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[2000] Part 1 Case 11 [HCM] |
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www.ipsofactoJ.com/highcourt/index.htm
[2000] Part 1 Case 11 [HCM] |
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HIGH COURT OF MALAYA |
Liew
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vs -
Fork
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Coram NH CHAN JCA |
9 NOVEMBER 1999 |
Judgment
NH Chan JCA
In this case it falls on this court to decide on the proportions of the beneficial interests of a man and a woman, who are not married to each other but who have lived together as husband and wife, in the ownership of a house which they have acquired in their joint names.
The parties Miss Liew (the plaintiff) who is a well known lawyer in Kuala Lumpur and Mr Fork (the defendant) bought the house with the aid of a housing loan from Bank Bumiputra (M) Bhd for which they were both liable to the bank for its repayment.
The loan was secured by a charge to the bank of the property in which they were registered as joint proprietors. Subsequently the outstanding loan for the purchase of the house was repaid with Miss Liew paying off the balance of the loan directly to the bank. There was nothing in the form of an agreement or in the transfer document or in any other place that would indicate how the parties' respective beneficial interests in the property were quantified.
In 1989 the personal relationship of the couple faltered and finally it broke down altogether and Mr Fork left. The cause of the breakdown of the relationship is not material for the determination of this case as they were not married to each other.
After they fell out. Miss Liew then brought the present proceedings against Mr Fork claiming that she is entitled to have the house as she had substantially paid for it while Mr Fork had only made minimal contributions to its purchase and even on that she claims that Mr Fork had given up his share of it to her.
In
her statement of claim she also claims for money lent to Mr Fork. The claims
are disputed by Mr Fork. Mr Fork counterclaims for the house claiming that
he had bought over Miss Liew' s share of it but later (at the end of the
trial when he was unable to prove that he had paid Miss Liew for the
acquisition of her share to the house) his counsel Mr Leong was prepared to
accept an aliquot share of the house as representing his contribution to
which he had made to the purchase of the house.
THE
LAW
The principle of law that I invoke in this case, and for this I quote Dillon LJ in Springette v Defoe [1992] 2 FLR 3 88, at 391,
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is the age old principle that if two (or more) persons purchase property in their joint names and there has been no declaration of trusts on which they are to hold the property, they will, as a matter of law in the absence of evidence to the contrary, hold the property on a resulting trust for the persons who provided the purchase money in the proportions in which they provided it: see Dyer v Dyer (1788) 2 Cox Eq Cas 92 and the speech of Lord Upjohn in Pettit v Pettit [1970] AC 777 at p 814. |
In Pettit v Pettit [1970] AC 777, at 814 Lord Upjohn said this:
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It is far more likely to be solved by the doctrine of resulting trust, namely, that in the absence of evidence to the contrary if the property be conveyed into the name of a stranger he will hold it as trustee for the person putting up the purchase money and if the purchase money has been provided by two or more persons the property is held for those persons in proportion to the purchase money that they have provided. My
Lords, all this is trite law but I make no apology for citing the
judgment of Eyre CB in 1788 in the leading case of Dyer v Dyer
(1788)2 Cox, Eq Cas 92, 93, 94, set out in full in White and Tudor's
Leading Cases in Equity, 9th Edn (1928), Vol 2, 749: The
clear result of all the cases, without a single exception, is
that the trust of a legal estate, whether freehold, copyhold, or
leasehold: whether taken in the names of the purchasers and others
jointly, or in the names of others without that of the purchaser;
whether in one name or several; whether jointly or successive -
results to the man who advances the purchase-money. This
is a general proposition, supported by all the cases, and there is
nothing to contradict it; and it goes on a strict analogy to the
rule of the common law, that where a feoffment is made without
consideration, the use results to the feoffor. It is the established
doctrine of a court of equity, that this resulting trust may be
rebutted by circumstances in evidence. The
cases go one step farther, and prove that the circumstance of one
or more of the nominees being a child or children of the purchaser,
is to operate by rebutting the resulting trust; and it has been
determined in so many cases that the nominee being a child shall
have such operation as a circumstance of evidence, that we should be
disturbing land-marks if we suffered either of these propositions to
be called in question, namely, that such circumstance shall rebut
the resulting trust, and that it shall do so as a circumstance of
evidence. The
remarks of Eyre CB in relation to a child being a nominee are
equally applicable to the case where a wife is a nominee. Though
normally referred to as a presumption of advancement it is no more
than a circumstance of evidence which may rebut the presumption of
resulting trust, and the learned editors of White and Tudor were
careful to remind their readers at p 763 that 'all resulting trusts
which arise simply from equitable presumptions, may be rebutted by
parol evidence...' This doctrine applies equally to personalty. These presumptions or circumstances of evidence are readily rebutted by comparatively slight evidence;... [emphasis added] |
For the meaning of resulting trusts by operation of law, see Halsbury's Laws of England, 4th Edn, Equity Vol 16 (Reissue), paragraph 904 at p 806 where it says:
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A
resulting trust may arise solely by operation of law, as where, upon
a purchase of land, one person provides the purchase money and the
conveyance is taken in the name of another, there is then a
presumption of a resulting trust in favour of the person providing
the money, unless from the relation between the two, or from other
circumstances, it appears that a gift was intended (Dyer v Dyer (1768)
2 Cox Eq Cas 92 at 93, per Eyre CB; 2 White & Tudor's
Leading Cases in Equity (9th Edn) 749; and see Fang Ping Shan v
Tong Shun [1918] AC 403, PC). There is likewise a presumption of
a resulting trust where there is a voluntary transfer of [property]
[1] into the name of
another (Fowkes v Pascoe (1875) 10 Ch App 343 at 348; Vandervell
v IRC [1967] 2 AC 291) or into the joint names of the grantor
and another (Re Vinogradoff, Allen v Jackson [1935] WN 68),
... These two categories of purchase in the name of another and
voluntary transfer into the name of another have been classified as
'presumed resulting trusts' because they depend upon the presumed
intention of the grantor (Re Vandervell's Trusts (No 2), White v
Vandervell Trustees Ltd [1974] Ch 269 at 287 et seq,
per Megarry J; revsd without discussing this classification
[1974] Ch 269 at 308, CA). There is also another class of resulting
trust, classified as an 'automatic resulting trust' because it does
not depend on any intentions or presumptions, where the creation of
the trusts is express, although, in the events which happen, the
beneficial destination of the property is undermined. This is the
case when there is an entire or partial failure of the objects of
the trust, and then, to the extent of the failure, the benefit of
the trust results automatically to the settlor or his
representatives (Softer v Cavanagh (1838) 1 Dr & Wal 668;
Patrick v Simpson (1889)24 QBD 128; and Vandervell v IRC
[1967] 2 AC 291). --------------------- [1]. I substitute the word ["property"] for the words "pure personalty" which were in the text because in this country we do not have s. 60(3) of the English Law of Property Act 1925 where, in the case of a voluntary conveyance of land, a resulting trust for the grantor is not to be implied. In the absence of evidence of contrary intention, the grantee takes the land absolutely. There is no such distinction between realty and personalty (immoveable and moveable property) in our law for the creation of resulting trusts by voluntary transfer of real or personal property into the name of another. |
According
to Megarry J (see Re Vandervell's Trusts (No 2), White v Vandervell
Trustees Ltd [1974] Ch 269 at 287 et seq.) there are two
categories of resulting trusts, namely, the purchase of property in the name
of another and the voluntary transfer of property into the name of another,
which have been classified as "presumed resulting trusts". This is
because these two types of resulting trusts depend on the presumed intention
of the grantor that the property is to be held by the grantee on trust for
the grantor, so that the beneficial interest returns (results) to the
grantor. The other class of resulting trust is classified as an
"automatic resulting trust" because it does not depend on any
presumed intention of the settlor. An automatic resulting trust exists where
property has been conveyed to another on express trust, but the beneficial
interest returns (results) to the transfer or because the beneficial
destination of the property is undermined. This may happen when there is an
entire or partial failure of the objects of the trusts. The part of the
trust undisposed of will then result (return) automatically to the settlor.
In the present case where it concerns the house, I have only to determine on the proportions of the beneficial interests in the ownership of the property between Miss Liew and Mr Fork by applying the principle of the presumed resulting trust. I do not have to be concerned at this stage with the type of presumed resulting trust created by voluntary transfer into the name of another or with an automatic resulting trust created by an express trust which has failed. Here, at this juncture, I am only concerned with a presumed resulting trust of the kind that is in favour of the person (persons) providing the purchase money for the property but takes (take) the purchase in the name of another or in their joint names. In Halsbury's Laws of England, 4th Edn, Gifts Vol 20 (Reissue), paragraph 40 at p 27 it says:
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Purchase
in another's name. Where a
person buys real or personal property and pays the purchase money,
or part of it, but takes the purchase in the name of another, who is
neither his child, adopted child or wife, prima facie there
is no gift, but a resulting trust for the person paying the money (Earl
of Plymouth v Hickman (1690) 2 Vern 167; Dyer v Dyer (1788)
2 Cox Eq Cas 92, The Venture [1908] P 218, CA, Pettit v
Pettit [1970] AC 777, HL). The rule applies to the case where
several persons purchase property in the name of one (Wray v
Steele (1814) 2 Ves & B 388; Bull v Bull [1955] 1 QB
234, CA; Diwell v Fantes [1959] 2 All ER 379, CA), and to the
case of a purchase taken in the joint names of the person paying the
money and of another (Rider v Kidder (1805) 10 Ves 360). The
same rule applies to the case of a voluntary transfer of [property] [2]
into the name of another jointly with the transferor. ----------------------------- [2] I substitute the word ["property"] for the words "pure personalty" which were in the text because in English Law by virtue of their Law of Property Act 1925, s 60(3) resulting trust is not to be implied by the voluntary conveyance of real property to another merely because it not expressed to be conveyed as a gift for the grantee. Fowkes v Pascoe (1875) 10 Ch App 343, CA; Re Vinogradoff. Allen v Jackson [1935] WN 68) or into that other's name alone (Down v Ellis (1865) 35 Beav 578; Re Howes, Howes v Platt (1905) 2 TLR Sel; Vandervell v IRC [1967] 2 AC 291, HL). Proof of payment of money prima facie imports an obligation to repay in the absence of any circumstances tending to show anything in the nature of a presumption of advancement (Seldon v Davidson [1968] 2 All ER 755, CA). [emphasis added] |
Presumed
resulting trusts are rebuttable by evidence of an alternative intention. In
the case of a voluntary transfer into the name of another, it can be
rebutted by evidence of an intention to make a gift of the property to the
transferee. Where property is conveyed to the transferor's wife or child,
the intention to make a gift of it to them is presumed. This presumption of
an intention to make it a gift where property is conveyed from husband to
wife or from father to child is known as the presumption of advancement. Or,
in the case of a purchase in the name of another or in joint names, it is
rebuttable by evidence of an intention that the money for the purchase of
the property is to be provided by way of gift, loan, or rent. The
presumption of such a resulting trust (that is, where that parties hold each
other's shares in the property as trustees for one another proportionate to
their contributions to the purchase price) can also be displaced by evidence
of the parties' common intention to share the property on a wholly different
basis for apportioning the parties' shares, notwithstanding the inequality
of their contributions to the purchase price (see Springette v Defoe,
supra).
So that, in the present case, and also as held in Springette v Defoe (supra), the principle of law that is applicable is the age-old principle that if two or more persons purchased property in their joint names and there was no declaration of trusts on which they were to hold the property, they held the property on a resulting trust for each other proportionate to their contributions to the purchase price: see Dyer v Dyer (1788) 2 Cox Eq Cas 92; Pettit v Pettit [1970] AC 777, by Lord Upjohn at 814; Bernard v Josephs [1982] Ch 391; Young v Young [1984] FLR 375, CA. See also Halsbury's Laws of England, 4th Edn, Trusts Vol 48 (Reissue), paragraph 612 at p 325 which says:
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Where property is purchased in joint names, without any express declaration as to their beneficial interests, then, ... if the purchase money was provided in unequal shares, then each party has an equitable tenancy in common under a resulting trust with shares proportionate to his or her respective contributions to the purchase price (Bernard v Josephs [1982] Ch 391; Young v Young [1984] FLR 375, CA). |
This kind of resulting trust is rebuttable by evidence of an alternative intention, such as an intention that the money for the purchase of the property be provided by way of gift, loan, or rent. But as explained in Springette v Defoe (supra) in a case where the purchase money was provided in unequal shares, the presumed resulting trust can also be displaced (rebutted) by evidence (which must be communicated between them and made manifest at the time of the transaction itself) of a common intention to share the property on a basis for apportioning the parties' shares that are disproportionate to their respective contributions to the purchase price. This involvement of a wholly different basis for apportioning the parties' shares can be seen as where there is an agreement at the time of the acquisition to share the beneficial interests equally or in other proportions which are disproportionate to the parties respective contributions to the purchase price. Thus, in Springette v Defoe (supra) it was held that (see the headnote at 388):
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(1) |
If two or more persons purchased property in their joint names and there was no declaration of trusts on which they were to hold the property, they held the property on a resulting trust for the persons who provided the purchase money in the proportions in which they provided it, unless there was sufficient specific evidence of their common intention that they should be entitled in other proportions, that common intention being a shared intention communicated between them and made manifest at the time of the transaction itself. Since in the present case it was clear, notwithstanding any subjective intention each might have had, that there had been no discussion between the parties as to their respective beneficial interests, it must follow that the presumption of a resulting trust was not displaced, and accordingly, since the plaintiffs contribution to the purchase price, taking into account the discount attributable to her tenancy, and her cash contribution at the time of purchase amounted to some £18,000 and the defendant's to some £6,000 the respective beneficial interests of the parties were 75 per cent and 25 per cent. |
In Springette the recorder at first instance reached the conclusion (see the judgment of Dillon LJ at 391):
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... that they were to share equally, on the ground essentially that, though neither of them ever said anything about it to the other, each of them had in fact in his or her own mind an uncommunicated belief or intention that they were to share 49 St Andrews Road equally. |
This conclusion of the recorder was reversed by the Court of Appeal. Dillon LJ dealt with it as follows (at 392):
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However, the fact that after the purchase the mortgage was paid in equal shares is not evidence that they had a common intention that the property itself should belong to them in equal shares beneficially. It is merely evidence that, as the recorder found, they had agreed that they would each pay half of the mortgage payments; it goes no further than that. Accordingly, the case for equal beneficial shares must rest on the uncommunicated belief / intention of each that they would be sharing benefit as well as burden equally. |
And Dillon LJ concluded thus (at 393):
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But the common intention of the parties must, in my judgment, mean a shared intention communicated between them. It cannot mean an intention which each happened to have in his or her own mind but had never communicated to the other. |
Steyn LJ concurred and said (at 394, 395):
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On the appeal the question is whether the assistant recorder was right in concluding on the evidence that an actual common intention at the time of the purchase to acquire the property in equal beneficial shares had been established. When
they gave evidence the parties were agreed on one point. There had
been no discussion or communication between them as to the
beneficial shares which they would have in the property. And the
judge accepted that evidence, subject to minor and immaterial
qualifications. On behalf of the respondent it was suggested that
the parties must have communicated an intention that they should
have equal shares at a subconscious level. I fear that will not do.
Our trust law does not allow property rights to be affected by
telepathy. Prima facie, therefore, the alleged common
intention was not established. Can
it make any difference that both the man and the woman thought that
they were acquiring equal shares, albeit they did not say so to each
other? No authority in favour of an affirmative answer was cited. In
my judgment the answer must be a decisive no. The law must perforce
concentrate on external signs of common intention. It must
concentrate on what was said or done, rather than on what was
privately thought or speculated. If any authority for this
proposition is needed, it is to be found in the decision of the
House of Lords in Lloyds Bank plc v Rosset [1991] 1
AC 107 at p 132F, [1990] 2 FLR 155 at p 163G; see also Gissing v
Gissing [1971] AC 886 at p 906 B-D. ... In judging whether there was an actual common intention, the law must concentrate on manifested and communicated intentions. |
Where
the property was purchased in joint names and the purchase money was
provided in unequal shares, as in the present case, there is then a
resulting trust for each other in the proportions in which they had provided
the purchase money. Then only will the question arise as to whether the
presumption of the resulting trust has been displaced by evidence of a
common intention (which had been communicated between them and made manifest
at the time of the acquisition itself) to share the property in other
proportions or, to have one of them take the whole beneficial interest in
the property, notwithstanding the inequality of their contributions to the
purchase price.
In order to displace the presumption of a resulting trust in such a case, it is necessary to establish that there is evidence of their having manifested to one another at the time of the acquisition of the property an actual common intention as to how the beneficial interests should be held other than in the proportions on which they have provided the purchase money. To use the words of Dillon LJ (ibid at 393),
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But the common intention of the parties must, in my judgment, mean a shared intention communicated between them. It cannot mean an intention which each happened to have in his or her mind but had never communicated to the other. |
And Steyn LJ in the same case said (ibid at 394),
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Our trust law does not allow property rights to be affected by telepathy. |
See also Gissing v Gissing [1971] AC 886, HL, where Lord Diplock said, at 906B-F:
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As in so many branches of English law in which legal rights and obligations depend upon the intentions of the parties to a transaction, the relevant intention of each party is the intention which was reasonably understood by the other party to be manifested by that party's words or conduct notwithstanding that he did not consciously formulate that intention in his own mind or even acted with some different intention which he did not communicate to the other party. On the other hand, he is not bound by any inference which the other party draws as to his intention unless that inference is one which can reasonably be drawn from his words or conduct. It is in this sense that in the branch of English law relating to constructive, implied or resulting trusts effect is given to the inferences as to the intentions of parties to a transaction which a reasonable man would draw from their words or conduct and not to any subjective intention or absence of intention which was not made manifest at the time of the transaction itself... In drawing such an inference, what spouses said and did which led up to the acquisition of a matrimonial home and what they said and did while the acquisition was being carried through is on a different footing from what they said and did after the acquisition was completed. Unless it is alleged that there was some subsequent fresh agreement, acted upon by the parties, to vary the original beneficial interests created when the matrimonial home was acquired, what they said and did after the acquisition was completed is relevant if it is explicable only upon the basis of their having manifested to one another at the time of the acquisition some particular common intention as to how the beneficial interests should be held. |
See also Lloyds Bank plc v Rosset [1991] 1 AC 107 by Lord Bridge of Harwichat 132F:
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The first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially. The finding of an agreement or arrangement to share in this sense can only, I think, be based on evidence of express discussions between the partners, however imperfectly remembered and however imprecise their terms may have been. |
When it is established by evidence of a common intention as to how the beneficial interests should be held by the parties, then in such a case, the presumed resulting trust is displaced (rebutted). Once a finding to this effect is made it will be necessary next for the party who is claiming a greater proportion of the share of the property than his or her contribution to the purchase price to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust. This is how Lord Bridge put it, ibid (132G):
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Once a finding to this effect is made it will only be necessary for the partner asserting a claim to a beneficial interest against the partner entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or a propriety estoppel. |
See also Halsbury's Laws of England, 4th Edn, Trusts Vol 48 (Reissue), paragraph 612 at p 325:
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Where
property is purchased in joint names, without any express
declaration as to their beneficial interests, then, ... if the
purchase money was provided in unequal shares, then each party has
an equitable tenancy in common under a resulting trust with shares
proportionate to his or her respective contributions to the purchase
price (Bernard v Josephs [1982] Ch 391; Young v Young
[1984] FLR 375, CA) ... Provision of the purchase money may arise
from payment of mortgage instalments or of the deposit or of legal
fees. (Gissing v Gissing [1971] AC 886, HL; Re Densham (a
bankrupt), Exp the trustee of the bankrupt v Densham [1975] 3
All ER 726. The contribution must be to capital expenditure and not
to income expenditure e.g. rent: Savage v Dunningham [1974]
Ch 181)... Where property is bought with the aid of a mortgage, the
court has to assess each of the parties' respective contributions in
a broad sense, but the court is only entitled to look at the
financial contributions, or their real or substantial equivalent, to
the acquisition of the property (Burns v Burns [1984] Ch 317
at 344, CA per May LJ; Bernard v Josephs [1982] Ch 391, CA). Prima
facie, if the purchase is financed in whole or in part on
mortgage, the person who assumed liability for the mortgage
payments, as between the joint owners, is to be treated as having
contributed the mortgage moneys (Re Gorman (a bankrupt) ex p the
trustee of the bankrupt v The bankrupt [1990] 1 All ER 717; Huntingford
v Hobbs [1993] 1 FCR 45, CA). Where the house is taken in only one of the two names, usually in practice the man's, the position is more complicated. Subject to any express declaration of trust, where the property is purchased in the man's name but both parties contribute to the purchase price, the woman acquires an interest under a resulting trust proportionate to her contribution to the purchase price (Pettit v Pettit [1970] AC 777, HK; Gissing v Gissing [1971] AC 886, HL; Cowcher v Cowcher [1972] 1 All ER 943). Alternatively she may wish to make a claim under a constructive trust. On such a claim the first and fundamental question which must always be resolved is whether, independently of any inference to be drawn from the conduct of the parties in the course of sharing the house as their home and managing their joint affairs, there has at any time prior to acquisition, or exceptionally at some later date, been any agreement, arrangement or understanding reached between them that the property is to be shared beneficially (Lloyds Bank plc v Rosset [1991] 1 AC 107, HL, citing the leading cases of Pettit v Pettit [1970] AC 777, HL; Gissing v Gissing [1971] AC 886, HL). This common intention, which has been said to mean a shared intention communicated between them (Springette v Defoe [1992] 2 FLR 3 88 at 393, CA per Dillon LJ) and which must relate to the beneficial ownership of the property can only be based on evidence of express discussions between the parties, however imperfectly remembered and however imprecise their terms may have been (See Grant v Edwards [1986] Ch 638, CA; Hammond v Mitchell [1992] 2 All ER 109). Once a finding to this effect is made, it will only be necessary for the party asserting a claim to a beneficial interest against the party entitled to the legal estate to show that he or she has acted to his or her detriment or significantly altered his or her position in reliance on the agreement in order to give rise to a constructive trust or proprietary estoppel (Lloyds Bank plc v Rosset [1991] 1 AC 107, HL; Hammond v Mitchell [1992] 2 All ER 109). |
Where
the acquisition was in the joint names of parties and if evidence of a
shared or sole beneficial interest in the property (even though in unequal
property to the contributions made by the parties to the purchase price) is
established, then the presumption of a resulting trust (where the parties
hold the shares of each other in property as trustees for one another
proportionate to the contributions to the purchase money) is displaced (and
if requisite detriment is established) by a constructive trust.
THE
FACTS
The
parties bought the house (No 114, Pinggiran Ukay from Fu Lee Development Sdn
Bhd for $120,227.50. To obtained a housing loan from Bank Bumiputra (M) Bhd
for the sum of $84,000 to pay the balance of the purchase price to Fu Lee
Development. The property which was registered in their joint names was
charged to the bank security for the loan. Subsequently the charge was
discharged by the bank when Miss Liew repaid the bank the balance that was
due on the loan.
The figures below are taken from the statement of agreed facts and they are not in dispute. Thus:
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The price of the property (house No 114, Pinggiran Ukay, Mukim of Ulu Kelang, Selangor) as stated in the Sale and Purchase agreement dated 1/6/79 was $120,227.50. Mr
Fork Kian Seng Cash contribution to the purchase of the house
Miss Liew Choy Hung Cash contribution to the purchase of the house
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These
figures give, on a resulting trust, for practical purposes, Mr Fork 8.5 per
cent and Miss Liew 91.5 per cent share in the property. On these facts the
parties are presumed by operation of law to hold the property on a resulting
trust for each other in proportion to the purchase money that they have
provided.
But Miss Liew was not satisfied with this. She thought that she could have the house all to herself. She said that in 1986 the bank was demanding repayment of the money owed to the bank on overdue instalments and was threatening to apply to court for an order for sale of the property. And she said that was when Mr Fork told her
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I have only a very small share in this property. Do not let the bank auction the land. Take over my share and redeem the property. I owe you a lot of money and take over my share. |
When her counsel Miss Chew asked,
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What do you understand when the defendant says 'Take over my share'? |
Miss Liew replied,
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Whatever he owed to me would amount to a contra of his share. |
On
this evidence the question is whether the resulting trust has been displaced
and the answer will depend on whether on the evidence that an actual common
intention at the time of the purchase to acquire the property solely for
Miss Liew's own beneficial interest had been established. In the event that
the resulting trust is displaced by such evidence, then, the next question
is whether Miss Liew is alone entitled to the whole beneficial interest in
the property on a constructive trust. A constructive trust exists if the
requisite detriment is established. The acceptance of Mr Fork's "very
small share" in the property as set-off for the money owed to Miss Liew
by Mr Fork (if it can be proved) will constitute the requisite detriment.
This
communication was supposed to have taken place in 1986. There had been no
discussion between Mr Fork and Miss Liew at the time of the purchase of the
property in 1979 (the sale and purchase agreement was dated June 1, 1979) as
to the beneficial shares which they would have in the property, let alone a
communication from Mr Fork to Miss Liew asking her to take over his share of
the property. In my judgment the alleged common intention which would have
displaced the resulting trust was not established.
At the beginning Mr Fork also claimed for the whole beneficial interest in the property. He said that he had bought over Miss Liew's share in the property. If that was true then he would have been entitled to the whole of Miss Liew's share in the property. In such an event happening the resulting trust would have been displaced, not because of any pre-existing common intention as there was none but, by a binding contract under the Contracts Act 1950. See Gissing v Gissing (supra) by Lord Diplock at 906DE-F:
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.. .what spouses said and did which led up to the acquisition of a matrimonial home and what they said and did while the acquisition was being carried through is on a different footing from what they said and did after the acquisition was completed. Unless it is alleged that there was some subsequent fresh agreement, acted upon by the parties, to vary the original beneficial interests created when the matrimonial home was acquired, what they said and did after the acquisition was completed is relevant if it is explicable only upon the basis of their having manifested to one another at the time of the acquisition some particular common intention as to how the beneficial interests should be held. |
In order to succeed Mr Fork has to establish a subsequent fresh agreement to vary the original beneficial interests created when the property was acquired. This is what he said,
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ln mid 1981 I made an offer to buy over the property from the plaintiff. I mean to buy over her share of the joint property. |
When his counsel Mr Leong asked him about the terms of the contract, he said,
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I suggested that I would pay her $1,200 a month to progressively acquire her share of the joint property and also from time to time I would give her larger sums when I have the money. |
When asked what the price was for the sale of Miss Liew's share of the property, he replied,
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I first suggested that the property should be sold at the original purchase price. The plaintiff wanted the market value. After some discussions and disagreement, we arrived at a figure which we think is $122,400. |
He also said that Miss Liew was supposed to draw up a written agreement but the agreement was not drawn up. He said (under cross-examination by Miss Chew),
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I did offer to buy from the plaintiff her half share at the purchase price but the plaintiff insisted at the market value and not at the original purchase price. |
When asked by Miss Chew how he had arrived at the figure of $122,400, he answered,
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It must have come about after discussions with the plaintiff since she did not want to sell it to me at the original price. |
So much for the so called agreement on the price for the sale of Miss Liew's share in the property. When giving evidence in chief he said that they had agree to that a figure which they thought was $122,400. But under cross-examination he said that the price must have come about after discussing it with Miss Liew who did not want to sell at the original price. If there was in fact an agreed price, then he should know what the amount was. As the case stands, he was vague about the agreed price. He said that he thought it was $122,400 but later he changed it; it must have come about after discussing it with Miss Liew. In my judgment I do not think he was telling the truth.
When he said that he thought the agreed price was $122,400 he knew then that there was no agreement reached on the price. He has said that Miss Liew did not want to sell at the original price which was $120,227.50 but at market value. This clearly demonstrates that no agreement was ever reached on the price at all and the so-called agreed price of $122,400 could not have been the market price (which was Miss Liew's price) as it was a figure that was arrived at by arithmetical copulation only, not one which was based on a valuation of the market price.
This
is how, I think, Mr Fork arrived at his calculated sum of $122,400. In order
to pay $120,000 which was the original price in round figures (the actual
original price was $120,227.50) at 1,200 a month would have required 100
instalments. And by adding just two further instalments, the figure of
$122,400 was arrived at.
When
Miss Chew asked him, "Have you paid in full the sums of $122,400?"
He replied, "I believe I would have paid in full." Miss Chew then
asked "But you have nothing to substantiate that?" There was no
answer. In my judgment I do not believe that he ever paid $1,200 a month or
any other sums to purchase Miss Liew's share of the property. I do not
believe that there was any agreement at all for the sale of Miss Liew's
share of the property to Mr Fork.
When Miss Chew asked him in cross-examination, "What about the loan from the bank? Who takes over the loan?' His reply was, "There was no mention of that since there was no discussion of that." "Who serviced the loan then?" asked Miss Chew. He replied, "I think I did from time to time because I was paying her by instalments." Then followed these questions and answers,
|
Q: |
But it still has to be serviced by you because you have bought her entire share for $122,400. |
|
A: |
It should be me if I have paid her in full. |
|
Q: |
Since you say you are paying her by instalments, what was the arrangement for paying the loan? |
|
A: |
That was not mentioned in our discussion. |
All
this, to my mind, made the so-called agreement (if one ever existed at all)
void for uncertainty: see s 30, Contracts Act 1950 which says,
"Agreements, the meaning of which is not certain, or capable of being
made certain, are void."
In the result I find that the parties hold the property on a resulting trust for each other in proportion to the purchase money that they have provided. That means, in my judgment, Mr Fork is entitled on a resulting trust to an aliquot share of the property for his contribution of $10,812.16 (which for practical purposes is 8.5 per cent) and Miss Liew is also entitled on a resulting trust to an aliquot share of the property for her contribution of $117,044.66 (which for practical purposes is 91.5 per cent). This trust could be enforced by an order for sale and the proceeds of the sale (after deducting all reasonable expenses incurred for putting the property up for sale) will be divided between the parties in the proportions that l have indicated. See Cooke v Head [1972] 1 WLR 518 where Lord Denning MR ventured to suggest, at 520, that the trust could be enforced by an order for sale. He said:
|
... whenever two parties by their joint efforts acquire property to be used for their joint benefit, the courts may impose or impute a constructive or resulting trust. The legal owner is bound to hold the property on trust for them both. This trust does not need any writing. It can be enforced by an order for sale, but in a proper case the case can be postponed indefinitely. It applies to husband and wife, to engaged couples, and to man and mistress, and maybe to other relationships too. |
The
claims for money lent
Miss
Liew claims that she had lent money to Mr Fork during the fifteen years when
they were living together. Some of these loans went as far back as 1981. She
filed her action in 1992. I was quite surprised to find that limitation of
time was never raised as a defence.
Miss Liew claims that the cheques listed in Exh B (which is an agreed document) are for loans that she had given to Mr Fork. Mr Fork has denied that he had borrowed those sums from her. As a matter of law proof of payment of money prima facie imports an obligation to repay (on a resulting trust as a voluntary transfer of property to another) in the absence of any circumstances tending to show anything in the nature of a presumption of advancement or that the money had been paid in settlement of an existing debt or that the cheques were given in return for cash: see Seldon v Davidson [1968] 2 All ER 755, CA. The headnote reads, at 755:
|
Held:...the burden of proof was on the defendant...because, in the absence of any circumstances tending to show that a presumption of advancement arose or that the money had been paid in settlement of an existing debt or that the cheques were given in return for cash, the admitted payments imported a prima facie obligation to repay. |
Willmer LJ at 757:
|
The way I look at it is this. Payment of the money having been admitted, prima facie that payment imported an obligation to repay in the absence of any circumstances tending to show anything in the nature of a presumption of advancement. This is not a case of father and child, or husband and wife, or any other such blood relationship which could have given rise to a presumption of advancement. Counsel for the defendant who has argued the case in support of the appeal, was constrained to admit that the house, which had been bought with the aid of the money paid by the plaintiff, is no doubt prima facie subject to a resulting trust in favour of the plaintiff. That being so, it would be strange indeed if the same considerations did not apply to the money paid by the plaintiff to the defendant to assist him in the purchase of the house. |
And a little further down the page the Judge said this:
|
... we have from the defendant in this case a clear admission of the payment of the money, and no suggestion that it was paid in settlement of an existing debt, or that it was given in return for cash, or anything of that sort. In the absence of any such circumstances, money paid by the plaintiff in circumstances such these is prima facie repayable on demand. |
Seldon
v Davidson is a case where the payments were
admitted by the defendant so that the burden of proof was on him to prove
that there was no obligation on his part to repay the plaintiff because the
payments were gifts to him, or that the money had been paid to him in
repayment of a debt due by the plaintiff, or that the cheques were given to
him in exchange for cash. But in the present case the payments by the
cheques listed in Exh B were not admitted by Mr Fork. In such a situation
the burden of proof is on Miss Liew to prove that Mr Fork had received the
payments by those cheques.
Miss Liew produced photocopies of the following cheques listed in Exh B:
|
CHEQUE NO. |
DATE |
AMOUNT |
EXHIBIT NO |
|
OCBC77048 OCBC262413 OCBC 344833 OCBC387235 LEE WAH 222042 |
24/6/85 18/2/86 8/12/86 17/5/87 6/8/88 |
10,000.00 600.00 1,558.92 606.21 1,000.00 |
P1 P2 P3A P3B P9 |
They were all crossed cheques made payable to Mr Fork. All the cheques have been cleared by Miss Liew's bank. There was also another cheque which is not listed in Exh B but which Miss Liew has tried to prove by producing a photocopy of it. Since there was no objection to its admissibility by Mr Leong, I have allowed its admission and marked it as Exh P4. P4 was a crossed cheque for $557.30 payable to Mr Fork which was cleared by Miss Liew's bank.
In my judgment, I find that Miss Liew has proved that Mr Fork had received the payments as shown by these cheques. The burden of proof has now shifted to Mr Fork to prove that there was no obligation on his part to repay Miss Liew. Mr Fork only denied that he had borrowed those sums from Miss Liew but, in my judgment, that is not sufficient to rebut the presumption of the resulting trust in the present case.
Once
it is proved that the payments have been made to him as a volunteer there is
an obligation on his part to repay to the grantor on a resulting trust. The
onus is now placed on him to prove the facts that would show that the money
was not repayable. There was no suggestion from Mr Fork that the payments by
cheques were gifts, or that they were paid in settlement of an existing
debt, or that they were given in return for cash, or anything of that sort
which would have displaced the resulting trust. In the absence of any such
circumstances, the proof of payment of money (being a voluntary transfer of
property to another) prima facie imports an obligation on the
recipient to repay to the grantor on a resulting trust: see Seldon v
Davidson (supra).
On the other hand, Miss Liew was not able to produce the copies of the other four cheques listed in Exh B which I show below so she produced the butts of those cheques and her bank statements (to try to show that the cheques had been cleared by her bank) instead:
|
CHEQUE NO |
DATE |
AMOUNT |
EXHIBIT NO |
|
OCBC 781179 OCBC 832378 OCBC 18384 OCBC 2624012 |
15/5/81 6/11/81 23/10/82 9/8/85 |
2,000.00 13,000.00 7,499.56 742.92 |
P5A, P5B statement P6A, P6B statement P7A, P7B statement P8A, P8B statement |
Mr Leong argued that by merely producing the butts and bank statements do not necessarily mean that Mr Fork had received the payments. I agree with Mr Leong that Miss Liew has not managed to prove that the amount shown on the butts have been paid to Mr Fork. Mr Fork did not admit to the receipt of the payments so that the burden of proof is on Miss Liew to prove that she had paid those sums to him.
I
have not seen the cheques nor the photocopies of them so that I am unable to
say if the cheques were made out to Mr Fork or if the amount on the cheques
have been paid into his bank account. Without an admission from Mr Fork that
he had received the money, or the production of the actual cheques (or at
least photocopies of them as agreed documents) or anything like an IOU from
Mr Fork for the payments, or any other direct evidence of receipt of the
payments, I am unable to find with any degree of confidence that the alleged
payments were received by Mr Fork. I am, therefore, constrained to hold that
Miss Liew has failed to prove that the amounts written on the cheque butts
were received by Mr Fork.
In the same Exh B, Mr Fork has also a claim for the payments he said he had made by three cheques to Miss Liew. I list below the cheques as I find them on Exh B, thus:
|
BANK |
CHEQUE NO |
DATE |
AMOUNT |
|
Public Bank Public Bank Public Bank |
363719 738310 738304 |
10/6/87 26/1/89 23/12/89 |
8,802.00 630.00 1,151.00 |
The payments were disputed by Miss Liew, so that the burden of proof is on Mr Fork to prove that Miss Liew had received the payments from the above cheques. Mr Fork did not produce the cheques or anything of the sort that would show that Miss Liew was the payee. He also gave uncertain evidence as to why the payments were made. At first he said that the payments were for the purchase of Miss Liew's share of the property. Later, under cross-examination by Miss Chew, he changed his mind. He said:
|
The loans were made to her. She has not repaid me. So my thinking is since this property is in dispute this amount should go towards payment to increase my shareholding in the disputed house. |
Since
he was unsure as to what the payments were for and, furthermore, I also find
as a fact that Mr Fork has failed to prove that Miss Liew had received the
payments represented by these three cheques.
The
claims for the rentals
In paragraph 9.1 of her statement of claim Miss Liew claims the rentals which she says Mr Fork had collected from the tenants of two of her other premises when she was away abroad which he did not hand over to her. She claims (in paragraph 9.1 of her statement of claim):
|
(a) |
Rentals and miscellaneous sums from No. 11, Jalan Boon Kim |
2,611.00 |
|
(b) |
Rentals from K3 Flat, Menara Impian, Taman TAR, Kuala Lumpur |
4,500.00 |
Miss Liew's evidence was surprisingly brief. She said,
|
From the agreed bundle at p 80 I am claiming $1,311, for rental collected by the defendant from my tenant at No 11, Jalan Boon Kim. I am referring to the part that is in the box. It is in the defendant's handwriting. |
But when her counsel Miss Chew asked her why in her statement of claim she is claiming the sum of $2,611 for No 11, Jalan Boon Kim, she replied,
|
$1,311 is two months rentals at p 80 of the agreed bundle leaving $1,300 outstanding which is the amount stated in Exh P10B for No 11, Jalan Boon Kim. So if you add the two together we get $2,611. |
That was a strange answer because when I looked at p 80 of the agreed bundle, I found that the amount of $1,311 was made up of:
|
1 month deposit |
$ |
650.00 |
|
|
Electricity, water deposit |
300.00 |
||
|
Legal fees |
267.00 |
||
|
Disbursements |
94.00 |
||
|
$ |
1,311.00 |
||
|
Add the June and July rentals |
June |
650.00 |
|
|
July |
650.00 |
||
|
And that makes the total sum: |
$ |
2,611.00 |
She has also claimed $4,500 which she says Mr Fork had collected from the tenant of her flat K3, Menara Impian, Taman TAR, Kuala Lumpur. When Mr Fork was asked by his counsel Mr Leong that,
