HEADNOTE
[This headnote is not to be read as part of the judgment]
The appellant, Ms Cheryl Li, and the respondent, Mr Zhiyong (Tommy) Tao, were in a relationship. In 2015 a house in St Ives in Sydney was purchased and was registered solely in Ms Li's name. The pair separated in 2018. Mr Tao contended that Ms Li held the house on trust for him, pursuant to an express trust. The primary judge found that there was an oral agreement creating such a trust. Her Honour held that Ms Li could not rely on the writing requirements in s 23C of the Conveyancing Act 1919 (NSW) to resist Mr Tao's claim, based upon the doctrine of part performance.
There were four issues on appeal. First, whether the primary judge erred in making findings in respect of Mr Tao's credit. Second, whether Ms Li did in fact declare a trust in the terms contended for by Mr Tao. Third, whether the doctrine of part-performance applied in this case. Fourth, pursuant to a notice of contention filed by the respondent, whether Mr Tao's beneficial interest could be recognised notwithstanding s 23C under the doctrine in Rochefoucauld v Boustead [1897] 1 Ch 196.
The Court dismissed the appeal (per Kirk JA, Ward P and Mitchelmore JA agreeing), and held as follows:
In respect of the first and second issues:
- The trust finding was factual and likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge. It is therefore necessary to show that the findings were "glaringly improbable" or "contrary to compelling inferences", unless the credit findings could themselves be overturned. The appellant's challenge to the credit findings was not made out: at [50].
Lee v Lee (2019) 266 CLR 129; [2019] HCA 28, applied.
- The challenge to the existence of the trust turns on the first issue and fails with it: at [34]. The finding of the trust agreement between Ms Li and Mr Tao was not glaringly improbable or contrary to compelling inferences: at [51].
In respect of the third issue:
- A court of equity will only recognise the interest of party alleging an oral agreement if they can show that they performed acts which are unequivocally, and in their own nature, referable to some such agreement as that alleged. Here, none of the four factors identified by the primary judge was on its own unequivocally referrable to an agreement of the kind alleged: at [58]. Adding together a series of equivocal acts does not an unequivocal act make. The doctrine of part performance does not, therefore, allow Mr Tao to escape the provisions of s 23C of the Conveyancing Act. The primary judge erred in concluding to the contrary: at [61]-[62].
Maddison v Alderson (1883) 8 App Cas 467; Pipikos v Trayans (2018) 265 CLR 522; [2018] HCA 39, applied.
In respect of the fourth issue:
- The doctrine in Rochefoucauld v Boustead has four requirements: the defendant has had land conveyed to them on trust; when they received it they knew it was to be held on trust; they now seek to deny the trust by relying on the Statute of Frauds provisions; and they do so in order to claim the land for themselves: at [68].
Rochefoucauld v Boustead [1897] 1 Ch 196, applied.
Cadd v Cadd (1909) 9 CLR 171, [1909] HCA 59; Bloch v Bloch (1981) 180 CLR 390, [1981] HCA 56; Bahr v Nicholay [No 2] (1988) 164 CLR 604, [1988] HCA 16; Nelson v Nelson (1995) 184 CLR 538, [1995] HCA 25, referred to.
- The requirements were satisfied. Mr Tao and Ms Li agreed that the St Ives property would be conveyed to her, but as trustee holding it in trust for him (a fact, thus, that she knew). Ms Li denies the trust, seeking to rely on Statute of Frauds provisions, and claims the land for herself. That being so, it is competent for Mr Tao to seek to prove by parol evidence that it was so conveyed upon trust for him: at [69].
- The appellant argued that the doctrine in Rochefoucauld v Boustead should be applied in a narrow fashion, limited to two species: where a settlor assigns the land conditionally, as in an old fashioned mortgage, and in cases where the trustee prevents the writing to come into effect by fraud. There was no good authority for this point, and no principled basis for so limiting the doctrine: at [73]-[77].
Ciaglia v Ciaglia (2010) 269 ALR 175; [2010] NSWSC 341, considered.
Overmyer Industrial Brokers Pty Ltd v Campbells Cash & Carry Pty Ltd (2003) ATPR (Digest) 46-242; (2004) Aust Contract R 90-181; [2003] NSWCA 305, distinguished.
- The appellant further suggested that the doctrine does not extend to cases where the respondent never had a legal interest in the land: at [78]. Again there was no compelling argument or relevant authority which supported this position, and it was contrary to Victorian authority and, probably, Rochefoucauld v Boustead itself: at [77]-[95].
Organ v Sandwell [1921] VLR 622, applied.
Cadd v Cadd (1909) 9 CLR 171; Di Pietro v Official Trustee in Bankruptcy (1995) 59 FCR 470; Young v Young (2014) 23 Tas R 76; Dunphy v Russell [2018] NSWSC 721, considered.
Wratten v Hunter [1978] 2 NSWLR 367, distinguished.
- The appellant also suggested that Mr Tao's claim should not be enforceable because at some stage during the breakdown of the relationship he stopped making the loan payments on the property, contrary to his promise to do so. This argument appeared to be suggesting that this affected an assessment of unconscionability. The doctrine in Rochefoucauld v Boustead does not depend upon some weighing up of the merits of the conduct of the parties. It is sufficient that the requirements of the doctrine are made out. No defence of unclean hands was pleaded. This case falls squarely within the doctrine articulated in Rochefoucauld v Boustead. No extension of legal doctrine is required: at [94]-[95].