Martin v Martin

The land was purchased in her name by the husband and the question is whether the presumption of advancement has been rebutted and a resulting trust made out. Her appeal is on the ground that a resulting trust has not been made out by any satisfactory evidence and that in any event on the case made for the husband the purpose would be unlawful; the unlawfulness she finds in the case made for the husband is a purpose inter alia to defeat federal land tax, which had not then been discontinued.

The relevant facts, so far as they appear in evidence, are relatively few. The parties were married on 14th June 1947. She was a spinster named Hellenore Mary Jones aged thirty-nine and he was a divorced man named George Henry Haliday Martin aged forty-five. They had lived together for some years before marriage and their adultery was the ground upon which Martin's former wife had divorced him. It appears that in the year 1946 Martin bought about 1200 acres of land at Sherlock, a place near Tailem Bend. The land had been improved with buildings, a house and shed. The purchase price was £3,000. The land was called "Whittakers". The parties took up their residence there. Shortly afterwards Martin bought 892 acres which adjoined "Whittakers" on the east. He paid £334 10s. 0d. for the land. He says that it was a rough stony section. Both husband and wife worked upon the farm; she laboured not infrequently in the same way as he did. Then came the first of the two transactions by which land was purchased in the appellant wife's name and paid for by him. Lying next to the 892 acres which Martin bought for £334 10s. 0d. on the east side, but separated by a road, was a block of land consisting of 1,527 acres. There were two parts in separate titles; one containing 827 acres was to the east or north-east. It is the land awarded to Martin by the judgment. The other part contained 700 acres. The land was in the hands of the State Bank of South Australia. By a memorandum of transfer dated 6th July 1948 the Bank transferred the entire parcel of 1,527 acres comprised in two certificates of title to Mrs. Martin in consideration of £700 expressed to be paid by her. Martin said in his evidence that some months after his marriage he heard that the Bank had foreclosed on the land and that it was on the market. He then negotiated for its purchase. He could not recall whether he signed a contract to purchase the land but he paid the purchase money, £700. He says that it was a rough scrub block, with practically no clearing and no water; there was no rabbit proofing and much of it was not even fenced. In his evidence he told the Court a good deal about his subjective intentions and his reasons but there is very little evidence of what occurred between him and his wife or between either of them and the Bank. She says that the first she knew of the matter was when at Tailem Bend he asked her to sign the transfer. As to her own intention she told the Court that when she signed the transfer she just left it to her husband. "I was prepared to do whatever he wanted me to do with it, transfer it to him or anyone else he told me to."

Of his own intention Martin has given two or three conflicting accounts. After she left him, as she did on 9th March 1956, taking the certificates of title, he lodged a caveat. In the caveat which was dated 12th October 1956, Martin claimed an equitable interest as tenant in common with his wife, "by reason" so said the caveat "of having provided the greater part of the moneys for purchase of the whole land and by reason of a verbal agreement between Hellenore Mary Martin and myself that the said land should be owned by us in common." In his oral evidence he said he found the whole, not the greater part, of the purchase money and he deposed to no such oral agreement with his wife. In an affidavit made in support of the caveat six weeks later he said: "I provided the purchase money of £700 in the following way: I handed £300 in cash, my property, to the respondent" (his wife) "and paid the balance of £400 plus disbursements by cheque on my account." In this affidavit he also said that he had several conversations with his wife at the time when the property was purchased and the title taken in her name. "I cannot recall now the exact words used but the purport of the conversation was that although the title was to be taken in her name the land should belong to us in equal shares." There is nothing of this sort in his oral evidence.

When Martin commenced the proceedings out of which this appeal arises he put his case in the alternative. His summons asked first for a declaration that he is equitable owner of the land forming the three blocks. But alternatively he sought a declaration that he is equitable owner as tenant in common with his wife in the proportions of four-sevenths and three-sevenths. He added for good measure "or in some other and what proportions". The reference to four-sevenths and three-sevenths is evidently enough connected in some way with the two sums of £400 and £300. In the affidavit in support of the summons Martin says that of the purchase price of £700 he paid £300 in cash and the balance was arranged by overdraft upon his account with the State Bank. All reference to a tenancy in common in equal shares disappears. There is, however, a reference to a topic which in his evidence is developed, namely the avoidance of federal land tax. He says in his affidavit but not in his evidence that he spoke to his wife on the subject. "I spoke to the respondent and told her that as I had the other land in my name it would be better to put this land in her name because of federal land tax. I said to her "If the restrictions on the sale of property are lifted the property I am buying will easily be worth £5,000 and this will take me over the federal land tax limit"."

In his evidence Martin did not suggest that he mentioned the subject to his wife or for that matter had any significant discussion about the result of, or the reasons for, putting the title in her name. There is, it is true, a curious passage in his cross-examination where counsel for the wife seems to have taken all the risk of asking the witness directly whether he had ever spoken to his wife about who was to be really the owner of the land in dispute. At first he answered Yes he would think so, at different times, and he went on that she used to say at times "I" (that is Mrs. Martin presumably), "would down tools for a day or two" and he Martin " even said "What about putting it back in my name"." Emboldened by this, no doubt, the counsel persisted and obtained this answer from Martin: - "Actually I did not say "Although I am going to put it in your name, it will really belong to me." It was that I always thought that." Still further persistence by cross-examining counsel resulted in an answer of a contradictory kind if the notes are correct: "I did say to my wife "Although I am going to put it into your name, I want you to understand that it is going to be mine"." In his very full and detailed judgment Abbott J. ignores the foregoing passage and this Court may safely do the same. It is obviously valueless as evidence that an express statement was ever made.

The whole question was dealt with as depending on what may be called the subjective intention of Martin and upon his wife's understanding of the effect of putting the title in her name. Martin in his evidence at the hearing gave the following account of the reasons actuating him in doing so: - "When I purchased the land I put the property titles in my wife's name. I did that for various reasons. There were various restrictions, I do not know, about transfer. For one thing, there was a price limit on land at that time. I cannot name any specific person and I cannot name any person who told me, that people were going to have land taken away from them with soldier settlements. I know it seems now, looking back on it, it seems not very much to be afraid of. Tax questions kept cropping up in conversation between neighbours and laymen. I believed my eldest lad was going to come up and work the Whittaker place. That is Cyril. There was a house of sorts on the other block. He was married. He came up there for a little while. I intended to hold that. There was a restriction on the sowing of wheat. I intended to hold Whittaker's. They would not have allowed me to grow more than a certain amount on my own land, so I thought in the two titles I would probably give one to the wife. The same way with superphosphate, I could only obtain so much in my own name, but if another property was in my wife's name, and I did this for a year or so, I could obtain super in her name for that block. There was federal land tax at that time. I believed it was considerable, although I have never gone into it to know just what. I knew over £5,000, I understand, worth. Holding Whittaker's, over 2,000 acres there, and 2,000 on section 12 would have put me up to over the £5,000 worth, I thought rendering me liable to federal land tax, but being on the two titles would not come into it. Q. Did you ever intend to give the land to your wife, for yourself and for you to have no interest. A. No, I never did or I would not have worked it for all those years."

The next step taken by Martin after the transfer by the Bank to his wife of the 1,527 acres was to sell the first piece of land he had acquired at Sherlock, namely the 1,200 acres called "Whittakers". That appears to have been done about the beginning of September 1948. The transfer to the purchaser was dated 12th November 1948. Thereupon Martin and his wife moved into a dwelling in the northern corner of that part of the land acquired from the State Bank comprising 700 acres which the decision under appeal leaves in Mrs. Martin's ownership. They went on working this land in much the same way as they had done with "Whittakers". At the beginning of May 1952 Martin bought 2,000 debentures of £1 each of the Electricity Trust of South Australia in his wife's name and 2,000 of them in his own name. He made the investment through the State Savings Bank at Tailem Bend, the then manager of which says that he came carrying a sugar bag containing bank notes. From it he shook out a quantity of £10 notes of which the Bank took the necessary 400. Martin said in evidence that he intended that his wife should take beneficially the 2,000 debentures obtained in her name. She, on the other hand, asserted that she paid for these debentures herself. She gave evidence as to the source whence she obtained the money, evidence which she could not substantiate. Her story in relation to the debentures was disbelieved. Not very long after the acquisition of the debentures the last piece of land was bought. It was an irregularly shaped piece of land containing 255 acres, lying south of the 700 acres with a contiguous boundary. By a transfer dated 19th August 1952 the vendor in consideration of £75 transferred it to Mrs. Martin. In the evidence very little attention is paid to this transaction.

Two and a half years later, namely in January 1955, Martin instructed a firm of sharebrokers in Adelaide to buy another £1,000 of debentures of the Electricity Trust and to place £400 of them in Mrs. Martin's name. This was done and he found the money. As to all £2,400 of debentures he said in evidence: "I intended the debentures as a gift for my wife. She deserved something and we were fairly happy."

Up to her leaving her husband on 9th March 1956 they appear to have gone on working the land. He had the custody of the certificates of title in her name. He kept them with other documents in a milk can sealed up and placed in a heap of stones near the milk shed. This he described as his safe deposit. He had told his wife where he had placed the documents and valuables and when she left him on 9th March 1956 she removed the stones, opened the tin and took the two certificates of title in her name. She took nothing else and replaced the can beneath the stones.

Although they had lived and worked together upon the land up to this point she had suffered some violence at his hands, how much was of course not investigated in these proceedings. Some years before she left him she had consulted a solicitor and at his instance, so she says, she kept a diary of incidents upon which she might found a suit for dissolution on the ground of cruelty. She instituted the suit immediately after her departure, alleging cruelty for one year and upwards. He did not defend the suit. While they were living together there was, as may be supposed, no question between them about the money earned from the land. He says that he bought and sold the stock and produce and made the return of income tax in his name. They dwelt together and he found the household expenses.

In the end Martin's case depends upon the correctness in the foregoing circumstances of the view taken by Abbott J. that Martin did not intend that his wife should have the beneficial ownership of the land. It was of course for Martin to make out positively that his wife did not take the land beneficially but as a trustee for him. As she was his wife the fact that he found the purchase money for the land raised no presumption in his favour of a resulting trust as it would or might have done had she been a stranger. The presumption is in her case that the beneficial ownership went with the legal title. It is called a presumption of advancement but it is rather the absence of any reason for assuming that a trust arose or in other words that the equitable right is not at home with the legal title. Evidence however that the wife was intended to take as a trustee has long been admissible. This struck Mr. Ashburner as somewhat strange and he wrote in his book on Equity (2nd ed. (1933) p. 110 n.): - "It is difficult to justify the grounds on which evidence of intention has been admitted to show that the child or wife takes as a trustee. Evidence of intention is always admissible to rebut a presumption made in equity against the legal effect of an instrument; but here there is, strictly speaking, no presumption of advancement. The child or wife has the legal title. The fact of his being a child or wife of the purchaser prevents any equitable presumption from arising." It is for the most part assumed that proof of the intention will be made out by circumstances. But it is undeniable that the husband who found the money may testify to his own intention. This perhaps was first decided by Stuart V.C. in Devoy v. Devoy [1] . The Vice Chancellor said: "Where the conduct of the father only raises a presumption and the question is as to the amount of evidence necessary to rebut the presumption, it is too much to say that the evidence upon oath of the actor, although subject to the qualification with which it must be received as that of an interested witness, is to be wholly rejected" [2] . In Dumper v. Dumper [3] , the same Vice Chancellor admitted a father's evidence of his own intention and referred to this decision saying "As to the father's evidence, although it is clearly admissible in this case as in the case of Devoy v. Devoy [1] , it must in every such case be liable to observations which tend to diminish its weight [4] ". In Davies v. The National Trustees Executors and Agency Co. of Australasia Ltd. [5] Cussen J. said: - "It is impossible to try to arrange into certain sets of categories certain facts, and say beforehand they will or will not become decisive or immaterial. The attention must be kept steadily fixed on the one fact in issue - What was at the time the intention of the purchaser or transferor? Anything which is relevant to that issue is admissible. You may have the evidence of the purchaser or transferor himself, if he is alive, as to his mental condition in the past, and though in some circumstances such evidence should be received with caution, yet it may be accepted" [6] . His Honour's judgment, which contains a very clear formulation of the principles involved, makes it entirely a question of fact. The burden of proof is firmly placed upon the person asserting that a trust was intended but the issue depends upon the intention with which the property was purchased by the parent in the name of the child or the husband in the name of the wife or as the case may be. "If on the whole of the evidence the Court is satisfied" said Cussen J. "that the husband or father did not intend at the time of the purchase that his wife or child should take by way of advancement, the rule of law is that there is a resulting trust for the husband or father. Similar rules apply where a transfer or assurance of property is made without consideration by a husband or father to a wife or child. It has been suggested in some cases that the presumption in favour of advancement is stronger in the case of a transfer than it is in the case of a purchase; but although this may be so in some circumstances, I think that no substantial distinction applicable universally can be drawn" [1] .

1. (1857) 3 Sm. & Giff. 403 [ 65 E.R. 713]. 2. (1857) 3 Sm. & Giff., at p. 406 [ 65 E.R., at p. 714]. 3. (1862) 3 Giff. 583 [66 E.R. 540]. 4. (1857) 3 Sm. & Giff. 403 [ 65 E.R. 713]. 5. (1862) 3 Giff., at p. 590 [66 E.R., at p. 543]. 6. [1912] V.L.R. 397. 7. [1912] V.L.R., at p. 403. 8. [1912] V.L.R., at pp. 401, 402.

The argument that the reason or motive for causing the property to be purchased in the name of the wife was to make it possible to avoid tax or to escape some provision of the law must often be amphibolous. For it may be relied upon as a ground for saying that since tax could not lawfully be avoided or the provision of the law escaped lawfully unless the beneficial ownership was conferred with the legal property, the presumption is strengthened that it was so intended. On the other hand, it may be pressed further and used to show that the legal title was placed in the name of the wife or child as a nominee for no reason except to cloak the truth. When that is the case there must, under Australian case law, be further inquiry and it must be ascertained whether the unlawful purpose was in any degree carried out or, on the other hand, the intending law breaker recanted before any necessity arose of using the cover he had thus provided or else virtuously refrained from using it. See Payne v. McDonald [2] ; Perpetual Executors and Trustees Association of Australia Ltd. v. Wright [3] ; Donaldson v. Freeson [4] ; Drever v. Drever [5] . Perhaps a different view obtains in England: see Gascoigne v. Gascoigne [6] ; Re Emery's Investments' Trusts; Emery v. Emery [7] . In the present case the purposes by which Martin claims that he was actuated, though involving thoughts of evading land tax if ever he might otherwise become chargeable, and of avoiding the operation of other controls, were all nebulous and in fact lay in future possibilities, or contingencies and not in present necessities or imminent dangers. There was no definite liability or disadvantage which would have been incurred if Martin had acquired the land for himself in his own name. But although it cannot be said that the legal title was placed in the wife's name in order to effect an unlawful purpose precluding Martin from setting up a resulting trust it remains true, nevertheless, that the motives by which he claims to have been actuated are of a kind which might impel a scrupulous man to make a true gift to his wife, so that the evils he feared would be avoided in a perfectly lawful way and without any violation of propriety. Such a view tends to strengthen, even if somewhat artificially, the presumption of advancement. It would mean of course that the husband would rely on the matrimonial relationship as sufficient to secure to him enjoyment of the property. The fact is that in very many cases where a husband places property in his wife's name he has no thought of any differences arising between them, none at all of a dissolution of marriage except by death, and he acts in simple confidence that as legal and beneficial owner of the property his wife will always consult his interests and probably comply with his wishes in exercising her proprietary rights. The nature of the property must of course have some bearing upon the likelihood of such an explanation of a transaction being the correct one. For example, other reasons are perhaps more likely to account for the investment in shares and stock in a wife's name. When, however, it is the true explanation of what the husband has done, it means that there is no resulting trust in the husband's favour. It is hardly necessary to add that this Court does not accept the view that provisions like s. 105 of the Law of Property Act, 1936-1956 go beyond procedure for ascertaining and enforcing existing rights and confer upon the Court what may be described as a special power of appointment over the disputed property between the husband and wife: see Wirth v. Wirth [1] . Perhaps we have here a case in which the confidence of the husband in the matrimonial relationship, in spite of his previous experience of matrimony, led him to confer upon his wife the beneficial as well as the legal title to the property. But that is not the view which Abbott J. adopted. Towards the close of his judgment, in approaching the application to the facts of the presumption of advancement, his Honour said: "I am inclined to the view that the applicant never intended that the wife should have any equitable interest in this land, and I am satisfied that until she had taken legal advice she never thought that she had any equitable interest in it." Then after a further reference to facts and some citations, his Honour said: "I have formed the definite opinion, in this case, that the husband never intended the Sherlock land as an advancement to her." If this means, as one would assume that it does, that Martin intended to retain the beneficial ownership of the land and used his wife as a nominee or trustee, it is a finding that could mean nothing but a resulting trust for the husband. But the learned judge in the course of referring to the facts supporting the conclusion he has stated said: "She laboured in the field with him and he spent his own money in improvements. It was obviously a whole-hearted joint effort, without any thought of what might happen if they should ever become divorced." Abbott J. went on to say, using the language of Stuart V.C. in Hoyes v. Kindersley [1] , "the circumstances all negative the presumption that would otherwise arise from the fact that the" (land) "was purchased in the name of the wife" [2] . After mentioning ways in which Martin asserted ownership, his Honour proceeded: "In these circumstances today a fair decision would be an equal division and were it not for what the husband has himself said, that is what I should do." (What the husband himself said was that he wanted only the upper part of the land.) If his Honour's statement means that the proper inference of intention is that the wife was to hold the land placed in her name as a trustee for herself and her husband as tenants in common in equal shares, all that can be said is that the actual evidence given at the hearing does not support the conclusion. As to the earlier story which Martin had put forward in support of his caveat, Abbott J. had already said in his judgment, "I do not believe what he deposed to in his affidavit sworn on 26th November 1956, that he informed his wife that "although the title was to be taken in her name, the land should belong to us both in equal shares" ". But it seems probable that his Honour did not contemplate a finding of fact that a beneficial ownership was intended as tenants in common in equal shares but took the view that the section authorized the court to exercise a discretion independently of legal rights and make a division or distribution that appeared just and fair in the circumstances. Be that as it may, the question for this Court must be whether it should give effect to the finding of Abbott J. that Martin never intended that his wife should take the land as an advancement. It is a finding based entirely upon his Honour's opinion of Martin's real intention. It is evident that as a witness Martin could not and did not carry great weight. On the subject of his real intention he had put forward inconsistent stories and had founded inconsistent claims upon them. In the circumstances perhaps the presumption of equity might have formed a safer guide than Martin's evidence. But a court of appeal must exercise great caution in setting aside a finding upon a question of intention made by the judge who has seen and heard the parties as witnesses. There is no ground for thinking that Abbott J. in any way misapprehended the relevant circumstances or the bearing of the evidence. The point to which the case must come is the safety of an affirmative finding that Martin intended when the pieces of land were put in his wife's name that she should not take the beneficial interest. In arriving at such an affirmative finding Abbott J. took into account all the circumstances as well as his estimate of the parties.

1. (1908) 6 C.L.R. 208. 2. (1917) 23 C.L.R. 185. 3. (1934) 51 C.L.R. 598. 4. [1936] Argus L.R. 446. 5. [1918] 1 K.B. 223. 6. [1959] 1 All E.R. 577. 7. (1956) 98 C.L.R. 228. 8. (1854) 2 Sm. & Giff. 195 [ 65 E.R. 362]. 9. (1854) 2 Sm. & Giff., at p. 197 [ 65 E.R., at p. 363].

After full consideration the case appears on the whole to be of a description in which the primary judge's conclusion of fact should be treated as final. For that reason the appeal against the order for the transfer of the property should be dismissed. The order directed that Mrs. Martin should pay Martin's costs of the application and from that part also of the order she appeals. She complains of the reasons given by Abbott J. for so exercising his discretion. The reasons may not be sound, but it is an order which it would be proper to make. It is a piece of adverse litigation and if the relationship of husband and wife might have made a difference, that is a relationship that was dissolved at an early point in the proceedings. The dissolution of a marriage apparently makes no difference to the jurisdiction to decide the summons if it has been issued already (see Fribance v. Fribance [1] ) but in this case the dissolution makes it clearer still that the litigation is an adverse proceeding between independent parties.