The Weekend Lease
8 The Minister for Lands notified in the Government Gazette of 21 May 1965 that an area of land at Norah Head had been set apart as Crown Land for weekend leases and invited applications for weekend leases. A weekend lease was a lease in perpetuity. (Crown Lands Consolidation Act 1913 (NSW) s 136F). It could be subject to such conditions as the Minister notified in the Gazette relating, amongst other things, to improvements or other matters as were required to be regulated in the public interest. (s 136A(4)). The holder of a weekend lease could be required to make payment towards the cost of making roads in the area. (s 136DD). The annual rent was to be 2.5% of the capital value of the lease for the first ten years and thereafter as re-determined by the local land board. (s 136C). Section 136H of the Crown Lands Consolidation Act provided that the holder might apply to purchase the land comprised in the weekend lease, and the Minister might grant or refuse any such application at his discretion. The section also provided that the price of the land should be the capital value as at the date of the application to purchase and should be determined by the local land board whose determination should be irrespective of the value of any improvements effected by the holder or paid for by him.
9 The notification in the Gazette stipulated that no deposit of rent or survey fee was required to accompany an application, but that such rent and survey fee should be payable upon confirmation of an application. It also stipulated that the weekend leases would be subject to conditions, including that the holder erect a dwelling on the land leased within one year from the confirmation of his application, or such further period as the Minister might allow, in accordance with plans and specifications approved by the Wyong Shire Council. The persons who could apply for a weekend lease were limited. Except with the Minister's consent, no person owning land in the Wyong Shire and within one mile of the South Pacific Ocean was competent to apply. There were other restrictions. The notification in the Gazette included a stipulation that:
" Application must be made in good faith, that is to say, the sole object of the applicant in making the application must be to obtain the land in order that he may hold and use it for his own exclusive benefit according to law. "
10 The plaintiff said that the reason the land was put in the deceased's name was because at that stage he did not own a house.
11 The notification in the Gazette also stipulated the capital value of the various portions or blocks which were to be made available. The deceased was successful in securing the block which was allotment 7 in section 7. The Gazette stated its capital value to be £476, at an annual rent of £11 8s, and that the successful applicant was required to pay £83 as the proportionate part of the cost of road construction. A survey fee of £10 was also payable. The sum of the three notified figures for annual rent, proportionate part of cost of road construction and survey fee, totalled £104 18s. It was suggested that this bore a close relationship to the £100 which the plaintiff testified to having paid the deceased to enable him to acquire the land. However the moneys were payable in instalments.
12 On 18 August 1966, the deceased was advised by the Department of Lands that he should pay a deposit, being the rent for the first half-year of $11.90 and the first instalment of the survey fee of $2. The road construction costs totalling $166 plus interest were payable by fifteen instalments, between 20 July 1967 and 20 July 1981. It appears from later correspondence from the Department of Lands that he took up the opportunity to pay the road construction costs by instalments. As at 6 May 1969, there was a principal balance of $143.91 outstanding for road construction costs and a principal balance of $14 outstanding for survey fees. Therefore, I do not regard the claimed similarity between the £100 which the plaintiff said she contributed, and the sum of the required payments for annual rent, road construction costs and the survey fee, as corroborating the plaintiff's evidence.
Contribution of £100
13 The defendant submitted that the plaintiff's evidence that she contributed £100 should not be accepted, because by the time the deceased was required to pay money to acquire the weekend lease, or construct the house on the property, Australia had converted to decimal currency. His application was not confirmed until 20 July 1966. Australia introduced decimal currency on 14 February 1966. However, the fact that decimal currency was introduced before the deceased was required to make any payment for the weekend lease, does not mean that the plaintiff could not have paid him £100 from sometime around July 1966 or later. There was no evidence that it was not possible to use Australian pounds as lawful currency after 14 February 1966, and her savings in pounds could surely have been used by the deceased and converted into dollars if that were necessary.
14 The deceased kept a cashbook of his expenditure upon building work for the property. It was submitted for the defendants that if the plaintiff had paid £100 to him, it is likely that the contribution would have been recorded in the book which he kept. However, the book records expenditures. It does not record the sources of the funds expended.
15 The plaintiff's credit was not seriously shaken in cross-examination. I accept her evidence that she paid £100 to the deceased to help him pay the costs associated with the acquisition and holding of the weekend lease, or the costs of building the house on the land.
Work on the House and Garden
16 The house, which the deceased built, was a single bedroom fibro house. A number of his friends and relatives helped in the building. The plaintiff and her son Rodney also went to the property with the deceased on a number of weekends to help as they could. She did not carry out the heavy manual labour, but provided food and refreshment and assistance with the lighter tasks. The plaintiff says that during the period of construction the deceased said to her on more than one occasion, "the shack will be yours one day". The plaintiff helped the deceased line the internal walls and ceilings with a plaster-like substance. She helped the deceased paint the ceiling, internal walls, and skirting boards. She scrubbed the floors, tidied up, and helped get rid of the old building materials. She also established the garden on the property. When the building was finished, she and the deceased maintained the house and garden until the deceased's death. She did most of the work in the garden. They visited the property regularly.
17 The records kept by the deceased of his expenditure on the building of the property show that he outlaid $826.94, mostly in materials, in the construction of the house up to its completion in late 1968 or 1969.
Purchase of the Fee Simple
18 On 6 May 1969, the deceased was advised by the Department of Lands that his application to purchase the holding had been granted on 26 March 1969. The price of the land was $1,134. There were further adjustments for outstanding rent on the weekend lease, costs, stamp duty, the balance of the survey fee, and the balance of the road construction costs. The total sum payable was $1,334.72. That amount was paid on 6 June 1969.
19 The £100 contributed by the plaintiff was not part of the moneys paid in June 1969. Her evidence was that she paid the £100 at about the time the deceased first succeeded in acquiring the land in the ballot from the Crown. She said that the deceased put in the rest. She said that she paid £100 of the price required for the weekend lease. In her oral evidence she denied that the payment of £100 was made before any construction had started and said that she thought it was "about the time either of the weekend lease or he was buying the land." Having regard to her affidavit evidence, I am satisfied that the £100 was paid as a contribution to the payment of rent, road construction costs and survey fees payable as conditions of the weekend lease, and towards the payment of building costs for the construction of the house. It is not possible to say to which of these the plaintiff's £100 was applied, or how much was applied to each component. The plaintiff has not established that any part of the £100 formed part of the purchase price paid by the deceased in 1969 to acquire the freehold title.
The Resulting Trust Claim
20 The initial presumption which arises from the fact that the deceased was the registered proprietor of the Norah Head property is that he had full ownership of it, and there is no beneficial interest in favour of someone else which was imposed on his legal title. (Currie v Hamilton [1984] 1 NSWLR 687 at 690; Black Uhlans Inc v New South Wales Crime Commission & Ors [2002] NSWSC 1060 at [128]).
21 However, where two persons jointly provide the purchase money for property and the property is put into the name of one of them, then, unless the relationship between the parties gives rise to a presumption of advancement, it is presumed that the beneficial ownership of the property is held in the proportions in which they each contributed the purchase money. (Calverley v Green (1984) 155 CLR 242 at 246-247, 258-259). There is no presumption of advancement as between de facto partners. (Napier v Public Trustee (WA) (1980) 55 ALJR 1 at 3; 32 ALR 153 at 158; Calverley v Green at 260, 268-269; cp Calverley v Green at 250-251,264-265). The presumption can be rebutted by evidence of actual intention.
22 It was submitted for the defendants that the plaintiff's evidence rebutted any presumption of a resulting trust. It was submitted that her payment of £100 was a gift, and that the reason which she gave for the property being purchased in the deceased's name only, when it could have been purchased in their joint names, indicated that he should have the entire beneficial ownership commensurate with the legal title. The plaintiff said that the property was put in the deceased's name because at that time he did not own a house. I do not think that the evidence displaces the presumption of a resulting trust, if that presumption otherwise arises. There were no words of gift, assuming, which I doubt, that any reliance could be placed upon professed recollections of conversations occurring almost forty years ago.
23 Ordinarily, the presumption of a resulting trust arises at the time the property is acquired. If the presumption is not displaced, then, unless there is a later agreement to alter the equitable interests in the property acquired, or the beneficial interests arising under the resulting trust are displaced by an interest arising under a constructive trust, the interests are not changed by later contributions to the conservation or improvement of the property. (Currie v Hamilton [1984] 1 NSWLR 687 at 691; Calverley v Green at 262-3). If the evidence establishes that it was the intention of the parties that their respective interests should be in accordance with something other than their contributions to the purchase price, such as their contributions to the purchase of the land and discharge of a mortgage, effect will be given to that intention so that although the trust will arise at the time of purchase, the quantum of their interests will fluctuate in accordance with that intention. (Bloch v Bloch (1981) 55 ALJR 701 at 704; Currie v Hamilton at 692; Calverley v Green at 262-263). There is no such evidence in this case.
24 The plaintiff's difficulty in establishing a beneficial interest from the principles of resulting trusts, is that the £100 which she contributed did not form any part of the purchase price of the relevant property. The relevant property was the deceased's estate in fee simple as registered proprietor of the land. It was not his interest as lessee under the weekend lease. It is now established that the concept of what constitutes the "purchase price" for the purpose of calculating beneficial interests under resulting trusts includes the incidental costs of purchase, such as legal expenses, stamp duty and registration fees. (Ryan v Dries (2002) 10 BPR 19,947; [2002] NSWCA 3 at [52]-[53]). But the evidence does not show that the plaintiff's £100 was a contribution to the payment of such incidental costs either.
25 In a letter from the Department of Lands of 6 May 1969, the Under Secretary stated that the Crown grant on purchase could not issue until payment of all of the amounts set out in the letter. Those amounts comprised the price of the land of $1,134 together with outstanding rent on the weekend lease, balance of the survey fee, and balance of the road construction costs as well as stamp duty and other incidental costs. There is no evidence that the plaintiff's £100 was used to pay for the purchase price or for any of the amounts paid on 6 June 1969. Nor does it appear that the purchase price of $1,134 was reduced to take account of rental payments already made under the weekend lease. Section 136H of the Crown Lands Consolidation Act provided that the price of the land should be its capital value as at the date of the application to purchase. There was nothing in the Act which allowed for a reduction of the price by reference to the annual rent paid under the weekend lease. It may be that the costs of the survey fee and the deceased's proportionate share of the road construction costs should be regarded as part of the purchase costs in accordance with the principle established in Ryan v Dries. If that were so, then one could perhaps regard payments of the instalments of the survey fee and the road construction costs made before the confirmation of the application to purchase as being part of the purchase costs in the same way as the payment of the outstanding moneys for survey fees and road construction costs would be part of the purchase cost. However, it is not possible to say whether any part of the £100 contributed by the plaintiff, let alone what part, was used to pay the survey fees or the deceased's proportionate share of the road construction costs. Clearly the money spent on building the house was not part of the purchase costs.
26 The presumption of resulting trusts has an historical basis explained by Campbell J in Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060 at [130]-[134]; and the High Court in Chief Commissioner of State Revenue v Dick Smith Electronics Holdings Pty Ltd [2005] HCA 3; (2005) 79 ALJR 550; 213 ALR 230 at [24]). Equity presumes that parties intended that land be held beneficially otherwise than in accordance with the legal title, where, there being no presumption of advancement, land was transferred by one to another for no sufficient consideration, or a party paid the whole or part of the purchase price of a property conveyed to another, or the parties contributed in unequal proportions to the payment of the purchase price and took a conveyance of the property into their joint names. As Bryson J (as his Honour then was) demonstrated in Little v Little (1988) 15 NSWLR 43, the circumstances in which the presumption of a resulting trust arises are all referable to persons paying the whole or part of the purchase price of property. In Currie v Hamilton McLelland J (as his Honour then was) held (at 691) that it was the aggregate cost of the purchase price and incidental costs, fees and disbursements which should form the basis of a calculation. This view was upheld in the Court of Appeal in Ryan v Dries (2002) 10 BPR 19,947; [2002] NSWCA 3 at [53] where Hodgson JA said:
"….on balance, consistently with McLelland J's view, I prefer the view that equity, dealing with presumed intentions and preferring substance to form, would have regard to the totality of the money which purchasers have in truth outlaid to obtain the property. That means that normally the proportion should be determined with reference to the proportions of payments for both the purchase price and the incidental expenses that had to be incurred in order to obtain the property."
27 In my view, moneys spent on complying with the obligations to pay rent, survey fees and road construction costs under the weekend lease, and to build the house as required by the terms of the weekend lease, and not within a wider concept of what constitutes the "purchase price" as expounded in Ryan v Dries. There is no presumption that the parties intended that the beneficial title to the property would be held in accordance with their respective contributions to amounts which the deceased had to pay in order to apply successfully to the Minister for the purchase of the land which he then held on a weekend lease. The observations of Hodgson JA were directed to the particular question as to whether incidental expenses of purchase were to be taken into account in the calculation, and in my view they do not go wider than that.
28 Nor, if it be relevant, did the plaintiff acquire a beneficial interest in the weekend lease under a resulting trust. I express no view on the question of whether the payments towards the annual rent, road construction costs, and survey fees could be regarded as payment towards a "purchase price" for the lease. Having regard to the statutory provision which tied the annual rent to a fixed proportion of the capital value of the land, it is at least arguable that such required amounts were analogous to the purchase price of a lease, and that the rent was in substance an amortised purchase price. However it was a condition of the deceased applying for the weekend lease that it be his sole object to "obtain the land in order that he may hold and use it for his own exclusive benefit according to law". Given that there were restrictions on those persons who were qualified to become holders of weekend leases, it is readily understandable that the Minister imposed such a condition in the public interest to seek to preclude persons acquiring a beneficial interest in a weekend lease. The presumption of a resulting trust is a presumption as to the actual intention of the parties who contribute towards the purchase price of the property. As the Minister had stipulated that the applicant for a lease should hold it for his own exclusive benefit, I do not think there can be a presumption that the parties intended that he hold the weekend lease partly for the benefit of the plaintiff. On the other hand, there was no restriction on the owner of the fee simple holding the land for the benefit of another, after purchase from the Crown.
29 There is no presumption of a resulting trust from the making of capital contributions to the improvement of the property. For these reasons, I do not regard the contribution of £100 which the plaintiff made towards the compliance with the conditions of the weekend lease, or the building costs of the house, as giving rise to a presumption that she held a beneficial interest in the estate obtained by the deceased by purchase from the Crown in the proportion which that payment bore to the total moneys expended by the deceased in connection with the weekend lease, the building of the house and the purchase.
Constructive Trust Claim
30 The ultimate basis for the imposition of a constructive trust is that it would be unconscionable for the holder of the legal title to the property to assert that he holds it free of any beneficial interest in the claimant. However, although "unconscionability" is the underlying basis upon which equity will intervene, it is not itself a sufficient description of the principles upon which equity does so. Equitable rights do not arise merely because the Court considers it fair in all the proven circumstances that the legal owner of property should hold it, or a portion of it, for the benefit of another. (Muschinski v Dodds (1985) 160 CLR 583 at 615-616).
31 One class of case where equity will intervene to prevent the unconscientious denial by the legal owner of another party's rights, is where the parties agreed, or it was their common intention, that the claimant should have an interest in the property owned by the other, and the claimant acted to his or her detriment on the basis of that agreement or common intention. (e.g Grant v Edwards [1986] Ch 638; Green v Green (1989) 17 NSWLR 343; Maharaj v Chand [1986] AC 898 at 907).
32 Another class of case where equity will intervene is to "…[restore] to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them." (Baumgartner v Baumgartner (1987) 164 CLR 137 at 148). The characteristics of a constructive trust which arises on this basis were explained by Campbell J in West v Mead [2003] NSWSC 161 at [52]-[64]. His Honour said (at [59]):
" … a plaintiff needs to establish there is indeed a joint endeavour between the parties, in which expenditure is shared for the common benefit. It is also necessary to identify what the scope of that joint endeavour is. … Further, for any couple, the scope of the joint endeavour they are engaged in might change from time to time. If, within the scope of a joint endeavour … an asset is acquired, as a result of contributions both parties have made, and for a purpose of the ongoing joint endeavour of the parties, this gives rise to the presumption that the beneficial interest ought be shared equally. That presumption can be displaced if one party is able to show that the contributions, both financial and non-financial, to that asset should be regarded as unequal. "
33 The imposition of such a trust does not depend on the actual or presumed intention on the part of the prospective trustee to hold property on trust. Baumgartner v Baumgartner was significant for its expansion of the nature of the contributions which may be taken into account in determining the parties' proprietary interests to include non-financial contributions. (Green v Green at 369; West v Mead at [56]). The plaintiff says that the acquisition of the Nora Head property was a joint endeavour between her and the deceased to which each made financial and non-financial contributions. However, more is required to impose a constructive trust on these principles. The joint endeavour must fail, or there must be a premature termination of the parties' joint relationship. (Baumgartner v Baumgartner at 148-149; West v Mead at [64]). In the present case there was no premature termination of the parties' joint relationship or failure of their joint endeavour. I do not consider that the principles established in Baumgartner v Baumgartner and applied in Hibberson v George (1989) 12 Fam LR 725 apply directly in this case. I turn to the claim based on a "common intention" constructive trust.
34 Where a constructive trust is imposed, based upon the parties' common intention as to the ownership of property upon which the claimant has acted to his or her detriment, the inquiry is as to the actual intention of the parties. The law does not impute a presumed intention to the parties based upon what the Court considers fair and reasonable persons in the position of the parties would have intended had they turned their minds to the issue. (Pettitt v Pettitt [1970] AC 777 at 804, 810, 816-817; Gissing v Gissing [1971] AC 886 at 900, 902, 905-909; Allen v Snyder [1977] 2 NSWLR 685 at 690, 698, 701).
35 It is unnecessary to enter the debate as to whether a trust based on the parties' common intention is properly characterised as a constructive trust, or whether it should be characterised as an express trust which is enforceable notwithstanding the want of writing as it would be an equitable fraud for the legal owner to rely on the absence of writing to deny the beneficiary's interest. (Allen v Snyder at 692-3; 699). In later cases, eg Grant v Edwards [1989] Ch 638; Maharaj v Chand [1986] AC 898 at 907; Green v Green (1989) 17 NSWLR 343; Brandling v Weir [2003] NSWSC 723; Parianos v Melluish (2003) 30 Fam LR 524, this class of trust has been classified as a constructive trust, even though it is based on the parties' actual intentions, rather than imposed despite their intentions.
36 The intention to be established need not be that the parties have a specific share of the property. It is sufficient that they intend that the claimant should have a beneficial interest or "some form of proprietary interest". (Green v Green at 355, 356; Grant v Edwards at 654; Parianos v Melluish at [31], [39]).
37 The intention may be established in various ways. There may be an agreement between the parties as to how the property should be held. There may be express statements as to their intention. Their intention may be inferred from their conduct. The question of what acts demonstrate an agreement or common intention referable to the beneficial enjoyment of the property is one of evidence, not law. (Allen v Snyder at 691; Green v Green at 355). A common intention that a party have a beneficial interest in a property owned by another will not be inferred merely from their joint occupation of property, nor the carrying out of household duties, nor the bringing up of children on the property, nor the doing of repairs, renovations, maintenance, decoration or improvement, nor the provision of furniture. (Pettitt v Pettitt [1970] AC 777 at 805-6, 811, 818, 826; Gissing v Gissing [1971] AC 886 at 900, 910; Burns v Burns [1984] Ch 317 at 326, 328, 342).
38 The intention may be inferred from financial contributions, direct or indirect, to the acquisition of property, including the paying off of mortgages, or the payment of expenses which free up funds for that purpose. (Burns v Burns at 328-329; Gissing v Gissing at 900, 902-3, 906-907; Grant v Edwards at 647, 648-9, 653-4, 655; Green v Green at 355). This is a wider enquiry than whether a contribution was made to the purchase money such as to give rise to a presumption of a resulting trust. Whilst both enquiries address the inferences to be drawn as to the parties' actual intentions, a contribution to the purchase price creates a presumption of beneficial ownership in the proportion which the amount contributed bears to the price. For a "common intention" constructive trust, a contribution, direct or indirect, to the costs of acquisition of the property is a matter from which an intention that the claimant have a beneficial interest in the property might be inferred. There is a difference between a fact from which an inference can be drawn, and a fact from which a rebuttable presumption arises. The significance of the difference will depend upon the strength of the presumption. In the case of the "common intention" constructive trust, there is no presumption that the beneficial interest is in proportion with the contribution to the purchase price.
39 Other evidence from which conclusions may be drawn about the intentions of the parties include declarations of the parties before or at the time of the transaction or so close in time after the transaction as to constitute a part of it. Subsequent declarations of intention are only admissible against interest. (Calverley v Green (1984) 155 CLR 242 at 262 and 269; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365; Bryson v Bryant (1992) 29 NSWLR 188 at 215).
40 The plaintiff must also show that she acted to her detriment in a way referable to the agreement or intention that she have an interest in the property. (Austin v Keele (1987) 10 NSWLR 283 at 291; Grant v Edwards at 648; Carruthers v Manning [2001] NSWSC 1130 at [124]). Conduct which is insufficient to establish a common intention as to the ownership of the property may be sufficient to constitute relevant actions to the plaintiff's detriment to establish a trust if the common intention is established otherwise. Conduct may be both the evidence from which an intention that the plaintiff have a beneficial interest can be inferred and the act of detrimental reliance. (Green v Green at 355; Grant v Edwards at 647, 652, 655). In Grant v Edwards Nourse LJ said (at 648) that to qualify as acting on the common intention, the conduct must be such that the plaintiff could not reasonably have been expected to embark upon it unless she were to have an interest in the property. In Green v Green (at 357) Gleeson CJ, with whom Priestley JA agreed, approved a less stringent test taken from the judgment of Sir Nicholas Browne-Wilkinson VC in Grant v Edwards (at 657) that:
"... once it has been shown that there was a common intention that the claimant should have an interest in the house, any act done by her to her detriment relating to the joint lives of the parties is, in my judgment, sufficient detriment to qualify. The acts do not have to be inherently referable to the house. … The holding out to the claimant that she had a beneficial interest in the house is an act of such a nature as to be part of the inducement to her to do the acts relied on. Accordingly in the absence of evidence to the contrary, the right inference is that the claimant acted in reliance on such holding out and the burden lies on the legal owner to show that she did not do so..."
41 The quantum of the claimant's beneficial interest will be that which the parties agreed upon or intended, if that can be established. In Green v Green and in Parianos v Melluish it was held that although the parties did not turn their minds to the particular form of title which they intended the claimant to have, the conclusion which best gave effect to the intentions of the parties was that they were beneficially entitled to the property as joint tenants, so that upon the death of the respondent, the claimant became the absolute beneficial owner by survivorship.
42 If the evidence does not permit of a finding as to the precise size, nature and extent of the beneficial interest the parties intended the claimant to have, one starts with the maxim that equality is equity. (Green v Green at 355). But that standard can and should be departed from where the parties make disproportionate contributions to the acquisition of the property. In Baumgartner v Baumgartner, Mason CJ, Wilson and Deane JJ said (at 149-150):
" Equity favours equality and, in circumstances where the parties have lived together for years and have pooled their resources and their efforts to create a joint home, there is much to be said for the view that they should share the beneficial ownership equally as tenants-in-common, subject to adjustment to avoid any injustice which would result if account were not taken of the disparity between the worth of their individual contributions either financially or in kind. "