Property B Lecture 1

IntroductionProperty A learning types of interests, property B starting how those interests interact with one another. How they compete or coexist? Learn Torrens system in detail and how it affects priorities in land .

Problem solving and application also form objectives.

Topic 1 – Resulting Trusts, Consulting Trusts and Equities.Equities influences two things

- REMEDIES (discretionary cf legal remedy)

Discretionary Factors

Adequacy of legal remedies Clean hands (must be an innocent party) Delay or latches Effects on third parties *important for property law**

- OWNERSHIP

Can be split into legal and equitable (in certain circumstances) which can coexist in the same proprietary interest.

AKA beneficial ownership.

TWO WAYS OF CREATING EQUITABLE INTERESTS

Operation of Law-The law automatically results in the title to be split- Eg constructive trust

1. Express Trust When:

1. inter vivos –While alive (between the living)2. After death through a will (does not take effect until you die)

Who:

Trustee – legal owner, the person with the proprietary interest at law.

Beneficiaries – persons holding the beneficial interest in the property, equitable owner.

How :

By transfer - transferring legal title to the trustee in order to hold that property on trust for the beneficiaries.

By declaration - declare yourself as the trustee.

Expressed trust MUST BE IN WRITING and signed EITHER WAY (Requirement of the PLA S53 (1) (b))

53. Instruments required to be in writing

(1) Subject to the provisions hereinafter contained with respect to thecreation of interest in land by parol-

(b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will;

This is all property b expects you to know about expressed trusts

2. Trust by Operation of Law Does not have in writing requirement as under PLA S53 (2)

(2) This section shall not affect the creation or operation of resulting,implied or constructive trusts.

How :

1. Trust is Presumed by the law2. Trust is Imposed by the law

Who:

Trustee – holder of legal title.

Beneficiaries – holding equitable title. The party the law is trying to protect for policy.

(frequently both parties are unaware that a trust exists, not deliberately created by someone, its all automatic).

Types :

Resulting TrustsPresumed by operation of law the title can split up in equitable and legal.

Which interest are better legal or equitable? equity is the true situation and meant to prevail in court there are complicating factors for instance

o equitable relief is discretionary and may be trumped where o You come with unclean hands or o You’re a volunteer or third party interests. o The Torrens System which sets up a whole set of priorities.

When: Arise in circumstances such when equity presumes ( despite transfer of legal title to one person) that the transferor’s intention was for some/all of the equitable title to be held/retained (by transferor himself or another person)

PRESUMPTION OF RT arises

Resulting Trust arises because equity infers or persumes where its assumes - purchasers does not intend to make a gift.

-----> three steps in answering a RT question:

First: does one of the circumstances giving rise to the presumption of RT exist? Second: two ways of rebutting. Lastly: If Presumption of Advancement exists, need to consider if there is evidence of a

contrary intention to that presumption? Can PoA be rebutted by evidence to the contrary, that the person does not intend to gift? Eg it evidence it was intended as sale or loan.

CIRCUMSTANCES WHICH GIVE RISE TO PRESUMPTIONS OF RESULTING TRUST:

Named by Gibbs J in Calverly v Green 1984

PURCHASE MONEY RTs1. Legal title holder not paid the purchase price.2. Legal title holders dont hold legal title in same proportions to which they contributed

toward purchase price

in both these cases there is a mismatch between who paid the money for the purchase price and who holds legal title or the proportion of that.

GRATACIOUS TRANSFER (not in course)3. A full or partial transfer to someone who is a volunteer.

- Some people think these premsumptions have no place in todays law, read Murphy J in Calvain v Green: lay people would be astounded it exits

Example 1: A has full legal title but only paid half if the PP. equity will presume that B has a 50% therefore A holds the full title in trust for himself AND B in equal proportions. A is a trustee.

Example 2: legally joint owners notionally sharing a third of legal title. Equity will presume they intend to hold in the proportions that they contributed to PP. RT arises to that affect. (can say they are all trustees don’t have to say which for who)

Example 3: B is a volunteer received the land gratuitously therefore equity will presume that B is holding the legal title on trust for A. A is presumed to have intended to retain legal title because there is no money involved.

REBUTTING PRESUMPTIONS OF RESULTING TRUSTS (2 ways)

Evidence Of Contrary Intent (to that of the PoRT).- Produce evidence that the transferor actually intended to pass equitable title

o either make a gift of the title, o make gift of money to purchase title or o Loaning money nothing to do with title

- Must be ACTUAL intent o not implied (no reasonable person test). o Have to be expressed in word or conduct that infers that intent.

- MUST BE IN REFERENCE TO THE INENTION AT THE TIME OF THE PURCHASE OR TRANSFER.

- The onus is on the party trying to rebut the PoRT , the gift receiver

Presumption of Advancement- Refutes RT- Need circumstances shown where equity will presume that a gift to advance the

receivers interests.- There are recognized circumstances. (Re Deane J in Calvern v Green) works on the

basis of categories. (usually where rship of support)

*husband to wife (gender biased)- law presumes the intent of a husband is to advance a wife’s interest- not vice versa and not defactos (CvG judgment by mason and dean

JJ), - Inclusive of female financés as well, has been a case.- Love and affection NOT relevant- Not recognized between de factos (Cummins)

o Brennan & Mason JJ – Not marrying suggest want to maintain control of individual assets, therefore to reflect not recog de factos.

o J Gibbs prepared to recognize

*parent to child (changed from father to child since Calverly v Green)- Not from child to parent

REBUT Evidence Of Contrary Intent (To PoA)

o Evidence you don’t intend to make gift

Calverly v Green 1984 (Authority for de factos not inclusive in

PoA + mortgage liability IS a contribution to purchase price but who repays mortgage is not relevant to a RT, it does not constitute as a contribution to purchase price as it comes after the purchasing of the property)Facts:

Defacto couple Mr C and Ms G lived together for 10 years. Mr C contributed $10 out of $20 in total to the grocery bill, after oil spill inflation bill

increased to $120 and Mr C’s contributions remained the same. They decide to buy a house. C contributes $9000 to purchase of a new house with G, loan for $18000. Bank only provided loan if both joint mortgagors. Became reg joint legal owners of house. she contributions to household goods largely

he is paying off the mortgage repayments plus 9k for PP from his previous house. Both jointly liable for the mortgage ( notional $9000)

HC Held:Murphy J took the stance that the resulting trust was outdated and should be scrapped.

Mason and Brennen JJ (majority Dean J agreed) PoRT because both held an equal legal title but contributed unequally contributions to PP. Mortgage repayments not count towards PP liability under loan counts as contribution towards PP by that amount Also stated that the presumption was not rebutted by presumption of ADV because they

weren’t married, furthermore no evidence contrary to the intent of a RT, that is no evidence C intended to gift.

PoRT no evidence of contrary intent: his contributing more not evidence of gift No PoA: not extend to defactos. not marrying allows indepence of assets

Calc of contributions to the purchase price:

o Mr C contributed $9000 to PPo Both are contributing their liability under the mortgage, each contribute a further $9000.o Therefore out of total contributions she is providing only one third

The majority hinted that contributions after purchase may lead to constructive trust.

Gibbs CJ part of minority but better reasoning for problems:

He describes the 3 circumstance giving rise to RT presumptions. BUT he says that money has to be provided by the purchaser in his character as such not as

a loan or repayment of something. Whoever liable for loan is the real contributor. PoA

o applies to not father but in position of locos parentes eg guardian.o Confirms authorities denied PoA when the wife makes the purchase for husband.o PoA will not work in cases of siblings (sisters), nephews or grandchildren.o We don’t want these categories to freeze in time. He was prepared to accept

defacto relationships. PoA exists – is it rebutted? Look at intent AT THE TIME IT WAS PURCHASED. Found PoA rebutted

o on evidence that G had no intent to confer beneficial interest to C. C made no suggestion on putting it on both names until the bank gave him a

hard time giving him a loan in his own name Therefore the RT holds just like majority Legal title 50-50 notionally, in equity Mrs G 1/3 and Mr C2/3

Cummins v Cummins 2006 (matrimonial homes, contributions not

only consideration)

Facts: Barrister who didn’t pay tax for 45 years at the bar and owed million dollars to ATO.

He had assets amounting to $250,000 He and separated wife had purchased the matrimonial home in 1970 registered as joint

tenants. Ms C had paid a contribution of 76% towards the purchase price 1987 Mr C transfers his legal title (gratuitously) to Ms C so she hold 100% of the legal title 2000 – declares bankruptcy &his property devolves automatically to the appointed trustee

in bankruptcy The trustee in bankruptcy challenges the transactions in 1987 to get proceeds

HC Held:

Sackville J –

Any presumption of RT that may have arisen was rebutted that their actual contrary intent was to take the house as JT at law and Equity. (evidence of contrary intent)

Her share is untouchable by creditors

On HC appeal obiter – Gleeson, Gummow , Hayne, Hayden & Crennan JJ –

Was main purpose of the transfer to defraud creditor (Riganshaw principles – onus of proof alters according of consequences) notes of solicitor showed he was trying to avoid the ATOs debt. Unwounded the transfer, look at situation in 1980

Carvley v Green (Gibbs) if 2 parties contribute unequally but hold in joint names equally hold in RT for themselves in the proportions they contributed the money

PoA of husband to wife not available in the reverse position. If PoA found, then found equitable title at par with the legal, legal title truly reflects

ownership. Found invalid transaction reflected legal title truly reflects ownership & evidence of contrary

intent to RTo Problem the already said that transaction was about defrauding creditorso Need to be about intent at the time of purchase, here subsequent conduct

Can look at subsequent conduct to determine intent at relevant time Joint title was evidentiary ‘Can fix only on uneven contrabutions to PP to determine the equitable interest otherwise

will produce distorted or artificial results’ Marriage regardless of contributions should infer an intent for a half interest because it’s

often purely coincidental whose money is used to pay vendor for purchase. Half interest should be inferred to matrimonial homes regardless of contributions and regardless of being in one name only – Prof scott(court found this to apply with added force as both names on legal title)

Unclear whether RT never existed or rebutted on the basis of evidence of contrary intent.

Constructive TrustsImposed by operation of law to prevent legal title holder from acting unconscionably. splits equitable and legal title.

Two circumstances

2 TYPES we’ll be looking at:

1) Common intention CT

2) Boomgartner CT / Joint venture CT / remedial CT.

All containing a component of “unconscionability.”

(also where specifically enforceable contract for sale or imperfect gifts )

Common Intention CT

Elements of Common Intention CT 3 components1. Actual Common Intent (CI)

Intention= must be that the claimant had/would had an equitable interest in land Actual = must be expressed or inferred (cant be imputed (assigned)).

o From: Real actual words or inference from actual words of conducto Can’t use reasonable person test (imputed)

Timing = expressed before or after the property purchase if they develop the ci way after the purchase.

2. Detrimental Relience on CI Claimant has changed his position somehow on the basis of relying on the common

intent.3. Unconscionability

IN THE CIRCUMSTANCES FOR THE LEGAL TITLE HOLDER TO DENY AN EQUITABLE INTEREST ON THE PART OF THE CLAIMENT.

GENERALLY WHERE elements 1 AND 2 ARE SATISFIED THE CIRCUMSTANCES HAVE TO MADE IT UNCONSIONABLE FOR THAT DENIAL TO TAKE PLACE. However there are special circumstances which make it more like to be unconscionable or unlikely.

IF ALL SATISFIED CLAMIENT WILL HAVE AN EQUITABLE INTEREST.

CICT - The court RECOGNISES a CT to protect somebody who has relied .

The court is considering giving up a career, becoming a homemaker/housekeeper, raising children becomes more and more a detrimental reliance. (Donas and Donas) argument you would have done those things anyway out of love and affection.

Ellen v Snyder (conditional, not on reading guide)

Facts:

Defacto couple, the man holding legal title to their property which he paid for via a loan and she furnished. There was a common understanding between the two of them that an equitable interest

between the two of them was to pass to the woman if she married him or if he died. The relationship broke down before either of those things happened.

Held:

She couldn’t establish equitable interest because the common intent/understanding between them was not fulfilled for her to have the equitable interest.

Hygens v Wingfield Vic 1987 (failure on trivial detriment, not

on reading guide)Facts:

A unit in torquey. He bought house she planted tree painted balcony and purchased household items when living with him for 7 years till he died.

Held:

This women fell well short of the necessary determinant required for a common intention constructive trust. As she benefited from free accommodation and she didn’t really pay for anything substantial this was not considered determinant of the type we are talking about. A disappointed expectation is not enough to amount to detrimental reliance.

Oglevie V Ryan 1976 NSW (1. Covers the elements of a CICT. 2. It

points out that the executor of the will stands in the shoes of the deceased and is bound by the same the same obligations, if its unconscionable for the deceased to deny the claimants rights then its also unconscionable for the executer to do so. 3. You have to state what type of equitable interest has been established because the CICT will only protect the interest of the nature intended by the parties. This trust merely gives effect to what was agreed upon. 4. Note the timing of a CICT, always have to ask when did the equitable interest arise? Especially, in cases where that person because insolvent that date becomes crucial.)(Don’t worry about reading the part performance alternative judgement part)

Facts:

1939 Annie Ryan moves into cottage with her mother behind the local cinema and was employed there as the cinema cleaner which was run by a happily married Mr O.

2 decades later after the passing of Mrs O, Mr O moved into the cottage as a boarder with Annie and her mum.

In 1962 Annies mum dies and (7 years following) the cinema and cottages will be sold to a small company GJ Coles who want to knock it down to make a supermarket. So Mr O suggests he buys a house for the two of them IF she took care of him for the rest of his life and after he died the house would be hers for the rest of her life. This all eventuated for the two years leading up to his death. Nothing in his will for her.

Held:

No RT she hasn’t contributed to PP

J Holland: the defendant had relied upon a CT and the deceased and his executive after his death became bound in equity to hold the legal title to the subject property on trust for R and are bound to permit the R to occupy the property rent free during her life for as long as she desired.

Elements of CICT

1. Common intent – Intent = life estate This case involves an EXPRESSED not inferred arrangement. Mr O clearly proposed the

arrangement. It’s an expressed common intention in the form of an (mutual) agreement between them before the purchase. The property was even purchased to give effect to that intent.

COMMON INTENTION RT CAN EXIST REGARDLESS OF WHEN THE COMMON INTENTION IS FORMED, BEFORE OR AFTER PURCHASE. (obiter)

2. It is found that the claimant acted to her detriment in relying on this CI. She satisfactorily argued that she was induced by this agreement not to find her

own home and find herself a permanent job because she instead had to act as a house keeper etc.

3. It would be unconscionable for the legal title holder to deny R’s equitable interest. Having himself created that understanding and having allowed detrimental

reliance upon in it would be unconscionable for O to deny its effect. Executer stands in shoes of deceased

You have to state what type of equitable interest has been established. Can only get the equitable interest intended In this case she didn’t receive a fee simple but a life estate.

Parsons v McBain (Authority on timing of acquiring an CITR

interest BUT this becomes murky, important to third parties.)Facts:

Two brothers separately owned two homes, got married and lived there with wives.

Both declared bankruptcy. A trustee in bankruptcy is appointed for each.

In Cummins no time limitation because the purpose was fraud here the court went with the relation back period, period for which the trustee in bankruptcy can unwind and automatically void any transaction they think was improper six months prior to being declared bankrupt (two catagories of unwinding, the later is for where you haven’t found definitively an intention to defraud creditors)

In the six months prior to bankruptcy, both brothers transfer certificate of title to their wives which had been 100% in there names previously. The trustee asks to set aside these transfers (under both catagories of unwinding periods) they have been declared void.

Wives argued even though they were imputed the trustee couldn’t get 100% of proceeds because each wife held a 50% equitable fee simple interest already before the transfers took place by CI.

Full Federal Court Held:

The court had accepted evidence from long ago that each couple would share the ownership of their matrimonial home. Therefore the wives 50% interest in the proceeds was untouchable and would be safe from creditors.

According to this case the timings of when the wives acquired that interest was as soon as all the elements were fulfilled.

No question of resulting trust here, the husbands bought the land first then met the wives.

Cf Cummins; In Cummins court found that spouses are held to be JT at law and at equity.

Because that was a RT, property purchased before marriage Case where they did originally hold legal title jointly this case husbands held full legal

title even though the judges speak of professor Scott’s view, it’s not the case here. facts do differ from cummins. It would be a step further to say it applied in this scenario also.

Cummins hadn’t been decided yet

Timing: when does CT arise

Three views

1. CT arises automatically when elements satisfied independent of court order (court gives effect only) Parson v Mc Bain for CI (for JV not clear)

2. A remedy that the court grants and doesn’t exist until court declares it (can deem it to come into operation of judgement or retrospectively)

3. Even if criteria satisfied court chooses another remedy(Boumelhelm case)

Justice Dean mushinski - There does not need to have been order before equity can recognise the prior existence of a CT, judges have a lot of flexibility to adjust the existence of the trust (not independent of court order) where competing equitable and common law claims are involved a declaration of CT by way of remedy can properly be so framed so that the consequences of its imposition are opperativeas of date of judgement or formal court order or some other specified date.

A bet each way, want flexibility where third parties are involved.

Joint Venture or Baumgartner Constructive Trust (AKA Remedial CT or Unconscionable Retention of Benefit CT)

Different creature:- (Remedial v institutional) from the other CI because it is imposed (Cf merely recognised by the court when it arises due to certain circumstances, merely gives effect to the pre-existing intention

which is why it can be known as institutional CT because it arises from its own esteem) by the court as a remedy.- CI outcome is get what was intended, JV based on contributions to JV

Elements of Baumgartner CT:

1. Joint venture requires some endeavor or relationship of some kind setting out together to do something.

2. Pooling of resources or contributionspayments to the purchase price, later payments to improve the land,mortgage repayments, household expenses are all relevant. Non financial resources, child rearing, house keeping and labour

3. JV ends without blame If analyzing a situation where the JV hasn’t ended yet assume that they will. (doesn’t refer to affairs need to see cases.)

4. UnconscionabilityIt would be unconscionable to retain the benefit in all the circumstances.

( this CT is imposed regardless of what the parties’ indented at the start if you can make up the elements.)

Mushinski v. Dodds (1985) 160 CLR 583 (j dean becomes law)Facts:

De facto couple, 3 years . buy old cottage planned for an arts and crafts business. Ms M pays PP of $20,000. D was expecting $9,000 from his previous marriage divorce settlement planned to be used for renovating the cottage for the business also as by a prefabricated home for them. So that eventually both contribute the same amount. D insisted his name appear on legal title as TIC. Relationship ends before the plan goes through as no permit. The divorce settlement didn’t turn out with the sum anticipated, payout was not enough for the completion of the cottage renovations. They have 50% of the legal title but In total M spent $25,000 in purchase price and renovation and D only $2,500 in renovations.

Seeks declaration for sole equitable title on the basis of a CT.

HC Held :

The court split in the decision:

Brennan and Dawson JJ - No constructive trust.

Brennan J:

Made observation that the relationship was not always placid, no CT but a conditional gift with a condition he failed to fulfill. therefore a personal action (not proprietary) lay against Dodds, should not effect his equitable title.

No unconscionability, retention of benefit must be inconsistent with original agreement or purpose. Although parties ceased to persue common purpose at the start the unfairness doesn’t amount to unconsciounable.

(dig at Mason& Dean) the flexible remedy of the CT is not so formless as to place proprietary rights in the discretionary disposition of a court acting according to vague notions of what is fair. Cant give proprietary rights to vague notions of justice not up to courts discretion to merely label something unfair and call it a CT.

Dean and Mason JJ – A JV CT existed.

**Dean J: Failed JV analysis

M entitled to a payment as an equitable contribution on the basis of joint and several liability as debtors. He owes her a debt for the amount he promised to pay and didn’t.

Where both parties contributed to a JV and it fails without attributable blame to either parties and where the contributions to the JV were made in such circ that it wasn’t intended the other party should enjoy then each party should have their contributions made to them. (Not gift to other party but for purpose of the JV)

To allow one party to retain the benefit it would be unconscionable.o Parties must first pay off joint debts incurred o Then each party get out respective contributionso Residue is to be divided in equal shares

Suggests that perhaps retention is be inconsistent with original agreement or purpose.

Not only for commercial scenarios but extends to domestic ones (here both) Cant change legal title just on fairness There was a removal of the assumed basis of the arrangement between them when

the joint project was abandoned. Analogis to a commercial venture. Requirement you return capital after debts have

been paid. Preclude him from asserting or attaining his half ownership to the extent of where it

would be unconscionable to do so. The fact that CT predominantly remedial (cf institutional= rship governed by law)

o Remedial = weopon it can impose /discretionary?

Mason J

Inequitable for him to retain the interest without crediting to M for the contributions she made.

Gibbs CJ – equitable charge, no trust, but willing to go with Deans to uphold the CT.

Cant have CT just because its not fair. M is entiteled to an equitable contributions, shes entitled to sue for a debt in equity

as secured by an equitable charge over the property. But was prepared to go with Dean J.

- RT rebuted by evidence of contrary intent She intended he have a half share at the time of the purchase held because he was expected to pay for improvements (conditional gift)

- CICT because usually someone who doesn’t appear on the legal title trying to claim equitable interest – here it’s the vice versa.

Any proceeds would firstly go toward paying any debt, then too various recognized contributions and any surplus to be split 50-50%

Baumgartner v. Baumgartner (1987) 164 CLR 137 (elements became established, time taken to look after a child is considered a non financial contribution and equate that with some kind of money -eg earnings lost)

Facts:

Office romance, Leo who has had two prior marriages and Frances who was already married with two children. F moves in with L and defactos for 6 years. They had a child. A year after they began living together Leo purchases land, paid from own funds plus a mortgage, legal title under his name alone and he took out a loan to build the house.

F objected several times that her name was not on title, L essentially responded that they weren’t married and the loan was under his name. his says ’ im doing this for all of us’; the harder I work the sooner I’ll have it paid off and the better we will be in the future. L told firend that the lender wouldn’t allow it because no marriage, there’s no need to have both names on the paper because F knows it’s both our house once its built. L says Home was hers if they get married. She would gave him her pay packet every week which to use for household expenses and mortgage repayments. (lower court considered as pooling of resources) She changed her name to his surname by deed poll.

The relationship ended she took furniture with her. She sought a declaration from the court to say that she owned part the title in equity.

HC Held:

The HC stated you cannot impute a common intent from a reasonable person type of scenario what someone in Leo’s shoes would have thought the conversation meant.

It’s unconscionable to retain the benefits after the substratum of a joint venture collapses, thus the proportion of contributions should be restored to the parties that made them.

Mason willson & deans jj:

Just because no CI to pass beneficial interest not essential. Using trust to circumvent unconscionable conduct.

Unconscionable where parties pooled their resources for the purposes of their joint relationship and one of the purposes of that rlship was to secure accommodation. Once that fails unconscionable for one party to walk away with the contributions.

Elements of Baumgartner CT:

Imposed regardless of the parties intent

1. Joint venture

Long term stable relationship as a family. No commercial element like in Mishinski v Dodes completely domestic type relationship.

Building house together as defacto couple.

2. Pooling of resources or contributions

earnings and his proceeds of sale of previous land being pooled together of resources for joint venture purposes, that is with a view to cover the expenses of living together as a family.

The fact that the earnings weren’t split between them was noted.

Land was purchased and house was built for the benefit of and for the purpose of furthering their relationship.

Labour/child rearing Dean J left open Payments to improve the land after purchase, mortgage repayments etc Related to the acquisition to the property (direct or indirectly)

3. JV ends without blame Relationship breakdown= everyone has clean hands as far as the law is concerned. Reprehensible behavior.

4. Unconscionability

Mentioned the comments on the phone were uncon. Assertion that it was his sole property to the exclusion of any interest at all of the respondent. Amounts to unconscionable which attracts the intervention of equity and the imposition of a constructive trust.

Start with 50-50 then take contributions to overall relationship and determine distribution

ADJUSTMENTS TO COMPENSATION TO BE TAKEN INTO ACCOUNT:

Surplus 45- 55 split imposed as opposed to 50-50 in machinski. Special allowance made for francis that she took three months off to have her child and the earnings she forwent during those three months adding it to her ledger.Court made allowences for him for the furniture she took and he kept making mortgage repayments after the relationship ended and got credit for that. This was slightly nullified by the

fact that he had free accommodation there after the end of the relationship where as she had to find another place. Proceeds from the previous home also added to the ledger on his side.

Parishe v. parishe (1997) (when is it relevant to compensate a

potentially non financial contributions without giving up work)

FactsHome maker for 17 years and primary carer of children.

South Australia SCRecognised a CT existed and that it was not necessary in regards to the pooling of funds for them to be physically pool fund in each case and the court can take into account both financial and non financial contributions and the manner in which they conducted there relationship.

Homemaker/child carer, should be recognised in a substantial not token way. As it enables the husband to work more freeing him up to earn greater amounts of money and acquired more assets because of that and should therefore share in those assets.

Cressy v Johnson 2009Facts2 children nine year relationship women had been the homemaker.

Vic SCEmphasis to be more than just love and support for the joint venture has to at least partially be deliberately aimed at building material wealth and contributions and pooling must be aimed at enhancing the material wellbeing of the joint venture. THE HOMEMAKER IN THIS CASE FASCILITATED income producing activities or investments AQUASITION NOT JUST LOVE JOINT VENTURE ITSELF.

ABTS Pty Ltd v Boumelhem 2009(Considering whether all elements exist and all trusts) good summary for trust.

Facts(complicated)

Elderly parents pensioners, with little to no English skills who provide money to son.

- For failed café business.- Another business.- Buying a property called Dundas for two duplexs to be built and subdivide the block

one of which the parents would get.- Total $ 400,000 payments by parents which went somewhat to purchase of Dundas

and somewhat to the development of the building.- Son had full legal title- Son went bankrupt- Mortgagee secure loan over property- Dundas property for security of his business debts\

- John legal title, charges by creditors and parents contributors

NSW SC? Held:Legal doesn’t reflect contributions of PP. for 19% by parents on PoRT, Presumption of Advancement but rebutted.

JUSTICE WARD PARAGRAPHS IN READING GUIDE

ALL TRUSTS COVERED IN THIS CASE****

Joint Venture Constructive Trusts- Judge reiterates Dean J in Mshinskis. WAS THERE A JOINT VENTURE?

Did they make acquisitions and contributions together to the dunda property.

D argued it was a loan only by pointing out past loans and the mothers affidavit agreement to loan to her son. As well as a deed of charged which apparently evidenced loans to the sons business not for aquasition.

Held: this did not evidence that the parents would loan such a huge amount which required an increase on the family home mortgage three times despite being pensioners. Inconceivable that they would do that unless they expected an interest in that land. Therefore he excepted the evidence the father gave of the conversation saying they would gain ownership of one of the duplexes and the affidavit for a loan was attributed to nothing more than the mother’s poor English.

JV = on the balance of probabilities. Words not require to show the nature or the precise nature/extent/size of

the equitable interest intended (even for a COMMON INTENTION CT). POOLING

Judge didn’t think the half- half ratio according to the agreement with father was artificial and more applicable to the earlier loans.

HOW MUCH CONTRIBUTED?

FAILURE OF JOINT VENTURE WITHOUT ATTRIBUTABLE BLAME

Creditors argued venture didn’t really fail because he voluntarily declared bankruptcy therefore can attribute blame.

Justice ward -

in domestic relationships the court doesn’t look at who’s to caused the end of a relationship its off limits.

The element actually means that it doesn’t end due to some wrongful conduct of the party that seeks the imposition of the constructive trust.

If it is wrongful for the party asking leading to the end of the JV may affect the final element, the third element is RELATED TO unconscionability.

Issue of bankruptcy -

Bankruptcy ended JV, no longer possible to get credit for supplies anymore once bankruptcies been declared.

UNCONSCIONABILITY

TEST: Change in circumstances has to be so outside the contemplation/intention of the parties at time of entering jv, it may not be unconscionable to retain benefits.

In bankruptcy cases - Trustee in bankruptcy stands in place of the sons and he is denying the parents there rights, therefore that would be unconscionable.

EXISTS BUT BEFORE AWARDING CONSIDER IF APPROPRIATE REMEDY

Issue Should the court exercise discretion in imposing a CT even if elements exist Justice ward

(due to batherst v city council; HC says you must always consider a lesser remedy as a possibility first, eg equitable charge, damages other than CT. to prevent claimant from gaining an unfair priority over other equally deserving creditors. Consider third parties legitimate claims.

Timing was then explored Parsons v McBains – trusts exists from the time all elements are made out. However Mshinski trust only operates from the date the court gave orders (different types of CT)

o J ward noted that J dean was hesitant in awarding that order less the legitimate claims of third parties be adversely affected and ordered that CT only be awarded from date of judgement. So you can figure out which trusts applies then the timing of the interest.

o It’s not clear whether the existence of a potential third party creditor interest would cause a CT to not arise at all or impose it but from the date of the order and if the creditors interest arose earlier they get priority.

o CT withdraws assets from the general body of creditors which isn’t fair to them.o 2 cases mentioned that take priority of the creditors into accounto No guidance on what unfair priority means when you have equally deserving third

parties.o Certain factors might be contra to the imposition of a CT or give a lesser remedy

Are there any matters which call upon the protection of creditors as opposed to the prospective beneficiary of a CT.

The creditors’ physical materials that had been used on the land. No evidence of title searches by creditors The lack of clarity of exactly how much the contribution was.

As a result J ward decided for the parents contributions in excess of the 19% to purchase price there would be a recognised an equitable lien of the dandas property which arises at the time you made the contribution and it would be effected by the various equitable charges by the creditors which would rank according to the dates of each of the contributions. (in this case was not made in one lump sum) instead of a JV CT.

MAJOR DIFFERENCE IN GETTING A LIEN AS OPPOSED TO A CT IS THAT IF THE PROPERTY BOOMED IN PRICE OVER TIME WITH A CT YOU WOULD RECEIVE YOUR PERCENTAGE OF THE WHOLE THING MEANS YOU GET MORE THAN JUST WHAT YOU CONTRIBUTED.

Lien arising at time of each

contrabution

Resulting Trust

ABTS Pty Ltd v Boumelhem continued

Facts:

Parents had contributed 19% of the purchase price, giving rise to RT as their name didn’t appear in the legal title.

Held:

Presumption of advancement applies as this case falls within the parent to child category even though a grown man with historically unsuccessful life choices.

Court found definitive evidence of an intent of the parents was contrary to presumption of advancement in giving this contribution as they intended to get legal title to one of those duplexes.

No nebulous intent they believe they were getting the duplex, no intend to gift or loan but contributed to get an equitable interest therefore a RT arises proportionate to their contributions to towards the purchase price. (19% interest in equity)

Proprietary Estoppel

Three Types of EstoppelsCommon Law Estoppel

o representations regarding EXISTING facts o not intentions or representations for the futureo used as a shield not as a sword (defence and basis of a claim)

Equitable Estoppel

o representations about the future or about intention!o Sword or shield (defence and basis of a claim)

Sword: need a rep that induced an assumption and reasonable reliance on the assumption and unconscionable to depart from

o Famous case made this waltons which established he elementso Types include:

Promissory estopple Any legal interest

Only recently used as a sword Proprietary estopple (FOCUS)

Representations involving land Always used as a sword REQUIREMENTS: Need a land owner who-

1. Encourages Induced/creates or encourages an expectations in another that they will have or acquire a proprietary interest.

2. Reasonable reliance to detriment /changed their position on basis of the expection

3. Unconscionable to resile

Inwards v Baker (1965) 2 QB 29 (proprietary estopple, successors in title

equally bound)

Facts:

In 1931, father owns land, tells Jack Baker that he can build a bungalow on his land and he can stay indefinately.The will not altered to reflect the father’s new promise to his defacto wife, Mrs Inwards. Defacto wife children fall out and he is asked to vacate the land and rent backpay

It being a personal relationship, there is no contract and no formalities have been complied with.There is no part performance (because Jack’s conduct is not unequivocally referable toThe existence of the agreement)

Held ENCOURAGEMENT/ALLOWANCE OF EXPECTATIONS/ASSUMPTION

Father allowed directed him to think that if he expended his money in building the bungalo on the land he would be able to stay there for all his lifeAllowing him to think the expectation

REASONABLE RELIANCE TO DETRIMENT (change of position basis of expectation)

Jack had spent time, money and labour on the land, hiring people to help him construct thehouse

UNCONSCIONABILITY

Inequitable to allow this expectation to be defeated.

Successor stand in place of father, unconscionable for father to deny also unconscionable for them

As all elements are satisfied there is an (mere) equity (a propriety right) in Jack and the court has to work out how best to satisfy that equity in this case an irrevocable interest for right.3 prop interest

Legal

Equtable

Mere equities (can be non prop also)

TYPES OF EQUITIES:

Weaker then equitable interest and therefore different priority rules apply.

o If a third party comes along before you get to court to establish your interest you might miss out

o Even if established your interest in court how that equity is satisfied it’s at the courts discretion whether they make the promise good and giving your full interest or equitable compensation.

Equity of redemption = strongest proprietary interest = right to redeem a mortgage after you’ve paid it off and right to have it transferred back to you.

Equity of rectifications = right to have a contract corrected propriety when regarding leases because it attaches to the leasehold interest.

Equity to set aside a fraudulent transactions = arguments whether personal right or proprietary.

Remedies are discretionary:

Expectation relief Expectation damages Reliance damages

The minimum relief that makes things just

Effect of an Estoppel/ Nature of the Rights Created

Giumelli v Giumelli (1999) HCA (adopts the minimum equity/relief approach)FactsMr and Mrs Giumelli own in orchard in Western AustraliaThey create and run a partnershipTheir children help them pick fruit and clear land and after leaving school, they become increasingly involved in the partnership, Robert working for 24 years without wages.The parents tell their children that they will be given an interest in the land promises were made, each of which became more specific over time he built a house ($47000) on it. Got married moved out but lsot land if moved divorced remarried.

Held:In proprietary estopple the equity that founded the relief obtained was founded in an assumption as to the future acquisition of ownership of property

Assumptions induced by representations upon which there has been in fact been detrimental reliance by the plaintiff.

Three representations in the form of a promise by the parents on which Robert reasonably relied to his detriment (14years of labour, giving up his job, financing and divorcing his wife). And it would be unconscionable for his parents to now resile.

This gives him an equity which the court has to decide what the relief will be (not necessarily an interest in the property). In this case on prima facie appropriate relief to make good the promise CT over equitable fee simple in that promised land . However for estopple remedy is discretionary and the court decided that before a constructive trust is imposed to protect a full equitable fee simple the court should

consider having regard to the issues to the litigation there is an appropriate equitable remedy that falls short of the imposition of a trust.

Here two readons not to give him a CT1. There had been other proceedings regarding the partnership2. The brother was not blame worthy not responsible for the parents wrong

doing, pursuant to his own interest in the land therefore because of an innocent third party being effected by a CT. they declined to recognise an equitable interest but gave robert the next best thing.

Expectation damages – whats the value of the land you were promised and will impose equitable charge to secure expectation damages.

Donis v Donis [2007] VSCA 89 (clarifies the HC position)

Facts

Parents own property on plenty road with two houses. One of which their son moved in one and helped pay off mortgage repayments but once married the following year his wife wanted to move into the city. He responded by saying his ongoing contributions to that property would be their best investments they could make was in “our property”. Parents said the 20/40 acres is theirs. You don’t need a new house you can renovate the one you already own. A new house would be as big as 20 acres and all 4 names would appear on the title. Just worry about giving them children. They divorced. Recieves a letter saying one month to vacat, the house is stripped bare once that one month was up. Couple years later property sold for 4million dollars. Rosie claims one quarter of the proceeds.

VSCA Held

Nettle J the minimum relief is not applicable to proprietary estopple cases but to promissory estopple. Therefore as in Giumelli prima facie for proprietary estopple appropriate remedy is fulfilment of whatever has been represented to be your interest in the promise. Because equitable proprietary interest has been recognised the court needs to impose remedial trust.

The detrimental reliance that supports an equitable estopple need not constitute consideration; doesn’t have to be expenditure of money of financial disadvantage.

Neither does the deteriment need to correspond to the value of the interest of the expected land.

Prima facie to make the promise good of a proprietary estopple gives way to the following ind circumstances:

o expectation is uncertain (ABS v Baumhel = misunderstood what had gone on and the size of the claim was uncertain about the actual dollar figure.)

o Innocent third parties may suffer. (gimeli)o Where equity might be satisfied in different or a more limited wayo Expectation is all out of proportion of detriment suffered

o Shouldn’t go beyond preventing unconscionable wayo Consider if equity satisfied in more limited way

Prima facie Susie entitled to a quarter of the proceeds. Huge rise in the value of the property therefore parents argued calc as at the time of

the divorce but plus interest, a value between this and the current value was determined!

New value disproportionate to her detriment and given he suffering caused the parents. And it was a gratuitous promise.

Dismissed relevance of length of the marriage rates of divorce are high and yet made no conditions attached, to disproportion.

Determinet suffered is a kind that involves life changing discisions with irreversible consequences with a profoundly personal nature. Substantial deteriment but not necessarily financial in nature

She had a child much earlier than she normally would have therefore affected her career

The fact if shed moved to city as she desired she would have obtained capital gains on that property.

The equity raised by parents could only be satisfied by substantial fulfilment of the assumption on which the respondents actions were based.

Agreed to give her 600 000 $ (between 400 000 – 1mil between divorce and sale) Different to Gemeli because there was no innocent third parties involved she could

have gotten CT on property had the land not been sold.

ABS V BOUMHEL

Alternative claim of prop estopple by encouragement

argued the minimum equity to protect the parents was the imposition of a CT relying on Gemali

similar to common intention constructive trust – something of a covergance between them.

parents intent of acquiring one of duplex after sub division take place. This had also been an encouragement and making an representation in the mind of the parents by son.

Common intention CT interest should not pass to parents until such time as the duplex was finished and the sub div had occurred = this is rejected because the parents made the expenditure in the expectation of the interest they would receive which makes out a proprietary estopple action or if that’s any different they have made out the CICT action prima facie – rolling them into one. But court declined a CT because of innocent third parties involvement either under CICT or PE.

Criticism RT are outdated but here to stay

Where as common intention trust might be diminishing. But it has some use still in fraud cases where the only way to get around the fraud is to prove common intention.