the appellant's then solicitor, Mr McLaughlin wrote to Cutri & Associates advising that the appellant had instructed them "... to commence proceedings in the District Court [sic] seeking orders that your client holds 50% of the property as trustee for our client". No basis for that contention was articulated. It is clear that no such proceedings were commenced.
9. The appellant gave no evidence from which it was fairly arguable that the respondent holds his interest in either property on trust for her.
10. The primary judge observed: "I have not overlooked the evidence adduced by the defendant which was referred to by Mr Barlin in his submissions today of certain text messages that passed between the parties in November 2013. These text messages do seem to indicate that at that time the plaintiff may have been willing to transfer his interests in the properties to the defendant. However, the text messages go no further than to say that any such transfer would be effected by solicitors changing the paperwork. There is no evidence that solicitors were subsequently engaged to effect any such transfer, and it moreover appears that any such transfer would be voluntary. In the circumstances I do not think this evidence goes any distance towards undermining the plaintiff's title as a co-owner of either of the properties. In my opinion, the evidence adduced by the defendant does not disclose a reasonably arguable defence to the plaintiff's claim to s 66G relief. The evidence does not disclose a reasonably arguable case that the property was not held in co-ownership for the purposes of s 66G, nor a reasonably arguable case that making the s 66G order was inconsistent with a proprietary right or a contractual or fiduciary obligation. A reasonably arguable basis to contend that seeking the appointment of trustees for sale would be inequitable is lacking in this case."
11. I agree.

Order for net proceeds of sale to be divided equally

1. Order 3(f) provides for the net proceeds of sale to be divided between the parties equally.
2. It does not appear that any issue was taken before the primary judge about this order, but the evidence before the primary judge revealed two potential bases for querying that order. Neither was clearly articulated by the appellant. But the appellant was representing herself and could not be expected to understand the legal bases on which she might be able to contest an order for equal distribution of the net proceeds of sale.
3. The first such basis is if the beneficial ownership of the Magee Street property is not held in accordance with the legal title, because of unequal contributions to the cost of acquisition. The second is if, on the taking of an account in equity, the appellant is entitled to contribution from the respondent for repairs or improvements effected by the appellant, or for payments towards outgoings such as rates, taxes and insurance in excess of her share, or for payments to the mortgage in excess of her share.
4. The Magee Street property was purchased for $181,500. The deposit was $18,150. The appellant produced a receipt addressed to her for $17,750. It is clear that this sum was drawn down from a loan from the Commonwealth Bank made to the appellant and respondent equally. The balance of the deposit was paid by the parties' father.
5. The moneys advanced under the mortgage were $179,900. On the face of it there is a shortfall of $1,200 for the cost of purchase of the property, but neither party produced a settlement statement to show what adjustments to the purchase price were made for pre-paid or unpaid rates, taxes and utilities charges.
6. The appellant did not give evidence of having paid any moneys for the purchase of the Magee Street property. She referred to the application made to the Commonwealth Bank for the loan for the purchase of the Magee Street property that disclosed that she was working and had credit bank account balances of $11,690. She deposed: "My contributions [were] the only factor for obtaining these home investment loans as the Plaintiff had nothing to give at all."
7. The respondent did not contest the appellant's evidence that he made no financial contribution, except as borrower and mortgagor.
8. The appellant produced a document called "Customer's Record of Bank Cheque" dated 18 September 2001 identifying the Office of State Revenue as payee for an amount that is partly illegible. From the annexure to the appellant's filed affidavit it can be seen that the amount stated is $4,800 and some dollars and no cents. The last two dollar figures are illegible but may be 99. At 18 September 2001 duty on a contract for the purchase of land for $181,500 was $4,842.50.
9. Although the appellant does not expressly say she paid the duty: 1. there is evidence that she had funds from which the duty could have been paid; 2. there is uncontested evidence that the respondent made no payments; 3. there is no evidence their father paid the duty; and 4. there is evidence from the respondent that the appellant paid the duty on the purchase of the Stanwell Crescent property.
10. It is reasonably arguable that the appellant paid the duty.
11. As in the case of the Stanwell Crescent property it is reasonably arguable that the legal title to the Magee Street property is not held in accordance with the legal title, but with the parties' contributions to the purchase.
12. The appellant acknowledged that the respondent was a borrower on the loans from the Commonwealth Bank. She said that he made no financial contribution. But the loan from the Commonwealth Bank that was used to purchase the Magee Street property was made to both the appellant and the respondent. They were both liable to the Commonwealth Bank for its repayment. If there were shortfalls between the rent received and the required mortgage payments that were made up by the appellant, that would not alter the beneficial ownership of the property under the presumed resulting trust (Ryan v Dries [2002] NSWCA 3; (2002) 10 BPR 19,497 at [50]; Calverley v Green (1984) 155 CLR 242).
13. The appellant argued that it was only her financial position that enabled the loan to be obtained. If that be so it is irrelevant as the advance was made to both parties. In Ryan v Dries Hodgson JA contemplated (at [50]) that the position could be different if it had been agreed between the parties that the mortgage liability should be treated as that of the appellant alone, and the mortgage advanced should be considered as in substance made to the appellant only. The appellant gives no such evidence.
14. It is an available inference that the appellant paid the duty on the purchase of the Magee Street property, even though she did not expressly say so. That omission is explicable by the form and content of her self-prepared affidavits. However, there is no evidence and no available inference that she contributed to any other costs of the purchase.
15. There was no evidence of any additional cost of purchase above the purchase price of $181,500. Assuming that the duty paid was $4,899, this increases the cost of purchase to $186,399.
16. On the reasonably arguable basis that the appellant paid the duty, it is reasonably arguable that the beneficial ownership of the Magee Street property is held in the proportions calculated as follows: Respondent: $181,500 ÷ 2 = $90,750 Appellant: $181,500 ÷ 2 = $90,750 + $ 4,899 $95,649 $95,649: $186,399 = 51.3% Respondent: 48.7%
17. On a trial of the issue it might well be held that such a slight difference in contributions indicates that the parties are unlikely to have intended that their beneficial interests be in accordance with their contributions rather than the legal title. But the contrary is arguable. The costs of resolving the issue would exceed what is at stake. Sensibly the respondent accepted that if this position were reasonably arguable the appellant's defence to that extent should be accepted.
18. The second issue in relation to order 3(f) of 15 October 2018 concerns the appellant's claims to having made various payments in excess of her share.
19. The appellant asserts without particularity that she made up a shortfall in mortgage payments from time to time. She also says that she effected improvements, maintenance and repairs to the property and paid outgoings after she took possession in late 2014 or early 2015. So far as mortgage contributions in excess of a 50 per cent share is concerned, on an equitable accounting in a suit under s 66G the appellant would be entitled to contribution from the respondent for payments made in excess of her 50 per cent liability. She would also be entitled to that remedy at common law independently of the accounting in a partition suit, but such a claim that predated 2014 would be prima facie barred by the Limitation Act 1969 (NSW).
20. Likewise, so far as the appellant incurred expenses in effecting improvements in the property or paying expenses, such as council rates, water rates and insurance, she may be entitled to contribution at law if the payments were made at the express or implied request of the respondent, but subject to the operation of the Limitation Act (Maio v Sacco [2009] NSWSC 413 at [4]). The appellant would also be entitled to contribution in equity on the sale of a property following the appointment of trustees for sale to the extent that expenditure on repairs or improvements increased the value of the land. That right would not be defeated by the operation of the Limitation Act because the right of contribution in equity arises on the termination of the parties' relationship following the appointment of trustees for sale (Maio v Sacco at [5]). The appellant would also be entitled on an account in equity following the appointment of trustees for sale to contribution from the respondent for mortgage payments made by her to the extent they exceeded 50 per cent of the liability incurred.
21. However, on an account in equity, the appellant would be entitled only to the lesser of the amount of expenditure on improvements or repairs and the amount by which such expenditure had increased the value of the property (Maio v Sacco at [6]). There is no evidence that the appellant herself physically carried out repairs or improvements.
22. Further, on an equitable accounting the appellant would be required to do equity by accepting a charge for an occupation rent up to the amount that would otherwise be allowable for her claim for contribution to expenditure (Ryan v Dries at [2]-[7], [61], [65]-[66] and [71]). The rental income as at the beginning of 2014 was $260 per week. The appellant has pointed to no evidence that might indicate that on the taking of such an account she may even arguably have a claim for a balance in her favour after allowance is made for an occupation rent for over five years of occupation of the property.

Caveat

1. On 6 September 2019 the primary judge also ordered removal of the appellant's caveat.
2. The challenge to the primary judge's order for removal of the caveat is untenable. Not only did the caveat not disclose a caveatable interest, but following the appointment of trustees for sale the appellant no longer had any interest in the land. Her interest was transmuted to an interest in the net proceeds of sale.

The appellant's other submissions

1. These reasons have only addressed the appellant's submissions to the extent they have any apparent relevance to the legal issues in play. The appellant made additional submissions. For example, she submitted that the proceedings should have been commenced by statement of claim rather than summons. She submitted that her father was running the claim using the respondent as a front. She complained that the respondent selected the trustees to be appointed and that the trustees had retained Mr Cutri. But she adduced no evidence to challenge the trustees' propriety or of a conflict of interest. The appellant complained of the fees the trustees claim to have incurred to date. But as the primary judge explained, both parties will be entitled to require the trustees to account if there is a dispute about their charges.
2. The appellant submitted that the claim for the judgment sum in respect of the proceeds of sale of the Stanwell Crescent property should have been brought in separate proceedings. That is contrary to s 63 of the Supreme Court Act 1970 (NSW) that requires that so far as possible all matters in controversy between the parties be finally and completely determined.
3. None of the additional submissions advanced by the appellant indicated error by the primary judge.

Conclusion

1. For these reasons the orders of 15 October 2018 should be varied by: 1. discharging order 3(f) and substituting in lieu thereof an order that "balance to be paid to the plaintiff and the defendant in the proportions of 48.7% and 51.3%"; and 2. varying order 5 by substituting the sum of $103,704.49 for the sum of $108,983.93.
2. The primary judge ordered that the respondent's costs of the proceedings be paid from the proceeds of sale of the Magee Street property before the balance was divided between the parties (order 3(e) and (f)).
3. It appears from the primary judge's reasons that that might not have been his or the respondent's intention. The primary judge said during submissions on 15 October 2018: "HIS HONOUR: But in relation to costs the ordinary rule is that the costs of a 66G application come out of the proceeds of sale subject to the qualification that if a party has acted unreasonably there might be occasion to have the costs borne by their share of the proceeds. BARLIN: Yes, your Honour. HIS HONOUR: But this case is a bit different because you have got the two limbs to the case, namely, the 66G itself plus the claim for the account. BARLIN: Yes. HIS HONOUR: So I think it is appropriate that in those circumstances the order be made that the plaintiff's costs of the proceedings be [borne] out of the defendant's share of the proceeds."
4. That is not the effect of the order as entered, but no issue about that is raised on appeal.
5. On 6 September 2019 the primary judge ordered: "4. ... that the defendant deliver vacant possession of the property to the trustees for sale by 15 November 2019; 5. ... that the trustees be at liberty to obtain a Writ of Possession forthwith, such writ not to be executed before 15 November 2019."
6. As noted above these orders have been stayed. The appeal has substantially been unsuccessful. The appellant should be required to vacate the property in a further four weeks.
7. On 29 October 2018 Mr Wengel, one of the trustees for sale, wrote to the appellant and demanded payment of rent of $400 per week that he asserted was a market rent for the property. The rent payable in 2013 had been $260 per week. Mr Wengel also foreshadowed a claim for back rent for the time the appellant had been in occupancy of the property.
8. The appellant was not liable to pay any "rent" or occupation fee while she was a legal owner as tenant-in-common.
9. From 15 October 2018, when the order appointing trustees for sale was made, the appellant was no longer entitled to occupy the property by virtue of her legal ownership. She had no right to occupy the property except under lease or licence from the trustees. She is liable to a "rent" or "occupation fee", or I think more accurately, damages by way of mesne profits equivalent to a reasonable rent, for so long as she remains in occupation.
10. Whether $400 per week is a reasonable rent was not an issue in this court. The parties, including the trustees for sale who have been joined as respondents to the appeal, should have liberty to apply to the primary judge, for any consequential order arising from the delay in the appellant's vacating the property.
11. For these reasons I propose the following orders: 1. Appeal allowed in part. 2. Vary the orders made on 15 October 2018 as follows: 1. discharge order 3(f) and substitute in lieu thereof an order that "balance to be paid to the plaintiff and the defendant in the proportions of 48.7 per cent and 51.3 per cent"; and 2. in order 5 substitute the sum of $103,704.49 for $108,983.93. 1. Otherwise dismiss the appeal. 2. Order the appellant pay the respondents' costs of the appeal. 3. Discharge the stay of the orders of 15 October 2018 and 6 September 2019. 4. Order that the appellant deliver vacant possession of the property at 12 Magee Street, Ashcroft to the second respondents (trustees for sale) within 28 days. 5. Order that the second respondents be at liberty to obtain a writ for possession forthwith, such writ not to be executed before the expiry of 28 days. 6. Order that in accounting for the balance to be paid to the first respondent and the appellant in accordance with the orders of 15 October 2018, as varied by these orders, the second respondents charge the appellant with a reasonable market rent for her occupation of the property from 29 October 2018 to the date of her delivering vacant possession. 7. Give liberty to the parties (including the second respondents) to apply to the primary judge for any further or consequential orders.

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