Napier v Public Trustee (Western Australia)
32 ALR 1531980 - 1111A - HCA
(Decision by: Aickin J)
Between: Napier
And: Public Trustee (Western Australia)
Judges:
Gibbs ACJ
Mason J
Murphy J
Aickin JWilson J
Subject References:
Trusts
Resulting trust
Family law
De facto relationship
Judgment date: 11 November 1980
Canberra
Decision by:
Aickin J
This is an appeal from a decision of the Full Court of the Supreme Court of Western Australia which upheld a decision of Burt CJ dismissing a claim by the appellant against the respondent as executor of the will of one Olwyn Marion Jean Evans (the deceased) that certain land was, in the events which had happened, held upon trust for him. An alternative claim in respect of moneys lent or had and received, which was also dismissed by Burt CJ, was not pursued on appeal.
The deceased, who died on 1 September 1975, had lived with the appellant for some 14 years as his de facto wife in a house owned by him. In April 1969 the appellant entered into a contract to purchase another house and paid a deposit thereon. After entering into that contract he had a discussion with the deceased, to the details of which I refer below. The balance of the purchase money was paid by the appellant on 15 May 1969 and pursuant to his direction the property was transferred into the name of the deceased who had not contributed to the purchase moneys. Thereafter the property was let and the rents received by the deceased who also paid the rates and other outgoings. The terms of the deceased's will were not placed before the court, but it is apparent that the house property in question did not pass to the appellant.
The appellant gave evidence as to the conversation to which I have referred and no question arises as to his credibility. The trial judge plainly accepted his evidence. The question in issue is the legal effect of that conversation in the circumstances. He was taken through the conversation in evidence-in-chief and in cross-examination and, since the appeal turns on that conversation and its effect, it is desirable to set out in full the material parts of the appellant's evidence.
His evidence-in-chief contains the following account:-
Q.- As you know, the subject of these proceedings is your purchase of a property in Railway Avenue, Armadale in 1969. When did you first decide to purchase that property?
A.- I heard about the house, went to have a look at it and paid the deposit on it. Then I went back and told Mrs Evans. I said "This could be all right','
Q.- Before you get on to that, why did you wish to buy the place?
A.- I'm a dealer, naturally. I'd buy and sell anything if I got a chance.
MR LEY: Q.- It was for an investment?
A.- That's right.
Q.- Was that an investment for you?
A.- Yes. Actually it was an investment for her as long as she lived ... not when I first bought it. I bought it for myself when I first bought it.
Q.- You say that after you bought it you paid the deposit and went home to see her?
A.- And discussed it.
Q.- What did you tell her?
A.- I could put it in her name and she could collect the rent as long as she lived. Then it would revert back to the family. I was fairly sick at the time. I didn't have much faith in myself.
Q.- There was an agreement; you said to her that you would put it in her name?
A.- Yes.
Q.- What did she say to that?
A.- She agreed and then "I'll add a codicil to it, to my will; I'm not going to make another will. I'll add a codicil to it". I said ...
Q.- A codicil for what?
A.- To revert back to me. I thought I was going to die first, of course.
MR LEY: Q.- What was the agreement, if you died first?
A.- It should remain hers. She'd still collect the rent. She had to have something to live on.
Q.- What about after your death? What would happen to it then?
A.- If she was still alive, it should remain in her hands till such time as she died, and then it's to revert back to the family.
Q.- When you say, "the family" do you mean your -?
A.- My sons.
Q.- What about if she died before you?
A.- It was the same thing - come back to me.
Q.- That was to be done by the codicil?
A.- That's right.
The material parts of his cross-examination were as follows:
Q.- Did you have any health problems at the time (voices superimposed)?
A.- No. I was off colour when I bought the property. It was only security for her in case of my death. It was to revert back after her decease.
Q.- Did you have any views on your likely state of health or future life at the time you bought the property?
A.- I'd just about given up.
...
Q.- Can you give the agreement that you made with the deceased again. I am sorry to have to ask you again but some points arise from it?
A. - I heard about this property and went and bought it. I paid a deposit and then went back home and discussed it with Mrs Evans and I said: "Well, a good idea would be to put it in your name and you can hold it as long as you live and then why [sic] you die it will go back to the family..'
Q.- It was to go back to the family?
A.- Yes.
Q.- You did not think of making a formal arrangement so that she would have it for life rather than having it absolutely?
A.- No. She was to have it for life, not absolutely.
...
Q.- Did she refer to the house as "my house" during her lifetime when she was speaking to third parties?
A.- It was always referred to as her home; her house. It was to be her house in case of eventualities.
In re-examination the appellant was asked:-
Q.- When you originally reached the agreement with Mrs Evans, straight after the purchase; was the agreement if you died after her, that the property was to be transferred back to you or back to your family?
A.- Back to me, if I'd be alive, you see.
Q.- In what circumstances was it to be transferred back to your family?
A.- In case I died first; then she lived on. Then it would come back to the family.
To questions put by the trial judge he said:
Q.- You paid the money to them?
A.- I paid the money to Dalgety's.
Q.- Directed that they put it in her name?
A.- That's right. That was a personal agreement amongst ourselves; between our two selves.
Q.- Yes, and the relationship between you and Mrs Evans, I think I should know. What was it? Was it -?
A.- Very close.
Q.- Was it a de facto, husband and wife, relationship?
A.- That's right.
Q.- Then the idea and the arrangement was, if you died first, it would be her house until she died. She would leave it back to your estate?
A.- Mm.
Q.- If she died first, of course, it would come straight back to you?
A.- Straight back; yes.
For the appellant it was argued that in the circumstances there was a resulting trust in his favour and, in the alternative, that the respondent held the land in question upon a constructive trust.
The law with respect to resulting trusts is not in doubt. Where property is transferred by one person into the name of another without consideration, and where a purchaser pays the vendor and directs him to transfer the property into the name of another person without consideration passing from that person, there is a presumption that the transferee holds the property upon trust for the transferor or the purchaser as the case may be. This proposition is subject to the exception that in the case of transfers to a wife or a child (including someone with respect to whom the transferor or purchaser stands in loco parentis) there is a presumption of advancement so that the beneficial as well as the legal interest will pass. Each of the presumptions may be rebutted by evidence. It is, however, well established that no presumption of advancement arises in favour of a de facto wife: see Rider v Kidder (1805) 10 Ves Jun 360; 32 ER 884; Soar v Foster (1858) 4 K & J 152; 70 ER 64 and Allen v Snyder [1977] 2 NSWLR 685, especially at 690.
As Dixon CJ said in Wirth v Wirth (1956) 98 CLR 228 at 235: "Where a purchase was made in the name of a stranger who provided none of the purchase money the law was clear from a very early time that a resulting trust was presumed and the stranger could take beneficially only if he proved affirmatively that it was so intended" (see also the full discussion in the joint judgment of the court (Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ) in Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 , especially at 364-6).
It is also clear that a resulting trust need not necessarily relate to the entire interest in the property. The presumption may be rebutted as to a life interest, but still operate in respect of the interest in remainder (see per Jordan CJ in Re Kerrigan; Ex parte Jones (1946) 47 SR (NSW) 76 at 82-3, where after reviewing the authorities he said):-
"It was also urged that when property is bought by one person and put into the name of another three are only two possible alternatives, either the property wholly results to the buyer or is wholly an advancement; there is no middle course. Certain authorities have been cited which appear so to decide, but, to the extent to which they do, I am of opinion that they are wrong and should not be followed.
...
"In my opinion in every case of the present type, where there are facts which, unaided by evidence of actual intention, would give rise either to a presumption of resulting trust or such a presumption in collision with a presumption of advancement, the question how far either trust prevails, and to what extent, depends upon the intention of the parties as gathered from all available relevant facts, due consideration being given to the relative weight of the two presumptions when they collide."
In that case it was held on the particular facts that there was a resulting trust in respect of the income from certain mortgages for the life of the father, but not of the corpus, the mortgage debts having been placed in the names of his children.
The present case is one in which "unaided by evidence of actual intention" there would be a resulting trust in favour of the appellant. In the courts below it was held that the presumption of a resulting trust was, in the circumstances, rebutted as to the entire interest in the property. Burt CJ said: "But the facts displace the presumption. The admitted agreement was that the house would be Mrs Evans's house and she was for her lifetime to enjoy the rents and profits from it and to be the absolute owner of it. Hence the agreement that upon her death she would by codicil give it back, either to the plaintiff or to his sons. But she did not do so..'
The statement that she was to be "the absolute owner" might perhaps be an inference from the reference to the codicil for there is nothing in the evidence which otherwise suggests absolute ownership. However, the Chief Justice, in the passage which I have quoted, treats the codicil as a consequence of absolute ownership otherwise established. I can find nothing in the transcript of the evidence which could be regarded as an admission of an agreement in those terms yet the Chief Justice speaks of an "admitted agreement" to that effect. The whole question was whether or not the deceased was "absolute owner", and to treat the codicil as a consequence of absolute ownership begs that question.
In the Full Court the appellant's statement of claim was amended to add a claim based on a constructive trust. Brinsden J, with whom Lavan SPJ and Smith J agreed, said that he agreed with Burt CJ that the evidence rebutted the presumption of a resulting trust, and added: "The arrangement arrived at was inconsistent with any other intention than that the deceased was to take the property beneficially not only in respect of a life estate, as contended for on the appeal, but in respect of the reversion because otherwise she would have had nothing to will back to the appellant or to his sons." He also said: "An essential part of the arrangement was that the property would be transferred to the deceased to be beneficially enjoyed by her on the understanding that she would leave a will, or make a codicil to her existing will, devising the property either to the appellant if he survived her or his sons if he did not. I have already pointed out that that arrangement points to only one conclusion and that is that the whole of the interest in the land, that is the life estate and the reversionary interest, was to go to the deceased subject to her making a will or codicil in the manner mentioned." Brinsden J thus appears to have reached the conclusion that a gift of an absolute interest was intended by inference from the reference in the arrangement to the codicil.
The reasons of Burt CJ and the Full Court appear to me to treat the reference to the codicil in this conversation between two persons not legally trained as warranting the same inferences as would have been open from the use of the same word in a legal document prepared by a qualified lawyer.
The evidence, the critical parts of which I have set out above, does not, in my opinion, do more than rebut the presumption of a resulting trust in respect of the house property during the lifetime of the deceased. The reference to the codicil does not, in my opinion, bear the weight which has been placed upon it.
The first passage in the evidence which I have quoted above indicates that it was the deceased who first mentioned the codicil after she had agreed to the appellant's suggestion. In that context its significance is only that of a lay-woman's suggestion as to an appropriate means of carrying out the proposal to which she had agreed. I do not find in the other parts of the evidence anything which suggests otherwise. The fact that the appellant agreed with that suggestion does not alter its significance. It is clear that the appellant and the deceased saw the need for the title in the property to be recovered from the deceased so that it would "revert" to the appellant in accordance with the agreement. It is not surprising that they should have regarded a codicil by the deceased as a convenient means of achieving the desired result. A sound understanding of the nature of equitable interests would have revealed to them that it was not necessary, but that knowledge is not to be attributed to them.
No doubt a claim against a deceased estate based in part upon a conversation between the deceased and the claimant requires careful scrutiny, but here there is no suggestion that the appellant should not be believed. The only question in issue was whether the facts proved in evidence rebutted, in whole or in part, the presumption that there was a resulting trust in favour of the appellant, a question which in the circumstances can be dealt with as readily by an appellate court as by the trial court and upon which this court must decide for itself. I do not regard the facts deposed to as demonstrating that the intention of the appellant was that the entire beneficial interest should go to the deceased. Indeed I think the evidence demonstrates that such a result was not his intention. The proper conclusion is that the appellant retained an equitable interest in remainder expectant on the death of the deceased and that on the deceased's death his interest became absolute. If the matter were in doubt the proper conclusion would be that the respondent had not discharged the onus of proof but it is not necessary to rely on that onus.
In view of that conclusion I do not find it necessary to consider whether or not a constructive trust could be shown to have come into existence.
I would therefore allow the appeal and set aside the order of Burt CJ, substituting therefor judgment for the appellant.