Hill v Dunn

Supreme Court of NSW|2019-04-11|Before: Henry J

Solicitors: Nelson Keane & Hemingway (Plaintiff) File Number(s): 2017/377908

Judgment

On 5 April 2013, the plaintiff purchased a residential property in Dubbo and registered it in her name and the name of her then de facto partner, the defendant. The de facto relationship ended in 2014 and the plaintiff wishes to sell the property and move from Dubbo. The defendant has refused to sign an agency agreement for the sale of the property and so it currently remains unsold.
The plaintiff commenced these proceedings by way of summons on 14 December 2017 and is seeking relief to have the defendant's legal interest in the property transferred to her in circumstances where she paid the purchase price and all costs associated with the property.
The issues in this case are: 1. whether the defendant holds his legal interest in the property on resulting trust for the plaintiff; 2. if he does, whether it is appropriate to grant the declaratory and other relief sought by the plaintiff in circumstances where the defendant has taken no active steps in the proceedings; and 3. whether any other relief should be granted.

The evidence of the plaintiff

The evidence in the matter was given on affidavit by the plaintiff and establishes the following.
The relationship between the plaintiff and the defendant started in 2008 when the plaintiff was 15. They started living together sometime in 2009 when the defendant moved into the home of the plaintiff's mother. They lived together in various places after that except for a period in 2011 when the plaintiff moved away due to a violent incident with the defendant.
Prior to the purchase of the property on 5 April 2013, the plaintiff and the defendant were in a de facto relationship, had two children and were living in a caravan park in Dubbo, having previously lived with the defendant's mother in Gilgandra.
The purchase price of the property was $305,000. It was paid for entirely by the plaintiff out of settlement monies she received from a personal injury claim she made following a car accident that took place in December 2008, in which the plaintiff suffered serious injuries. The plaintiff also paid all other costs related to the purchase of the property. Since moving into the property in April 2013, the plaintiff has paid all outgoings and other property-related costs, as well as most of the costs of living. The defendant has not paid anything towards the purchase or maintenance of the property.
Prior to the purchase, the plaintiff had not considered whether to put the house in her name alone, or whether to include the defendant as a joint tenant. The plaintiff decided to include the defendant on the title of the property because she felt pressured to do so by the defendant and his mother. The plaintiff was fearful of what the defendant might do if she did not purchase the property in his name as well as hers. There was a history of threats and violence towards the plaintiff by the defendant in the period prior to her purchase of the property.
In August 2014, the plaintiff ended the relationship and the defendant moved out of the property to live with his mother. There were further threats and violence by the defendant during the period they both lived in the property, continuing until at least the end of the relationship.
In early 2015, the plaintiff decided to move from Dubbo and sell the property. A local real estate agent informed the plaintiff that she could not sell the property without the defendant signing an agency agreement. The defendant refused to sign the agency agreement, or discuss the sale with the plaintiff.
There is no evidence of any contact between the plaintiff and the defendant since 2015.

Does the defendant hold his legal interest in the property on resulting trust for the plaintiff?

A resulting trust may arise where property is paid for and purchased by one party in the joint name of that party and another party. In those circumstances, the law presumes that the purchasing party did not intend to give the other party a beneficial interest in the property and the other party holds its legal interest on trust for the purchasing party: Calverley v Green (1984) 155 CLR 242 (Calverley v Green); Muschinski v Dodds (1985) 160 CLR 583 (Muschinski v Dodds).
As Gibbs CJ said in Calverley v Green, at 246: Where a person purchases property in the name of another, or in the name of himself and another jointly, the question whether the other person, who provided none of the purchase money, acquires a beneficial interest in the property depends on the intention of the purchaser. However, in such a case, unless there is such a relationship between the purchaser and the other person as gives rise to a presumption of advancement, i.e., a presumption that the purchaser intended to give the other a beneficial interest, it is presumed that the purchaser did not intend the other person to take beneficially. In the absence of evidence to rebut that presumption, there arises a resulting trust in favour of the purchaser.
The presumption of resulting trust may be displaced if the relationship between the parties is of a type that would attract the presumption of advancement, such as that where a husband has purchased property on behalf of himself and his wife. The law currently does not recognise a presumption of advancement where a wife puts property in the name of her lawful husband or where a woman puts property into the name of her de facto husband: Muschinski v Dodds, Gibbs CJ at 590; Mercier v Mercier [1903] 2 Ch 98; Calverley v Green, Mason and Brennan JJ at 260; Deane J at 268 - 269.
Gibbs CJ in Calverley v Green considered whether the Court should reflect changing social attitudes and apply the presumption of advancement to de facto relationships (at 250 - 251). His Honour, in dissent, noted that it seemed natural to conclude that a man who puts property in the name of the woman to whom he is living in a de facto relationship does so because he intends her to have a beneficial interest, and that the presumption of advancement is raised. The nature of a de facto relationship and the presumption of advancement was considered by Ward J (as her Honour then was) in Ryan v Ryan [2012] NSWSC 636 where her Honour reviewed the High Court's comments in Calverley v Green and subsequent decisions on the issue. Her Honour noted that the majority's reasoning in Calverley v Green turned in part on the differential treatment under the Family Law Act 1975 (Cth) accorded to de facto couples vis-a-vis married couples and that there have been a number of changes to the legislative regime governing property division between de facto couples since that case was decided in 1985. While noting that those legislative developments might invite reconsideration of established categories to which the presumption of advancement applies, her Honour considered that until Calverley v Green is reconsidered at an appellate level, it was of appropriate precedential weight such that it should be followed.
I accept that Calverley v Green and Muschinski v Dodds are of sufficient precedential weight and should be followed. I have, therefore, approached this case on the basis that the presumption of advancement does not apply to the de facto relationship between the plaintiff and the defendant at the time of purchase.
In those circumstances, the presumption of a resulting trust can only be displaced by evidence of the actual intention of the purchasing party at the time of acquisition of the property. It is only their intention that is relevant in deciding whether the resulting trust is rebutted: Calverley v Green, per Gibb CJ at 251; see also JD Heydon and MJ Leeming, Jacobs' Law of Trusts in Australia (8th ed 2016, LexisNexis Butterworths) at [12-14].
In the present case, the evidence establishes that the plaintiff paid the entirety of the purchase price, related purchase costs and outgoings for the property. Detailed bank statements identified that the plaintiff received settlement monies in early 2013, and then purchased the property. These bank statements also identified various outgoings relating to the property paid from the plaintiff's bank account.
While the title reflects that the plaintiff and defendant are joint tenants, there is no evidence before the Court that can be taken to indicate that the plaintiff intended the defendant to benefit by way of a half interest in the property. To the contrary, the evidence indicates that, initially, she did not consider the issue at all, and then put the defendant's name on the title because she felt pressured to do so and feared the consequences if she did not.
Even if there were facts to show that the defendant had been a parent and a support for some time before the purchase, such evidence would not, in my opinion, displace the presumption of a resulting trust.
There is no evidence that the defendant provided any financial or other support in relation to the ongoing maintenance of the property and costs of living together. In any event, evidence of the defendant's subsequent conduct is not relevant to the question of whether the property was acquired on a resulting trust basis.
Accordingly, I am satisfied that the defendant holds his legal interest on resulting trust for the plaintiff.

Should a declaration be made in the absence of the defendant?

The Court has inherent power to grant declaratory relief: s 75 Supreme Court Act 1970 (NSW).
A party seeking a declaration must have a real interest to raise and "must be able to secure a proper contradictor, that is to say, someone presently existing who has a true interest to oppose the declaration sought": Russian Commercial and Industrial Bank v British Bank for Foreign Trade [1921] 2 AC 438 at 448.
The Court recognises that a proper contradictor is required in order to ensure that there is a person to be bound by the relief sought. That does not mean that the party must take steps to contest declaratory relief. It has been accepted that declaratory relief may be granted where a party with an interest in opposing the proceedings refuses to say whether it will take any action to contest the conduct: Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378; IMF (Australia) Ltd v Sons Of Gwalia Ltd (admin apptd) (ACN 008 994 287) (2004) 211 ALR 231 at 244.
Accordingly, there is a difference between having an interest in opposing the granting of declaratory relief and, once having that interest, choosing whether or not to oppose the granting of that relief.
In this case, the defendant, as a person who could be prejudiced by the grant of the relief sought, was properly made a party to the proceedings. Once served, he took steps to instruct solicitors who then ceased to act for him. He did not file any affidavit evidence in support of a defence, despite directions giving him the opportunity to do so by 17 October 2018, and choose not to attend the hearing by phone on 9 or 11 April 2019.
The fact that he has taken no active steps to defend or oppose the grant of relief does not, in my view, deprive the court of jurisdiction or provide sufficient justification for it not to exercise its discretion to make a declaration in this matter. The issues raised by the plaintiff in this case are neither abstract nor hypothetical and the defendant was a proper contradictor.
Consistent with the approach of Parker J in Zetting v Müller [2017] NSWSC 659, a declaration in the terms sought by the plaintiff should be made. The evidence presented in support of the plaintiff's claim is persuasive and the making of a declaration is the best way to resolve the issues raised by that claim.
Accordingly, I propose to make the declaration sought in paragraph [1] of the Summons.

Other relief

The plaintiff seeks a vesting order under s 71 of the Trustee Act 1925 (NSW) and, in the alternative, orders that the defendant sign and return all documents and do all things necessary to transfer his legal interest in the property to the plaintiff and, if the defendant fails to sign, an order that a Registrar execute the documents on behalf of the defendant pursuant to s 94 of the Civil Procedure Act 2005 (NSW).
A vesting order may be made to give effect to the declaration pursuant to s 71(2)(o) of the Trustee Act 1925 (NSW). The effect of this section is that the Court may make an order that the defendant's interest in the property vest in the plaintiff absolutely and forthwith. It is an appropriate order to make in this case.
The alternative order is sought due to the plaintiff's concern that, without a signed transfer form, a transfer of the property to the plaintiff will not be actioned by the Land Registry Services, NSW. This concern arises from a communication between the lawyer for the plaintiff and a representative of the Land Registry Service office, where the latter indicated that a signed transfer of some kind, which may be signed by the Registrar of this Court, was required. This position is consistent with the Registrar General's published guidelines for "Transfer Without Monetary Consideration", which refers to the need for a transfer to be signed by the transferor (in this case the defendant) or his attorney, an officer of a Court or by any person so directed by a Court. Those guidelines refer to the Family Court, but I infer that a transfer signed by an officer of this Court would also be acceptable
The procedural history and attitude of the defendant to date suggests that it is very likely the plaintiff will have difficulty in contacting him and obtaining his co-operation to sign and execute any transfer or other documents to give effect to a vesting order made by the Court.
Having regard to the approach of the office of Land Registry Services, NSW and the anticipated difficulties of obtaining execution of a transfer form by the defendant, I am satisfied that it is appropriate that the alternative orders, including those under s 94 of the Civil Procedure Act 2005 (NSW), should be made in this case.
The plaintiff does not seek any costs order as the defendant has not taken any active role in the proceeding. Accordingly, I make no order as to costs with the intent that the parties are to bear their own costs of the proceeding.

Orders

For these reasons, the Court makes the following orders: 1. Declare that the defendant holds his legal interest in the property at 54 Catherine Drive, Dubbo (NSW) being Lot 43 in deposited plan 241935 (the property) on resulting trust for the plaintiff. 2. An order pursuant to s 71 of the Trustee Act 1925 (NSW) that the property be vested absolutely in the plaintiff forthwith. 3. In the alternative to order 2, orders that: 1. the defendant forthwith sign and return all documents and do all things necessary to transfer his legal interest in the property to the plaintiff; and 2. if the defendant fails or refuses to sign and return such documents within 14 days of them being served on him in accordance with Order 3(a) above, the Registrar of the Court execute documents on behalf of the defendant pursuant to s 90 of the Civil Procedure Act 2005 (NSW). 1. Direct the plaintiff to serve a copy of these orders and published reasons on the defendant by email to jaidunn7@gmail.com. 2. No order as to costs.

Amendments 16 April 2019 - 16 April 2019 - pursuant to the 'slip rule' contained in the Uniform Civil Procedure Rules 2005 (NSW) r 36.17 the Court amends Order 3(b) of the Orders made 12 April 2019 by her Honour Justice Henry so that the reference to "the directions below" is corrected to "Order 3(a) above". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 April 2019

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