Cole, Re [1993] QSC 221

\ ' n () 0 IN THE SUPREME COURT OF QUEENSLAND MACKAY DISTRICT REGISTRY Mackay District Registry Before The Hon. Justice Demack [Re: Ruth Cole] Mise No. 23 of 1993 O.S. No. 18 of 1993 IN THE MATTER OF the Rules of the Supreme COurt AND IN THE MATTER OF an Application by RUTH COLE REASONS FOR JUDGMENT - DEMACK J Judgment delivered 04/08/93 CATCHWORDS: Joint Ownership Land Purchased Jointly Unequal Contributions to Purchase Price Presumption ofProportional Shares Rebutted - Tenancy in Common in Equal Shares. Counsel: Mr B. Harrison for Applicant Ms A. Hall for Respondent Solicitors: Macrossan & Amiet for Applicant Barry, Beaverson & Stenson for Respondent Hearing Date/s: 14/07/93 -- 1 of 9 -- \ ' 0 IN THE SUPREME COURT OF QUEENSLANDHELD AT MACKAY Mise No. 23 of 1993 O.S. No 18 of 1993 IN THE MATTER OF the Rules of the Supreme Court AND IN THE MATTER OF an Application by RUTH COLE JUDGMENT - DEMACK J. Judgment delivered the Fourth day of August 1993. Ruth Cole (formerly Ruth McClintock) and Arthur Stanley Whitten became the registered proprietors as joint tenants of () a block of land at Marian on 12 May 1982. They had purchased the land and the dwelling house on it for $34, 600. On 24 March 1983, they each became registered as a tenant in common in one undivided half part or share of the land. Mr Whitten died on 19 September 1991. The land was sold in late 1992. The proceeds of sale are held in the trust account of Messrs. (_) S. B. Wright & Wright and Condie solicitors and presently amount to $51,947.75. These applications are to determine the distribution of that sum. Mrs Cole claims half the sum. Mrs Potts, who is the sister of Mr Whitten and the sole beneficiary under his will, claims the bulk of the sum. Mr Whitten's wife was Mrs Cole's_ sister-in-law. After her death, Mrs Cole, who seems then to have been a widow, agreed to housekeep for Mr Whitten. They purchased the house at Marian as the place where they would live. Mrs Cole provided $8,000 towards the purchase price and Mr Whitten, $3000. The balance of the purchase price was borrowed from -- 2 of 9 -- 2 the National Australia Savings Bank. In fact, $24,000 was borrowed and it seems to be assumed for the purposes of these applications that both Mr Whitten and Mrs Cole became jointly and severally liable for the repayment of the money. After becoming registered as a joint tenant, Mrs Cole learned that this meant that, if she died first, her interest would pass to Mr Whitten, and vice versa. She discussed this with Mr Whitten, and their interests were changed to that of tenants in common in one undivided half part or share. A separate title deed was issued to Mrs Cole and the copy of 0 this, which is exhibited to the affidavit of Gene Christopher Paterson (document 19), is stamped with the notation of a Bill 0 of Mortgage in favour of the National Australia Savings Bank. This notation fully justifies the assumption that Mrs Cole was jointly and severally liable for the discharge of the debt. In fact, all the mortgage repayments were made by Mr Whitten. The full record of payments to the National Australia Savings Bank is not available. Ten of the fourteen sheets are exhibited to Mrs Pott's affidavit (document 13). These show generally regular weekly payments of $100 until May 1986. There were no further payments until 25 June 1987 when the debt was discharged in full. In addition to the payments of $100, there are payments of $1000 in December 1982, December 1983, December 1984, May 1985 and September 1985. Also there is a $2000 payment in May 19~6 and several payments of $500. The final payment was $4,762.89. Mrs Cole left the house at Marian in October 1985. Her then solicitors Messrs S. B. Wright & Wright and Condie wrote -- 3 of 9 -- 3 to Mr Whitten on 24 October 1985 asking to have the property sold. Mrs Potts wrote a reply on the letter and Mr Whitten signed that (exhibit 1). The effect of the reply seems to be that Mr Whitten agreed to the sale. It is agreed that, when the house was purchased, it was intended that the arrangement would be indefinite. Mrs Cole · says she left because of unacceptable conduct by Mr Whitten whilst drunk. There never was any sexual relationship between them. Mrs Potts says Mrs Cole left to get married. That is mentioned in the reply in exhibit one, so it is really Mr () Whitten' s assertion as well. I have had the opportunity of seeing both Mrs Potts and Mrs Cole give evidence. In this case that has not been much help. Of the two women, Mrs Cole was the more impressive as a witness. She was calm and careful in her responses to questions, and appeared to have that certainly about her which 0 suggests reliability. Mrs Potts has a significant hearing loss and was inclined to be argumentative. However, on three f. ~ significant issues there is evidence which raises some doubts u about Mrs Coles' reliability. First, Mrs Coles says she paid the rates to the Mirani Shire in respect of the property. The letter from the Shire Clerk dated 10 July 1992 (exhibited to the affidavit of M/s King [document 26]) shows that the records of the Shire are that all of the rates up to 1991 were paid by Mr Whitten. That was not explained by Mrs Cole. Secondly, a solicitor who was acting for Mr Whitten, Mr Callaghan, has sworn an affidavit that deposes to Mr Whitten I -- 4 of 9 -- 4 giving him instructions in February 1988 that he paid all the food bills himself. This is not consistent with Mrs Coles • evidence. However, Mr Callaghan's notes, which he relied on in preparing his affidavit, do not agree with a letter he wrote on 10 February 1988 (exhibit 2). In that letter it is said that Mr Whitten's instructions were that Mrs Cole made nine repayments of $50 towards the mortgage. The affidavit 0 says the instructions were that Mr Whit ten made all the repayments. There are nine $50 payments in the bank statements which the bank has described as "cash". However, 0 these were made in November and December 1985, and in January and February 1986, that is, after Mrs Cole left the house. Thirdly, on 27 November 1987, Mrs Coles' then solicitors, Messrs. S. B. Wright & Wright and Condie wrote to Mr Whitten's solicitors a letter in which it was claimed that Mrs Cole had paid $50 per week for four years by way of repayment to the 0 Bank. Mrs Coles' explanation of this (p. 25) was that there had been such an arrangement when she and Mr Whitten had lived ( ': for a time at Carlyle Street. By implication, the letter was \..____./ based on a misunderstanding. It seems to me that these three matters do not conclude the issue of credibility. I accept the letter from the Mirani Shire as evidence that Mr Whi tten paid the rates. On the other hand, I accept that Mrs Cole paid the grocery bills, as she said. There is no direct evidence to the contrary. There is evidence consistent with this in the pattern of repayments Mr Whitten made to the bank. The application made to the bank for a loari is exhibit 3. The figures in it are not fully -- 5 of 9 -- 0 (''! "j () 5 explained, but it seems to be the case that the monthly income of $1012 was Mr Whitten's pay. After allowing $320 per month for estimated general living expenses, there was as a surplus of $582 per month. Monthly repayments to the Bank were said to be $385. In fact, weekly payments from $100 were usually made, and more substantial payments from time to time. This would be possible, if Mrs Cole paid the grocery bills. The third matter is, in my opinion, inconclusive. There is now no suggestion that Mrs Cole made any payments under the mortgage. I am satisfied that when the house was purchased the agreement between Mr Whitten and Mrs Cole was:- 1. They would each have an equal share in the house, 2. Mrs Cole would contribute $8000 to the purchase, 3. Mr Whitten would contribute $3000 to the purchase, 4. Mr Whitten would meet the mortgage repayments, 5. Mrs Cole would pay for the food, 6. Mrs Cole would do the housekeeping, 7. The arrangement would continue indefinitely. The fact that they were to have equal shares in the house, even though Mrs Coles' initial contribution was much greater than Mr Whitten's, is consistent with the change to a tenancy in common in less than twelve months. In my opinion, the evidence here displaces the presumption that when two persons contribute to the purchase of a property in unequal shares they hold as tenants in common in the proportions . in which they contributed to the purchase price. This presumption was discussed in Calverley v. Green (1984) 155 -- 6 of 9 -- '. 0 0 () () 6 C.L.R. 242. The agreement was for equal shares. On behalf of Mrs Potts, M/s Hall argued that this was a case of a joint venture which had failed and she argued for a constructive trust of the kind imposed in Muschinski v. Dodds (1985) 160 C.L.R. 583. However, the factual situation in that case was very different from the si tuatiori here. In that case, the land was purchased with quite extensive plans in mind, with each of the parties making contributions, both of money and of time. Here Mr Whitten and Mrs Cole entered into an agreement for the purchase of a house in which to live. There was no long term plan. Even if, at the time of purchase, they did not envisage the arrangement coming to an end by the death of one of them, that was quickly in their minds, and was a stimulus to putting the title into tenancies in common. I accept Mrs Coles' evidence about this, and it follows from that that once they knew the difference between tenancy in common and joint tenancy, they agreed that a tenancy in common in equal shares expressed at law what they had in fact agreed. Thus up to the time when Mrs Cole left, they owned the property in equal shares. According to the writing in exhibit 1 Mrs Coles' solicitors' letter requesting sale of the property - Mr Whi tten agreed in October 1985 to the sale of the property. The handwriting includes, "I has signed the form for the sale to be held on the 7th December 1985". The awkward expression is due to the fact that Mrs Potts wrote the letter and, at some points, writes as if on behalf of her brother and at other points in the first person, intending -- 7 of 9 -- ' . 7 that her brother sign what is written. Thereafter, a dispute seems to have developed. Mr Whi tten apparently remained in the house until his death on 19 September 1991 . During that time he paid some $9,959 of the mortgage. He had use of the house and paid outgoings associated with it. On the other hand, Mrs Cole has been kept out of her share of the money, and for a time had to pay rent on a place where she lived. If the sale had proceeded in December 1985, the nett proceeds would have been shared equally, in accordance with 0 the arrangement made at the time of purchase. It does not seem to me, that, by delaying the sale, Mr Whitten in any way established a claim to something more than an equal share in the nett proceeds. The period that Mr Whitten had sole use of the house was approximately six years and the amount of the mortgage repayments, $9, 959, is approximately $33 per week. 0 This could be less than a reasonable rent for the house, according to the annexure D to Mr Paterson's affidavit (document 19). It does not seem to me that there is any basis for a constructive trust here. The parties had a clear agreement at the time of purchase for a tenancy in common in equal shares. No period was agreed to during which the various obligations they each undertook would be performed. It is not possible to attribute fault to either party for the ending of the relationship. A sale was then agreed to and Mr Whitten withdraw from that. He then enjoyed the use of the house for six years, during which time Mrs Cole was denied her share in -- 8 of 9 -- 0 0 8 the value of the property. In my opinion the proceeds of sale should be divided equally as the parties had agreed. I order that the costs of all parties be taxed as between solicitor and client and paid out of the amount presently held in trust by Messrs. S. B. Wright & Wright and Condie and that the balance of the fund be paid equally to Ruth Cole and Dorothy Beryl Potts Mrs Potts' summons is dismissed. -- 9 of 9 --