This was a claim which was brought by the executors of the estate of the late Ms Benson. Ms Benson was the registered proprietor as joint tenant with Shane Saunders, the defendant in this case, of a property located at Bilambil Heights.
The plaintiffs’ claim was that the property was held on trust for the plaintiffs as executors, for a proportion equal to the proportion of the purchase price which Ms Benson provided. There was some dispute as to whether the property was held as joint tenants, constructive trust or resulting trust in the plaintiff’s favour for a proportionate share made by the deceased.
The deceased had provided $170,000 towards the purchase price, which was significantly more than had been provided by the defendant. The deceased had died quite suddenly and unexpectedly.
The plaintiff’s pleading alleged an express trust. It alleged that on or about 30 October 2001, it was agreed between the deceased and the defendant that the purchase price would be provided in certain proportions, and that the property would be held by the deceased and the defendant upon trust as to a 220/270 share for the deceased. There court held there was no skerrick of evidence of there being any such express trust. A defence to a resultant trust was also argued by the defendant.
Broadly, both parties proceeded on the basis, correctly, that there is a presumption of resulting trust arising whenever property is purchased as joint tenants, by people who provide the purchase price in unequal proportions. The presumption of resulting trust does not apply in circumstances where there is a presumption of advancement. However, there is no presumption of advancement between de facto spouses: Calverley v Green (1984) 155 CLR 242 at 269. The question therefore was one of whether the presumption of resulting trust had been rebutted.
The Court was satisfied that it had. The evidence showed clearly that the deceased had an intention that the property would, in the event of her death, pass “automatically” to the defendant.
The relevant time for that intention to exist was the time of purchase of the property. Evidence of Ms Benson’s intention at that time came from her signature of the “Joint Tenants – Tenants in Common” document, her discussion with Mr Sande, her statement to the defendant at the time they attended the offices of Realty Conveyancing Services to sign documents, and her statement to Ms Clark at the time they were still looking at properties. The other statements which she made to Ms Clark, which were quite explicit about her intention, were not well placed in time. However, given that Ms Benson died only a matter of months after contracts were exchanged, they provided retrospectant evidence of her intention at the time of acquiring the property, even if they were statements which were made after the contracts were signed. There was no basis for the Court declaring that a resulting trust exists.
Counsel for the plaintiff also sought to put the case on the basis of a constructive trust. There had been nothing like a pleading of a constructive trust.
The nub of the submission was that, given the circumstances, which were common ground, that the deceased had provided $170,000 towards the purchase price, which was significantly more than had been provided by the defendant, it would be unconscionable for the defendant to take the benefit of her larger contribution. The Court did not accept that that is the appropriate conclusion to come to in accordance with the principles laid down in Baumgartnerv Baumgartnerv and Muschinski v Dodds.
The principle operates in a case 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 specifically 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 to do so.
Here, the finding of the Court regarding the resulting trust case demonstrated that it was the intention of the deceased that, in the event of her death, the defendant should have the benefit of the property. When what was to happen to the property if she died is something which she considered, and when she formed, and expressed, her intention on it, there was nothing unconscionable in her intention being carried out.
It should be borne in mind that the intention was one which she formed at a time when, though she had had some sickness in the past, she had no reason to believe that she would die soon. Mr Saunders’ occupation, as a fire fighter, was one which caused her some concern about whether he would meet an early death, through the risks inherent in that job. When they were planning a relationship together, placing the property in joint tenancy amounted to each taking the risk of their own early death, and accepting that in such circumstance the other would inherit the totality of the property
However, the fundamental matter which guides equity in deciding whether there is a constructive trust in this area, is whether the property would come to be enjoyed by a party in circumstances in which it was not specifically intended or specifically provided that the other party should so enjoy it. That equity was simply missing in the present case. Thus, the case on constructive trust failed. The result is that the action was dismissed.
An application was made by the defendant for indemnity costs. The first basis on which it was made was a document entitled “Offer of Compromise”. It invited the defendant to settle by consenting to a verdict for the defendant, with the plaintiff paying the defendant’s costs as agreed or assessed. It is clear that an offer of compromise under the Supreme Court Rules 1970 must be something which really gives up an entitlement which the person making the offer might otherwise have. This so-called “Offer of Compromise” did no such thing. Consequently, it was not an offer of compromise within the meaning of the Supreme Court Rules 1970, and the consequences which flow under the Rules from the serving of an offer of compromise, do not arise concerning it.
Another basis on which an application for indemnity costs was made is a letter purporting to be a Calderbank letter dated 5 July 2004. This if accepted, would have resulted in a contract which was void for uncertainty. There was no knowing what the deed of settlement would have involved, and that was a sufficient reason for reaching that conclusion. The application for indemnity costs was dismissed.
The plaintiffs were ordered to pay the costs of the defendant of the proceedings. Pursuant to section 74MA Real Property Act 1900, the plaintiffs were ordered to withdraw caveat on the property.