Duckworth v Duckworth & Anor [2002] QDC 88

DISTRICT COURT OF QUEENSLAND CITATION: Duckworth v Duckworth & Anor [2002] QDC 088 PARTIES: GRENVILLE PETER DUCKWORTH (plaintiff) V ANNE MARIE DUCKWORTH (first defendant) BARBARA CATHERINE GRIGG (second defendant) FILE NO/S: D131/00 DIVISION: District Court PROCEEDING: Trial ORIGINATING COURT: DELIVERED ON: 9 May 2002 DELIVERED AT: Maroochydore HEARING DATE: 1 May 2002 JUDGE: K S Dodds DCJ ORDER: I declare that Grenville Peter Duckworth and Anne Marie Duckworth are each beneficially entitled to a one-third interest in lot 9 on RP 176934, Country March, Parish Tuchekoi. I appoint Craig Anthony Griffin to hold as trustee real property described as lot 9 on RP 176934, County March, Parish Tuchekoi, situated at lot 9, Ironstone Creek Road, Tuchekoi in the State of Queensland for Grenville Peter Duckworth a one-third interest, for Anne Marie Duckworth a one-third interest, and for Barbara Catherine Grigg a one-third interest on the statutory trust for sale, and vest the said property in the said trustee, subject to encumbrances affecting the entirety but free from encumbrances affecting any undivided shares. CATCHWORDS: TRUSTS AND TRUSTEES – STATUTORY TRUST FOR SALE – where the first defendant is the sister of the second defendant and is the ex-wife of the plaintiff - where the second defendant holds the legal title to property after the plaintiff, first and second defendants agreed the property would be purchased in the second defendant’s name and where the purchase price of the property was provided by the plaintiff, first and second defendants and other family members – where the plaintiff and first defendant took over the management of the property from the second defendant -- 1 of 6 -- 2 who found it too stressful - where the plaintiff and first defendant had signed an agreement to be equitable owners of the property in equal shares and where the second defendant was not a party to that agreement – where the plaintiff and first defendant repaid the second defendant and family members for monies advanced – where the plaintiff and first defendant collected rent to pay mortgage, expended money and personal effort on maintenance and improvement of land and repairs and maintenance of the dwelling – whether trustees should be appointment and the property vested in them on the statutory trust for sale. Baumgartner v Baumgartner (1987) 164 CLR 137; Calverley v Green (1984) 155 CLR 242; Muschinski v Dodds (1985) 160 CLR 583; Property Law Act 1974, ss 11(c), 38. COUNSEL: Ms C E Carew for the plaintiff Mr M Taylor for the first and second defendants SOLICITORS: Paul Bone, Solicitor for the plaintiff Alan Taylor & Associates for the first and second defendants [1] This case involves an acreage property lot 9 on RP 176934, County March, Parish Tuchekoi (the property), containing a dwelling house the legal title to which rests with the second defendant. The first defendant is the sister of the second defendant and is the ex-wife of the plaintiff. They separated in 1995 and divorced in 1997. [2] At about the time of proceedings in the Family Court finalising the marriage the plaintiff and the first defendant signed an agreement in which, in effect, it was agreed they were the equitable owners of the property in equal shares. The second defendant was not a party to that agreement. The property was not taken into account in the Family Court proceedings as an asset of the marriage. The assets of the marriage were divided roughly 70% to the first defendant 30% to the plaintiff. [3] The plaintiff’s claim is for: a declaration that a trust, the Eumundi Property Trust, terminated in about May 1988; a declaration that from about May 1988 the second defendant held her title to an interest in the property on trust for the plaintiff and the first defendant in equal shares or in such proportions as the Court deem meet; alternatively, a declaration the plaintiff and the first defendant are beneficially entitled to an interest in the property evidenced by the plaintiff’s and the first defendant’s financial, personal and physical contribution to the acquisition, conservation, maintenance and improvement of the property in equal shares or in such proportions as the Court deem meet; and -- 2 of 6 -- 3 the appointment of trustees for the sale of the property pursuant to s 38 of the Property Law Act 1994 (the Act) and for an order vesting the property in trustees on the trust for sale. [4] The only witness was the plaintiff. Some documents were also admitted into evidence. [5] The evidence relating to the Eumundi Property Trust is sparse in the extreme. No trust deed is in evidence. The plaintiff in his statement of claim says the second defendant purchased the property but as a trustee of the trust which comprised 70 units. In his evidence, the plaintiff spoke of it but it was plain he really knew little about it. There is reference to it in exhibit 4 - a series of documents from solicitors who acted for the purchasers of the property. In particular, a trust account statement part of the exhibit is addressed not solely to the second defendant, but additionally to RF & FR Grigg which I take to be the first and second defendants’s father and another family member. There is no mention in the title deed to the second defendant holding the title as a trustee. Other parts of the exhibit, particularly reconciliation of the settlement of the purchase and an account for work done, refer to the Eumundi Property Trust (Grigg and Duckworth). [6] The property was purchased in September 1987. At that time, and for some time prior to that, the second defendant had been living with the first defendant and the plaintiff doing laundry and some babysitting for her keep. It seemed to be common ground that the second defendant has some intellectual difficulty. [7] The property was nextdoor to the then home of the plaintiff and the first defendant. I find that in 1987, when the owners of the property made it known they wished to sell it, it was agreed between the plaintiff, the first defendant and the second defendant that the property would be purchased in the second defendant’s name and would be tenanted and managed by the second defendant. Five acres including the dwelling house would be subdivided and the balance after subdivision would be for the benefit of the plaintiff and the first defendant absolutely. Other family members assisted with the purchase. I find the intent was to provide a property for the second defendant and also to benefit the plaintiff and the first defendant. [8] The purchase price of the property was $70 000.00. It was provided: By the plaintiff via a gift from his mother in a total amount of $15 500.00; By the first defendant the sum of $10 000.00 which was an estate bequest to her; By the second defendant the sum of $1 300.00; In addition, $24 637.00 was borrowed from the Metropolitan Building Society by the second defendant. She was responsible for that debt. That the plaintiff and first defendant may ultimately have attended to repayment of most of it is irrelevant to the question of the extent of the second defendant’s contribution: Calverley v Green (1984) 155 CLR 242. from the funds of the plaintiff and the first defendant - $2 500.00; from the father of the first and second defendants - $10 000.00; -- 3 of 6 -- 4 from the sister and brother-in-law of the first and second defendants - $2 000.00; from the brother and sister-in-law of the first and second defendants - $6 000.00. [9] It was never intended that the father, sister and brother were to have any continuing interest in the property. It seems that monies they advanced were always to be repaid by the plaintiff and the first defendant. [10] After the purchase, the second defendant continued to live with the plaintiff and the first defendant and in addition to her other activities managed the property which for the most part was tenanted. After a couple of years probably by about late 1989 the second defendant informed the plaintiff and the first defendant that she was finding it too stressful to manage the property, it was too much to handle and she asked the plaintiff and the first defendant if they would take it over. Thereafter, the plaintiff and the first defendant managed the property. Mortgage payments had been paid from rental income which when the property was tenanted exceeded those payments. That continued. Rates and insurance payments were attended to by the plaintiff and the first defendant. Monies contributed to the purchase by the first and second defendants’s father, brother and sister was repaid by the plaintiff and the first defendant over a two to three year period. The plaintiff and the first defendant paid $3 000.00 to the second defendant in $1 000.00 instalments to represent the $1 300.00 she had contributed to the purchase plus any further contribution. The first and second defendants expended money and personal effort on maintenance and improvement of the land and repairs and maintenance of the dwelling. The mortgage payments were finalised in about 1990 or 1991. [11] It is possible that the Eumundi Property Trust may have been a vehicle to carry out the intention to benefit the second defendant, the plaintiff and the first defendant and reflect the contributions of all who contributed to acquisition of the property until such time as moneys contributed which were to be repaid were repaid. However, as I have noted the evidence about the trust is sparse in the extreme. I am not in a position to make any declarations about the Eumundi Property Trust. [12] The plaintiff submitted that I should find a constructive trust from the arrangement entered into between the plaintiff, the first defendant and second defendant when the second defendant said she no longer wanted to manage the property and asked the plaintiff and the first defendant to take it over. [13] When purchase money for property is provided by a number of persons jointly as purchasers (and not by way of loan) and the property is purchased in the name of one person only, there arises a resulting trust in favour of those others unless there is evidence of an intention to benefit that one person beneficially or a relationship which may give rise to a presumption of advancement. In the event there is a resulting trust then the person in whose name the property is holds it on the trust for the others in the proportions in which they contributed to the purchase: Calverley v Green. [14] As I have already found, the original intention was to benefit the plaintiff, the first defendant and the second defendant by providing a property containing the dwelling house for the second defendant and the balance of the land for the plaintiff and the -- 4 of 6 -- 5 first defendant. That did not eventuate following the second defendant’s expressed wish that the plaintiff and the first defendant take over management of the dwelling house. This they did but it appears nothing was done about the title, the mortgage or the trust. [15] The plaintiff gave some evidence of the money which he said he and the first defendant had spent on the land and the dwelling house. There was no documentation to support the expenditure. The amounts were rounded off and I do not regard them as particularly reliable. The total according to the plaintiff’s evidence was $17 000.00. [16] There is an inference available on the evidence that after the second defendant had asked the plaintiff and first defendant to take over management of the dwelling house the original intention that the second defendant was to have a beneficial interest in the property was abandoned. I say that because apparently $3 000.00 was paid to the second defendant by the plaintiff and the first defendant to represent $1 300.00 she had put in plus an additional amount. However, it is by no means the only inference available in all the circumstances and when regard is had to the original intention behind the purchase. [17] The plaintiff submitted that thereby a new trust arose. It could not have been an express trust. There is no evidence which would support some declaration of trust. Moreover, s 11(c) of the Property Law Act 1974 requires proof by some writing signed by the disposer of an equitable interest. If the second defendant is to be constituted a trustee it can only be of a constructive trust arising out of the payment of the $3 000.00 to the second defendant and the expenditure of money and effort by the plaintiff and the first defendant thereafter in repaying the mortgage, the loans from other family members and on repairs, maintenance and improvement of the property. [18] In Muschinski v Dodds (1985) 160 CLR 583 and Baumgartner v Baumgartner (1987) 164 CLR 137, the High Court considered the foundation of the imposition of a constructive trust in the context of each case before the Court. What emerged was that a constructive trust was not to be imposed based upon “idiosyncratic notions of what is just and fair” but was “a remedy which equity imposes regardless of actual or presumed agreement or intention to “preclude the retention or assertion of beneficial ownership of property to the extent that such retention or assertion would be contrary to equitable principle”: Baumgartner at page 148. [19] There is a lack of precision and detail in the evidence. After the plaintiff and first defendant “took over” managing the dwelling one or other or both of them collected the rent. The rent exceeded the mortgage payments. The mortgage was finalised by 1990 or 1991. Presumably thereafter until at least separation in 1995 they continued to receive and benefit from rental from the dwelling house. As a matter of interest, rental based on $100.00 per week and 40 weeks a year for 5 years is $20 000.00. The money advanced by other family members was repaid. There is no evidence about the value of the property, about detail of the dwelling house, or about whether and to what extent any money spent on improvements or maintenance to the property contributed to its value. Some at least of the work done was done on the property other than on the dwelling house. -- 5 of 6 -- 6 [20] I find that when the land was purchased in the second defendant’s name a trust arose whereby the second defendant held the legal title to the property on trust to transfer to the plaintiff and the first defendant the title to the subdivided balance of the property after subdivision had excised the dwelling house and five acres more or less of the property. That has never happened. [21] I further find that after the second defendant had asked the plaintiff and the first defendant to take over management of the house and they had paid her $3 000.00 the second defendant held the legal title to the land on a constructive trust for the benefit of the plaintiff and the first defendant of a two-third joint beneficial interest in the property. I find the second defendant retained a one-third interest in the property. [22] I have considered whether the second defendant should account to the plaintiff for any of the $3 000.00 which she was paid. I have concluded such an accounting is not required. As I have already noted it was a relatively meagre amount. Since that time the plaintiff and the first defendant have apparently received all of the benefit from the property to the exclusion of the second defendant. [23] I declare that Grenville Peter Duckworth and Anne Marie Duckworth are each beneficially entitled to a one-third interest in lot 9 on RP 176934, County March, Parish Tuchekoi. [24] I can see no sufficient reason why I should not make an order under s 38 of the Property Law Act 1974 appointing trustees and vesting the property in them on the statutory trust for sale. A consent by a solicitor Craig Anthony Griffin to act as trustee is exhibit 7. [25] I appoint Craig Anthony Griffin to hold as trustee real property described as lot 9 on RP 176934, County March, Parish Tuchekoi, situated at lot 9, Ironstone Creek Road, Tuchekoi in the State of Queensland, for Grenville Peter Duckworth a one- third interest, for Anne Marie Duckworth a one-third interest and for Barbara Catherine Grigg a one-third interest on the statutory trust for sale, and vest the said property in the said trustee, subject to encumbrances affecting the entirety but free from encumbrances affecting any undivided shares. -- 6 of 6 --