Hepworth v Hepworth

High Court of Australia|1963-07-01|Before: Windeyer JJ, Taylor JJ

High Court of Australia Kitto, Taylor and Windeyer JJ. Hepworth v Hepworth [1963] HCA 49

This is an appeal from an order of the Supreme Court of South Australia which declared that certain real property of which the appellant is the registered proprietor is held by her in trust for herself and her husband, the respondent, as tenants in common in equal shares subject, in the case of the respondent's interest, to a charge in favour of the appellant for the payment of £400 together with interest thereon for a specified period. The real property in question consists of a block of land in a suburb of Adelaide together with a cottage erected thereon which from the time of its erection in 1946 until comparatively recently was the matrimonial home of the parties.

The land upon which the home was built was purchased early in 1942 for the sum of £170 and it was the appellant's case before the learned judge of first instance that she had purchased the land with moneys provided by her father and that, later, she made all of the arrangements for the erection of the dwelling. She, alone, she says, "contacted the builder, settled the plans and negotiated a loan under mortgage from the Savings Bank of South Australia". But, according to her, the Savings Bank was unwilling to make any advance to her unless her husband signed the mortgage as a guarantor. It was because of this circumstance, she says, that her husband became a guarantor and he agreed to execute the mortgage in that capacity. But she, the appellant, "had to see that all payments were made". The appellant further claimed that the respondent "did not subscribe anything towards the purchase of the land or the payment for the building" nor "anything towards the rates and taxes and upkeep of the land and improvements".

It is not too much to say that after a careful consideration of the evidence before him the learned trial judge entirely rejected the substance of this evidence. He observed that - "Having seen the witnesses in the witness box, I have formed a very definite impression that the wife had the dominant personality, particularly in regard to financial matters. The husband does not appear to me to have the quick intelligence of the wife. In general I thought the husband a more credible witness than either the wife or her father. Generally speaking, where his evidence conflicts with that of the wife or the wife's father, I prefer his evidence". No criticism has been advanced on this appeal concerning his Honour's observations with respect to the credibility of these witnesses and we are not asked to review his findings of fact. On the contrary, the appellant felt bound to discard the case made upon her evidence and that of her father in the first instance and to rely upon that of the respondent and, upon that evidence, to assert that to the extent to which some part of the purchase price of the land and some part of the cost of the building erected thereon, was provided out of moneys of which the respondent was the beneficial owner, the case was one to which the presumption of advancement applied and, accordingly, that the respondent has no beneficial interest in the real property in question. This proposition seems to have been put forward as an alternative before the learned trial judge but for reasons which he expressed briefly he did not entertain it. He said: "A number of authorities were cited in argument, dealing with questions arising out of resulting trusts and the presumption of advancement in favour of a wife. I have not placed any particular reliance on these authorities, since they are concerned with cases where a husband had purchased land, in some cases including buildings, and had arranged the transfer of the property into the name of the wife. On the facts of the present case these authorities are distinguishable, because here the negotiation was conducted by the wife herself with the assistance of her father. It was she or perhaps her father (but certainly not the husband) who arranged for the land to be transferred into her name; and it was she and her father who conducted the business side of the matter, particularly with regard to payments both to the builder, to Harris Scarfe Ltd. for materials, and to the Savings Bank".

For a proper appreciation of these observations it is necessary to make a brief review of the evidence accepted by his Honour. From the time when the parties were married until about 1952 the respondent handed to the appellant "practically the whole of his wages, keeping a small amount for his personal expenses and leaving the management of the domestic budget to his wife". In evidence the respondent said that he handed his pay packet to his wife "except one pound per week" and that if he "wanted to buy anything" his wife would give him the money to buy it. He knew, he said, that his wife banked moneys and it was established as a fact that small but regular deposits were made by the appellant to a savings bank account for some years after 1939. This was an account which the appellant had in her own name before marriage and at the beginning of 1940 the account stood in credit to the extent of £54 17s. 2d. whilst on 19th January 1943 the amount in credit was £147 15s. 8d. On that day £147 was withdrawn and it was on the same day that the sum of £166, being the balance of purchase money for the land in question, was paid to the vendor. There can be no question that, as the learned trial judge found, the amount of the withdrawal was applied towards the payment of the balance of purchase money.

In the circumstances disclosed by the evidence his Honour found that the savings from the moneys provided by the respondent to the appellant were the property of the husband and in doing so he relied upon Blackwell v. Blackwell [1] and Hoddinott v. Hoddinott [2] . We see no reason to doubt the validity of this conclusion (see also the earlier cases of Barrack v. M'Culloch [3] ; Mews v. Mews [4] ; Montgomery v. Blows [5] ; Pope v. Bushell and Co. [6] ; and Birkett v. Birkett [7] , though in other and special circumstances the like conclusion may not be open (see e.g. Richards v. Richards [8] ). We are of the opinion, therefore, that his Honour was on sound ground when, having preferred the respondent's evidence in the case, he proceeded upon an analysis of the appellant's bank account, with which we need not further concern ourselves, to hold that one-half of the sum expended on the purchase of the land was provided out of moneys of which the respondent was the beneficial owner.

[1943] 2 All E.R. 579. 2. [1949] 2 K.B. 406. 3. (1856) 3 K. & J. 110 [69 E.R. 1043]. 4. (1852) 15 Beav. 529 [51 E.R. 643]. 5. [1916] 1 K.B. 899. 6. (1888) 4 T.L.R. 610. 7. (1908) 24 T.L.R. 284. 8. [1958] 3 All E.R. 513.

The cost of building the dwelling was in the vicinity of £1,400. Approximately £300 was paid to the builder and £70 was paid for material purchased for the erection of a garage on the property. The balance was financed by a loan of £1,000 from the Savings Bank of South Australia which was secured by a mortgage. The mortgage appears to have provided for regular payments of instalments representing interest and principal and in 1958 there remained owing on account of the principal the sum of £800. This amount was paid in that year by the appellant out of an award of damages which she had received for personal injuries. The intervening instalments, the learned trial judge found, had been paid equally out of moneys belonging to the respondent and the appellant. In the result his Honour held that each party was entitled to a moiety of the property but held that the respondent's interest was subject to a charge in favour of the appellant for the payment of half of the amount expended by her in discharging the mortgage in 1958 together with interest from the date of such discharge until payment by the respondent.

It was no part of the case on the facts presented by the appellant on the original hearing that she had with her husband's consent applied moneys belonging to him, or, for that matter, that she had applied any moneys representing savings from the amounts provided from time to time by her husband, in the purchase of the land in question. She was not, therefore, concerned and did not, in fact, attempt to establish by her evidence that the respondent consented to the expenditure of any such moneys towards the purchase of the land in her name. On the contrary, as already appears, she maintains that the purchase money was provided by her father and that, in those circumstances, she was under no obligation to consult her husband as to the form the transfer should take. Indeed she claimed that the purchase money was actually paid over to the vendor by her father in her presence. But, contrary to her evidence, which was substantially rejected, she now maintains that the moneys of her husband which the learned trial judge has found were applied towards the purchase of the land and the building of a dwelling upon it were used with his knowledge and acquiescence. Further, she alleges that in taking title to the land in her name she did so in circumstances which give rise to a presumption in her favour. Of course, if moneys to which the respondent was beneficially entitled were with his full knowledge and acquiescence used for the purpose of acquiring land in her name a gift in her favour would be presumed.

Naturally enough in the circumstances, the evidence of the appellant on this particular aspect of the case is, to say the least, not very illuminating and does not provide any ground for concluding that this is a case to which the presumption of advancement applies. On her evidence no occasion arose for her to consult her husband as to the form which the transfer should take. But it is clear that there were some antecedent discussions though the evidence concerning them is scanty in the extreme. Probably this may be accounted for by the fact that the parties thought that the critical issue in the case was concerned solely with the source of the moneys applied in the purchase of the land and the erection of the building and it was to this issue that their evidence was almost exclusively addressed. Nevertheless, if the appellant wished then to rely upon the presumption of advancement the onus rested upon her of showing that the moneys which were, in fact, applied in the purchase of the land were so applied with her husband's consent for the purpose of acquiring the title to the land in her name. She was, of course, and is, entitled to rely upon the respondent's evidence in support of the proposition now advanced and, in the absence of any evidence in her own case which would support it, this is what she had done on this appeal. But in our view the respondent's evidence does not provide a sufficient foundation for the appellant's contention. Apparently, late in 1941 the appellant informed the respondent that she intended to purchase the land in question and he appears to have assumed that the purchase money would be provided out of savings from his earnings. As far as one can see the matter was discussed on more than one occasion and in evidence he said that he told the appellant that he "wanted an interest in this land" but his wife "wanted everything in her name". When he said that he wanted an interest in it "she refused". "She absolutely refused. There was no other conversation". This evidence was not the subject of any direct contradiction by the appellant for her evidence was that "Not a penny of my money went into the £170 for the block of land. It was my father's money The defendant was told that my father purchased the block of land. I told him and my father also told him". "Nothing was paid of that amount out of what was accumulating from his (the respondent's) wages". No formal contract for the purchase of the land was ever entered into but there were tendered in evidence two receipts. The first was a receipt signed by the vendor for £4 "as deposit on land situated in Currie Street, Prospect, volume No. 1690 folio 134". The full purchase price was expressed to be £170 and the balance of £166 was "to be paid when transfer completed". The second receipt was a receipt for £166 "being the balance of Purchase Money for purchase of portion of Allotments 56 and 57 Currie Street". According to the scanty evidence the respondent was asked to make out the first receipt either by his wife or Mr. Pugh. There is no evidence as to who made out the second receipt but there was a suggestion at the outset of the appeal that the second receipt was in the same handwriting as the first. But upon inspection the second receipt proved to be typewritten and there is not the slightest evidence of the circumstances in which it was prepared or as to who prepared it. But the significance of the first receipt is that it acknowledges receipt of the deposit from Mrs. K. B. Hepworth and this was relied upon as some evidence that the respondent consented to his wife taking the title to the land in her own name. The deposit was paid a few days before completion but we do not attribute to it the significance which the appellant's argument claimed should be given to it. It was merely a receipt for a deposit made at a time when, so far as the evidence is concerned, the respondent was insisting he wanted an interest in the land and there is nothing to indicate that the deposit was paid out of moneys of which the respondent was the beneficial owner. The existence of the first receipt in his handwriting is not, in our opinion, sufficient to justify the inference that he had given his consent to the title being taken in his wife's name. The moneys in the Savings Bank were under the control of the appellant and it is consistent with the evidence that she took it upon herself to apply practically the whole of it in payment of the balance of the purchase money and that, in taking the title in her own name, she did so in spite of her husband's expressed wish to the contrary. There is no other circumstance in the case which, as far as we can see, would justify any contrary inference and that being so the appeal should, in our view, be dismissed.

Other questions of an insubstantial nature were discussed during the argument upon the appeal but they were disposed of during the hearing. We should, however, mention that prior to the institution of the proceedings letters were exchanged between the solicitors for the parties. These were written at a time when the marriage had broken up and were mainly concerned with the presence in the matrimonial home of a boarder to whose presence the respondent objected. But they were relied upon by the appellant for the purpose of showing that the respondent did not, during this interchange of letters, assert any claim to an interest in the land. To our minds the argument of the appellant attached an undue significance to these letters and no inference adverse to the respondent should be drawn from them. Curiously enough the appellant asserts that at no time did the respondent assert a right to a present interest in the land; on the contrary, she asserts that, at the most, all that he had asked her to do on occasions was to transfer an interest to him. If this be so it is difficult to understand why these proceedings were ever instituted by the appellant for there was no reason why, being the registered proprietor, she should seek a declaration that she held the land and improvements "free of all claim or demand by the defendant".

For these reasons the appeal should, in our opinion, be dismissed.

This case concerns the ownership of a house which is, or was, the matrimonial home of the parties. The appellant, the wife, contends that she is sole owner, legally and beneficially, of it.

Community of ownership arising from marriage has no place in the common law. We have nothing that corresponds with the various regimes relating to matrimonial property that exist in countries that have the civil law. Since the abolition of dower and curtesy and the enactment of the Married Women's Property Acts, questions arising between husband and wife as to the ownership in law of property that they have enjoyed, or are enjoying, in common thus fall to be decided according to the same scheme of legal titles and equitable principles as govern the rights of any two persons who are not spouses. But there are some qualifications. On a voluntary transfer by a husband to his wife, or on a purchase by a husband in the name of his wife, a presumption of a resulting trust does not arise - or, as some would say, less accurately I think, it is overborne by a countervailing presumption of advancement. An intention, proved or presumed, that a trust should exist is at the base of every trust: and spouses, living together, may express their intention clearly enough one to another without resorting to the language of conveyancers. Thus it sometimes happens that property which is held in the name of one spouse but which they enjoy together, belongs beneficially to both jointly or in common. Nevertheless if after a husband and wife have quarrelled disputed rights to property have to be decided, they must be decided according to the interests, legal and equitable, already created, not according to what may seem to be fair in a situation of discord that, quite probably, was not contemplated by either when the property was acquired. I say this because of some of the observations in some of the English cases that were cited, observations that may suggest that the statutory jurisdiction that was invoked in this case gives a court a discretion to disregard existing legal and equitable rights and to make such order as may seem to it fair in the circumstances existing when it is considering the case. That has not been the view of this Court: Wirth v. Wirth [1] ; Martin v. Martin [2] ; or of other Australian courts: Buchanan v. Buchanan [3] , per Philp J. [4] ; Robinson v. Robinson [5] , per Hale J. Section 105 of the Laws of Property Act, 1936-1960 S.A. is in similar terms to s. 17 of the English Married Women's Property Act, 1882. It is a procedural corollary to the provisions of the Married Women's Property legislation, which make a married woman capable of acquiring, holding and disposing of property as if she were a feme sole; and which give her the same civil remedies against all persons, including her husband, for the protection and security of her property as if she were a feme sole. Lord Devlin, then Devlin L.J., pointed that out in Short v. Short [6] . He went on to say - and this I quote as it is, I respectfully think, to be preferred to dicta to the contrary: "I hold that the powers of the court under s. 17 are substantially the same as in any other proceeding where the ownership or possession of property is in question. The discretion is no wider and no narrower than the ordinary discretion of the court in such cases. I accept that, as Somervell L.J. said in Lee v. Lee [7] , where there are conflicting claims to a number of small items, there is power in the court to arrive at a broad conclusion. This may be attributable to the summary nature of the process, though I should myself be inclined to think of it as an example of the de minimis principle; all courts have to do rough justice from time to time. Apart from this, rights of property have to be determined according to law [8] ".

(1956) 98 C.L.R. 228. 2. (1959) 110 C.L.R. 297. 3. [1954] St.R. Qd. 246. 4. [1954] St. R.Qd., at p. 248. 5. [1961] W.A.R. 56. 6. [1960] 1 W.L.R. 833, at p. 849. 7. [1952] 2 Q.B. 489. 8. [1960] 1 W.L.R., at p. 849.

In the present case there is no room for "rough justice". We are not dealing with, or dividing between the parties, a number of small items of furniture and other chattels. This case concerns the ownership of the house which was built to be their home. The question must be decided strictly according to their proprietary rights, legal and equitable. And the learned trial judge expressly stated that this was the way in which he approached the question. It was argued for the appellant that his Honour departed from the path that he set out to follow. Abandoning the case she had attempted to make at the trial as to the source of the funds by which the land was purchased, the wife took her stand on the appeal upon the fact that the legal title is in her. This meant, it was urged, that the property was hers, and hers alone, in law and in equity; for, it was said, the respondent had not displaced the presumption of advancement. The onus was on him to show that the beneficial interest did not accompany and accord with the legal title. That is beyond doubt. But this case is not really one in which it is appropriate to speak of a presumption of advancement. It is not like a case in which a husband bought property and had it put in his wife's name. Here the wife bought the land, largely with what must be taken to have been the husband's money, entrusted to her for safe keeping and use for their mutual benefit. She, in fact the dominant personality, seems to have been the manager of affairs for herself and her husband. He knew that the land was being bought by her, that she made the contract and that she planned that the matrimonial home should be built upon it, as in fact was done. A case of this kind does not really depend simply upon presumptions or conflicting presumptions. It depends upon "the intention of the parties as gathered from all available relevant facts": see per Jordan C.J. in In re Kerrigan; Ex parte Jones [1] . The form that the legal title to the house should take was the subject of discussions between husband and wife on more than one occasion. These conversations seem to me to show that the husband, although he assented against his real wish to the title being in his wife's name, never accepted the view that he had no interest in the property. The argument for the appellant was that his expressed wish to have the title in the names of himself and his wife was an assertion that she ought to give him an interest, and thus an admission by him that he had no interest. In considering whether a trust has been established or not, the acts and declarations of the parties forming part of the transaction are, of course, admissible either for or against the party who did the act or made the declaration. But subsequent declarations are admissible as evidence only against the party who made them: Shephard v. Cartwright [2] . Of the conversations that are relevant, that which occurred when the wife was in hospital for the birth of her second child is perhaps the most important. The building of the house was being arranged. According to the respondent's evidence, his wife - having apparently been advised by her mother - said: "I'd like the place placed in my name, the same as my mother's home is at the present time". He said: "I told my wife I was not happy about this. My wife said to me: "Well Mum's and Pop's arrangements have been all right. Their home is in Mum's name. They have got on all right. Why can't we?" I became an agreeable party to it at that stage". It was not an occasion when the husband would be likely to stand out against his wife's wishes. But there is, I think, nothing in his assent that indicates an intention on his part to forego whatever beneficial interest he had in the property. Quite the reverse. And there is I think, nothing in her request which indicates that she expected to become the sole owner of the house. Quite the reverse. Probably neither party knew much about legal and equitable interests. Nevertheless, an arrangement that the matrimonial home should be "in the name" of the wife suggests to me that she was not to have an absolute interest in it. A conversation which occurred later is at best equivocal. It seems to amount to no more than an insistence by the husband that if he were to pay off the mortgage with his money his claim to an interest in the house should be recognized. Disharmony had already begun. The wife, he said, wanted everything in her name and absolutely refused his request. I do not think this episode should be construed as meaning that he was admitting that he had no beneficial interest. I need say no more. The facts were all carefully considered by the learned trial judge. I agree with my brothers Kitto and Taylor, whose judgment I have had the benefit of reading, that the appeal should be dismissed.

(1946) 47 S.R. (N.S.W.) 76, at p. 83; 63 W.N. 288, at pp. 291, 292. 2. [1955] A.C. 431, at p. 445.

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