Jones v Jones

PARTIES : Evonne Anette Jones - plaintiff Alfred William Jones - defendant

COUNSEL : C A Vinden - plaintiff D A Allen - defendant

SOLICITORS : Mason Lawyers - plaintiff Bilbie Dan - defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

6210/06 Jones v Jones JUDGMENT 1 His Honour: In these proceedings the plaintiff seeks a declaration that the defendant holds his interest in a property at Millers Forest (the property) on trust as to one half for her. The defendant is the registered proprietor of the property. The plaintiff also seeks an order for its sale under the Uniform Civil Procedure Rules 2005, Pt 27, r 27.1, and ancillary relief. 2 The plaintiff is the sister of the defendant and Victor Daniel Jones (Daniel). Each is unmarried, and of middle age. Their father died in about 1990 aged 65. For a long time they lived together with their mother, Joan Mavis Jones (Mrs Jones), in the family home at Swansea (the home). The relationship was close and mutually supportive. The defendant left the home in acrimonious circumstances on about 27 March 2005 to live elsewhere. The others have remained there. 3 The plaintiff, Daniel, and their mother are pensioners. The defendant has been in employment most of his life, and presently works as a deck hand on a tug boat. 4 In summary, the plaintiff claims that in about August 1997 she and the defendant agreed to purchase the property for the price of $60,000 as an investment, to be owned by them in equal shares. She claims that she paid him the total sum of $30,000 in cash for her share, and that it was agreed that, as she was a pensioner, he should be the registered proprietor. 5 The defendant denies any agreement or payment as claimed, and says that the property was bought by him with his own money. Background 6 The following matters are common ground and, in any event, are established on the evidence. 7 In August 1997 the defendant agreed to purchase from Mr Ern Griffiths the property for the price of $60,000. 8 On 18 September 1997 Colonial State Bank offered the defendant a home loan of $60,000 to be secured by a mortgage over the property and another investment property which he owned at Swansea. 9 On 19 September 1997 the defendant retained Mr John Cobb, solicitor, to act on the purchase of the property, and signed the memorandum of mortgage over both his properties. 10 On 19 November 1997 G E Sault & Sons Pty Ltd (the builder) provided a quotation addressed to "Mrs Jones" for roofing work at the property for the sum of $4,600. 11 On 2 December 1997 the defendant paid $1,790 for tanks for the property. 12 On 5 December 1997 the builder issued a receipt for the sum of $2,000 paid as a deposit for the roofing work. 13 On 10 December 1997 a home warranty policy was issued to the defendant for the work to be carried out on the property by the builder. 14 On 12 December 1997 the defendant commenced payments under the mortgage from his account with Colonial State Bank. 15 On 2 February 1998 the transfer of the property from Mr Griffiths to the defendant, and the mortgage over both properties to secure the sum of $60,000, were registered. 16 On 20 August 1998 the defendant's employment with Delta Electricity ended as a voluntary redundancy. 17 On 2 September 1998 the defendant invested the sum of $65,000 from the proceeds of his leave and other entitlements in an annuity plan. 18 On 15 September 1998 he received a superannuation payment in the sum of $168,345.57. 19 In about September 1999 the property was let at a rental of $120 per week. The rent was paid into a separate account operated by the defendant with Colonial State Bank until 2 June 2001, and thereafter into an account with Commonwealth Bank, Belmont, which he operated for this purpose. 20 On 7 April 2001 the plaintiff agreed to buy a Mazda Astina motor vehicle from a dealer for the price of $22,295. Allowing for the deposit of $5,000, and the trade-in on another motor vehicle for $3,500, the balance payable was $13,795. This amount was paid by the plaintiff on 23 April 2001. 21 On 20 April 2001, when the balance was $11,420.64, the defendant withdrew the sum of $6,000 from the rent account and gave it to the plaintiff which she used to pay for the motor vehicle. 22 In February 2002 Mrs Jones suffered a debilitating stroke. The defendant provided her with assistance which entitled him to a carer's pension. Between 2 April 2002 and 1 April 2005 this pension was paid into another account which he had opened with Commonwealth Bank, Belmont on 7 August 2001. 23 On 14 March 2002 the plaintiff and Daniel authorised the defendant to operate their accounts with the Commonwealth Bank. 24 On 27 March 2005 the defendant left the home and terminated his relationship with the plaintiff, Daniel and Mrs Jones. He has had no social contact with them since. 25 On 12 August 2005 the plaintiff lodged a caveat over the property, claiming a one half interest described to be "… under a constructive trust entered into at the time of purchase". 26 On 16 August 2006 the mortgage over the property was discharged by the defendant. The issue 27 The issue for decision is whether there was an oral agreement between the parties relating to the beneficial ownership of the property or, alternatively, whether there should be inferred from the conduct of the parties an actual intention on the part of the defendant as registered proprietor to hold his interest upon trust for the plaintiff as to one half share. The question, therefore, is one of fact. 28 The time of the acquisition of the property is the material time for determining the beneficial interests of the parties ( Calverley v Green [1984] HCA 81; (1984) 155 CLR 242, pp 252, 262). The circumstances in which a court of equity will intervene to declare the existence of a beneficial interest in property were considered in Green v Green (1989) 17 NSWLR 343. With reference to Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137, Gleeson CJ said (p 353): "The most common case of intervention of that kind to be found in the law reports is the case where the person in whose favour a constructive trust is found has, directly or indirectly, made a financial contribution towards the cost of acquiring, improving, or maintaining the property in question."

His Honour continued (p 355): "In the judgment of Vice-Chancellor Browne-Wilkinson in Grant v Edwards his Lordship identified as two matters to be demonstrated when a party seeks to establish a constructive trust based on actual intention, first, that there was a common intention that both should have a beneficial interest, and secondly, that the claimant acted to his or her detriment on the basis of that common intention. His Lordship pointed out that proof of such common intention can be direct, as for example, by evidence of express agreement or the making of admissions, or such common intention can be inferred from the making of contributions to the cost of a property, or meeting expenses in maintaining it. That, however, is merely one of the ways, but not the only way, in which the evidentiary basis for inferring a common intention can be laid. As was earlier observed, such conduct may also be of considerable factual importance in establishing an acting to detriment, but once again, in that respect its status is evidentiary and it is not a matter of legal necessity." 29 Thus, in this case, the court is required to examine the evidence of the words and conduct of the parties to ascertain whether it supports the inference that it was the intention of the parties that the property be purchased by both, and that their interests in it be equal. The plaintiff's case 30 The plaintiff's case is that the defendant holds the property on a constructive trust for the parties' beneficially in equal shares. She says that the trust arises under an oral agreement whereby she provided $30,000 to the defendant for the purchase of the property as an investment in which each would have a beneficial interest. She says that she acted to her detriment in giving effect to that intention. 31 I now turn to so much of the evidence which is relevant to the plaintiff's claim. 32 The plaintiff said that she depended on her mother for assistance with banking and financial matters. After her mother suffered a stroke in 2002 she depended on the defendant for this kind of assistance. As they did not trust banks, it was the practice of herself and other family members to hold cash savings and valuables in safes at the home. 33 On a day in August 1997 the parties, Daniel and Mrs Jones were sitting at the kitchen table at the home when the defendant said to the plaintiff: "Robert Burt has told me that Ern Griffiths' property at Millers Forest is for sale, do you want to go halves with me in buying the house. It would be a good investment for both of us and it is only $60,000."

She told him she had $30,000 and would go halves. He then said: "If you give me your $30,000, I will borrow the rest of the money." 34 The next day, a Sunday, the parties, Daniel and Mrs Jones inspected the property and met the owner, Mr Griffiths. Mr Griffiths said he wanted $60,000 for the house. In the course of his reply the defendant said: "Evonne and I are going halves in the house." 35 A short time later, there was a conversation around the kitchen table at the home between the parties, Daniel and Mrs Jones. The defendant asked the plaintiff for $20,000 and said he would try the bank for a loan and would "… fix it all up for us".

The plaintiff then took the sum of $20,000 in cash from her safe and gave it to the defendant, who counted it. She said that at this time she had savings of $30,000, of which $20,000 had been given to her by her father on her 21st birthday. 36 On a later occasion there was a similar gathering around the kitchen table. The defendant asked the plaintiff for $10,000 for solicitor's and legal fees. The plaintiff took this sum in cash from her safe, and gave it to the defendant. At about this time the defendant told the plaintiff that if the property was in her name she would lose her pension, and that he would put it in his name so she could still get her pension. She agreed with this proposal. 37 Some time later the defendant said to the plaintiff words to the effect that "… We are now the owners of the property". 38 Subsequently, the parties, Daniel, Mrs Jones and some friends carried out renovations and cleaning work on the property on a number of occasions. The plaintiff was involved in cleaning the inside of the house. The renovation work included a new roof the cost of which was paid by the parties. She paid the builder $2,000 for which she was given a receipt. The defendant paid the balance. She sold her caravan in order to raise the money she paid for the roof. As the caravan had been registered in the defendant's name, she told him she wanted to sell it and it was necessary for him to sign the relevant papers for the transaction to proceed.

She also purchased a stove and gas heater for $220 which the defendant and Daniel transported to, and installed in, the property. 39 On an occasion when the plaintiff and the defendant were working at the property, a Mr and Mrs Macgregor asked them if they could rent it. The parties agreed to let it to them at a rent of $120 per week. The rent was paid into a rental account opened in the name of the defendant. 40 In April 2001 the plaintiff arranged to purchase a Mazda motor vehicle for the price of $22,295. She had a conversation with the defendant in which he said words to the effect that he would give her $6,000 out of the rent account which was her half, to go towards the motor vehicle. The defendant subsequently withdrew that sum from the rent account and gave it to the plaintiff who used it to pay for the motor vehicle. The defendant did not say it was a gift or a loan. 41 Shortly before he left the home in about April 2005, there was a conversation between the plaintiff and the defendant about the property. She asked him to sell it, and he replied that he wanted to keep it. She also asked him how much was in the rent account and he replied that the amount was $7,000. 42 Daniel gave evidence the effect of which, in short, corroborated the plaintiff's evidence of her conversations with the defendant in which he invited her to go halves in buying the house, and of his statement to Mr Griffiths at the inspection that he and the plaintiff would buy the property for $60,000 as an investment. He said he was present at the home when the defendant asked the plaintiff for, and was given, $20,000 in cash which was counted out on the kitchen table. He said that, on a later occasion, he heard the defendant ask the plaintiff for the other $10,000, and saw her give him that sum in cash, and the money being counted. He was present at a conversation about this time when the plaintiff asked the defendant about putting half the property in her name, and he replied that she would lose her pension if it was. 43 Daniel said that he assisted the parties in the renovation and cleaning work at the property, and that they used the defendant's truck to transport the stove and heater bought by the plaintiff to the property, and installed them there. He said that, prior to the defendant leaving the home, he heard the plaintiff ask the defendant if he would sell the property, because she wanted her half out of it as he had met up with a girl, and the defendant's reply that he would not do so. He said that he was present when his father gave the plaintiff a brown paper bag on her 21st birthday, and said to them that it contained $20,000. 44 Mr Robert Reid gave evidence of a long social relationship with the parties, Daniel, and Mrs Jones, and that they have visited each other at home from time to time. He said that on an occasion in the late 1990s he was at a barbecue at the Jones' home when the plaintiff, in the defendant's presence, showed him some photographs of the property taken before and after the renovations were done. He said that the defendant then said words to the effect: "It cost us $60,000. Evonne gave me $30,000. We are 50/50 in the house." 45 He said that the defendant said the same on about half a dozen other occasions. In particular, he remembered a conversation in about March 2004 in the car park of a motel at Albury during which he said to the defendant that he was thinking of buying a motel. The defendant then told him of some properties he owned in Swansea, and that he and his sister owned half each of the property at Millers Forest, for which she had given him $30,000. 46 He gave evidence of an incident on 9 February 2006 when the defendant came to his house to collect some iceboxes. He said that there was a conversation on the back veranda between his wife, Louise, and the defendant which included the following: LOUISE: "You are doing the wrong thing by your sister, Alf, and your father would roll over in his grave if he knew what you were doing. You are 50/50 in the house with your sister."

LOUISE: "That's a lie Alf." 47 Mrs Louise Reid said that she has known the Jones family for about six years as participants at car club functions and visitors to each other's home. She recalled that, on a few occasions, the defendant said: "Evonne and I are in the house 50/50." 48 She gave evidence of the conversation on 9 February 2006 between herself, her husband, and the defendant to substantially the same effect as set out in par 46. She said that when denying the plaintiff's interest in the property, the defendant stated: "That's the beauty of having things in your own name." 49 Mr Harold Griffiths gave evidence that he was the son of Mr Ern Griffiths, the former owner of the property. He spoke of an occasion prior to the sale when he attended the property with his father and met for the first time the parties, Daniel and Mrs Jones. He asked the defendant if he was going to live in the property to which the defendant replied to the effect: "No, we've bought it for an investment for my sister and myself." 50 The evidence of Mrs Karole Verna Green was that she and her husband are the tenants of the property. She said that on occasions, including in December 2004, she had spoken to the defendant requesting repairs to the property. In my opinion, however, her evidence was of minimal relevance to the issues in the case and I attach no weight to it. The defendant's case 51 For the defendant, parts of the affidavit of his uncle, Victor Jeffrey Haddow of 23 May 2007 were read. Mr Haddow said he kept his savings in a safe at the Jones' house, and that they were available to be lent to members of the family. He said that some time ago he lent the defendant money to help pay out a loan on a prawn trawler. He also said he helped out on the boat and shared the proceeds of their endeavours with the defendant. I did not find the evidence of relevance to the issues in the proceedings. 52 The thrust of the defendant's evidence was to deny that he discussed with the plaintiff the purchase of any property, that she gave him $30,000 or any money, and to deny any conversation or conduct indicative of acknowledgment that she had any claim to the property. In effect, he denied any agreement with the plaintiff for the purchase of the property, and that she had any interest in rent received from it. He denied the conversations to which Daniel and Mr Griffiths referred, and disagreed with those referred to by Mr Reid and Mrs Reid. 53 He said that he purchased the property on his own account, for which he borrowed $60,000 from Colonial State Bank, secured by the mortgage over both it and his property at Swansea. He paid the mortgage instalments, and rates and taxes for the property. 54 He said that the $6,000 was provided to the plaintiff as a loan to assist in the purchase of the Mazda motor vehicle; that he paid the builder for the roofing; that he denied the plaintiff purchased a stove and heater for the property, and that he doubted the plaintiff's capacity to save money as she claimed. Determination 55 It was common ground that Mrs Jones' disability rendered her incapable of giving evidence in court. Although she was present during the hearing, neither party called her. 56 The case of each party was in stark conflict with that of the other. There was no documentary evidence of payments made by the plaintiff to the defendant. Resolution of the conflict involves an assessment of the reliability of the witnesses, taking into account evidence in corroboration of his or her version as well as evidence which indicates it is inherently unlikely or implausible. However, it is unnecessary to deal separately with each of the many points in conflict. I refer only to those which, in my opinion, are essential to the outcome. 57 The overall impression of the plaintiff, Daniel, Mr Reid, Mrs Reid, and Mr Griffiths was that each was a truthful witness whose evidence was given honestly to the extent that recollection permitted. None were shaken in cross-examination. Indeed, my assessment was that much of the evidence given in cross-examination served only to reinforce their evidence in chief. I accept the evidence of the plaintiff and of these witnesses in preference to that of the defendant whenever it is in conflict. In doing so, I have taken into account the similarities in the affidavit evidence of the plaintiff and Daniel, and of Mr Reid and Mrs Reid, but in the circumstances I draw no adverse inference from them. I have also kept in mind that most of the relevant events referred to by the plaintiff and Daniel were said to have taken place in August 1997 and months shortly thereafter, and that neither kept a contemporary diary note or record. 58 I have come to a different view about the defendant. I found him to be a witness upon whose evidence it was unsafe to rely where it was contested unless it was corroborated by independent documentary or other evidence. However there was no such support for such of his evidence as was relevant to the issues in the case. 59 The evidence shows that the defendant's departure from the home on 27 March 2005 marked the complete breakdown of his relationship with the other members of the family, a situation which has continued to the present time. Whatever were the true circumstances for him leaving, his bitterness, particularly towards the plaintiff, was reflected in his affidavit and oral evidence and, in my assessment, undermined his overall reliability as a witness. Examples include his statements (T p 131), in effect, that by reason of these proceedings he would no longer leave his property to be shared between the plaintiff and Daniel, and that since he began seeing his girlfriend Cathy "… things went very sour", and (affidavit 23 May 2007, par 39(aa)) "… there has been [sic] problems with Evonne. This culminated in my forced removal from the property by Evonne. I dispute that there was anything on my behalf of the nature that would require the issue of an Apprehended Violence Order". His assertions that the plaintiff had not worked, and would have no savings, are of similar kind. 60 Furthermore, there were some matters about which his evidence, in my opinion, was implausible or improbable. 61 An example concerned the provision of $6,000 to the plaintiff for the purchase of the Mazda motor vehicle. There was ample evidence, including bank statements and documents relating to the mortgage, which indicated that the defendant was fairly meticulous in the ordering of his affairs and experienced in looking after his commercial interests. I find it highly unlikely that he would have withdrawn this money from the rent account referable to the property and not from his personal account if, in truth, it was a loan as asserted in his affidavit (par 39(z)). Furthermore, shortly after leaving the home he made demands through his solicitors (e.g. letter 14 June 2005) upon the plaintiff for the recovery of property he claimed to own, yet no reference was made to this transaction and no claim for its repayment has been made. In the circumstances, the fact that no claim has been made and the defendant kept no record of it supports the finding, which I make, that there was no loan, and that the defendant's evidence on this issue should be rejected. The relevant bank statement corroborates the plaintiff's version, and supports the finding that the withdrawal and payment to the plaintiff was made in accordance with their agreement that they were equal owners of the property, and entitled to share equally in the rental proceeds. 62 Another example was the defendant's reluctance to concede that the plaintiff made a payment of $2,000 to the builder from the proceeds of the sale of her caravan against the weight of the evidence that she did. He accepted that the money from the sale of the caravan was the plaintiff's, and did not contradict her account as to the time, purpose, and circumstances of the sale. Although at one point (T p 110) he accepted, in effect, that she paid $2,000 as the deposit to the builder whose name he had given her, he later asserted (T p 142) that this was false. He made no attempt to meet the evidence that the builder gave the plaintiff a receipt for the payment. In my opinion, his refusal to acknowledge the obvious, just as with the $6,000 payment, was out of concern to protect his case rather than to tell the truth. 63 A part of the defendant's evidence which I found to be implausible was his evidence to the effect that he told Mr and Mrs Reid during the conversation on 9 February 2006 that the plaintiff owed him and his uncle $12,000 (T pp 146, 147). This component of the conversation was not put to either Mr or Mrs Reid, and it was not suggested to the plaintiff in cross-examination that she owed the defendant and/or their uncle this, or any other amount. My conclusion was that either it was unlikely that he made the statement, alternatively, if he did, the allegation was untrue. The fact that the allegation was not raised as an issue in defence and/or that no claim has been made for repayment reinforces this conclusion. Conclusion 64 Consistently, upon my acceptance of the evidence of the plaintiff and of Daniel, I find that in about August 1997 it was the common intention of the parties to purchase the property for the price of $60,000 as an investment, to be owned by them in equal shares. The evidence also supports the findings, which I make, that the plaintiff paid the defendant $30,000 in cash for her share, and that it was agreed that he should be the registered proprietor to hold the property on behalf of both. 65 The evidence of the plaintiff and Daniel, which I accept, establishes the probability that the plaintiff accumulated the amount of $30,000 from her father's gift and her own savings. It is consistent with the evidence which founds the inference that she also raised the amount of $8,000 for the purchase of the Mazda motor vehicle in April 2001 from her savings. 66 Furthermore, I find that the evidence of conversations and events in which the defendant acknowledged the plaintiff's interest in the property after the purchase establishes the inescapable inference that it was always their intention that it be equally owned by them. Although not exhaustive, the following matters substantiate the plaintiff's case. 67 On the plaintiff's evidence, which I accept, she paid $2,000, a substantial sum for her, in December 1997 towards the cost of the roof. I find that the defendant knew that the plaintiff's caravan was sold to provide her with money for this purpose. It was consistent with their agreement as to joint ownership of the property that both parties shared the cost of the roof. 68 Further, I find that the plaintiff's evidence, which I accept, establishes that in April 2001 the defendant agreed to withdraw the amount of $6,000 from the rent account and gave it to the plaintiff on the basis that she was entitled to share equally in the rental proceeds. 69 I have also taken into account the evidence of the various statements made by the defendant to Mr Griffiths, and to Mr and Mrs Reid, which is set out above. I accept their evidence, and find that it supports the probability that, until about the time he left the home on 27 March 2005, the defendant properly accepted and acknowledged the existence of the arrangement for which the plaintiff contends. 70 Accordingly, I hold that the plaintiff is entitled to a declaration to the effect that the defendant holds the property upon trust for the plaintiff and the defendant in equal shares, and to consequential relief. 71 In the circumstances it is appropriate to direct the plaintiff to bring in short minutes to give effect to these reasons, and to formulate the terms of appropriate ancillary orders. As to the question of costs, my present view is that there should be an order that the defendant pay the plaintiff's costs of the proceedings. However, failing agreement, I will afford the parties the opportunity to address me in relation to costs. Arrangements should be made with my associate by 4pm 11 April 2008 for the re-listing of the matter. **********

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