Plaintiff v Defendants

For the Defendants (and Plaintiffs by Counterclaim)

1 This is an application for declarations and other orders in relation to 25 Glencairn Drive, Greenvale ("Greenvale property"). The Greenvale property is registered in the names of the first defendant, Ali Sivritas, and the second defendant, Muzeyyen Sivritas, as joint proprietors. The plaintiff, Muharrem ("Harry") Sivritas, is the defendants' second son.

2 The plaintiff claims that the defendants hold the whole of their interest in the Greenvale property on constructive trust for him. As an alternative, the plaintiff claims that the defendants hold part of their interest in that property on resulting trust for him, and that he is entitled to an equitable charge over the property in relation to the part which is not held on trust for him. The defendants deny the existence of any trust or equitable charge. By way of counterclaim, they assert that if a trust exists, it is a constructive trust pursuant to which the parties' equitable interests are commensurate with their respective expenditures.

3 For the reasons set out in this judgment, I have concluded that the defendants hold the Greenvale property on a constructive trust pursuant to which the plaintiff is a tenant in common with a 73.61 percent equitable interest and the defendants are tenants in common with a 26.39 percent joint equitable interest.

4 The balance of this judgment is divided into the following parts:

Facts not in dispute or inferred from documentary evidence

5 In 1969, the defendants migrated to Australia from Turkey, accompanied by the plaintiff, the defendants' eldest son, Yavuz (also known as "Tom"), and the defendants' youngest son, Zafer (also known as "Paul"). Yavuz was then nine, the plaintiff seven and Zafer four years old.

6 On 28 December 1979, the defendants purchased 6 Moyston Court, Coolaroo ("Coolaroo property") from the Housing Commission for $35,700 under a terms contract which required them to pay a deposit of $200 and monthly instalments of $177.76. The terms contract is discussed further below. The Coolaroo property became the family home for the defendants and their three sons.

7 On 26 October 1980, the plaintiff was involved in a car accident.

8 In the period 1980 to about 1990, the first defendant worked at Ford Motor Company and then retired. In 1980, the second defendant was working part-time as a cleaner at The Herald & Weekly Times. There was dispute as to whether she ceased that employment to look after the plaintiff following his car accident. If she did, she resumed working at The Herald & Weekly Times in 1984. She then retired in or before 1990.

9 During 1981, the plaintiff received a compensation payment of $10,720 from the Motor Accidents Board, and in February 1982, he received a further payment of $4,660, taking the total to $15,380. These amounts were deposited in successive State Bank accounts in the name of the second defendant. The relevant account had a balance of $11,960.11 when it was closed on 11 July 1984.

10 In late May 1984, the plaintiff received a payment of $86,153 in settlement of his personal injury claim. The total amount of compensation received by the plaintiff in 1981, 1982 and 1984 arising from the car accident was thus $101,533 ("compensation money"). On 30 May 1984, $86,150 from the compensation money was invested in a term deposit with the State Bank in the second defendant's name. This was followed by a new term deposit with the principal amount of $85,550 and a maturity date of 11 July 1984. When this amount is added to the amount of $11,960.11 referred to above, the plaintiff's savings as at 11 July 1984 totalled $97,510.11.

11 In July 1984, the defendants were two months in arrears in their monthly instalments under the terms contract.

12 On 11 July 1984, the plaintiff paid the total amount of interest and principal outstanding under the terms contract, namely $35,322.78, from his compensation money. The circumstances surrounding this payment are in dispute and are discussed below. When the amount of $35,322.78 is deducted from the $97,510.11 referred to above, the plaintiff's savings were reduced to $62,187.33.

13 Around July 1984, the plaintiff paid a deposit of $2,000 for the purchase of a block of land at Shandeen Court, Coolaroo ("Shandeen Court block"). He did not proceed with the purchase and the deposit was subsequently refunded to him.

14 A term deposit with the State Bank in the second defendant's name in the amount of $61,160 matured on 25 July 1984. I infer that this amount represented the amount of $62,187.33 referred to above after adding other savings and interest and deducting the deposit of $2,000 for the Shandeen Court block.

15 A term deposit with the State Bank in the second defendant's name in the amount of $48,430 matured on 25 August 1984.

16 On 19 August 1984, the defendants attended an auction of the Greenvale property. The Greenvale property was a newly completed property that was being sold by the builder. The defendants were accompanied by Yavuz and a friend of the first defendant's named Hussein who is now overseas. The plaintiff did not attend the auction. Following the auction, the defendants entered into a contract to purchase the Greenvale property for $160,543. The contract provided for payment of a deposit of $16,200, a payment of $44,000 by 10 October 1984 and the balance of $100,343 by 19 November 1984. A small holding deposit was paid on 19 August 1984 and the balance of the deposit of $16,200 was paid in the following week. The defendants became the registered proprietors on 26 November 1984. The events preceding the auction, at the auction and immediately after the auction are in dispute and are discussed below.

17 In addition to the purchase price of $160,543, stamp duty of $6,022.50, solicitors' fees of $300 and Titles Office fees of $160 were paid on the purchase of the Greenvale property, bringing the total to $167,025.50 ("acquisition price").

18 The acquisition price for the Greenvale property was funded by the amount of $56,500 realised by the sale of the Coolaroo property on 16 November 1984, a mortgage loan taken out by the defendants with the State Bank for $39,061, and a third component, the source of which is in dispute and is discussed below.

19 Although the mortgage was in the defendants' names, the defendants did not solely service the mortgage. There is a dispute as to who made the mortgage repayments and this is discussed below.

20 In late November 1984, the defendants, the plaintiff, Yavuz and Zafer began residing at the Greenvale property. It became the family home. All of the furniture was provided by the defendants. The first defendant installed new window furnishings and Yavuz paid for new carpet. In November 1984, the plaintiff was 22 years old, Yavuz was 25 years old and Zafer was 20 years old.

21 Yavuz was convicted of theft in 1980. In the financial year 1 July 1984 to 30 June 1985, he worked at Henry B Smith Ltd full-time and at Coles supermarkets part-time, and operated a part-time manchester business which he had established in 1983. He borrowed $13,000 from the State Bank on 9 May 1985 for the purposes of the manchester business in addition to an existing loan of $3,500. His income tax return for the 1984-85 financial year disclosed a net income of $16,379.95 derived from his employment at Henry B Smith Ltd and Coles supermarkets. It appeared that only part of Yavuz's income tax return for the 1984-85 financial year was provided to the Court. The part that was provided did not include details of his manchester business. However, Yavuz gave evidence that the business made a loss of about $1,000 in that financial year. The manchester business made a loss of $6,017 in the next financial year, struggled in 1989 and ultimately failed in 1990 or 1991.

22 Yavuz visited Turkey in 1986 and married in 1987. He returned to Australia with his wife in 1987 and they began residing at the Greenvale property. They later had three daughters, who also resided at the Greenvale property. Yavuz visited Turkey on 9 July 1991, returning 21 September 1991, and on 24 August 1998, returning on 7 April 1999. His wife accompanied him on those trips and also visited Turkey on 17 July 2004, returning on 3 October 2004. Yavuz's family left the Greenvale property in 2006. He has remained in employment since 1984 apart from his absences overseas, and during a period in which he was unable to find work after returning from overseas in 1991, at which time he undertook a training course. His wife was not in paid employment at any time and received Centrelink payments.

23 The plaintiff has never married and does not have any children. He has lived continuously at the Greenvale property since 1984. He has never been overseas since arriving in Australia in 1969. He has tended to stay at home and has had limited personal expenses. Apart from work for a coffee company in 1985, 1986 and 1987, he has not worked since 1980 and has received various social security benefits. He now receives a disability pension from Centrelink.

24 In the period 1984 to 1996, Zafer was employed. In 1996, he married and moved out of the Greenvale property.

25 In about 1990, the first defendant ceased employment and commenced receipt of the aged pension. At that time, the second defendant was not in paid employment and received a carer's pension for caring for the first defendant, who has had health problems for some time. She subsequently received the aged pension.

26 Between 1980 and 2006, the defendants made several trips to Turkey, including one occasion when they departed together on 17 June 2005 and returned on 13 September 2006. Other trips are as follows:

(i) departing 16 March 1988 and returning 7 June 1988;

(ii) departing 19 June 1991 and returning 30 November 1991;

(iii) departing 2 March 1994 and returning 9 August 1994;

(iv) departing 16 September 1996 and returning 10 December 1996;

(v) departing 12 May 1998 and returning 7 April 1999; and

(vi) departing 29 May 2002 and returning 18 February 2003;

(i) departing 1 September 1986 and returning 11 February 1987;

(ii) departing 9 July 1991 and returning 21 September 1991;

(iii) departing 25 October 1991 and returning 30 November 1991;

(iv) departing 24 August 1998 and returning 7 April 1999; and

(v) departing 16 October 2002 and returning 18 February 2003.

27 The outgoings on the Greenvale property (electricity, gas, water and telephone expenses) and local rates were paid by various members of the family from time to time. There was a dispute before me as to who paid and how much each person paid. In the initial years, a number of alterations, which were described by the defendants as improvements, were made to the property. Again, there was dispute in respect of the alterations or improvements. These issues are discussed below.

28 During the period 1984 to 2006, no major maintenance was performed on the Greenvale property. For example, the property has never been repainted.

29 The family members had a normal loving relationship until 2003. On 29 October 2003, the plaintiff personally lodged a caveat on the Greenvale property and gave as the address for notices Zafer's address, 7 Warrick Street, Ascot Vale. That caveat was replaced by another caveat lodged on 10 April 2006 by the plaintiff's former solicitors. The plaintiff gave evidence that he wanted to sell the Greenvale property in 2003, and that when he asked the defendants to provide him with the documents he needed, the first defendant refused to do so and demanded a payment of $200,000. The defendants denied they had a dispute with the plaintiff in 2003 in relation to the Greenvale property. While the defendants were in Turkey, the plaintiff's former solicitors sent them a letter dated 21 July 2005 in which the solicitors asserted that the defendants held the Greenvale property on trust for the plaintiff and requested the defendants to sign documents to give effect to the trust. The defendants did not sign the documents.

30 The plaintiff commenced this proceeding on 28 July 2006 while the defendants were still in Turkey. Following the defendants' return to Australia in September 2006, there was an altercation between the plaintiff and the first defendant at the Greenvale property. The defendants vacated the Greenvale property in November 2006 and now live with Yavuz and his family. The plaintiff alleges that the defendants caused deliberate damage to the Greenvale property while they were in occupation and when they left. The defendants deny that they deliberately caused any damage and allege that the damage asserted by the plaintiff was fair wear and tear.

31 Rent has not been paid by any member of the Sivritas family while living at the Greenvale property.

32 The Greenvale property is currently worth $600,000. The outstanding mortgage amount is approximately $7,000. It appears that no repayments on the mortgage have been made after 19 April 2005 and that the mortgage has been in arrears since that time. The plaintiff is now the sole occupant of the Greenvale property.

33 In this proceeding, Zafer supported the plaintiff's position while Yavuz supported the defendants' position.

34 Zafer has provided $60,000 to the plaintiff to help fund the cost of this proceeding. He did not claim any interest in the Greenvale property. He said that he made an agreement with the plaintiff in 1984 under which the plaintiff agreed to pay him part of the proceeds of the Greenvale property when it was eventually sold.

35 Yavuz has not claimed any interest in the Greenvale property. Given that he lived in the property with his family rent free for 22 years, this is not surprising.

36 Oral evidence on behalf of the plaintiff was given by the plaintiff, Zafer, and a former colleague of the first defendant, Mustafa Ciftci. Brief oral evidence was also given by the plaintiff's solicitor, Peter Finkelstein, on discovery issues. Oral evidence on behalf of the defendants was given by each of the defendants, Yavuz and an expert architect, Rudolf Arends. The defendants and Mr Ciftci gave evidence through an interpreter. The defendants have a limited understanding of the English language; they speak broken English but cannot read or write English.

37 Given that some of the critical events occurred over 20 years ago and there were significant gaps in the documentary evidence, it is not surprising that many facts are unclear. The difficulties in working out what happened were compounded by the fact that the oral evidence clashed on virtually every key issue.

38 Mr Barton, who appeared for the defendants, attacked the credit of the plaintiff and Zafer, and Mr Cawthorn SC, who appeared with Mr Sedal for the plaintiff, attacked the credit of the defendants and Yavuz. I will not set out their submissions on credit as I have found the evidence of all of the witnesses other than Mr Ciftci and Mr Arends unsatisfactory. Where I do not specifically refer in this judgment to particular evidence of the plaintiff, the defendants, Yavuz or Zafer that is inconsistent with any of my findings or conclusions, it is because I have not accepted that evidence.

39 Apart from the obvious difficulties arising from the fading of memories over time, the evidence of the plaintiff and the defendants was unreliable because of their tendency to tailor their evidence to suit their respective cases. They were evasive in relation to questions that did not suit their case, to the point of sometimes denying obvious facts. The plaintiff often slowly repeated questions put in cross-examination before answering them, blamed his lawyers for alleged mistakes in documents on several occasions, was argumentative and tended to make speeches. The defendants were also argumentative and had a tendency to make speeches. At one stage, the second defendant motioned to the first defendant while he was giving evidence. In fairness to the defendants, it is possible that this behaviour and some of the deficiencies in their evidence can be attributed to unfamiliarity with the Australian legal process and the difficulties in giving evidence through an interpreter, particularly in relation to questions that dealt with legal concepts which may not have direct equivalents in the Turkish language.

40 Zafer's evidence was remarkably similar to the plaintiff's. He had a vested interest in supporting the plaintiff's case because he expected to receive part of the proceeds of the sale of the Greenvale property as repayment of the contributions he said he had made towards mortgage payments and also because he helped finance the plaintiff's current proceeding (see paragraph 34 of this judgment). Many of his answers were too precise and too confident to be credible, given that the events in question occurred many years ago. In turn, Yavuz's evidence was remarkably similar to the defendants' evidence. Some of his evidence was contradicted by contemporaneous records, particularly in relation to critical financial issues.

41 In these circumstances, the most reliable evidence was the evidence in contemporaneous records and oral evidence that was supported by such records. Mr Ciftci and Mr Arends were independent, disinterested witnesses whose evidence was reliable.

42 The defendants gave evidence that they kept all of their important documents in a basket in a kitchen cupboard at the Greenvale property. Although they were vague as to exactly what documents were kept in the basket, it appears that they included utility bills, rate notices and mortgage pay-in books. There was some evidence that only recent utility bills were retained in the basket. The defendants said that when they returned from Turkey in September 2006, all of the documents in the basket were missing.

43 Yavuz gave evidence that he kept his work-related records, business records and bank statements in separate envelopes in a suitcase at the Greenvale property. He said that when, in 2006, he looked for the documents at the request of the defendants' solicitors for the purposes of this proceeding, he found the envelopes in the suitcase but their contents were missing.

44 In this proceeding, the plaintiff produced mortgage pay-in books for the Greenvale property, a loan application signed by the defendants on 7 August 1987 and an accompanying signed and undated statement of financial position, parts of Yavuz's tax returns, written statements by the defendants in the Turkish language (with typed English translations) setting out their responses to the plaintiff's claims, and various other documents belonging to the defendants or Yavuz. It is not clear whether the translated statements were addressed to the defendants' solicitors, the plaintiff's solicitors or some other person. Some of the abovementioned documents were discovered by the plaintiff in his original affidavit of documents sworn on 30 January 2007, some were discovered in a supplementary affidavit sworn on 21 August 2008 and some were discovered during the course of the hearing in a further supplementary affidavit sworn on 1 September 2008. The plaintiff's solicitor gave evidence that the documents that were discovered on 21 August 2008 and 1 September 2008 were not discovered earlier because he only formed the view that the documents were relevant a short time before the respective affidavits were sworn.

45 The copies of the loan application and accompanying statement of financial position referred to above that were provided to the defendants for the purposes of this proceeding were incomplete in that the bottom part of each of the two pages was cut off. The plaintiff, in his affidavit of documents sworn on 30 January 2007, described the statement of financial position as "undated" and did not specifically refer to the loan application. The defendants' solicitors requested better copies and were informed by the plaintiff's solicitors that better copies have not been found. While the plaintiff was giving evidence, he produced complete copies and said that he had deliberately provided incomplete copies to his solicitors to provide to the defendants' solicitors in order to "trap" the first defendant. There was no suggestion that the plaintiff's solicitors were aware that they had deliberately been provided with incomplete copies, or that complete copies or originals were available. The plaintiff said that he was not legally represented when he first gave discovery of these documents and that, had he been given legal advice that it was improper for him to give discovery of incomplete documents, he would not have done so.

46 Although the plaintiff denied doing so, the irresistible inference is that the plaintiff looked through documents belonging to the defendants and Yavuz that were located at the Greenvale property and took those documents for the purposes of preparing for this proceeding. I am not able to reach any conclusions as to precisely what documents the defendants and Yavuz had, which were taken by the plaintiff. For example, in relation to the mortgage pay-in books, the plaintiff discovered the books for the period 1994 to 2006. I do not know whether mortgage pay-in books for the period 1984 to 1994 were in existence, what information they contained about payments and whether they were taken by the plaintiff and not discovered. Although the plaintiff's conduct in taking the documents of the defendants and Yavuz and in seeking to "trap" the first defendant was reprehensible and reflects adversely on his credit, I am not able to reach any positive finding that the plaintiff only gave his solicitors such of the documents taken by him that he believed would assist his case or damage the case of the defendants.

47 The first defendant gave evidence that the plaintiff paid out the outstanding amount of principal and interest on the Coolaroo property as a gift motivated by his gratitude for the care that the defendants provided to him following his car accident. He stated that the plaintiff made the payment to the Housing Commission without prior discussion with him and that he only found out about it one month after the payment was made. The second defendant's evidence was similar to the first defendant's. She said that she accompanied the plaintiff to the Housing Commission offices in the city to pay the outstanding amount out of the plaintiff's compensation money and that they did not tell the first defendant until a month later when the process was finalised.

48 The nature of the plaintiff's injuries arising from his car accident was not clear. Judging from the substantial compensation (in 1984 terms) that the plaintiff received, and the fact that he has not resumed employment since the accident, apart from some paid work in 1985, 1986 and 1987, I infer that the plaintiff's injuries were serious and that he required some care from the defendants, particularly in the early years following the accident. The plaintiff admitted that the second defendant looked after him after the accident but said that this took the form of the performance of normal domestic chores (such as cooking, laundry and cleaning) and taking him to see doctors from time to time. The defendants asserted that the second defendant gave up her part-time job as a cleaner to look after the plaintiff. The plaintiff denied this. Both defendants said that the care that they provided to the plaintiff was motivated by love and affection for their son and they did not expect any reward for this.

49 If the defendants' evidence is to be believed, the plaintiff made a gift of $35,322.78 to them out of his compensation money by way of payment of the outstanding amount of principal and interest owing on the Coolaroo property. This represented more than 35 percent of his savings at that time. The plaintiff was then 22 years of age. He faced the prospect of never being able to work again and having to provide for himself, and possibly a family, and pay medical and other expenses for the rest of his life from his savings. In these circumstances, it is inherently improbable that the plaintiff would make an unsolicited gift of $35,322.78 for the exclusive benefit of his parents. I find that he did not do so.

50 The plaintiff's evidence was that the defendants approached him in about July 1984 and sought financial assistance with regard to the arrears in the monthly instalments for the Coolaroo property. He said that he proposed that he would invest his compensation money in the Coolaroo property and give up his investment in the Shandeen Court block. He said that he reached an oral agreement with the defendants to pay the outstanding principal and interest of $35,322.78 owing on the Coolaroo property and free them from any monthly payments. He described the agreement in these terms: "The agreement that I put my money in and that this property belongs to me". He did not elaborate on the terms of the agreement and, in particular, did not say that the defendants agreed to make a gift to him of their interest in the Coolaroo property.

51 I accept the plaintiff's evidence that prior to making the payment of the outstanding principal and interest owing on the Coolaroo property, he had a discussion with the defendants and that an oral agreement was reached with them that the payment would be an investment by him rather than a gift. However, I do not accept the plaintiff's evidence that the agreement was to the effect that the Coolaroo property would belong to him exclusively as a result of the payment. Just as it is inconceivable that the plaintiff would agree to make a gift of the amount of $35,322.78 for the exclusive benefit of the defendants, it is also inconceivable that the defendants would agree to forego their interest in the Coolaroo property by holding it on trust for the plaintiff exclusively. Although in July 1984 the defendants were two months in arrears with the monthly payments on the Coolaroo property, there was no evidence that they faced eviction or that the defendants' interest in the property was in jeopardy. On the contrary, the first defendant gave evidence that the defendants were able to pay the arrears. I accept that they could do so (see paragraph 63(d) of this judgment).

52 In order to enable me to determine what inferences can be drawn about the oral agreement that was reached by the plaintiff and the defendants in July 1984, it is necessary to look in detail at the nature of the defendants' interest in the Coolaroo property as at 11 July 1984 and the surrounding circumstances.

53 During the hearing of this proceeding before me on 27, 28 and 29 August 2008 and 1 and 2 September 2008, the parties did not have a complete copy of the terms contract. The plaintiff tendered an incomplete copy and this became exhibit 1. At the conclusion of the hearing, a complete copy of the terms contract was located in the Court file amongst documents produced to the Court by the Director of Housing (the successor to the Housing Commission) pursuant to a subpoena. By agreement, this complete copy was substituted for the incomplete copy and became exhibit 1. In light of the contents of the terms contract, I arranged for the proceeding to be mentioned before me on 12 September 2008 for the purpose of inviting counsel to make further submissions on the provisions of the terms contract and on the meaning of "purchase price" for the purposes of a resulting trust involving the acquisition of property under a terms contract. A further mention took place on 23 September 2008 at which further detailed oral and written submissions were made by Mr Cawthorn and Mr Barton.

54 The Housing Commission terms contract that the defendants executed on 28 December 1979 was regulated by the Housing Act 1958 (Vic). That Act provided for, among other things, the making available of adequate and suitable houses for lease and sale to persons in need of assistance due to their financial circumstances by the Ministry of Housing with the assistance of the Housing Commission.[1]

55 The terms contract is styled "Contract of Sale". It describes the defendants as "the purchaser". Clause 1 states: "The Commission pursuant to its statutory powers in that behalf will sell and the purchaser will purchase at the price and upon the terms and conditions hereinafter contained [the Coolaroo property]". Clause 2 states: "The purchaser shall be deemed to have entered into possession of the premises as purchaser on the Thirtieth day of December, 1979, (hereinafter called the 'date of sale')". Clause 3 provides that the "purchase price" shall be the sum of $35,700, consisting of a deposit of $200 which is expressed to have been "paid in cash by the purchaser" and the sum of $35,500 which is described as "the said balance" which, pursuant to cl 4, is to be paid

by monthly instalments of principal and interest combined of One hundred and seventy seven dollars seventy six cents each on the first day of each calendar month until the whole of the said balance together with interest thereon as aforesaid shall have been paid the first of which instalments shall be paid on the expiration of one calendar month from the adjustment day ...

The adjustment day is stated to be on or before the last day of December 1979. The initial rate of interest was stated to be 5.5 percent per annum.

56 Clause 4 of the terms contract enabled the Housing Commission to increase the rate of interest and the amount of the monthly instalments from time to time. Clause 5 enabled the defendants to make early payments of principal. Clause 6 of the terms contract provided that the defendants occupied the Coolaroo property as weekly tenants from the date of sale at a rental equal to the monthly instalments, and that, if the monthly instalments were paid punctually, they "shall be accepted in satisfaction of the rental".

57 Clause 7 of the terms contract provided that the defendants could not sell the property within five years, other than to the Housing Commission, and that after five years, the defendants could sell the property to anyone, subject to the Housing Commission having a right of first refusal in certain circumstances. In both cases, cl 7 referred to the defendants transferring or selling their "interest in the said property", with cl 7(3) referring to the "fair market value of the said property". Clause 7(2) referred to s 36(2) of the Housing Act 1958 which gave the defendants the right to obtain from the Housing Commission a transfer of the land subject to executing a mortgage in favour of the Housing Commission. Upon the sale of the property by the defendants in accordance with the terms contract, they were entitled to any capital gain over and above the purchase price set out in the terms contract. It appears that the Housing Commission had the power to waive the restriction on the sale of the property to a third party within five years and did so when the defendants sold the property to a third party within five years.

58 Clause 8 of the terms contract provided that the defendants were liable to comply with any notices or orders relating to the property made or issued after the date of sale (namely 30 December 1979) and that, from that date, they were liable for all rates, charges, taxes, assessments and outgoings in respect of the property. Clause 9 required the defendants to insure the property in the names of the defendants and the Commission. Clauses 14 and 15 set out the remedies the Commission could exercise in the event of default by the defendants, including the service of a default notice. There was no evidence that the defendants received a default notice at any time prior to 11 July 1984.

59 The Housing Act 1958 was repealed by the Housing Act 1983 (Vic) with effect from 1 January 1984. Under s 11 of the Housing Act 1983, the Director of Housing became the successor to the Housing Commission and was deemed to be substituted as a party to any contract previously entered into by the Housing Commission. Section 3(2) of the Housing Act 1983 contained saving provisions for all things done by or under the Housing Act 1958. Both Mr Cawthorn and Mr Barton submitted that any rights that the defendants had pursuant to s 36(2) of the Housing Act 1958 as at 1 January 1984, when that Act was repealed by the Housing Act 1983, survived by virtue of s 3(2) of the Housing Act 1983. Mr Barton also referred to s 14(2)(e) of the Interpretation of Legislation Act 1984 (Vic). Mr Cawthorn also referred to Maxwell v Murphy.[2] Mr Cawthorn also submitted that, as the terms contract incorporated the provisions of the Housing Act 1958, including s 36(2), that provision continued to apply by virtue of the contract. I agree that, by virtue of s 3(2) of the Housing Act 1983 and s 14(2)(e) of the Interpretation of Legislation Act, s 36(2) of the Housing Act 1958 applied to the defendants as at 11 July 1984.

60 If the conclusion in paragraph 59 of this judgment is wrong, the consequence would be that s 4(1) of the Sale of Land Act 1962 (Vic) would have applied as at 11 July 1984. Section 4(1) of the Sale of Land Act (which confers a general right on a purchaser under a terms contract to obtain a transfer from the vendor subject to execution of a mortgage to be prepared at the purchaser's cost) was in force at all relevant times. While the Housing Act 1958 was in force, s 36(2B) of that Act excluded s 4(1) of the Sale of Land Act from applying to terms contracts regulated by the Housing Act 1958. The existence of s 36(2B) indicates that the Housing Act 1958 recognised that the Housing Commission terms contracts were terms contracts within the meaning of s 4(1) of the Sale of Land Act. Once the Housing Act 1958 was repealed, s 4(1) of the Sale of Land Act applied to such terms contracts unless ss 36(2) and 36(2B) continued to apply to contracts entered into before 1 January 1984.

61 Mr Barton submitted that, under the terms contract, the defendants had an equitable interest in the Coolaroo property. Mr Cawthorn submitted that, by virtue of cl 6 of the terms contract, the defendants were in possession of the Coolaroo property as weekly tenants, and the monthly instalments constituted rent. He submitted that the references to the defendants' "interest in the said property" in the terms contract were references to their interest as weekly tenants.

62 I reject Mr Cawthorn's submission that the references to "interest in the said property" in the terms contract were references to the defendants' interest as weekly tenants. While the purpose of cl 6 of the terms contract is unclear, its reference to the defendants being in occupation under a weekly tenancy does not displace their occupation as purchasers who are paying off the purchase price by monthly instalments. Contrary to Mr Cawthorn's submission, cl 6 does not state that the monthly instalments constitute rent. Rather, it states that if the instalments of principal and interest are paid punctually, they "shall be accepted in satisfaction of the rental". Accordingly, cl 6 does not detract from the character of the terms contract as a contract by which the Housing Commission sold the Coolaroo property to the defendants on terms that required them to pay a deposit of $200 and monthly instalments, initially fixed at $177.76.

63 Mr Cawthorn also submitted that the defendants were not equitable owners of, and did not have an equitable interest in, the Coolaroo property as at 11 July 1984 for the following reasons:

(a) The defendants occupied the property as weekly tenants and the instalments constituted rental. For the reasons I have already given, I reject this submission.

(b) The default clause in the terms contract (cl 15), which gave the Housing Commission a discretion to rescind the contract and retain part of the instalments that had been paid, coupled with the weekly tenancy clause (cl 6), "set up an arrangement akin to a hire-purchase agreement, whereby instalments paid prior to the date of a default by the purchaser are forfeited". He relied on Esanda Finance Corporation Ltd v Plessnig.[3] I reject this submission. Stern v McArthur,[4] rather than Esanda, more accurately reflects the essential nature of the terms contract in this case. Stern is discussed further in paragraphs 149 and 160 of this judgment.

(c) As a result of Chang v Registrar of Titles,[5] there are doubts about whether a vendor becomes trustee of the property for the purchaser prior to payment of the purchase price in full. I reject the submission that Chang requires the conclusion that the defendants in the present case were not equitable owners of, and did not have an equitable interest in, the Coolaroo property at the relevant time. There is nothing in Chang that detracts from the principle that a purchaser under a specifically enforceable contract of sale of land ordinarily acquires an equitable interest in the land, particularly in a case such as the present where completion has occurred (see paragraph 155 of this judgment) and the contract of sale acknowledges that the purchaser has an interest in the property and a right to obtain a transfer subject to a mortgage.

(d) The defendants were in default under the terms contract in that they had not paid two instalments and were therefore not entitled to specific performance. Mr Cawthorn also submitted that the consequence of the default was that the defendants could not exercise the right under s 36(2) of the Housing Act 1958 to obtain a transfer subject to a mortgage. I reject this submission. I find that the defendants had the ability to remedy the default by paying the arrears. The first defendant gave evidence that he was working, that the arrears were "nothing" and that he was "going to close that gap". As at 11 July 1984, both defendants and Yavuz were employed. The arrears could have been paid from the defendants' own income or from a loan or other contribution from Yavuz or the plaintiff himself. As the defendants and their three sons were living harmoniously in the Coolaroo property as their family home, I can infer that if the defendants needed financial assistance to pay the arrears in order to protect their interest in the Coolaroo property or to exercise the right under s 36(2) of the Housing Act 1958, Yavuz or the plaintiff would have provided that financial assistance if able to do so. The plaintiff was clearly able to do so, given his substantial savings at that time.

64 Accordingly, I find that, as at 11 July 1984, the defendants were in occupation of the Coolaroo property as purchasers under a terms contract and that they had an equitable interest in that property.

65 At the time the defendants entered into the terms contract on 28 December 1979, the purchase price was $35,700 payable by a deposit of $200 and monthly instalments of $177.76 that were due on the first of every month commencing 1 February 1980. According to the Housing Commission settlement statement dated 11 July 1984, the monthly instalments had increased to $229.76 by that date and the instalments due on 1 June and 1 July 1984 were in arrears. The evidence does not enable me to determine when the new instalment amount of $229.76 became effective and what other changes to the instalment amount were made between 28 December 1979 and 11 July 1984.

66 By the time the plaintiff paid out the outstanding amount of principal and interest on 11 July 1984, the defendants had paid the deposit of $200 and 52 monthly instalments of between $177.76 and $229.76. The first defendant gave evidence that the instalments were $200 per month. As $200 per month is close to the medium point between $117.76 and $229.76 (namely $203.76), I will proceed on the basis that the defendants paid 52 monthly instalments of $200, totalling $10,400 in addition to the deposit of $200.

67 When the defendants executed the terms contract, they acquired an equitable interest in the Coolaroo property, with an entitlement to obtain the legal interest upon paying out the outstanding principal and interest or by exercising the statutory right to request a transfer from the Housing Commission subject to giving a mortgage to the Housing Commission. If the defendants had sold the Coolaroo property on 11 July 1984, the Director of Housing, as the successor to the Housing Commission, would have been entitled to the amount of $35,322.78 and the defendants would have been entitled to the balance of the sale price. In other words, by paying the monthly instalments between 1979 and 11 July 1984, the defendants acquired "equity" (in economic terms) in the Coolaroo property which had increased from $200, representing the initial deposit they paid in 1979, to the value of the Coolaroo property as at 11 July 1984 less the amount of $35,322.78 that was still owed to the Housing Commission.

68 As expert valuation evidence was not provided to establish the value of the Coolaroo property as at 11 July 1984, Mr Cawthorn submitted that it was "impermissible" for the Court to determine a value as at that date. He relied on ISPT Pty Ltd v Melbourne City Council.[6] In that case, the Court of Appeal held that while the Victorian Civil and Administrative Tribunal may not piece together a valuation of its own, it can reach a decision on value based on the valuation evidence before it.[7] In my opinion, in view of the fact that the Coolaroo property was sold a few months after 11 July 1984 for $56,500, the ISPT case does not preclude me from drawing an inference about the approximate value of the Coolaroo property as at 11 July 1984 based on that sale price.

69 The Coolaroo property was purchased by the defendants on 28 December 1979 for $35,700. It was sold in 1984 for $56,500, with settlement taking place on 16 November 1984. It can be inferred that, in accordance with normal market practice, the contract of sale was entered into at least 30 days before settlement. The evidence established that a decision to sell the Coolaroo property was made after the auction of the Greenvale property on 19 August 1984. In these circumstances, it can be inferred that as at 11 July 1984, the Coolaroo property had a market value of slightly less than the sale price of $56,500 that was agreed some time between 19 August 1984 and 16 October 1984. It is likely that the value was approximately $55,000 as at 11 July 1984. This estimate can be tested by assessing the increase in sale price between 28 December 1979 and 16 November 1984 (a period of 1,785 days), namely $20,800. If one assumes a linear increase in value, the daily increase was $11.65.[8] On the basis of this assumption, the value of the Coolaroo property increased from $35,700 on 28 December 1979 to $55,008.46 on 11 July 1984. This is calculated by multiplying the daily increase of $11.65 by 1,657 days (being the number of days between 28 December 1979 and 11 July 1984) and adding the product of $19,308 to the original value of $35,700.

70 Accordingly, I infer that the Coolaroo property was worth approximately $55,000 on 11 July 1984. As the Housing Commission was owed $35,322.78 as at that date, the defendants' "equity" (in economic terms) in the property was worth $19,677.22.

71 While the defendants may not have known the precise total amount that they had paid for the Coolaroo property and its precise value in July 1984, they would have known that they had paid a substantial amount and that the property was worth well in excess of $35,700. Also, while it is unlikely that the defendants were aware of the finer details of the terms contract, it is likely that they would have regarded themselves as owning the Coolaroo property from December 1979 subject to the Housing Commission's interest. In these circumstances, it is inconceivable that when the defendants discussed the plaintiff's contribution of $35,322.78 with the plaintiff in July 1984, they would have agreed to forego not only the benefit of the payments that they had made to the Housing Commission but also the increased value of the property in favour of the plaintiff. The Coolaroo property was the family home for the defendants and their three sons in July 1984 and was still required for the purpose of providing a home for the whole family. The entire family lived harmoniously in the family home, with the defendants being the principal providers for the whole family. The evidence was to the effect that until the dispute leading to this proceeding arose in 2003 or 2006, the defendants intended to provide for their sons equally. Had the defendants relinquished their interest in the Coolaroo property in favour of the plaintiff, they would have jeopardised their ability to provide for themselves and their other two sons. It is simply not credible that the defendants would agree to confer exclusive beneficial ownership of the Coolaroo property upon the plaintiff. That they did not do so is supported by the fact that the transfer executed by the Director of Housing on 31 October 1984, following the payment on 11 July 1984, was in favour of the defendants rather than the plaintiff.

72 The plaintiff's evidence that he told his parents that his contribution of $35,322.78 would be an investment is significant. Ordinarily, a person invests in real estate in order to earn income through rent and to obtain the benefit of capital appreciation of the property. In this case, as the Coolaroo property was the existing family home and no member of the family paid rent, the plaintiff's investment was for the purpose of obtaining capital gains on future increases in the value of the property. The plaintiff did not buy the property from the defendants nor did they make a gift of the property to him. If either of these scenarios had applied, the plaintiff would have been expected to direct the defendants to require a transfer from the Housing Commission in favour of the plaintiff. He did not do so.

73 From all of the above circumstances, I infer that as at 11 July 1984, the defendants wished to continue to provide a family home for themselves and their sons, that they wished to preserve their interest in the Coolaroo property and that they were willing to treat the plaintiff's payment of the outstanding principal and interest owing on the Coolaroo property as an investment which would entitle him to an interest in the property, to be realised upon the sale of the property. It can also be inferred that the plaintiff wanted to invest part of his savings in real estate whilst at the same time helping his parents by freeing them from the burden of future monthly instalments. On the basis of the plaintiff's use of the word "investment" in his discussions with the defendants and his conduct in not requesting the defendants to procure a transfer of the Coolaroo property from the Housing Commission to him, it can be inferred that the plaintiff intended that the defendants would continue to have the benefit of their existing interest in the Coolaroo property and that the interest he would acquire by virtue of his investment would be separate from and in addition to the defendants' interest. Whilst the plaintiff and the defendants in their discussion did not articulate the nature of the plaintiff's interest in precise legal terms, it can be inferred from all the circumstances that they agreed, in effect, that the defendants would retain their existing equitable interest in the property, the plaintiff would contribute $35,322.78 as an investment, and the plaintiff would be entitled to share in future increases in the value of the property upon its sale, commensurate with his contribution. The nature of the plaintiff's proprietary interest in the Coolaroo property arising from this agreement is discussed further below.

Purchase of Greenvale property and sale of Coolaroo property

74 The plaintiff said that in 1984, he was seeking to purchase a property as a means of investing his compensation money. He found the Shandeen Court block and paid a deposit of $2,000. The plaintiff said that he subsequently became interested in the Greenvale property, which he inspected before offering the builder $140,000. The builder rejected this offer and the property proceeded to auction on 19 August 1984. The plaintiff said that he asked his parents to attend the auction and bid on his behalf rather than attending and bidding himself because he had already met the builder and did not want him to think that the plaintiff was keen on the property, thus driving up the price. The plaintiff said that the property was passed in and, as his parents were the highest bidders, negotiations took place after the auction. He said that the auctioneer came to pick him up from the Coolaroo property and he then negotiated the purchase of the Greenvale property. He said that what secured the sale was an offer by him to pay the amount of $44,000 a little over one month before the final balance was due on 19 November 1984. He said that this was attractive to the builder, as he was building another house and needed the cash flow.

75 The plaintiff said that prior to the auction, he had a discussion with the defendants and an agreement was reached that they would buy the Greenvale property on his behalf. He said that he told the defendants that they would hold the property "on trust" for him and that the defendants were happy with that. When cross-examined on whether he used the words "on trust", the plaintiff said that he had used the word "trust" in its ordinary, rather than legal, meaning, namely that he was trusting his parents to hold the property on his behalf. I do not accept that the plaintiff used the word "trust" or the expression "on trust" in 1984. He said that the reason why the Greenvale property was registered in his parents' names was that he could not fund the entire purchase price out of his compensation money and was unable to obtain a mortgage loan from the bank because he was not working at the time and could not demonstrate regular income and savings in a bank account over the previous 12 months. He said that the defendants were able to secure a mortgage loan.

76 Zafer gave evidence that he was present when the plaintiff inspected the Greenvale property prior to auction and made an offer of $140,000 to the builder. He said that although he was not present at the initial discussion between the plaintiff and the defendants, he heard the defendants say after the auction that the plaintiff was the owner of the house in full.

77 The first defendant said that he and the second defendant attended the auction of the Greenvale property in order to gauge house prices in that area, rather than for the purpose of buying the property. He said that Yavuz also attended the auction, as did a friend named Hussein who is now overseas. He said that, at the auction, he bid for the property and it was knocked down to him for $160,543. He said that the auctioneer's house was nearby and that he, the second defendant, the builder and the auctioneer went to the auctioneer's house after the auction. It was unclear from his evidence whether he said that Yavuz or Hussein also attended. He said that the auctioneer arranged for a car to pick up the plaintiff from the Coolaroo property and bring him to the auctioneer's house. He said that the contract was signed at the auctioneer's house. He said that he did not discuss the purchase of the Greenvale property with the plaintiff prior to the auction. He said that the first time that the plaintiff had seen the Greenvale property was after the auction. He said that the Greenvale property was purchased for the defendants to own and that the purchase price would be funded out of the proceeds of sale of the Coolaroo property, a mortgage, and a pooling of the family's money, including the plaintiff's, to fill any gap. He accepted that the plaintiff's contribution was not a gift. He said: "It couldn't be a present. We came to an agreement and helped each other together and we bought [the Greenvale property] like that".

78 The second defendant said that she attended the auction with the first defendant and Yavuz. She did not refer to Hussein. She said that the defendants did not intend to bid at the auction. During the auction, the first defendant shooed a fly with his hand and the auctioneer misinterpreted this as a bid and knocked down the property to the first defendant. She also said that Yavuz accompanied the defendants to the auctioneer's house after the auction. In other respects, her evidence regarding the auction and its aftermath was similar to the first defendant's evidence.

79 Yavuz said that he attended the auction with the defendants and a friend of the first defendant. It was unclear from Yavuz's evidence whether he said that he accompanied the defendants to the auctioneer's house after the auction. He said that his parents did not discuss the possible purchase of the Greenvale property with the plaintiff prior to the auction and that the plaintiff saw the Greenvale property for the first time on the day of the auction after the defendants had purchased it.

80 The circumstances that prevailed prior to the auction of the Greenvale property were that the defendants had been in arrears in making the monthly payments to the Housing Commission for the Coolaroo property. They did not have savings of their own in July 1984. The first defendant was in full-time employment and the second defendant was also employed. As described in paragraphs 9 to 14 of this judgment, the plaintiff had savings of approximately $61,160 out of the compensation money as at 25 July 1984. At that time, the defendants and their sons, including the plaintiff, had a loving and caring relationship.

81 In these circumstances, it is inconceivable that the defendants would have purchased the Greenvale property on impulse at the auction for a substantial amount (in 1984 terms) without prior discussion with the plaintiff. The second defendant's evidence that the Greenvale property was bought as a result of a hand motion to shoo a fly being mistaken as a bid is not credible. Likewise, it is difficult to believe that the plaintiff would have committed his entire compensation money to the Greenvale property, and contributed the largest proportion of the purchase price, without first obtaining an acknowledgment from his parents that he would have an interest in the property.

82 Some aspects of the plaintiff's version of events are credible. His evidence that the purchase of the Greenvale property was finalised only after he arrived following the auction is supported by the payment terms set out in the contract of sale. Ordinarily, a contract of sale provides for the payment of the deposit and the balance within a number of months after the purchase. The contract for the sale of the Greenvale property provided for payment of a deposit of $16,200, an additional amount of $44,000 on 10 October 1984 and the balance on 19 November 1984 (three months after the auction). The plaintiff's evidence that he negotiated the early payment of the amount of $44,000 as an incentive to entice the builder to sell because of the builder's cash flow needs is plausible and I accept it.

83 However, I do not accept all of the plaintiff's evidence, particularly in relation to the agreement that he made with the defendants. Just as the defendants would not have bid for the Greenvale property without first discussing the proposed purchase with the plaintiff because they needed his financial contribution, the plaintiff would not have made a prior offer of $140,000 to the builder without first discussing this offer with the defendants because he needed them to obtain mortgage finance. Given that the family was living harmoniously at the Coolaroo property (which was now paid off), that the plaintiff, Yavuz and Zafer were young men in their 20s, and that the plaintiff had substantial savings, it can be inferred that in July/August 1984, the family discussed the possibility of moving to a bigger and better family home in the new residential estate in Greenvale. It can also be inferred that it was agreed that such a new home would be financed principally from the plaintiff's savings and a mortgage loan to be taken out by the defendants. Initially, it may not have been part of the agreement to sell the Coolaroo property. However, once the Greenvale property was selected, it can be inferred that it was agreed that the Coolaroo property would be sold and the proceeds used to contribute to the purchase price. It can also be inferred that, as everyone other than the plaintiff was then in employment, all family members would contribute towards the mortgage payments, rate payments, outgoings and other household expenses.

84 As for ownership of the new family home, I accept the plaintiff's evidence that he and the defendants agreed that his contribution would entitle him to an interest in the home rather than being a gift, but I do not accept that the defendants agreed to hold the entire legal interest on trust for him. Rather, I infer from the circumstances that once the Greenvale property was selected to become the new family home, it was agreed that the defendants would apply the proceeds of the sale of the Coolaroo property and mortgage funds towards the purchase of the property and share in making the mortgage payments and other expenses, that no member of the family would pay rent, and that the property would be owned for the benefit of the plaintiff and the defendants in accordance with their respective financial contributions. The existence of this agreement and the defendants' claim to have considered themselves to have a proprietary interest in the Greenvale property is supported by the fact that they furnished the property, installed curtains, established the garden and generally established a new home for themselves and their sons. The nature of the parties' proprietary interest in the Greenvale property arising from the abovementioned agreement is discussed further below.

85 The plaintiff's initial offer of $140,000 for the Greenvale property (if it was made) and the defendants' subsequent purchase of the property at auction were acts performed in accordance with the abovementioned agreement. They were agreed acts rather than unilateral steps.

86 Mr Ciftci's evidence is not inconsistent with the agreement that I have found the parties made in July/August 1984. Mr Ciftci said that he was a work colleague of the first defendant in 1984 and that the first defendant then told him that he had moved to a house in Greenvale that had been purchased by the plaintiff from money he received from a compensation claim. For the reasons given in paragraph 41 of this judgment, I accept Mr Ciftci's evidence. However, I find that when Mr Ciftci's evidence is viewed in its context, he said no more than that the first defendant told him that the plaintiff had paid the bulk of the purchase price for the Greenvale property out of his compensation money.

Source of funds for purchase of Greenvale property

87 The Greenvale property was purchased for the amount of $160,543. In addition, stamp duty, legal fees and registration fees were paid, taking the total outlay to $167,025.50. As I mentioned in paragraph 18 of this judgment, it was common ground before me that the acquisition price was partly funded by the proceeds of sale of the Coolaroo property as to $56,500 and partly from a mortgage loan from the State Bank for $39,061. The source of funds for the balance of the acquisition cost was in dispute.

88 The defendants gave evidence that the deposit of $16,200 was partly funded by a loan or gift (it was not clear which) of between $10,500 and $12,000 from Yavuz, and a loan of $1,500 from Mr Ciftci. Their evidence was not clear about the balance, although it appears that they maintained that it was funded by them assisted by other members of the family.

89 The plaintiff gave evidence that he contributed the whole of the purchase price of the Greenvale property. He did so by reference to the deposits and withdrawals from bank accounts and term deposits kept for him by the second defendant, representing the compensation money. The plaintiff's case was that as at 11 July 1984, he had savings of $97,510.11 and that the payment of $35,322.78 representing the outstanding amount of principal and interest owing on the Coolaroo property was made from those savings, leaving a balance of $62,187.33. His ongoing savings were deposited in a term deposit maturing on 25 July 1984 in the amount of $61,160.00. The deposit of $16,200 was paid in August 1984 out of his ongoing savings. After this payment and the receipt of $2,000, being the refund of the deposit for the Shandeen Court block, he ended up with a term deposit of $48,430 maturing on 25 August 1984. He claimed that the balance of $144,343 due on the Greenvale property after payment of the deposit of $16,200 was made up of the term deposit of $48,430, the proceeds of sale of the Coolaroo property of $56,500 (for which he claimed all the beneficial interest), a mortgage of $39,061 taken out by the defendants (which he said he alone serviced), sundry interest of $3,000 and the proceeds of sale of photographic equipment of $1,500. The plaintiff gave evidence that the deposit of $2,000 for the Shandeen Court block was refunded when he paid the deposit for the Greenvale property in August 1984. Insofar as the plaintiff's evidence suggested that, as at 25 August 1984, he held the $2,000 in addition to the term deposit of $48,430, I reject that evidence. The plaintiff's evidence in relation to the $2,000 was not supported by any documentary evidence and his assertions in this case in relation to the Shandeen Court block have not been consistent.[9]

90 I do not accept the defendants' contention that the deposit of $16,200 was partly funded by a loan or gift of $10,500 to $12,000 from Yavuz and a loan of $1,500 from Mr Ciftci. Mr Ciftci gave evidence, which I accept, that he made a loan of $1,500 to the first defendant in 1978 or 1979 for the repair of his Chevrolet vehicle, that the loan was repaid within a short period and that he did not make any further loan in 1984. As for Yavuz, I am not satisfied that he contributed the amount of $10,500 or any other amount towards the deposit in 1984. At that time, he had just established his manchester business and on 9 May 1985, he borrowed $13,000 from the State Bank for the purposes of that business. If he had savings of $11,000, as he claimed, he would have used the savings for the business rather than borrowing $13,000. Yavuz's evidence was also unreliable because he initially claimed the business made a profit in the 1985-86 financial year and admitted it made a loss of $6,017 only when confronted with his tax return for that year in cross-examination. His explanation that he had confused calendar years for financial years was unconvincing. Further, if Yavuz had $11,000 in August 1984, it would have been saved up over several years, reducing the likelihood he would have resorted to theft in 1980.

91 As the defendants were in arrears with the monthly payments on the Coolaroo property in July 1984 and the property was not sold until November 1984, it is unlikely the defendants had substantial savings to contribute to the deposit for the Greenvale property.

92 In all the circumstances, I find that the plaintiff contributed the entire deposit. In paragraphs 14 and 15 of this judgment, I referred to a term deposit for $61,160 maturing on 25 July 1984 and a term deposit of $48,430 maturing on 25 August 1984. I infer that the plaintiff paid the deposit partly out of the maturing term deposit of $61,160 and partly out of the refund of the deposit of $2,000 for the aborted purchase of the Shandeen Court property, leaving him with a balance of approximately $46,960. I infer that he then reinvested this amount, together with interest and other funds available to him, in the new term deposit of $48,430 maturing on 25 August 1984.

93 The defendants' evidence about the source of funds, apart from the deposit, was that $56,500 was contributed from the proceeds of the sale of the Coolaroo property, $39,061 was borrowed by way of a mortgage loan, a contribution was made by the plaintiff, and the defendants paid the rest assisted by other family members. Their evidence of the amount of the plaintiff's contribution was unclear, although they conceded it was approximately $45,000. They claimed that they paid for all of the legal and other expenses for the purchase of the Greenvale property. They said they borrowed $6,000 to contribute to the purchase of the Greenvale property. However, the only loan document for that amount that was produced to the Court was dated 1987.

94 The plaintiff's evidence as to the source of funds for the purchase of the Greenvale property was more consistent than that of the defendants, and was also supported by some of the contemporaneous records. The sources of funds relied upon by the plaintiff included $1,500 from the sale of photographic equipment owned by the plaintiff and $3,000 interest on the plaintiff's savings. No documentary evidence was produced to support the plaintiff's oral evidence about these sources of funds. The plaintiff's evidence was not directly contradicted by the defendants' evidence. Although the amount of $1,500 is an estimate and appears high, I accept this amount. However, I do not accept the amount of $3,000 for interest. As at 25 August 1984, a term deposit of $48,430 became due. An amount of $44,000 was paid to the builder on 10 October 1984 in accordance with the contract of sale for the Greenvale property. The plaintiff therefore did not have the amount of $48,430 for the whole period from 25 August 1984 until settlement on 19 November 1984. While the evidence does not enable me to calculate the interest the plaintiff earned, I cannot see how the interest could have exceeded $1,000. Accordingly, I allow only $1,000 for interest.

95 The plaintiff has therefore satisfied me that the sources of funds for the acquisition price for the Greenvale property included the following:

(a) $16,200: deposit for the Greenvale property funded by the plaintiff's savings;

(b) $56,500: proceeds of sale of the Coolaroo property;

(e) $1,000: interest on the plaintiff's bank deposits and term deposits;

(f) $1,500: proceeds of sale of the plaintiff's photographic equipment.

96 The plaintiff did not produce any evidence for the difference between the above amount of $162,691 and the acquisition price of $167,025.50, namely $4,334.50 (except for the additional $2,000 for interest which, as indicated above, I have not accepted). Mr Cawthorn submitted that the most likely explanation is that the amount was funded from interest earned by the plaintiff. However, interest has already been taken into account. I therefore find that the plaintiff has failed to establish that he contributed the additional $4,334.50.

97 There were no records available for the mortgage payments on the Greenvale property for the period 1984 to 1994. Pay-in books were available for the period 20 April 1994 to 19 April 2005. During that period, regular payments were made totalling approximately $35,000. The monthly payments were generally in the order of $200-$290 per month, with a payment of $5,000 on 19 April 2005.

98 The defendants' evidence was that, from 1984 to 1990, the first defendant made all of the mortgage payments, possibly with some contributions from Yavuz. They said that, from 1990 to 2006, the family members pooled their income and, out of that pool, mortgage instalments were paid. The defendants said that during the periods that they were in Turkey, they left the pay-in books for the mortgage with the plaintiff together with their bank cards and requested that he make the mortgage payments on their behalf.

99 The plaintiff's evidence was that he made all of the mortgage payments between 1984 and 1994 from his social security and disability pension income, his salary while he was employed in 1985, 1986 and 1987, and regular contributions from Zafer. The plaintiff said that Zafer gave him money each week to enable him to make the mortgage payments and that he and Zafer had an agreement that when the property was sold, they would work out how much Zafer had contributed and he would be paid part of the proceeds of sale of the property. Zafer's evidence was that until 1996, he contributed $100 per week to the plaintiff to assist him in making the mortgage payments. No further details of this agreement were provided to the Court. The plaintiff gave evidence that the pay-in books containing the mortgage payments for the period 20 April 1994 to 19 April 2005 were completed by him or a teller and that he provided the funds for those payments, assisted by Zafer until 1996.

100 In the absence of any documentary evidence for the period 1984 to 1990, the likelihood is that those family members who were earning income in that period contributed to the mortgage payments. At that time, the first defendant, Yavuz and, it appears, Zafer and the second defendant were in employment and the plaintiff was in employment in 1985, 1986 and 1987, and was otherwise receiving benefits. There was evidence from the defendants that, as a young man, Zafer did not contribute to the mortgage payments because he was always out at discos and with girls. While I accept that Zafer provided some financial assistance to the plaintiff from time to time, I do not accept that he contributed $100 per week, particularly since the mortgage instalments were approximately $200-$290 per month for part of the period in which he allegedly made the weekly contributions.

101 Given that the defendants, Zafer, Yavuz and the plaintiff were living harmoniously in the Greenvale property, which then served as the family home, I find that in the period 1984 to 1990, they all contributed to the payment of the mortgage. It is likely that the defendants' contributions exceeded the plaintiff's contributions. However, in the absence of any documentary and independent evidence as to how much was contributed by each person, it is impossible for me to determine the precise amounts of their respective contributions.

102 In the period 1990 to 1996, neither defendant was in paid employment. They were both in receipt of the old age pension or a carer's benefit. They both made a number of trips to Turkey, spending several months there before returning to Australia. Yavuz continued to reside in the property with his wife and children, as did Zafer. I find that in the period 1990 to 1996, the defendants continued to contribute to the mortgage. Although their own contribution may have been lower than in the period 1984 to 1990, they were assisted by Yavuz. I also find that the plaintiff contributed, with assistance from Zafer.

103 In relation to the period 1996 to 2005, I find that the defendants (assisted by Yavuz), continued to contribute and that the plaintiff continued to contribute but to a lesser extent because Zafer ceased assisting him once he had married and left the Greenvale property.

104 I do not accept the plaintiff's contention that the fact that the pay-in books for the period 1994 to 2005 were completed by him or a teller, establishes that the sources of the funds were his. As the defendants had limited English writing skills, the evidence that the plaintiff deposited the mortgage payments is not inconsistent with the defendants' evidence that they provided funds to enable him to do so on their behalf. Likewise, the payments that are recorded in pay-in entries completed by a teller could well have been made by the first defendant assisted by a teller. The plaintiff did not explain why there would be a need for a teller to complete the entry when the plaintiff attended the bank.

105 In September 1989, the mortgage payments on the Greenvale property were in arrears and the State Bank made a written demand for payment. The defendants' evidence was that the arrears were paid off by them using funds derived from the sale of a Camry vehicle which was ostensibly owned by Yavuz but registered in the second defendant's name. Mr Cawthorn submitted that this evidence should not be accepted. He pointed out that the loan of $13,000 that Yavuz had taken out in 1985 from the State Bank for his manchester business formed part of the amount demanded by the Bank. He submitted that the proceeds of sale of the vehicle went towards discharging Yavuz's loan, rather than making up the mortgage arrears. There is force in Mr Cawthorn's submission. However, having regard to my conclusion in paragraph 107 of this judgment, it is not necessary for me to make a finding on this issue.

106 In relation to the lump sum payment of $5,000 on 19 April 2005, the defendants' evidence was that they had been saving to go to Turkey to visit the first defendant's elderly mother and when that trip did not proceed because of the improvement in the elderly mother's health, they gave the money that they had been saving for the airline tickets to the plaintiff to deposit in the mortgage account on their behalf. The plaintiff's evidence was that he had accumulated savings in 2003, 2004 and 2005 out of which he applied the amount of $5,000 to the mortgage loan. Mr Cawthorn submitted that the defendants' evidence should not be accepted because they did in fact travel to Turkey in June 2005. Both the plaintiff's and the defendants' versions have their difficulties. The timing of the subsequent visit to Turkey weakens the defendants' evidence. As for the plaintiff, no explanation was provided by him as to why he was putting savings aside, given his modest expenditure patterns, instead of using the funds as and when they became available to reduce the mortgage on a property he claims to own, particularly since the local rates were seriously in arrears in the period 2003 to 2005. Once again, it is not necessary for me to make a finding on this issue.

107 Although over the period 1984 to 2005, there may have been times when the defendants contributed more than the plaintiff and times when the plaintiff contributed more than the defendants, I am satisfied (with the assistance of the principle of striving for practical equality referred to in paragraph 133 of this judgment), that, over the entire period, the defendants, assisted by Yavuz, should be treated as having contributed half of the mortgage payments and the plaintiff, assisted by Zafer until 1996, as having contributed the other half. The parties' contributions to the mortgage are consistent with the agreement discussed in paragraphs 83 and 84 of this judgment and their assertions that they have a proprietary interest in the Greenvale property.

108 The evidence regarding the payment of local rates and other outgoings on the Greenvale property was, as could be expected, as contradictory as the evidence in relation to the payment of the mortgage instalments. The defendants said that they paid the rates while Yavuz paid electricity, water and gas expenses. The plaintiff said that he paid the rates and water expenses with some contributions by Yavuz and the defendants, and that he took it in turns with the defendants to pay electricity, gas and telephone expenses or paid proportions of those expenses shared with the defendants. The rates have been in arrears over many years and special repayment arrangements have been made with the local council from time to time.

109 In the absence of any contemporaneous documentary evidence or other independent evidence, it is impossible for me to determine who paid the outgoings and in what proportions. However, the preponderance of evidence suggests that the defendants were primarily responsible for payment of the rates (which tended to be substantially in arrears) while other outgoings were shared, with Yavuz making substantial contributions. The plaintiff's financial ability to contribute to outgoings was limited, particularly after Zafer left the Greenvale property in 1996. As between the plaintiff and the defendants, it is likely that the defendants contributed a larger proportion of the outgoings. I note that the defendants' having contributed to outgoings is consistent with the agreement discussed in paragraphs 83 and 84 of this judgment and their assertion of a proprietary interest in the Greenvale property. However, as no evidence has been presented as to the amounts of the payments made by the parties and as neither party submitted that their payment of outgoings should result in an adjustment to their beneficial interest in the Greenvale property, I will not take those payments into account in determining the beneficial interests.

110 In their counterclaim, the defendants allege that they made improvements to the Greenvale property. They called Mr Arends to give expert evidence about the cost of the improvements at the time they were made and also the cost in today's dollars. Mr Cawthorn objected to the evidence of Mr Arends on several bases, including that the cost of the relevant items should be proved by the production of receipts, rather than through expert evidence. In the absence of receipts and other contemporaneous records, I allowed the expert evidence.

111 Considerable time was taken at the hearing with evidence as to the nature of the improvements that were allegedly made, who paid for the improvements and how much was paid for them. The amended defence and counterclaim claimed that the money expended by the defendants on the property, which included, among other things, improvements made by the defendants, needed to be taken into account in relation to a constructive trust. However, in his closing address, Mr Barton conceded that there were discrepancies in the evidence as to who paid for the various improvements, that there was no evidence that the improvements increased the value of the Greenvale property, that the amounts involved in the contributions were too limited to be of substantial assistance in determining individuals' contributions to the property, and that the only relevance of the improvements was to show that the defendants, in making the improvements (many of which were of a permanent nature) acted consistently with their assertion of ownership of the Greenvale property.

112 In these circumstances, my conclusions in relation to the improvements to the Greenvale property alleged in the defendants' amended defence and counterclaim can be summarised briefly as follows:

(a) The defendants alleged that they provided the carpet. The plaintiff, the second defendant and Yavuz gave evidence that Yavuz paid for the carpet. The first defendant's evidence appeared to be to the effect that he had purchased the carpet, but his use of the word "we" may have referred to Yavuz rather than to the first defendant himself. Yavuz gave evidence that he claimed in his tax return part of the cost as an expense in his manchester business. The amount paid was unclear but was approximately $6,000. Mr Arends' evidence, which I accept, was that the cost would have been approximately $5,000.

(b) The defendants alleged that they installed curtains. The evidence was that the first defendant paid approximately $1,500 for the material and made the curtains himself. Mr Arends' evidence, which I accept, was that the cost would have been $1,500.

(c) The defendants alleged that they installed timber fencing comprising a rear fence and two side fences. There was disputed evidence as to who had paid for the fencing. It seemed to be accepted by all parties that Yavuz or the defendants paid for at least part of the fencing, and that the plaintiff paid for at least part of the fencing. The amounts paid were unclear. Mr Arends' evidence, which I accept, was that the total cost would have been approximately $4,000.

(d) The defendants alleged that they established and maintained the lawns and garden. Confusing evidence was given about who paid for the materials and contributed the labour, although in general it appeared to be accepted that the first defendant contributed a large amount of the labour. Mr Arends' evidence, which I accept, was that the cost of establishing the lawns and garden would have been approximately $8,000.

(e) The defendants alleged that they erected a roof, pergola and paving for a future BBQ. The evidence was that the first defendant paid for most or all of the material and that the labour may have been contributed by an acquaintance. Mr Arends' evidence, which I accept, was that the cost of the pergola and paving would have been approximately $5,000.

(f) The defendants alleged that they installed light fittings in the house and driveway. The evidence was that the first defendant or Yavuz paid for these. The amount paid was unclear. Mr Arends' evidence, which I accept, was that the lights would have cost approximately $2,000 to buy and install.

(g) The defendants alleged that they installed five crystal lights. The evidence was that Yavuz paid for these. The amount paid was unclear. Mr Arends' evidence, which I accept, was that the lights would have cost approximately $400 each plus the cost of an electrician at $75 per hour to install them. Yavuz removed these lights when he vacated the Greenvale property in 2006. There was evidence that the plaintiff paid for a further five crystal lights which were installed. It was not suggested that Yavuz removed the lights for which the plaintiff had paid.

(h) The defendants alleged that they painted the Greenvale property and made repairs, although the second defendant gave evidence that no painting was done. The plaintiff claimed that he purchased paint and did some painting. Mr Arends' evidence was that the property had not been repainted since it was built and there was little evidence of repairs and maintenance. I accept Mr Arends' evidence on these matters.

(i) The defendants alleged that they erected a garden shed. The evidence was that Yavuz paid for the shed and that the concrete base was paid for by the first defendant and installed by a neighbour. The amount paid for the shed and for the concrete were unclear. Mr Arends' evidence, which I accept, was that the cost would have been approximately $1,270.

(j) The defendants alleged that they installed a concrete fountain. The evidence was that Yavuz paid approximately $500 for the fountain. Mr Arends agreed with the figure and gave evidence, which I accept, that the fountain can be removed from the property.

113 I find that the improvements made by the defendants were consistent with their assertion of a proprietary interest in the Greenvale property. The same can be said of the plaintiff's more limited contribution to the improvements.

114 In his reply and defence to counterclaim, the plaintiff alleges that the defendants caused deliberate damage to the Greenvale property during the time they resided there and when they vacated it in 2006. The alleged damage consisted of removal of light fittings from ceilings leaving bare wires hanging, damage to interior walls by way of holes in the plaster board, damage to timber fittings, damage to the timber stairway, broken windows, floor tiles and wall tiles, damage to the rangehood and oven, water damage to the kitchen cupboards and shelving, broken hinges, damage to the shower cubicle, damage to the ceiling in the bathroom, broken windows in three rooms, damage to the front doors and damage to concrete pathways outside the house. The plaintiff also alleged that the side fences are beginning to collapse.

115 The defendants contended that the above items were fair wear and tear over the period 1984 to 2006. Mr Arends' evidence, which I accept, was that each of the items of alleged damage constituted fair wear and tear or non-wilful damage, other than the removal of light fittings and a ceiling rose, and a missing ceiling exhaust fan in the bathroom.

116 In his closing address, Mr Cawthorn informed me that the plaintiff was not seeking any relief in relation to the above items of damage. He submitted that the items of damage were relevant in rebutting the defendants' evidence that they had an interest in the Greenvale property. He submitted that a person who claims ownership of property would not cause deliberate damage to it.

117 Given Mr Arends' evidence that the items of damage were fair wear and tear other than the items described in paragraph 115 of this judgment, and the plaintiff's failure to establish that those items were caused by the defendants rather than Yavuz or his family, I give little weight to the evidence of damage on the question of ownership of the Greenvale property.

118 In the context of a "purchase money resulting trust" case, a presumption of resulting trust arises in favour of a person where that person purchases property in the name of another or in the joint names of both.[10] Where more than one person contributes the purchase price and there are unequal contributions, but the property is conveyed into the name of only one of those people, there is a presumption of resulting trust as equitable tenants in common in shares proportionate to the parties' respective contributions.[11] The onus of establishing the payment(s) giving rise to a presumption of resulting trust lies on the person who is asserting the existence of a resulting trust.

119 When a presumption of resulting trust arises, it performs a similar function to the civil onus of proof.[12] A presumption of resulting trust can be rebutted by evidence of contrary intention.[13] Where a presumption of resulting trust as equitable tenants in common arises following unequal contributions to a purchase price, that presumption can be rebutted by evidence of a shared intention or agreement to the contrary.[14] The presumption can be rebutted by, among other things, evidence of intention to make a gift of the property.

120 The strength of any presumption of resulting trust will vary from case to case, as will the weight of evidence required to rebut the presumption.[15]

121 A contrary intention can be expressed before or at the time of the transaction, or so immediately after the time of the transaction that it forms part of the transaction.[16] Evidence of subsequent acts will only be admissible as admissions against interest.[17]

122 A person's intention can be found or inferred from his or her contemporaneous words and conduct. From a consideration of a person's words and conduct, certain inferences may be drawn, having regard to the surrounding circumstances and context in which they were uttered or performed.[18]

123 In certain circumstances, because of the relationship between the purchaser and the person in whose name the property is purchased (such as parent and child), a countervailing "presumption of advancement" arises.[19]

124 A person's beneficial interest under a resulting trust is solely determined by his or her direct financial contribution to the purchase price at the time the property is purchased and the trust was created. That is, each person's beneficial interest will be in the proportion of his or her direct financial contribution to the purchase price.[20]

125 Mortgage repayments do not constitute a direct contribution to the purchase price,[21] but the assumption of liability under a loan (such as by way of mortgage) can constitute such a direct contribution.[22]

126 Some cases have treated incidental costs such as stamp duty, registration fees, legal fees and bank fees as part of the purchase price on the basis that the underlying principle is concerned with the cost to the purchaser and not the benefit to the vendor.[23] If it had been necessary for me to reach a conclusion on this matter, I would have concluded that only costs necessarily incurred prior to and as a condition of obtaining registration of the interest which is to be held on trust should be included in the purchase price. On this basis, stamp duty and registration fees would be included but legal fees and bank fees would not be.[24] Although legal fees and bank fees are normally incurred in the purchase of property, they are not always incurred, and where they are incurred, their amounts may vary significantly depending on the purchaser's circumstances and, more importantly, they may be incurred as debts that are paid after the registration of the interest which is to be held on trust. However, as will appear, in light of my conclusion that a constructive trust rather than a resulting trust governs the ownership of the Greenvale property in this case, it is not necessary for me to express a final view on this issue.[25]

127 As discussed above, a beneficial interest under a resulting trust will not be established by contributions other than contributions to the purchase price. Money subsequently expended on outgoings or improvements will not alter the beneficial interests of contributors under the resulting trust which is already in existence.[26] The beneficial interests could be altered if, for example, the parties came to a later agreement about those interests. They could also be altered if the resulting trust is superseded by a constructive trust.

128 There are different categories of constructive trusts. One category involves contributions to property or to a relationship, including in a family context by the non-legal owner of the property. Such a constructive trust has its basis in preventing a person from unconscionably asserting his or her legal rights to property.[27] I will refer to this species of constructive trust as a "Muschinski v Dodds constructive trust".

129 A Muschinski v Dodds constructive trust arises:[28]

where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do ...

130 In rejecting the notion that a constructive trust will be imposed in accordance with idiosyncratic notions of what is just and fair, Deane J in Muschinski acknowledged that general notions of fairness and justice are relevant to the traditional concept of unconscionable conduct, this being a concept which underlies fundamental equitable concepts and doctrines, including constructive trusts.[29] His Honour said that equity operates upon legal entitlement to prevent a person from asserting or exercising a legal right in circumstances where the particular assertion or exercise of it would constitute unconscionable conduct.[30] He also noted that:[31]

the extent to which the relevant principle of equity operates to qualify legal entitlement is only that to which it positively appears that it would be unconscionable for one party to assert or retain the benefit of property contributed by the other party.

131 Muschinski was applied by the High Court in Baumgartner v Baumgartner,[32] in a case in which the parties had pooled their earnings for the purposes of their joint relationship where one of the purposes of that relationship was to secure accommodation for the parties (who were in a de facto relationship) and their child. Their contributions, financial and otherwise, to the acquisition of land, the building of a house, the purchase of furniture and the making of their home, were on the basis of, and for the purposes of, that joint relationship. The Court held that, in this situation, the appellant's assertion, after the relationship had failed, that the relevant property, which was financed in part through pooled funds, was his sole property, amounted to unconscionable conduct which attracted the intervention of equity and the imposition of a constructive trust at the suit of the respondent.

132 In determining the scope of any Muschinski v Dodds constructive trust, a court can take into account direct financial contributions to the purchase price of the property and incidental costs such as stamp duty, registration fees, solicitors' fees and bank fees. However, a court is not limited to such expenditure. It can also take into account the pooling of financial resources,[33] other financial contributions even in the absence of pooling,[34] contributions of labour,[35] and non-financial contributions or contributions in kind such as homemaking and parenting contributions.[36] Further, the inquiry into whether the assertion by a party of his or her legal rights would be unconscionable can encompass events that occurred after the property was initially acquired. Expenditure on repairs and renovations of the property by a person asserting a constructive trust in respect of the property, where the expenditure is accepted by the legal owner of the property in the knowledge that it would improve the home and add to its value, can be considered as a contribution in quantifying the first person's equitable interest under the constructive trust.[37]

133 The High Court said in Baumgartner that where financial contributions have been pooled for a substantial period of time, the principle that equity favours equality will be applicable and there is much to be said for the view that the parties will hold the beneficial interest in equal shares as tenants in common, with suitable adjustments to take into account the parties' actual contributions either financially or in kind.[38] In the same case, the Court said that courts should, where possible, strive to give effect to the notion of practical equality, rather than pursue complicated factual inquiries which will result in relatively insignificant differences in contributions and consequential beneficial interest.[39] In such a case, the person asserting that there should be a departure from the equality principle has the evidentiary onus of establishing there should be such a departure.[40]

134 The "common intention constructive trust" is another species of constructive trust. It is different from a Muschinski v Dodds constructive trust, but will often arise in similar circumstances. A common intention constructive trust will arise where there is an actual or inferred common intention of the parties as to their entitlements to the beneficial interest in the property, and there has been detrimental reliance on that common intention by the claimant such that it would be an equitable fraud on the claimant to deny his or her interest in the property.[41] The onus of proving the parties had a common intention lies on the party asserting the property is held on trust for his or her benefit.[42]

135 Where a resulting trust arises and the beneficial interest is held by parties as tenants in common in proportion with their contributions to the purchase price, and there is a mortgage in the joint names of two or more of the parties, then to the extent to which a party pays more than his or her share of interest and principal secured by the mortgage, an equity arises in favour of that party, and the party is entitled to an equitable charge securing a contribution from the other party or parties.[43] In Black Uhlans Inc v New South Wales Crime Commission, it was said that such an equity can only arise (and, accordingly, a charge be available) where the person who makes mortgage payments has a liability under the mortgage to do so.[44]

136 Mr Cawthorn submitted that the defendants hold the Greenvale property on constructive trust for the plaintiff for the entire beneficial interest. In argument before me, he put this on two different bases, although he said it made little difference which was adopted. The first basis was the existence of an oral agreement between the plaintiff and the defendants, pursuant to which the plaintiff made or acquiesced in the payment of the outstanding principal and interest on the Coolaroo property on 11 July 1984, the subsequent application of the proceeds of the sale of the Coolaroo property to the purchase of the Greenvale property, the making of a further contribution of approximately $64,000 towards the purchase of the Greenvale property, and the making of all mortgage payments from 1984 to the present day. Mr Cawthorn submitted that, in light of those circumstances, it would be unconscionable for the defendants to deny the plaintiff's interest in the property. It appeared that, in relying on this first basis, Mr Cawthorn was submitting that the Court should find that a Muschinski v Dodds constructive trust existed. The second basis on which Mr Cawthorn relied was that there was a common intention constructive trust, founded in essence on the parties' common intention that the plaintiff be the full beneficial owner of the Greenvale property and on the same matters as those which he said went towards the oral agreement between the parties and the unconscionability of a denial of the plaintiff's interest by the defendants.

137 In seeking to establish the plaintiff's interest in the Coolaroo property and in the proceeds of the sale of that property, Mr Cawthorn submitted that the defendants held the Coolaroo property on constructive trust for the plaintiff for the entire beneficial interest pursuant to a common intention that the plaintiff would be the owner of the Coolaroo property after paying the outstanding amount of capital and interest owing on that property on 11 July 1984, and that the plaintiff was beneficially entitled to the entire proceeds of $56,500 from the sale of the Coolaroo property. In the alternative, he submitted that, as the plaintiff had contributed approximately 99% of the purchase price of the Coolaroo property (which was, in his submission, the price of $35,700 in the terms contract - see the discussion of the "first interpretation" in paragraph 152 of this judgment), the defendants held 99% of the beneficial interest in the Coolaroo property on resulting trust for the plaintiff following his contribution of that amount, and that the plaintiff became beneficially entitled to 99% of the proceeds of $56,500 from the sale of the property. On the basis of those submissions about the Coolaroo property, he submitted that the plaintiff's interest in the Greenvale property was partly derived from the application of the proceeds of the sale of the Coolaroo property to the purchase of the Greenvale property, as described in the previous paragraph of this judgment.

138 In the alternative, Mr Cawthorn submitted that, by virtue of the plaintiff contributing 75 percent of the purchase price for the Greenvale property, a presumption of resulting trust arose in favour of the plaintiff for 75 percent of the beneficial interest in the property, and that the presumption was not rebutted by the defendants' evidence. He said that that 75 percent was comprised of the application of the proceeds of the sale of the Coolaroo property and the further contribution of approximately $64,000 which was said to have been made by the plaintiff. He submitted that in respect of the remaining 25 percent of the purchase price, which was contributed by the mortgage of $39,061 taken out by the defendants, the defendants held their interest on constructive trust for the plaintiff because he paid all of the instalments on the mortgage. In the alternative, Mr Cawthorn submitted that the plaintiff was entitled to an equitable charge securing the amount of his mortgage contributions.

139 The defendants' amended defence and counterclaim claimed that any presumption of resulting trust arising in relation to either the Coolaroo property or the Greenvale property was rebutted by the parties' common intention that the defendants would have the full title to the land (which I take to mean both the Coolaroo property and the Greenvale property) which, combined with the defendants' reliance on that intention, meant that the plaintiff was estopped from denying that the defendants have full title. The amended defence and counterclaim also claimed that if a resulting trust arose in favour of the plaintiff in relation to either the Coolaroo property or the Greenvale property (which the defendants denied), the defendants had expended money on the property in an expectation generated by the plaintiff or pursuant to a common intention that the defendants would have an interest commensurate to their expenditure, meaning that a common intention constructive trust should be found to exist, or a Muschinski v Dodds constructive trust imposed, in proportion to the parties' expenditure.

140 In their pleadings, the defendants also denied that the plaintiff's further contribution to the purchase of the Greenvale property was $64,000 and contended that it was in fact approximately $45,000, and denied that the plaintiff made all of the mortgage payments in relation to the Greenvale property.

141 In argument before me, Mr Barton relied on the intention of the plaintiff in paying the outstanding amount of principal and interest owing on the Coolaroo property, which he submitted was a gift motivated by the plaintiff's gratitude to his parents for looking after him after his car accident, in submitting that no resulting trust arose in relation to the Coolaroo property. He also accepted that if I was against him on the question of intention, there was a resulting trust in favour of the plaintiff on the basis of the "third interpretation" referred to in paragraph 152 of this judgment.

142 Mr Barton also maintained reliance on a constructive trust analysis in the event that I found that the defendants held the Greenvale property on a full resulting trust for the plaintiff. He did not develop this submission in detail but relied on both the "common intention" and Muschinski v Dodds species of constructive trust, and indicated that, in his submission, in that situation I should consider contributions made by the defendants after 1984 to payments of the mortgage and possibly improvements made to the property, although he conceded that the improvements did not increase the value of the property. I take this to have included the potential scenario in which I concluded that the defendants held the Greenvale property on a resulting trust in less than 100 percent (given that the plaintiff did not assume liability for payment of the mortgage as mortgagor, and that, as I have already set out, it is only assumption of such liability and not payment of instalments which goes towards determining the "purchase price" for a resulting trust, it would not be open to me to conclude that the Greenvale property was held on a full resulting trust for the plaintiff).

143 Mr Barton submitted that the plaintiff's payment towards the purchase price of the Greenvale property was also a gift, although he conceded that the evidence supporting a gift in relation to those payments was weaker than in relation to the payment for the Coolaroo property. Mr Barton did not specifically deal with the plaintiff's contributions towards payment of mortgage instalments in this respect, but it appeared that the defendants' case was that those contributions were also a gift by the plaintiff. He also submitted that the evidence established that the defendants' contributions towards payment of mortgage instalments were not a gift.

144 Neither Mr Cawthorn nor Mr Barton submitted that this case was governed by the principles of equitable estoppel.

145 The conventional analysis is that, as the plaintiff contributed to the purchase price of the Coolaroo property, a resulting trust arose in his favour in relation to his contribution and the onus was on the defendants to rebut the presumption of resulting trust.

146 During argument, I asked counsel whether they were aware of any case law on "purchase money resulting trusts" that dealt with a terms contract. Both counsel informed me that they were not aware of any specific case law. I have not been able to find any case law either. This is not surprising, as a contribution to the purchase price by a person who is not a party to the contract of sale after the contract is signed and the purchaser pays the deposit and goes into possession would normally be pursuant to an agreement as to the right or interest (if any) the person will acquire for the contribution, thus giving rise to a constructive trust and displacing any resulting trust that might otherwise have arisen. It may also be that terms contracts give rise to so many variables that it is inappropriate for equity to presume a purchase money resulting trust as distinct from imposing a constructive trust (or an equitable charge in favour of the person contributing for his or her contribution akin to a charge for mortgage repayments). However, as neither party submitted that a resulting trust cannot arise, this judgment proceeds on the basis that it can.

147 The defendants sought to rebut the presumption of a resulting trust by giving evidence that the plaintiff paid out the outstanding principal and interest on the Coolaroo property as a gift that was motivated by his gratitude to them for looking after him after his car accident. In paragraph 49 of this judgment, I concluded that the payment was not a gift. In paragraph 73 of this judgment, I concluded that the plaintiff paid the amount of $35,322.78 pursuant to an agreement that the defendants would retain their existing equitable interest in the property, the plaintiff would contribute $35,322.78 as an investment, and the plaintiff would be entitled to share in future increases in the value of the property upon its sale, commensurate with his contribution. The plaintiff, in effect, contributed equity (in economic terms) in the Coolaroo property (which, in substance, had already been acquired beneficially by the defendants) by buying out the interest in the property that the defendants did not already own, namely the Housing Commission's interest.

148 The making of the above agreement had the effect of rebutting the presumption of resulting trust. The plaintiff relied on this agreement in contributing $35,322.78 to discharge the outstanding principal and interest owing on the Coolaroo property. For the defendants to deny the plaintiff's equitable interest would constitute equitable fraud. Accordingly, a common intention constructive trust arose reflecting the above agreement. Based on the analysis set out in paragraph 69 of this judgment, the value of the Coolaroo property increased by $1,500 between 11 July 1984 and 16 November 1984 (being the difference between $55,000 and $56,500). As the plaintiff contributed $35,322.78 of the total value of $55,000 as at 11 July 1984 (being 64.22 percent of that total value), pursuant to the trust, he was entitled to 64.22 percent of the increase in value of $1,500, be[45]g $963.35.45 Accordingly, the plaintiff's equitable entitlement to the proceeds of sale of the Coolaroo property comprised his contribution of $35,322.78 and the gain of $963.35, bringing the total to $36,286.13.

149 My approach in treating the parties as having agreed, in substance, for the plaintiff to invest new equity of $35,322.78 in the Coolaroo property in addition to the defendants' accumulated equity of $19,677.22 (see paragraph 70 of this judgment) is consistent with the decision of Deane and Dawson[46]J in Stern46 and the decision of Gaudron J in [47]umgartner.47 Stern concerned an application by purchasers under a terms contract for relief against forfeiture arising from their default under that contract. Deane and Daw[48]n JJ said:48

The circumstance in the present case which warrants relief being granted is not only that the forfeiture provision was by way of security for the payment of the purchase moneys, but also that the contract as it was carried into effect was essentially an arrangement whereby the appellants undertook to finance the respondents' purchase upon the security of the land. In other words, there was a close and obvious parallel between it and a purchase with the aid of a mortgage ... and the parties acted upon that basis. The respondents were required to pay a commercial rate of interest on the balance of purchase money from time to time outstanding in much the same way as would have been the case if the outstanding purchase price had been advanced to them by the vendors by way of interest-bearing loan. The contract was not an "ordinary commercial contract unconnected with interests in land" ... It was a contract by an ordinary couple for the purchase of land in a subdivision upon which they proposed to build their home. In that regard, it is relevant to note that, in this country, the instalment contract for the purchase of land has long been one of the types of contracts used by subdividers for selling lower-priced lots of land ... It is at least of passing interest to observe that, although it is not established by the evidence, the contract may well have been an instalment contract within the meaning of Pt III of the Land Sales Act 1964 (N.S.W.) and, if so, the point would have been reached where the respondents were entitled under s. 13 of the Act to call for a transfer of the land upon executing a mortgage back to the appellants.

The deposit paid by the respondents was small and the instalments of purchase moneys extended over a considerable period of time. As has been said, interest was payable at a substantial rate upon the balance of purchase moneys outstanding from time to time. The appellants retained the legal estate as security for the payment of the instalments and the provision for forfeiture was by way of further assurance. Had there been a mortgage, equity would have regarded the respondents as entitled to their equity of redemption without regard to any stipulation as to time. The maxim pacta sunt servanda would not have prevailed. That being so, there seems to us to be no good reason why equity should not extend a similar remedy in a transaction of such a similar character or why that similarity should not provide the justification for refusing to hold the respondents strictly to their bargain. ...

If, however, further justification is required for the exercise of the jurisdiction to grant relief, it is to our minds provided by the circumstance that it is the respondents who had a reasonable expectation of benefiting from any increase in the value of the land with the passage of time. ... The forfeiture of the respondents' interest in the land would truly result in a windfall to the appellants whereas relief against forfeiture would not result in a gain to the respondents properly describable as a windfall.

150 In Baumgartner, Gaudron J said: [49]

in this country homes are commonly acquired by means of crédit foncier arrangements. Under these arrangements "equity" in the home is accumulated over time with the gradual reduction of mortgage debt by regular payments apportioned to both principal and interest. Where a fund (which is the property of the contributors thereto) is used for the acquisition in this manner of "equity" in an asset, it is unconscionable for one only of the contributors to that fund to assert ownership of that asset to the exclusion of any interest in the other contributor(s). That situation is properly remedied by the imposition of a constructive trust.

Where a constructive trust is imposed by reason of the utilization of a joint fund to acquire "equity" in an asset, the terms of the trust will necessarily need to be fashioned to take account of contributions made other than from the joint fund. On occasions it may be sufficient to treat the contributions to mortgage repayments as if they were contributions to the consideration for the purchase of the asset, and to fashion the terms of the constructive trust along the same lines applicable to a resulting trust so that the beneficial interest is held in tenancy-in-common in shares proportionate to the total contributions made towards the acquisition of "equity" in the asset.

151 If I am wrong in my conclusion that the presumption of resulting trust has been rebutted, the principles relating to resulting trusts apply to the plaintiff's payment of $35,322.78. Those principles have the effect of conferring on the plaintiff a beneficial interest in the Coolaroo property commensurate with his proportionate contribution to the purchase price of the Coolaroo property. Crucial to determining the plaintiff's interest is the meaning of the expression "purchase price" in the context of a Housing Commission terms contract entered into in December 1979. The nature and provisions of the terms contract have already been discussed in paragraphs 54 to 58 of this judgment.

152 During the mention on 12 September 2008 (see paragraph 53 of this judgment), I informed counsel that, as no purchase money resulting trust case deals with terms contracts, the treatment of the terms contract in this case falls to be determined on first principles. I informed counsel that it seemed to me that there are three possible ways of analysing the meaning of "purchase price" in the context of the terms contract in this case:

(a) First, the purchase price may be regarded as being the original purchase price of $35,700 set out in the terms contract ("first interpretation").

(b) Second, the purchase price may be regarded as the sum of the financial contributions made by the plaintiff ($35,322.78) and the defendants ($200 plus 52 months' instalments totalling $10,400), namely $45,922.78 ("second interpretation").

(c) Third, the purchase price may be regarded as the value of the Coolaroo property as at 11 July 1984 ("third interpretation").

153 At the mention on 23 September 2008 (see paragraph 53 of this judgment), unsurprisingly, Mr Cawthorn submitted that the first interpretation is the correct interpretation and Mr Barton submitted that the third interpretation is the correct interpretation. Mr Cawthorn submitted that Mr Barton should be bound by concessions he made in his original submissions regarding the parties' contributions to the purchase price. I reject this because the original submissions were made without the parties having had the opportunity to read a complete copy of the terms contract.

154 In submitting that the first interpretation is the correct interpretation, Mr Cawthorn stated that the relevant principle is that "a resulting trust of a property purchased in the name of another arises once and for all at the date on which the property is acquired" (emphasis added). He submitted that acquisition takes place, and the trust arises, at the time of transfer. In support, he relied on references to the expression "to transfer" in Napier v Public Trustee (WA)[50] and the expressions "when the property was purchased", "when the property is conveyed" and "causes it to be transferred" in Calverley.[51] He also relied on Curley v Parkes[52] and Lewin on Trusts.[53] He submitted that only the plaintiff's contribution of $35,322.78 was paid at or shortly before the time the Coolaroo property was transferred to the defendants and therefore it was the only contribution that can be taken into account for the purposes of a resulting trust. He submitted that the prior payments of the defendants were irrelevant.

155 The cases upon which Mr Cawthorn relied dealt with resulting trusts in the context of conventional purchases where a contract is executed and the legal title is transferred to the purchaser within a short period. In the leading case of Calverley, which was such a case, Mason and Brennan JJ said that "[t]he purchase price is what is paid in order to acquire the property" (emphasis added).[54] Normally, this refers to the deposit and the amount of the balance payable at settlement. In the same case, Gibbs CJ and Deane J referred to "purchase money".[55] The reference to the time of acquisition raises an issue as to what that time is in the context of a terms contract. Mr Barton submitted that the relevant time in this case was December 1979 when the contract was completed, namely at the time the defendants paid the deposit, rather than when they obtained a transfer in 1984. He relied on Myers v Witham,[56] where Cussen ACJ held that, in a contract of sale of land involving mortgage finance by the vendor, completion took place when the purchaser "accepted title", namely when the purchaser paid the balance of the deposit, rather than when title was subsequently transferred. Mr Barton also relied on the following statement in Voumard's The Sale of Land:[57]

In the case of a sale on extended terms the date of "completion" will in general be the date when the title is to be accepted, and this will ordinarily also be the date upon which possession is to be given and taken and outgoings adjusted: see Myers v Witham [1924] VicLawRp 77; [1924] VLR 470; (1924) 30 ALR 354; Sutton v Cary (1916) 16 SR (NSW) 254; (1916) 34 WN (NSW) 45. But in the case of a sale for cash, "completion" takes place when the balance of purchase money is paid, the property is transferred or conveyed to the purchaser, and all other matters are finally settled between the parties: Killner v France [1946] 2 All ER 83.

The above principle is discussed further in paragraph 161 of this judgment.

156 If the first interpretation is correct, only the deposit and subsequent instalment payments of principal can be regarded as contributing to the purchase price. The plaintiff contributed $34,808.58, or 97.50 percent of the principal, and the defendants contributed $891.42 or 2.50 percent of the principal.[58] As the proceeds of sale of the Coolaroo property were $56,500, the plaintiff's share is $55,089.21 and the defendants' share is $1,411.79. On the basis of the first interpretation, the plaintiff would be entitled to virtually the entire proceeds of sale. If this interpretation were adopted, the plaintiff would make a windfall gain by investing $35,322.78 for a little over four months (128 days) and the defendants would not only receive negligible credit for the deposit of $200 and the monthly instalments totalling $10,400 that they paid between 1980 and 1984, but would also forfeit the equity (in economic terms) of $19,677.22 that they built up in the Coolaroo property by virtue of paying the deposit and those monthly instalments (see paragraph 70 of this judgment).

157 If the second interpretation is correct, the defendants contributed 23.08 percent and the plaintiff contributed 76.92 percent. When these percentages are applied to the proceeds of sale of the Coolaroo property of $56,500, the defendants' share is $13,041.46 and the plaintiff's share is $43,458.54. If this interpretation is adopted, the defendants would receive credit for the deposit and the monthly instalment payments and a small proportion of the capital gain, while the plaintiff would take the benefit of the bulk of the capital gain. The defendants would receive less than the equity (in economic terms) of $19,677.22 they held in the Coolaroo property as at 11 July 1984. As noted above, neither Mr Cawthorn nor Mr Barton submitted that the second interpretation was the correct interpretation. Accordingly, I will not consider it further.

158 In submitting that the third interpretation was the correct interpretation, Mr Barton relied on Springette v Defoe.[59] That case involved the purchase by a de facto couple of a house from the local council. As the female plaintiff had been a tenant of the council for 11 years, the council discounted the purchase price of the house by ₤10,045. The de facto couple contributed to the purchase price from their savings and by taking out a mortgage loan jointly. The English Court of Appeal took into account the discount of ₤10,045 as a direct contribution by the plaintiff in working out the parties' entitlements under the resulting trust. Springette was disapproved by the House of Lords in Stack v Dowden[60] on the ground that the Court of Appeal adopted an incorrect approach to ascertaining the common intention of the parties. The House of Lords did not refer to the Court of Appeal's reliance on the discount of ₤10,045 in determining the parties' interests in Springette. In Laskar v Laskar, the English Court of Appeal said that "[a]lthough some of the reasoning in [Springette] was disapproved in Stack, nothing in Stack called that aspect of the decision [dealing with attribution of the discount] into question"[61] and treated the discount as "in effect a contribution ... to the purchase".[62] Springette does not appear to have been considered in any Australian cases. Springette is discussed further in paragraph 162 of this judgment.

159 If the third interpretation is correct, the value of the Coolaroo property as at 11 July 1984 was $55,000 (see paragraph 69 of this judgment). If one deducts the outstanding amount of principal and interest of $35,322.78 owing on the property as at 11 July 1984, the defendants' equity (in economic terms) was $19,677.22. On this basis, the plaintiff contributed cash of $35,322.78 and the defendants contributed equity valued at $19,677.22 to acquire co-ownership of an asset worth approximately $55,000 that was already owned by the defendants in the sense that they had an equitable interest subject to the Housing Commission's legal interest. On this interpretation, the plaintiff's share of the purchase price was 64.22 percent and the defendants' share was 35.78 percent. Of the proceeds of sale of $56,500, the plaintiff would be entitled to $36,286.13 and the defendants would be entitled to $20,213.87. If this interpretation is adopted, the defendants would keep their equity (in economic terms) in the Coolaroo property built up between 1979 and 1984 and 35.78 percent of the increase in value between 11 July 1984 and 16 November 1984 ($1,500), and the plaintiff would be entitled to his contribution of $35,322.78 and 64.22 percent of that increased value.

160 In my opinion, in the context of a Housing Commission terms contract, which contemplates a gradual acquisition of public housing by low income earners over a lengthy period, rather than a conventional purchase where the full purchase price is paid in exchange for a transfer of the land a few months after contracts are signed, it is inappropriate to regard the purchase price as being confined to the deposit, the principal component of monthly instalments and the final payment of principal which secures a transfer of the legal title. A Housing Commission terms contract can be regarded as being similar to a transfer in favour of the purchaser subject to a mortgage in favour of the Housing Commission, and indeed a conversion to this form of purchase was permitted by s 36(2) of the Housing Act 1958.[63] This is the approach adopted by Deane and Dawson JJ in Stern where their Honours described the terms contract in that case as "essentially an arrangement whereby the [vendors] undertook to finance the [purchasers'] purchase upon the security of the land".[64] On this basis, the terms contract can be regarded as involving, in substance, the defendants having beneficial ownership in the Coolaroo property subject to a security interest in favour of the Housing Commission. The monthly instalments can be regarded as akin to mortgage repayments. On this analysis, the plaintiff's contribution of $35,322.78 in substance discharged the Housing Commission's security interest and enabled the defendants to obtain legal title.

161 If the terms contract is considered as being, in substance, an acquisition by the defendants as purchasers that is partially financed by the Housing Commission as vendor on terms, it is arguable that the Coolaroo property was acquired by the defendants in December 1979. The principle set out in paragraph 155 of this judgment supports this argument, particularly in the case of a terms contract that has been on foot for many years. If this argument is correct and the Coolaroo property was acquired when the contract was completed (that is, when the deposit was paid on 28 December 1979), a resulting trust (as distinct from a constructive trust or equitable charge) cannot arise subsequently in respect of the plaintiff's contribution of $35,322.78. However, as discussed in paragraph 146 of this judgment, I will proceed on the basis that a resulting trust can arise. On this basis, it is arguable that in the case of a terms contract that has been on foot for many years, there can be two distinct acquisitions. The first acquisition takes place when the contract is completed and the purchaser acquires an equitable interest in the property. A person, other than the purchaser, who contributes to the deposit may be found by a court to have an equitable interest under a resulting trust. The second acquisition takes place when the legal title is transferred to the purchaser. A person, other than the purchaser, who contributes to the outstanding principal at that time may be found by a court to have an interest under a resulting trust based on the proportion the contribution bears to the value of the property at the time of the second acquisition.

162 Springette supports the approach I have adopted of analysing the plaintiff's contribution by reference to the value of the Coolaroo property as at 11 July 1984 rather than the purchase price as at 28 December 1979.[65] The economic "equity" of $19,677.22 that the defendants had built up in the Coolaroo property is similar to the economic benefit of the discount of £10,045 that the plaintiff in Springette had built up by being a long-term tenant of the Council. Just as the English Court of Appeal in Springette looked at the parties' contribution towards the market value of the property in that case rather than the discounted purchase price, so in this case it is appropriate for this Court to look at the market value of the Coolaroo property as at 11 July 1984. Accordingly, if the purchase price is viewed as at the time the plaintiff acquired his equitable interest on 11 July 1984, the asset being acquired was a house worth approximately $55,000 in which the defendants had equity of $19,677.22 and the plaintiff's contribution was $35,322.78 only.

163 If the plaintiff in this case had sought to buy a property in Coolaroo similar to the defendants' Moyston Court property in July 1984, he would have had to pay approximately $55,000. He could not have bought such a property for $35,322.78. Had it not been for the fact that the defendants had entered into the terms contract in 1979 and paid the deposit and the monthly instalments since that time, the plaintiff would not have had an opportunity to invest in a property worth $55,000 free of stamp duty and legal fees and obtain a tax-free return of $963.35 for his investment of $35,322.78 for a little over four months (128 days).

164 Adoption of the first and second interpretations could produce unfair and absurd results, particularly in the case of a terms contract which subsists for a lengthy period and relates to an asset which has significantly increased in value over that period. The first interpretation, in particular, could result in a forfeiture of a large part of existing equity (in economic terms) in the property built up by the purchaser under the contract paying principal and interest over many years and create a windfall gain for the person who makes the last lump sum payment of principal. It would be an affront to basic principles of equity, which seeks to avoid an unjust enrichment or an unconscionable outcome, if equity were to adopt interpretations which produced an unjust enrichment and an unconscionable outcome. In this case, for the plaintiff to assert ownership in the entire proceeds of $56,500 from the sale of the Coolaroo property a few months after contributing $35,322.78, and thereby, in effect, negate the defendants' equitable interest in the property, would be unconscionable and could not be countenanced by a court of equity.

165 Having regard to the above considerations, the third interpretation is more in accordance with basic principles of equity. It represents the correct interpretation of "purchase price" and the correct method of ascertaining the parties' respective contributions to the purchase price of the Coolaroo property. Accordingly, I find that the plaintiff's share of the proceeds of sale of the Coolaroo property is $36,286.13 and the defendants' share is $20,213.87.

166 As both the plaintiff and the defendants contributed to the purchase price of the Greenvale property, a resulting trust in favour of the plaintiff will arise to the extent of his contribution to the purchase price, unless the presumption of resulting trust is rebutted by the defendants. In paragraphs 83 and 84 of this judgment, I concluded that the plaintiff's contribution was not a gift and that he and the defendants made an agreement in July/August 1984 that the plaintiff would have an interest in the Greenvale property commensurate with his contribution to the acquisition price. This agreement displaces the presumption of resulting trust in favour of a constructive trust. It is immaterial in this case whether the constructive trust is labelled a Muschinski v Dodds constructive trust or a common intention constructive trust, as the requirements of both are satisfied. The plaintiff's substantial initial contribution to the purchase price and his subsequent contributions to the mortgage repayments can be seen as being detrimental reliance on the common intention, and it would be equitable fraud for the defendants to deny his interest, or as contributions to a joint endeavour whose substratum has been removed without attributable blame and it would be unconscionable for the defendants to retain the whole beneficial interest.

167 The plaintiff has the onus of proof in establishing how much he contributed towards the acquisition price of $167,025.50 for the Greenvale property. It follows from my conclusions in paragraphs 92 to 96 and 165 of this judgment that the plaintiff contributed the following amounts:

(a) $16,200: deposit for the Greenvale property funded by the plaintiff's savings;

(b) $36,286.13: plaintiff's share of the proceeds of sale of the Coolaroo property;

(c) $48,430.00: contribution funded from a term deposit held by the plaintiff;

(d) $19,530.50: half of the mortgage loan taken out by the defendants, based on the plaintiff's equal contribution to the mortgage payments (see paragraph 169 of this judgment);

(e) $1,000: contribution funded by interest on the plaintiff's bank deposits and term deposits;

(f) $1,500: contribution funded from the proceeds of sale of the plaintiff's photographic equipment.

168 On the basis of the above calculations, the plaintiff's share of the acquisition price of $167,025.50 is 73.61 percent and that of the defendants is 26.39 percent.

169 In relation to the mortgage loan, as the plaintiff was not a mortgagor, for the purposes of a resulting trust, he would not be regarded as having contributed any part of the mortgage loan.[66] However, as a constructive trust is a more flexible remedy,[67] I will treat the plaintiff as having contributed half of the mortgage loan for the purposes of calculating his interest, particularly since I cannot determine the precise amounts that have been paid under the mortgage since 1984.

170 The issue I now need to consider is whether the equitable interests of the parties arising from their contributions to the acquisition price need to be adjusted based on their other financial and non-financial contributions in relation to the Greenvale property.

171 For the reasons set out in paragraph 109 of this judgment, no adjustment will be made on account of the payment of rates and other outgoings.

172 As Mr Barton abandoned any claim for an adjustment of the defendants' equitable interest on account of their expenditure on improvements (see paragraph 111 of this judgment), no adjustment will be made for this expenditure. However, I should not be taken as acceding to Mr Barton's implicit proposition that, for the purposes of a common intention or Muschinski v Dodds constructive trust, moneys spent on improvements cannot be considered as contributions unless there is evidence that they have added to the value of the releva[68] property.68

173 There was evidence that the defendants provided furniture for the Greenvale property and established the lawns and garden, that the first defendant made the curtains for the property, and that the second defendant cooked the meals, washed the clothing and cleaned the house and generally performed the chores around the house. She was assisted in this regard by Yavuz's wife from 1987. There was also evidence that the second defendant looked after the plaintiff, by taking him to see doctors and otherwise providing him with assistance. The defendants gave evidence that the second defendant gave up her part-time job to look after the plaintiff. However, the evidence established that the second defendant worked part-time in the early hours of the morning and returned home around 8.00 am. There was insufficient evidence about the nature of the plaintiff's injuries and needs between 1984 and 2006 to enable me to conclude that the second defendant provided care for the plaintiff beyond cooking, cleaning and other domestic chores and taking him to see doctors from time to time. The fact that the second defendant was in Turkey between 1 September 1986 and 11 February 1987 and that the plaintiff was employed in 1985, 1986 and 1987 suggests that the plaintiff was well enough to care for himself during those periods.

174 The plaintiff and Zafer gave evidence that after Yavuz's wife commenced living at the house in 1987, the plaintiff washed his own clothes and bought his own meals because he did not like his sister-in-law's cooking and did not want her to wash his clothing. However, the evidence of the defendants and Yavuz was that the cooking and cleaning was shared between Yavuz's wife and the second defendant. I find that the plaintiff continued to rely on the second defendant, at least in part, for domestic chores, including laundry, cooking and cleaning.

175 Both defendants gave evidence that any assistance they provided to the plaintiff was out of parental love and affection without any expectation of reward. In light of this and the fact that they did not seek any relief in relation to the care they provided to the plaintiff and their performance of domestic chores, I do not take such contributions into account.

176 Likewise, no relief has been sought by the defendants in relation to the provision of furniture, food and other items that they paid for. The cost of food and similar day to day expenses was shared within the family. As for the furniture, there was no evidence that this has remained in the Greenvale property.

177 Further, no relief by way of occupation rent has been sought by the defendants in respect of the period since November 2006 when the plaintiff has been in sole occupation of the Greenvale property.[69]

178 In all the circumstances, the interests of the parties arising from their contributions to the acquisition price of the Greenvale property (namely 73.61 percent for the plaintiff and 26.39 percent for the defendants) will not be adjusted based on the other financial and non-financial contributions and other matters discussed in paragraphs 170 to 177 of this judgment. Accordingly, the defendants hold the Greenvale property on a constructive trust pursuant to which the plaintiff is a tenant in common with a 73.61 percent equitable interest and the defendants are tenants in common with a 26.39 percent joint equitable interest.

179 At the end of argument in this case, Mr Barton foreshadowed that, in the event that I find that the defendants have any beneficial interest in the Greenvale property, he will apply for an order for sale under Order 55 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) when I deliver my judgment. I informed counsel at that time that I will hear from them as to the orders to be made to give effect to my judgment.

[1] See especially ss 5 (duties of the Minister of Housing) and 15 (role of Housing Commission in assisting the Minister), and Part II (provision and disposal of houses), of the Housing Act 1958 (Vic) as in force at 28 December 1979.

[2] [1957] HCA 7; (1957) 96 CLR 261, 267.

[3] [1989] HCA 7; (1988) 166 CLR 131.

[4] [1988] HCA 51; (1988) 165 CLR 489 ("Stern").

[5] [1976] HCA 1; (1976) 137 CLR 177, 184 ("Chang").

[6] [2008] VSCA 180, [24].

[7] See also 101 Collins Street Pty Ltd v City of Melbourne (Unreported, Supreme Court of Victoria, Batt J, 2 April 1996) 83.

[8] All dollar amounts and percentages have been rounded to two decimal places for the sake of simplicity. The calculations which they reflect were performed using the fully accurate figures (and not the rounded figures included in this judgment).

[9] The plaintiff's further particulars of his amended statement of claim dated 12 March 2008 state that he received a refund of $14,600 for cancellation of the purchase of the Shandeen Court block. However, this amount was not mentioned in the plaintiff's evidence.

[10] Calverley v Green [1984] HCA 81; (1984) 155 CLR 242, 246-7, 255, 258, 266-7 ("Calverley"); Muschinski v Dodds [1985] HCA 78; (1985) 160 CLR 583, 589-90 ("Muschinski").

[11] Calverley [1984] HCA 81; (1984) 155 CLR 242, 246-7, 258, 262, 266-7; Delehunt v Carmody [1986] HCA 67; (1986) 161 CLR 464, 472-3. In Calverley, while Mason and Brennan JJ refer to "purchase price" (at 255, 257-8, 260-2), Gibbs CJ refers to "purchase money" (at 246-7, 251) and Deane J refers to both "purchase money" (at 266) and "purchase price" (at 270).

[12] Muschinski [1985] HCA 78; (1985) 160 CLR 583, 612.

[13] Calverley [1984] HCA 81; (1984) 155 CLR 242, 251, 255, 258, 261, 269; Muschinski [1985] HCA 78; (1985) 160 CLR 583, 590.

[14] Calverley [1984] HCA 81; (1984) 155 CLR 242, 258, 261, 269.

[15] Calverley [1984] HCA 81; (1984) 155 CLR 242, 255, 270.

[16] Calverley [1984] HCA 81; (1984) 155 CLR 242, 251, 261-2, 269; Muschinski [1985] HCA 78; (1985) 160 CLR 583, 589-90.

[17] Calverley [1984] HCA 81; (1984) 155 CLR 242, 262, 269.

[18] Hohol v Hohol [1981] VicRp 24; [1981] VR 221, 226.

[19] Calverley [1984] HCA 81; (1984) 155 CLR 242, 246-7, 256, 259, 267.

[20] Calverley [1984] HCA 81; (1984) 155 CLR 242, 246, 253, 258, 266-7.

[21] Calverley [1984] HCA 81; (1984) 155 CLR 242, 252, 257-8.

[22] Calverley [1984] HCA 81; (1984) 155 CLR 242, 251, 257-8, 267-8. See also Bloch v Bloch [1981] HCA 56; (1981) 180 CLR 390, 402, where it was held that, where the parties intended to acquire the land freed from the mortgage, and not simply the title to land subject to mortgage, the paying off of the mortgage will also be taken into account. In Calverley, Mason and Brennan JJ commented (at 263) that this would rarely be applicable where a house property was acquired as a home to live in.

[23] See Currie v Hamilton [1984] 1 NSWLR 687, 691; Atilgan v Atilgan [1999] NSWSC 324, [111]; Ryan v Dries [2002] NSWCA 3; (2002) 10 BPR 19,497; [2003] ANZ ConvR 47, 52; [2002] NSWCA 3, [25], [52]-[53]; Black Uhlans Inc v New South Wales Crime Commission (2002) 12 BPR 22,421; [2002] NSWSC 1060, [144]; Silvester v Sands [2004] WASC 266, [40]-[41]; Martech Energy Systems Pty Ltd (in liq) v Bell [2005] VSC 198, [8]; Shepherd v Doolan [2005] NSWSC 42, [24]; Dinsdale v Arthur (2006) 12 BPR 23,509; [2006] NSWSC 809, [11]; Brennan v Duncan [2006] NSWSC 674, [9]. Contra Little v Little (1988) 15 NSWLR 43, 44-46.

[24] This view is consistent with the statement by Mason and Brennan JJ in Calverley [1984] HCA 81; (1984) 155 CLR 242, 257 that "[t]he purchase price is what is paid in order to acquire the property", as the legal interest cannot be acquired without prior payment of applicable stamp duty and registration fees.

[25] In the only Victorian case on point of which I am aware, Martech Energy Systems Pty Ltd (in liq) v Bell [2005] VSC 198, [8], both parties proceeded on the basis that, in determining what was the "purchase price", the court ought to take into account all of the costs incurred to acquire the property, including legal costs and stamp duty and it therefore appears that this issue was not fully argued before the Court in that case.

[26] Currie v Hamilton [1984] 1 NSWLR 687, 693; Shepherd v Doolan [2005] NSWSC 42, [23].

[27] See generally Muschinski [1985] HCA 78; (1985) 160 CLR 583; Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137 ("Baumgartner").

[28] Muschinski [1985] HCA 78; (1985) 160 CLR 583, 620.

[29] Muschinski [1985] HCA 78; (1985) 160 CLR 583, 616; Baumgartner [1987] HCA 59; (1987) 164 CLR 137, 148.

[30] [1985] HCA 78; (1985) 160 CLR 583, 619-20.

[31] Muschinski [1985] HCA 78; (1985) 160 CLR 583, 623.

[32] [1987] HCA 59; (1987) 164 CLR 137.

[33] Baumgartner [1987] HCA 59; (1987) 164 CLR 137, 148-9, 156-7.

[34] Hibberson v George (1989) 12 Fam LR 725, 742.

[35] Miller v Sutherland (1990) 14 Fam LR 416, 424.

[36] See Muschinski [1985] HCA 78; (1985) 160 CLR 583, 622; Baumgartner (1987) 164 CLR 147, 149-50, 155-6; Read v Nicholls [2004] VSC 66, [60]-[64].

[37] Hibberson v George (1989) 12 Fam LR 725, 742.

[38] Baumgartner [1987] HCA 59; (1987) 164 CLR 137, 149-50.

[39] Baumgartner [1987] HCA 59; (1987) 164 CLR 137, 150.

[40] Hibberson v George (1989) 12 Fam LR 725, 743.

[41] Allen v Snyder [1977] 2 NSWLR 685; Hohol v Hohol [1981] VicRp 24; [1981] VR 221, 225; Rasmussen v Rasmussen [1995] VicRp 38; [1995] 1 VR 613, 615-16.

[42] Hohol v Hohol [1981] VicRp 24; [1981] VR 221, 226.

[43] Ingram v Ingram [1941] VicLawRp 20; [1941] VLR 95, 102; Calverley [1984] HCA 81; (1984) 155 CLR 242, 263.

[44] [2002] NSWSC 1060, [189].

[45] See fn 8 in relation to rounding.

[46] [1988] HCA 51; (1988) 165 CLR 489.

[47] Baumgartner [1987] HCA 59; (1987) 164 CLR 137, 156.

[48] [1988] HCA 51; (1988) 165 CLR 489, 528-9.

[49] Baumgartner [1987] HCA 59; (1987) 164 CLR 137, 156.

[50] (1980) 32 ALR 153, 158.

[51] [1984] HCA 81; (1984) 155 CLR 242, 252 (Gibbs CJ), 255, 258 (Mason and Brennan JJ) and 266 (Deane J).

[52] [2004] EWCA Civ 1515, [14].

[54] [1984] HCA 81; (1984) 155 CLR 242, 257.

[55] [1984] HCA 81; (1984) 155 CLR 242, 246-7, 251, 266. Deane J also referred to "purchase price" (at 269-70).

[56] [1924] VicLawRp 77; [1924] VLR 470, 474-5.

[57] LBC, The Sale of Land, vol 1 (at June 2008) [13.050] fn 2.

[58] This is calculated as follows. From the Housing Commission settlement statement dated 11 July 1984, it is apparent that, to 1 July 1984, $715.37 principal had been charged in instalments. That is the amount that had been charged, and not necessarily the amount that had been paid. In fact, as at 1 July 1984, outstanding instalments (comprising both principal and interest) totalled $459.53. Those instalments were for the periods 1 to 31 May 1984 and 1 to 30 June 1984. It is apparent from the settlement statement that interest of $78.62 accrued over the 11 days between 1 and 11 July 1984, or $7.15 per day. Assuming that interest accrued at the same rate between 1 May 1984 and 30 June 1984 as it did between 1 and 11 July 1984, the interest component of the outstanding instalments for the period between 1 May 1984 and 30 June 1984 was $435.98. As the total outstanding for that period was $459.53, the component of that total comprised by principal was $23.95. Therefore, as at 1 July 1984, the total principal paid by the defendants was comprised of the $200 deposit, plus the amount of principal charged to 1 July 1984 ($715.37), less the $23.95 of principal in the two outstanding instalments, being $891.42. The plaintiff paid the balance of the principal, being $35,700 (the purchase price) less $891.42, which equalled $34,808.58. See also fn 8 in relation to rounding.

[59] [1992] 2 FLR 388 ("Springette").

[60] [2007] UKHL 17; [2007] 2 AC 432, 457.

[61] [2008] 2 P&CR 14; [2008] EWCA Civ 347, [24] ("Laskar").

[62] [2008] 2 P&CR 14; [2008] EWCA Civ 347, [26]. See also R (on the application of Kelly) v London Borough of Hammersmith & Fulham (2004) 7 CCL Rep 542; [2004] EWHC 435 (Admin) [21]-[22] ("Kelly"), where Wilson J said that although a discount does not contribute to the price, it is taken into account for the purposes of a resulting trust because it substantially increases the value of the asset.

[63] See paragraph 57 of this judgment.

[64] [1988] HCA 51; (1988) 165 CLR 489, 528-9.

[65] See also Kelly (2004) 7 CCL Rep 542; [2004] EWHC 435 (Admin), [21]-[22], discussed in fn 62.

[66] See paragraph 125 of this judgment.

[67] See the statement of Gaudron J in Baumgartner that is quoted in paragraph 150 of this judgment.

[68] Compare Currie v Hamilton [1984] 1 NSWLR 687, 693; Hibberson v George (1989) 12 Fam LR 725, 742; Miller v Sutherland (1990) 14 Fam LR 416, 424-5.

[69] See Calverley [1984] HCA 81; (1984) 155 CLR 242, 253; Baumgartner [1987] HCA 59; (1987) 164 CLR 137, 150-1.