c. The defendants and each of them would account to the plaintiff for all expenditure on the purchases and in respect of the income and all outgoings in connection with each property, upon demand."
86 The existence of a trust is dependent on finding an intention of the parties to create such a trust existed. Formal or technical language is not required to express such intention and it may be inferred that the relevant intention existed by reference to the available evidence. The court may look to the nature of the transaction and the matrix of circumstances to infer the parties intention: Trident General Insurance Co Ltd v McNeice Bros. Pty Ltd (1988) 165 CLR 107, 121 per Mason J. In Bahr v Nicolay [No. 2] (1988) 164 CLR 604, Mason CJ and Dawson J said, at 618-619:
"If the inference to be drawn is that the parties intended to create or protect an interest in a third party and the trust relationship is the appropriate means of creating or protecting that interest or of giving effect to the intention, then there is no reason why in a given case an intention to create a trust should not be inferred."
87 In New South Wales a trust created inter vivos must comply with s 23C of the Conveyancing Act 1919:
"23C Instruments required to be in writing
(1) Subject to the provisions of this Act with respect to the creation of interests in land by parol:
(a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person's agent thereunto lawfully authorised in writing, or by will, or by operation of law,
(b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person's will,
(c) a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same or by the person's will, or by the person's agent thereunto lawfully authorised in writing.
(2) This section does not affect the creation or operation of resulting, implied, or constructive trusts."
88 During the hearing the first defendant disclaimed any reliance on 23C but in written submissions later she raised it. It is necessary to deal with it.
89 The requirement of writing does not apply to resulting, implied or constructive trusts only to express trusts which I will deal with first.
90 The plaintiff refers to the principle set out in D. Heydon and M.J. Leeming, Jacobs Law of Trusts in Australia, 7th Ed, LexisNexis Butterworths Australia, Sydney at [709] that equity considers it fraud for a person whom land is conveyed as a trustee and who knows it was conveyed as such to deny the trust and set up lack of writing in support of the denial. In such cases, parol evidence of the trust may be adduced to establish the trust and a declaration obtained: Rochefoucauld v Boustead [1897] 1 Ch 196 and Last v Rosenfeld (1972) 2 NSWLR 923 at 929-930.
91 The principle applies where a trustee has expended his own money upon the acquisition of the property but upon terms that he acquired the property as trustee for the beneficiary and had a lien for the moneys he had expended. This is very similar to the situation in this case where the purchasers incurred a personal liability on the loans but had agreed for a right of indemnity out of the rental income which was expected to and did cover the mortgage repayments.
Resulting Trust
92 In paragraph 20 of the statement of claim the plaintiff pleads that in the alternative the properties are held on a resulting trust for the plaintiff.
93 A resulting trust will be presumed where, on a purchase, the legal title to property is vested in someone other than the person who is proved to have provided the purchase money. The relevant principles are stated in Calverley v Green (1984) 155 CLR at 246-247:
"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. Similarly, if the purchase money is provided by two or more persons jointly, and the property is put into the name of one only, there is, in the absence of any such relationship, presumed to be a resulting trust in favour of the other or others. For the presumption to apply the money must have been provided by the purchaser in his character as such -- not, e.g., as a loan. Consistently with these principles it has been held that if two persons have contributed the purchase money in unequal shares, and the property is purchased in their joint names, there is, again in the absence of a relationship that gives rise to a presumption of advancement, a presumption that the property is held by the purchasers in trust for themselves as tenants in common in the proportions in which they contributed the purchase money: Robinson v. Preston [15], at p. 213 ; Ingram v. Ingram [16] and Crisp v. Mullings [17] (a decision of the English Court of Appeal). "
94 See also Muschinski v Dodds (1986) 160 CLR 583 at 589.
95 I will first deal with the two properties at Quakers Hill. It is plain on the evidence that the cash funds for the purchase were provided by the plaintiff. The initial proposal for the purchase was that it would be in the plaintiff's name but this changed in the time leading up to the purchase because of the problem of obtaining the necessary approvals or running the risk of transaction being disallowed. The contemporaneous documents signed by the first defendant indicate that she was aware that the property was to be purchased for the plaintiff. Subsequent to the purchase there are numerous admissions by her that the property was the plaintiff's property and it was the plaintiff's responsibility for the mortgages and notwithstanding the fact that the first defendant and her partner had signed them. Having regard to the contemporaneous documents and the admissions I am not prepared to accept the first defendant when she says that she did not know the circumstances of the monies being forwarded to the second defendant and that she thought they were loans to him by his brother.
96 There are other aspects which have been pointed to by the first defendant such as the terms of the mortgage documents which tend to indicate no trust being agreed upon nor a personal liability being accepted. They are, however, the only documents that would have enabled the transaction to be completed and no doubt the first defendant did not turn her mind to those matters. The income tax returns provide some contrary indication but it seems to me that the admissions and the contemporaneous documents clearly show what was in fact agreed, namely, that the properties were to be held in trust for the plaintiff and that the rental from the properties would be used to repay the mortgages to avoid the defendants having to contribute to them. The maintenance of a 'kitty account' over the period and the fact that the first defendant did not have to contribute to the mortgages in order to meet them was a strong point in favour of the conclusion to which I have adverted. In my view, there is an express trust over the Quakers Hill properties arising in favour of the plaintiff.
97 The position in relation to the Kurrajong property is obscured somewhat by the numerous proposals on the manner the property would be owned that were put forward prior to the purchase of the property. What seems clear is that the purchase price for the Kurrajong property was made up of $237,000 from the plaintiff and a loan of $202,000 taken out in the name of the defendants.
98 Earlier in this judgment I have referred to the facsimile of 19 July 1998 from the first defendant to the plaintiff. The text of that facsimile is set out in paragraph 47 above.
99 The parties before me did not put on any evidence of a reply to that facsimile prior to contracts being exchanged on 7 August 1998. Indeed the plaintiff says specifically that he did not say anything to the first defendant before that time. The only evidence of discussion was contained in paragraph 30 of the plaintiff's affidavit in these terms:
30. At around the time of settlement, I had a telephone conversation with Olivia and Fabian which included words to the following effect:
Olivia: "Hi Roy. We are moving into Kurrajong. When you are ready to come to Australia, we'll move out of the house and build a house on the adjacent five acres. We will be good neighbours, I promise. The house will cost $150,000.00. We will sell Pagoda Crescent and build the house with that money. Will it be okay?