HORESH v COMPTROLLER OF STAMPS (VIC)

Members:
G Gibson

Tribunal:
Administrative Appeals Tribunal of Victoria

Decision date: 25 January 1991

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G Gibson

On 18 August, 1989 the applicant, Mr Horesh, who is a solicitor, and Miss Susan Rechter signed a contract note in respect of an agreement by them to purchase ⅝A Dickens Street, Elwood. The purchase price was $170,000.00. Mr Horesh paid a deposit of ten per cent. Settlement was due on 28 November, 1989.

2. At this time, Mr Horesh and Miss Rechter had a property at 8/51 Acland Street, St Kilda. They say that the property then was valued at between $130,000.00 and $135,000.00 and was subject to a mortgage of $60,000.00. Mr Horesh says that they intended to proceed with the purchase of the Dickens Street property only if the Acland Street property was sold and Miss Rechter had funds available to pay for her share of the purchase.

3. Mr Horesh and Miss Rechter arranged finance by way of a joint mortgage from Westpac Banking Corporation in the sum of $125,000.00. Miss Rechter signed the

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acknowledgement of the terms and conditions together with Mr Horesh. On 28 October, 1989 Mr Horesh obtained the agreement from the ANZ Bank to provide a further $30,000.00 finance and on 3 November, 1989 he obtained agreement from Pyramid Building Society to provide a further $20,000.00 finance. The total finance arranged for the purchase was therefore arranged as to $125,000.00 by Mr Horesh and Miss Rechter jointly, and as to $50,000.00 by Mr Horesh alone.

4. On 28 November, 1989 settlement of the purchase was effected. Mr Horesh says that he provided all necessary funds. This must be subject to the exception of at least the moneys provided by Westpac pursuant to the joint mortgage. The transfer given by the vendor to Mr Horesh and Miss Rechter was to Mr Horesh in two parts and Miss Rechter in one part as tenants in common.

5. Because of the deteriorating market, Mr Horesh and Miss Rechter withdrew the Acland Street property from the market.

6. On 25 January, 1991 Mr Horesh and Miss Rechter executed a transfer to Mr Horesh in respect of the Dickens Street property. The consideration was expressed as ``being entitled to it in equity and subject to the amount owing under a Mortgage to Westpac Banking Corporation in the sum of $125,000.00''.

7. The Comptroller assessed that transfer to duty in the sum of $1,160.00. That assessment has been the subject of objection which has been disallowed. The decision to disallow the objection is what is to be reviewed at this Tribunal. The correspondence indicates that the Comptroller assessed the transfer on the basis that the property was valued at $170,000.00, and that Mr Horesh had a beneficial interest in a two-thirds share of the property prior to transfer, and accordingly the value of the property transferred was one-third of the value, namely, $56,666.66.

8. Mr Horesh argued that as all funds for the purchase of the property had been provided by him, the transfer should have been exempt from the provisions of Heading VI of the Third Schedule of the Stamps Act 1958, particularly by reference to Exemptions 10 and 17. He referred to the decision of the High Court in
Calverley v. Green (1984) 155 CLR 242.

9. Counsel for the Comptroller cross-examined Mr Horesh, made submissions relating to the state of the evidence, and submitted that the evidence was not such as to permit a finding that the presumption of resulting trust had been displaced. In addition to Calverley v. Green, she referred to
Gissing v. Gissing (1971) AC 886 and
Muschinski v. Dodds (1984-1985) 160 CLR 583.

10. The decision of the High Court in Calverley v. Green affirmed, relevantly, three propositions:

• (1) If two people contribute the purchase money for a property in unequal shares, and the property is purchased in their joint names, then in the absence of a relationship that gives rise to a presumption of advancement, there is a presumption that the property is held by the purchasers in trust for themselves as tenants in common in the proportion in which they contributed the purchase money.
• (2) The presumption of advancement does not apply to a de facto relationship.
• (3) If two people finance a purchase in part by way of moneys borrowed under a mortgage under which each is liable for repayment, the amount of money so provided is to be regarded as having been provided by each of the purchasers, and it is not possible to regard the money as having been provided by one of them alone simply because that person is the only person who in fact assumes a responsibility as between the purchasers for repayment of the mortgage.

11. Applying those propositions here, Mr Horesh and Miss Rechter must in my view be taken to have applied equally the amount of $125,000.00 in respect of which they gave the mortgage to Westpac Banking Corporation. The balance of the purchase price was provided by Mr Horesh alone. Accordingly, the presumption is that the legal title was held on a resulting trust for Mr Horesh and Miss Rechter as tenants in common in the proportions in which they contributed the purchase money. It was common ground that the relationship between Mr Horesh and Miss Rechter was not one of de facto marriage. There is no basis in this case for applying any presumption of advancement.

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12. Is there any basis on the evidence on which it may be found that the presumption of a resulting trust is rebutted? Miss Rechter was not called. There was apparently a breakdown of the relationship. In the course of discussion before this Tribunal, Mr Horesh conceded that when he and Miss Rechter agreed to buy the property, they intended that it be owned as to two-thirds by him and as to one-third by Miss Rechter. He said that at some point of time, when it became apparent that they could not sell the Acland Street property as they had hoped, this position changed, and that their plan in buying the property was always subject to change if Miss Rechter were to find herself unable to supply her share of the purchase price. In the event, and with the possible exception of the deposit, the whole of the purchase was effected through finance obtained from other parties, and neither Mr Horesh nor Miss Rechter contributed anything from their own funds. Most of that finance was obtained from Westpac under a mortgage under which Miss Rechter was liable for repayment of the whole of the amount borrowed, $125,000.00. Mr Horesh said he expressly agreed to indemnify Miss Rechter, but that circumstance does not alter the fact that Miss Rechter remained liable to Westpac for the whole of the amount borrowed, and does not alter the consequence that the whole of that sum is to be regarded as having been provided by Mr Horesh and Miss Rechter jointly.

13. Mr Horesh said that this case was distinguishable from Calverley v. Green on two grounds. First, he said that this was not a case of a de facto relationship. I do not think that that characterisation of itself has any bearing except possibly in relation to the inferences that may or may not be drawn about the intentions of the parties flowing from any facts which might give rise to such a characterisation. Secondly, Mr Horesh said that the fact that Miss Rechter executed that transfer was itself evidence of her state of mind at the relevant time. The authorities suggest that the relevant time to determine the state of mind is that at which the relevant property was acquired, and it is conceded that the intention of the parties at that time was that the property be acquired in the shares which were reflected in the transfer to them. In any event, it does not seem to me that the transfer executed on 25 January, 1990 could be a necessarily reliable guide to the state of mind of Miss Rechter as at 18 August, 1989 or even 28 November, 1989.

14. Mr Horesh had to concede that his contention had to overcome the terms of each of the main documents - the contract of sale, the application for mortgage, the transfer from the vendor to himself and Miss Rechter, and the express terms of the instrument of transfer that Mr Horesh prepared for the transfer to himself. The terms of the contract are matched by the terms of the transfer that settled the contract, the transfer reflects a common-sense view of the level of contribution made by the purchasers, and the terms of the transfer to Mr Horesh are not consistent with any suggestion that Miss Rechter had no interest in the property at the time at which that transfer was executed. In light of those circumstances, such evidence as was given about a possible change of mind of Mr Horesh and Miss Rechter about the basis on which they were acquiring the property is not in my view sufficient to afford any finding of fact about any relevant common intention such as would displace or rebut the presumption of a trust that results from the different contributions made by them to the purchase of the property.

15. It follows in my view that the applicant has not discharged the onus of showing that the assessment was excessive, and I think it should be affirmed. It was conceded that in this event costs should follow the event, and having reflected on the matters put as to the quantum of those costs, I think they should be fixed in the sum of $1,000.00.

16. For the reasons given, the decision of the Tribunal is:

• (a) the assessment under reference is confirmed;
• (b) the applicant is to pay costs of $1,000.00 to the respondent.