33 I have also already recorded that the subject property was subsequently sold in April 2004, consequent upon orders made according to Short Minutes agreed upon between the parties on 9 October 2003 (which included reservation of the Plaintiff's costs), and that the net proceeds of sale are presently held in an interest bearing controlled moneys account in the names of the two parties. The most recent information presented to the Court was that as at 31 August 2004 the balance of that account (representing those net proceeds of sale together with accrued interest thereon) was $280,230.
4 He noted a submission for Ms. Neilson that the presumption of resulting trust was rebutted, but made his order on the basis that there was a resulting trust.
5 The Master calculated the effect of the resulting trust as follows. He found an initial contribution by Mr. Letch of $36,829.00, to which he added one-half of the $154,123.00 which had actually been paid in respect of the mortgage, giving $113,890.00; and he said that this represented 60.96% of what had been paid, so that the respective interests of the parties in the property were 60.96% for Mr. Letch and 39.04% for Ms. Neilson. Applied to the proceeds of sale, this gave $170,828.00 to Mr. Letch and $109,301.00 to Ms. Neilson.
6 The Master found Mr. Letch had made mortgage payments of $154,123.00, strata fees of $13,646.00, rates of $3,597.00, and water rates of $2,826.00, a total of $174,193.00; and that Ms. Neilson was liable to contribute half of that, $87,097.00. He found that Ms. Neilson had made mortgage payments of $3,600.00, that Mr. Letch had received rents of $72,494.00, and that the value of Mr. Letch's sole occupation of the property was $57,270.00; and he found Ms. Neilson was entitled to a credit for half these sums, totalling $66,682.00. The difference between this figure and Mr. Letch's $87,097.00, namely $21,415.00, when subtracted from $109,401.00, gave the figure of $88,986.00 which was to go to Ms. Neilson.
7 The Master rejected a submission for Ms. Neilson that she should be given credit for amounts of $30,000.00 and $41,757.00 paid by her to Mr. Letch, on the basis that the case concerned only the entitlement of the parties to the proceeds of sale of the Kirribilli property and not rights of the parties under the Property (Relationships) Act. The Master had previously noted that proceedings had been brought by Ms. Neilson under that Act, but had been dismissed by the Registrar, and Ms. Neilson's application to have that order vacated had been dismissed.
8 Miss Neilson seeks leave to appeal on the following grounds:
1. That the Master erred in failing to address and resolve the contention that the presumption of a resulting trust had been rebutted.
2. Alternatively, the Master erred in failing to treat the defendant's contributions to the mortgage payments as being repayment in part of the debt which he owed the plaintiff.
3. The Master was in error in finding in paragraph 26 that the sum of $13,000.00 being part of the moneys paid by the opponent to purchase the Kirribilli property, were from the proceedings of sale of the opponent's property in Nelson Bay in circumstances where the opponent's unchallenged affidavit evidence at trial was:
(a) $40,757.26 advanced to him by the claimant was used to assist the purchase by him of $9/378 Miller Street, Cammeray;
(b) $13,000.00 of the proceeds of the sale of the Cammeray property was paid by him towards the purchase of the Kirribilli property.
The Master was in consequence in error in paragraph 70 in declining to bring to account one or both of the payments made by the claimant as an equitable set off or as an exercise of discretion in the grant of relief.
9 It appears that, accepting the basis on which the Master decided the matter, there may perhaps be minor errors in the Master's calculations. Assuming Mr. Letch paid $36,829.00 at the time of purchase, and the balance was provided by a mortgage of $150,000.00 in the names of both parties, and assuming a resulting trust was not rebutted, it may be that the calculation of proportions on which the property is held on trust would be on the basis that each provided $75,000.00 of the mortgage proceeds at that time: Calverley v. Green (1984) 154 CLR 242. However, the Master's calculation on the basis of the $154,123.00 actually paid to the mortgagee, rather than the amount of the advance, would not be significantly different. There may possibly be a small error in treating Mr. Letch as having made mortgage payments of $154,123.00 and Ms. Neilson as having paid $3,600.00, and treating the total amount paid off the mortgage as $154,123.00. However, even if there were such errors, they would not be significant.
10 The real question is whether there are sufficiently arguable errors in the finding of a resulting trust or failure to address the question of its rebuttal, and/or in not giving any credit to Ms. Neilson for $30,000.00 or $40,757.00; and whether, if so, that is sufficient to justify the grant of leave in the interests of justice.
11 In my opinion there are arguable errors in those respects, including the following:
1. Failure to advert to evidence that the proceeds of sale of the Cammeray property, purchased by Mr. Letch using $40,757.00 provided by Ms. Neilson, went towards the funds from which Mr. Letch paid $36,829.00 towards purchase of the Kirribilli property, when this matter would be relevant both to the question whether $36,829.00 was in substance all Mr. Letch's money and to the question whether the presumption of resulting trust was rebutted.
2. Failure to address the question whether the presumption of resulting trust was rebutted. This being a case where both parties contributed to the purchase, objective circumstances were more important than uncommunicated intentions: Calverley at 261-2; and there were objective circumstances that could support rebuttal of the presumption, including the circumstance that at the time of the purchase Mr. Letch was not only using money that may be found to have included proceeds of Ms. Neilson's $40,757.00 but also owed her a further $30,000.00 of which she had recently sought repayment.
12 If it is found that there were such error, and if it is found that the $36,829.00 was paid from an amalgam that included something like $40,000.00 of Ms. Neilson's money, it could also be found that much of Mr. Letch's pre-separation payments of mortgage instalments and other outgoings were made from an amalgam that included a remainder of about $22,000.00 of Ms. Neilson's money, at a time when Mr. Letch also owed Ms. Neilson a further $30,000.00; and in those circumstances, the basis for the adjustment of $21,415.00 in favour of Mr. Letch by reason of his payments of mortgage instalments and outgoings could be undermined. If the result were an equal division of the proceeds of sale, this could result in a costs order in favour of Ms. Neilson.
13 In my opinion, if there are such errors and they remain uncorrected, this would involve significant injustice to Ms. Neilson, particularly as otherwise she may not be able to recoup any part of the total of $70,757.00, by reason of the limitation statute. Accordingly, in my opinion leave to appeal should be granted.
14 Before concluding this judgment, it is necessary, in the interests of avoiding further confusion, to note some submissions made by Mr. Letch's Counsel:
(1) That when the Cammeray property was sold on 21 July 1992, "The proceeds received by the opponent were 'practically zero'".
(2) The property known as Waters Road, Neutral Bay "was purchased shortly following the sale of the Cammeray property", "using funds deposited into the account from the sale of the Cammeray property".
(3) The sum of $80,448.98 deposited into the account on 6 September 1993 (and used in part for the purchase of the Kirribilli property) were the proceeds of commercial bills "acquired by the opponent in 1990 following the sale of the Nelson Bay property".
(4) That by the time the Kirribilli property was purchased in September 1993, the claimant's $40,757.00 "had been disbursed either in the purchase of the Neutral Bay property or expended on living expenses".
15 As regards (1), Mr. Letch's oral evidence at T25 was that the profit was zero; and although at T24 he also said the net proceeds were practically zero, his evidence at T31 makes it clear that he could only have been referring to zero profit. The property was sold for $221,000.00, and par.[31] of Mr. Letch's affidavit sworn 7 November 2003 suggests that the net proceeds of sale were in the order of $150,000.00.
16 As regards (2), in par.[33] of Mr. Letch's affidavit, Mr. Letch swears that the Neutral Bay unit was purchased on 6 September 1994, that is, about a year after the purchase of the Kirribilli property.
17 As regards (3), in par.[34] of Mr. Letch's affidavit, Mr. Letch swears that the proceeds of sale of the Nelson Bay property were applied to the liquor store business at Castlecrag and also to the purchase of the Cammeray unit; and in par.[32], Mr. Letch swears that, apart from $15,000.00, all or the greater part of the proceeds of sale of the Cammeray property (that is, it would seem, in excess of $100,000.00) were applied to bank bills, that $18,100.00 and a further $13,000.00 were paid for the purchase of the Kirribilli property in about September 1993, and $6,750.00 was applied to the purchase of the Neutral Bay unit on 6 September 1994. The only suggestion to the contrary of this was Mr. Letch's oral evidence (T14) that moneys deposited into the bank bills came "from the profits of the Nelson Bay property"; but Mr. Letch did not say that what he had sworn in his carefully prepared affidavit was incorrect. Further, at T31-2, he admitted that what was received from Cammeray was part of the amalgam to acquire Kirribilli.
18 As regards (4), as shown by the above commentary, it is plainly contrary to the evidence.
19 I find it difficult to understand how the submissions I have identified could have been made. Although as foreshadowed I propose to order that the claimant pay costs thrown away by reason of proper material not being available at the hearing of the leave application, I would invite the Court hearing the appeal to consider whether the opponent should be disallowed the costs of these submissions because of their inaccuracy. This paragraph should be drawn to the attention of the Court hearing the appeal.
20 I propose the following orders:
1. Leave to appeal granted.
2. Notice of Appeal to be filed within 14 days.
3. Claimant to pay costs thrown away by reason of proper material not being available at the hearing of the leave application, such costs to be borne by the claimant's solicitor.
4. Otherwise, costs of the leave application to be costs in the appeal.
21 In explanation of order 3, I note that on 29 September 2005, I expressed the view that as between the claimant and her solicitor, the solicitor should bear those costs; and I said that, if there was to be any contention to the contrary, it should be provided within 35 days. No such contention was provided.
22 IPP JA: I agree with Hodgson JA.
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