Rix v Mahony [2012] NSWCA 332 | Case summary

The decision of the primary judge 12The first and fifth respondents resisted the appellant's claim that the first respondent held a one-half share in the property on trust for the appellant and Mrs Rix as joint tenants on two bases. First, it was argued that they had the benefit of a res judicata or Anshun estoppel by reason of the decision of Forster J. The primary judge rejected that argument (at [22]-[28]) and it is not pressed on appeal. Secondly, it was said that on the transfer of the three-quarter share for no consideration, a resulting trust arose in favour of the appellant and Mrs Rix as transferors, there was a presumption that the beneficial interest was held as tenants in common. Furthermore, at the time of the transfer their intention was that they have separate interests in the property. 13The appellant argued that at the time of the March 1993 transfer he and Mrs Rix held their four-fifths share as joint tenants and that following the transfer they "retained" their beneficial interest as joint tenants in part of that four-fifths share, being a one-half share. 14The primary judge accepted the first and fifth respondents' second argument. Her Honour's conclusions can be summarised briefly. Any equitable interest of the appellant and Mrs Rix only arose on the transfer of their legal interest to the first respondent for no consideration. Before that transfer, the appellant and Mrs Rix did not hold that legal interest on trust for themselves: DKLR Holding Co (No 2) Pty Ltd v Commissioner of Stamp Duties (NSW) [1982] HCA 14; 149 CLR 431 at 442, 463-464 and 474. It was not in issue that prior to the transfer the first respondent was entitled absolutely to a one-quarter share in the property. Forster J had determined that any presumption of advancement as between the appellant as a transferor and the first respondent had been rebutted. It was unnecessary to decide whether the position was the same as between Mrs Rix and the first respondent, although there was evidence capable of rebutting any presumption of advancement: [44]-[47]. The evidence established that the appellant and Mrs Rix intended to hold their interests in the property separately: [60]. Three matters supported that conclusion. They were the terms of an agreement dated 19 February 1993 and signed by the appellant and the first respondent, a conversation between Mrs Rix and the first respondent at about that time and the fact that the appellant and Mrs Rix were living apart at the time of the transfer. Her Honour's finding as to this last matter was based in part on Department of Social Security pension claim forms completed by the appellant and Mrs Rix in early 1993, and in part on answers given by the appellant in cross-examination.

Disposition of the appeal 16The further amended notice of appeal contains six grounds of appeal which do no more than identify the reasons why the primary judge concluded that any beneficial interest of the appellant and Mrs Rix was not held as joint tenants. That further amended notice also contains a summary of the appellant's argument. That argument extends beyond the claim dealt with by the primary judge. Some matters raised have no apparent relevancy to that claim. For example they include asserted reasons for the breakdown of relations between the appellant and the first and fifth respondents and concern events or conduct well after and unrelated to the transfer of interests in the property in March 1993. The appellant also relies upon further written submissions which, for the most part, respond to the first and fifth respondents' written submissions or supplement matters raised in the summary of argument. 17In the following paragraphs I have attempted to summarise the various arguments made by the appellant and deal with them. 18First, it is said that the question whether any joint tenancy between the appellant and Mrs Rix had been severed was not addressed before Forster J and that the respondents were prevented by res judicata or issue estoppel from raising that question before the primary judge. It is correct that this issue was not raised or dealt with in the proceedings before Forster J. That was because the relief sought by the appellant did not raise that question and because there was expressly excluded from the issues dealt with by Forster J "all questions pertaining to the rights and obligations of Mrs Rix in relation to any of the other parties". The declaration sought by the appellant in the first proceedings was that his daughter held a one-quarter share on trust for him. There was no claim as to any share being held for the parents as joint tenants. For that reason it was not necessary to address whether the voluntary transfer by the joint owners, assuming no presumption of advancement, gave rise to a resulting trust upon which a one-half share was held for them either as joint tenants or tenants in common. Indeed, the appellant's claim that a one-quarter share was held on trust for him was inconsistent with a claim that a one-half interest (which necessarily included that one-quarter share) was held on trust for him and Mrs Rix as joint tenants. However, the primary judge did not dismiss the appellant's claim on that basis and the respondents do not agitate this question on appeal. 19Secondly, it is argued that the primary judge erred in applying the "legal precedents" relied upon when dealing with the argument that following the transfer the appellant and his wife had "retained" part of their existing beneficial interest held as joint tenants. The cases referred to are DKLR Holding Co and Delehunt v Carmody [1986] HCA 67; 161 CLR 464. The primary judge did not err in applying either of those decisions. In DKLR Holding Co the Court applied the fundamental and uncontroversial propositions that (a) a person cannot declare himself to be a trustee for himself alone of property he already owns, and (b) that if a person holds a legal estate absolutely he does not hold separate legal and equitable estates. Those propositions apply equally to legal interests held by co-owners, either as joint tenants or tenants in common. Accordingly, her Honour was correct to proceed on the basis that the question which arose following the March 1993 transfer was whether there was a resulting trust in relation to a one-half share in the property and, if so, whether that interest was held for the appellant and his wife as joint tenants or as tenants in common. The question was not whether any pre-existing equitable interest in a one-half share held as joint tenants had been severed. 20Delehunt v Carmody decided that a consequence of the enactment of s 26 of the Conveyancing Act 1919 was to displace any presumption in equity that where two persons advance equally the purchase moneys for a property they hold as equitable joint tenants and replace it with a presumption that they hold as equitable tenants in common in equal shares. The primary judge did not rely upon that presumption. It was sufficient for her Honour to address whether, if there was a resulting trust in favour of the transferors, the beneficial interest was held as tenants in common and not as joint tenants. Her Honour assumed, without deciding, that there was no presumption of advancement in favour of the first respondent ([47]), and held that it was not the intention of the appellant or Mrs Rix at the time of the transfer that any beneficial interest be held for them as joint tenants: [59], [60]. That finding was sufficient to dispose of the appellant's claim. It was not argued by the respondents and the primary judge did not have to consider whether s 44(1) of the Conveyancing Act prevented any resulting trust arising from the mere fact of the voluntary transfer by the appellant and Mrs Rix: Newcastle City Council v Kern Land Pty Ltd (1997) 42 NSWLR 273. 21Thirdly, it was argued that the primary judge erred in finding that at the time of the transfer, the appellant and Mrs Rix intended to hold their interests in the property separately and not jointly. The appellant says in support of this argument that his relationship with Mrs Rix was close and their marriage sound; that if there was any separation in 1993 it was only for a short period; that the Department of Social Security claim forms relied on by the primary judge were privileged or inadmissible because they "could be a criminal offence"; and that the first respondent's evidence in relation to the question of intention was not corroborated or unbiased. 22As has been noted earlier, her Honour had regard to three matters in the evidence as justifying this finding. The evidence as to those matters was admissible and supported the finding made. The first matter referred to was the document signed by the appellant and first respondent and dated 19 February 1993. That document was in the following terms: "To whom it may concern. This is a personal agreement between Frederick George Rix and Lisa Jane Mahony. The agreement is that as of todays date, four people own twenty-five percent each of the property at 216A Gardeners Road, Rosebery. These people being Frederick George Rix, Mavis Harriet Rix, Dennis Anthony Mahony and Lisa Jane Rix. As of Monday, February 22, 1993, the fifty percent shares of Frederick George Rix and Mavis Harriet Rix will be signed over to Lisa Jane Mahony, this being for the purpose of Lisa and Dennis to obtain a loan to start their business. I have agreed to sign this declaration stating that I owe Frederick George Rix either of the following, that being of his choice. A) The price of $150,000.00 being for his share of the property at 216A Gardeners Road, paid at his request: Or; B) That if any or all of the above listed four (4) wishes to sell the property at 216A Gardeners Road each receives his/her twenty-five percent value of the home. I do this in good trust. ..................(Signed) ..................(Signed) LISA JANE MAHONY FREDERICK G. RIX" 23There is no reference in this document to any shares in the property being held jointly and the references to "four people own twenty-five percent each", the appellant's "share of the property", and to each receiving "his/her twenty-five percent value of the home" are inconsistent with the applicant's intention being that he would continue to have an undivided fifty per cent share in the property held jointly with Mrs Rix. Her Honour was entitled to treat this agreement as evidence that the appellant intended that his share be separate and that he be free to sell that share: [53]. 24The second matter of evidence was a conversation between the first respondent and her mother shortly after that document was signed: [51]. There was reference in that conversation to the first respondent holding "a ¼ share" for the appellant. Mrs Rix responded that she would not have made her daughter sign such a document or herself have signed such a document if the appellant had requested her to do so: [51]. The evidence of this conversation was not challenged in cross-examination. The primary judge was entitled to treat it as evidence from which inferences could be drawn as to Mrs Rix's state of mind at that time. It was not required, if used for that purpose, to be corroborated. Her Honour inferred from what was said that Mrs Rix was unlikely to co-operate with the appellant by agreeing to hold her interest as a joint tenant. That inference was an available one and was less consistent with the position being that Mrs Rix intended their interests be held as joint tenants, rather than as tenants in common or separately: [59]. 25The final piece of evidence was the separate Department of Social Security pension claim forms signed in early 1993. The form completed by the appellant was dated 17 March 1993. It stated that he was "living apart" from Mrs Rix and that they had separated on 1 January 1992. A form completed by Mrs Rix and dated 16 February 1993 stated that she did not reside with her husband and that they had separated in June 1991. In cross-examination, the appellant agreed that he regarded himself as separated from Mrs Rix at the time he completed his claim form and that the date 1 January 1992 truthfully recorded the date of separation. There was no objection to the cross-examination of the appellant on those documents on the basis that any answers he gave may tend to prove that he had committed some offence. 26This evidence justified her Honour's conclusion that at the time of the transfer in March 1993 the appellant and Mrs Rix regarded themselves as "separated": [58]. That fact made it more likely that at that time neither intended that they should hold any interest in the property as joint tenants: Abela v Public Trustee [1983] 1 NSWLR 308 at 315. 27Fourthly, it was argued that counsel who appeared for the appellant before the primary judge failed to act in accordance with his instructions, ignored the main issue as to whether the "marriage arrangement over a long period of time was severed or not" and, contrary to the appellant's instructions, failed to contest the "joint tenancy issue". There was no debate before this Court as to whether there was a sound basis for any of these assertions. However, they do not identify or give rise to any appealable error on the part of the primary judge. 28None of the other matters dealt with in the appellant's written submissions or summary of argument raise possible errors on the part of the primary judge. As I have already noted, some relate to events occurring well after the 1993 transfer and have no apparent relevance to the issue as to intention at the time of the transfer. They include whether Mrs Rix was under the influence of the first and fifth respondents at the time she executed her will in January 2009, the asserted reasons for the breakdown of the relationship between the appellant and his daughter, and the terms of an offer of settlement made by the appellant in September 2008. Some of these matters were not the subject of evidence before the primary judge and accordingly not taken into account by her Honour or able to be taken into account by this Court. They include an assertion that the 1993 transfer was in the nature of a "loan" of the property with the first respondent having an obligation to transfer the one-half interest in the property back to the appellant and Mrs Rix "as a joint tenancy".

Rix v Mahony

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