New South Wales Supreme Court CITATION : Drakeford v Bromhead [2003] NSWSC 296 HEARING DATE(S) : 03/04/03 JUDGMENT DATE : 15 April 2003 JURISDICTION: Equity Division JUDGMENT OF : Barrett J DECISION : Resulting trust as to both real property and money CATCHWORDS : TRUSTS AND TRUSTEES - resulting trust - property purchased in name of one sister with money provided by another sister - whether intention of second sister that first sister should have beneficial ownership established so as to rebut resulting trust - payment of money by first sister to second sister for specific purpose - purpose rendered unachievable by subsequent events - whether money held on resulting trust for first sister Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567 Calverley v Green (1984) 155 CLR 242 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 CASES CITED : Gilbert v Gonard (1884) 54 LJ Ch 439 Muschinski v Dodds (1985) 160 CLR 583 at 590 Rose v Rose (1986) 7 NSWLR 679 Twinsectra Ltd v Yardley [2002] 2 AC 164 Patricia Ann Drakeford - Plaintiff PARTIES : Paul David Bromhead as the Executor of the will of the late June Mary Bromhead - First Defendant Kim Maree Bromhead - Second Defendant FILE NUMBER(S) : SC 6048/01 COUNSEL : Mr P G Maiden - Plaintiff Mr M S Henry - Defendants Murwillumbah Lawyers Pty - Plaintiff SOLICITORS : Trenches - First Defendant Michael Dakin & Associates - Second Defendant IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BARRETT J TUESDAY, 15 APRIL 2003 6048/01 – PATRICIA ANN DRAKEFORD v PAUL DAVID BROMHEAD & ANOR JUDGMENT Background, parties and claims 1 These proceedings concern a strata title property at 3/24 Stewart Street, Lennox Head. By contract dated 11 October 2000, June Mary Bromhead ("Mrs Bromhead", known to her family as "Jule") became purchaser of the property from Susan Forrest Flinn for a price of $195,000. The purchase was completed on 10 November 2000 and Mrs Bromhead became in due course the registered proprietor of the property. Mrs Bromhead died some three months later, on 17 February 2001. 2 The plaintiff is Mrs Bromhead's sister. By her summons filed on 20 December 2001, the plaintiff claims a declaration that she is the equitable owner of the property by reason of a resulting trust in her favour. She makes a corresponding claim in respect of a sum of $25,000 held in a bank account of Mrs Bromhead. Consequential relief is also claimed. 3 There are two defendants. The first defendant is Mrs Bromhead's son who is the executor of her will dated 11 February 2001, probate having been granted to him on 27 August 2001. The first defendant consents to the making of the orders the plaintiff seeks but reserves his position on costs. He has taken no part in the proceedings. 4 The second defendant is one of Mrs Bromhead's daughters, Kim Maree Bromhead. She opposes the grant of the relief sought by the plaintiff and was represented by Mr Henry of counsel upon the hearing of the summons. The second defendant's interest in the proceedings comes from her being a beneficiary under Mrs Bromhead's will to the extent of 30% of the estate, the first defendant son being the beneficiary as to 70%. According to the inventory forming part of the probate, Mrs Bromhead's estate consisted of the Stewart Street property at a value of $200,000, a sum of $25,047.59 in an account with the Commonwealth Bank, furniture at a value of $3,500 and a Holden Commodore valued at $3,500. 5 The plaintiff's claims in respect of the sum of $25,000 and the Stewart Street property must be dealt with separately. I shall consider first the Stewart Street property although, in so doing, I shall need to refer also to the $25,000. The claim in respect of the property – provision of purchase money 6 The plaintiff's claim in respect of the property is, quite simply, that she paid the whole of the purchase money and purchase costs (including stamp duty and legal expenses), having obtained the necessary funds by mortgaging a property she owned in Bayview Street, Runaway Bay, Queensland. In her affidavit, the plaintiff deposes to a desire formed in about 1999 to provide each of her sisters (Mrs Bromhead and Mrs Daniel) with a home. The plaintiff's means were greater than theirs. She bought a duplex on the Gold Coast so that Mrs Daniel might live there. The two units are owned by the plaintiff and one is occupied by Mrs Daniel. For a period of about 13 months in 1999/2000, Mrs Bromhead lived with the plaintiff at the latter's home at 4 Tinba Court, Runaway Bay. The plaintiff had it in mind that Mrs Bromhead might go to live in the second duplex unit but Mrs Bromhead made it known to the plaintiff that she wished to live in the Ballina-Lennox Head area to be near her family at Ballina. The plaintiff says in her affidavit: "The deceased's move to Lennox Head was initiated by my handing the sum of $25,000.00 to the deceased with the intent of the money being used to lodge as a deposit on a property, if she found one that she liked at Lennox Head. The balance of any purchase price would then come from my funds or from my borrowings." 7 There is documentary evidence showing that on or shortly after 6 November 2000, the plaintiff drew down a mortgage loan in the sum of $225,000 secured by mortgage of her Bayview Street property and that several of the cheques by which this advance was made corresponded with cheques required by the solicitors acting for Mrs Bromhead on the purchase of the Stewart Street property. The corresponding cheques account for all but $42,259.55 of the mortgage advance, of which $41,204.03 is shown as "P.A. Drakeford (balance of loan)" and the remaining $1,055.50 is shown as "Bain Gasteen (fees)". (Bain Gasteen were the solicitors for the lender.) It is clear (and not disputed) that the total of the sums paid upon completion of Mrs Bromhead's purchase of the Stewart Street property, both as balance of purchase price and as expenses of purchase, was provided by the plaintiff out of the loan proceeds. 8 A deposit of $19,500 was paid at or about the time of the earlier exchange of contracts. There is in evidence a copy of a cheque for that amount drawn by the plaintiff on her account with Suncorp Metway Ltd at Brisbane. The cheque is drawn in favour of Elders Real Estate, the vendor's agent named in the contract, and is dated 6 October 2000 which was five days before exchange of contracts. It is thus clear (and again not disputed) that the plaintiff provided the whole of the deposit. 9 In light of this evidence, I find that the whole of the purchase moneys paid under the contract by which Mrs Bromhead became the ostensible purchaser of the Stewart Street property were paid and provided by the plaintiff. On principles discussed in Calverley v Green (1984) 155 CLR 242, it follows that it will be presumed that Mrs Bromhead, the ostensible purchaser, held the property from inception upon a resulting trust for the plaintiff as real purchaser and that that presumption will prevail unless rebutted. Rebuttal is dealt with in the following passage in the judgment of Gibbs CJ in Muschinski v Dodds (1985) 160 CLR 583 at 590: "However the presumption that there is a resulting trust may be rebutted by evidence that in fact the real purchaser intended that the other transferee should take a beneficial interest. Where both transferees have contributed to the purchase money, the intentions of both are material, but where only one has provided the money it is his or her intention alone that has to be ascertained. The evidence admissible to establish the intention of the real purchaser will comprise 'the acts and declarations of the parties before or at the time of the purchase ... or so immediately thereafter as to constitute a part of the transaction' ( Charles Marshall Pty. Ltd. v. Grimsley (1956) 95 CLR 353, at p.365 ); in addition, the purchaser may testify as to the intention which he or she had at the relevant time: Martin v. Martin (1959) 110 CLR 297, at p.304 . Subsequent declarations will be admissible as evidence only against the party who made them and not in his or her favour: Charles Marshall Pty. Ltd. v. Grimsley (above)." 10 The central question in relation to the Stewart Street property is accordingly concerned with the intentions of the plaintiff at the time of the purchase, she being the provider of the whole of the funds for the acquisition. It is appropriate to begin with the documentary evidence. Documentary evidence concerning purchase of property 11 On 29 September 2000, Elders Real Estate, Lennox Head (Mr Michael King), sent to Messrs Jensens, solicitors, a letter confirming sale of the property to the plaintiff and Mrs Bromhead and giving other details. Jensens received on 29 September 2000 from Stone & Partners of Byron Bay, solicitors for the vendor, a form of contract in which both the plaintiff and Ms Drakeford were named as purchasers. On 3 October 2000, Jensens sent the form of contract to "Ms P A Drakeford & Ms J M Bromhead" at the plaintiff's home address at 4 Tinba Court with a letter discussing the difference between purchasing as joint tenants and purchasing as tenants in common and giving directions as to how the contract should be completed once the plaintiff and Mrs Bromhead had decided which form of co-ownership they desired. 12 There are in evidence two pages (the first and the last) of a loan application to AMP Bank in which the property and loan details do not appear (provision for these being on pages other than the first and the last) but in which Mrs Bromhead appears as "Applicant 2". Mrs Bromhead's signature appears on the second of the pages. These two pages were, at some stage, faxed by AMP (or an AMP entity) to someone whose name has been obliterated and, after being signed by Mrs Bromhead, they were faxed, with the same AMP cover page (although with handwritten alterations to the sender, addressee and other matters), to the plaintiff's financial adviser, Mr Price. This transmission occurred on 2 October 2000. 13 There is also in evidence a like loan application form running to six pages in which the plaintiff is named as "Applicant 1" and which she has signed. This relates to a loan of $225,000 to be secured on the Bayview Street property. 14 The next document to which reference should be made is a copy of the first page of the form of contract for sale in respect of the Stewart Street property already mentioned which bears the signature of the plaintiff and a witness, but with both those signatures and the plaintiff's name as one of the two purchasers ruled through. The contract as exchanged and dated 11 October 2000 has a first page identical with that just mentioned but with Mrs Bromhead's signature above the crossed out signature of the plaintiff and a witness's signature (apparently "K Bromhead") beside the crossed out signature of the plaintiff's witness. 15 On 6 October 2000, Mr Price, the plaintiff's financial adviser, sent the plaintiff's cheque for the $19,5000 deposit to Mr King of Elders Real Estate with a note as follows: "Michael It has been decided to purchase in 1 name only hence we have dealeated [sic] Trish Drakeford's name etc. Please find attached deposit cheque. Regards Huw Price 6/10/00". 16 The documents to which I have referred make it clear that there was an initial proposal (reflected in the form of contract and the letter of 3 October 2000 from Jensens) that the plaintiff and Mrs Bromhead should become co-owners of the Stewart Street property but that, with the plaintiff's knowledge and concurrence, Mrs Bromhead became the sole purchaser and sole registered proprietor. Affidavit and oral evidence concerning purchase of property 17 I turn next to the affidavit evidence and cross-examination. The plaintiff says in her affidavit of 18 December 2001 that her payment of the purchase moneys "was not a gift to my sister" and "it was always intended to be my property". That must be taken to be a statement of the intention of the plaintiff, albeit a statement made some 14 months after the purchase and some ten months after the death of Mrs Bromhead had clarified for the plaintiff the reality that, in the absence of some order of the court to the contrary, the property would come to be owned by the beneficiaries under Mrs Bromhead's will. In her affidavit in reply sworn on 27 May 2002, the plaintiff said that it was arranged for the contract to be issued in the two names and that she had Mrs Bromhead's name placed there with her own "so as to give her some dignity and so that she didn't feel she was a pauper". She continued: "This act was not intended as a gift, but merely as an act of kindness to my sister." 18 There is evidence from the second defendant that she received the form of purchase contract and gave it to her mother (who was then ill), pointing out to her that the plaintiff and Mrs Bromhead were both shown as purchasers. The second defendant deposes that her mother than became very angry, saying "That's not right; that's not what she said", and that Mrs Bromhead afterwards said that she had spoken to the plaintiff by telephone and, "It's all sorted out now; she said she'd get another contract sent to me as soon as possible in my name". 19 The plaintiff was closely cross-examined. She confirmed that Mrs Bromhead's name had appeared alone in the final contract with the plaintiff's concurrence. The cross-examination continued: "Q. … At the time that you paid the deposit for the Stewart Street property, you intended, didn't you, that your sister be identified as the sole purchaser on the contract? A. Yes. Q. Similarly, when you paid the balance of the purchase price for the property, you intended for your sister to be the sole purchaser identified on the contract; isn't that right? A. Yes. Q. I'm sorry? A. Yes. Q. By your sister being identified as the sole purchaser on the contract, you intended, didn't you, to give her the property at Stewart Street upon paying the purchase price; isn't that right? A. It appears so, yes. Q. That was a nice thing to do, wasn't it? A. Well, wonderful. Q. And you did it by way of a gift, to your mind? A. No, I did not give a gift, no. Q. As far as you were aware, at the time that you provided for the purchase funds for the property, you would never obtain any ownership of the property, given that it was put in your sister's name; do you agree with that? A. I was not aware of that fully. Q. I'm sorry? A. I wasn't aware of that fully. Q. But your intention, at the time that you provided the purchase price, was consistent with that, wasn't it? A. The only reason -- Q. Will you answer my question? A. I'm sorry. Q. Your intention, at the time you provided the purchase price for the Stewart Street property, was that you would never obtain any ownership of any sort in the Stewart Street property; isn't that right? A. Never, is that --? Q. Is that so? A. I suppose so." 20 The next elements of the evidence to be mentioned, so far as the Stewart Street property is concerned, are those involving the financing of the purchase. It appears to have been envisaged at one point that Mrs Bromhead was to become a borrower from AMP as "Applicant 2", however, the plaintiff eventually became the sole borrower, with her Bayview Street property being security. A letter dated 11 October 2000 (the date of exchange of contracts) from the plaintiff's financial adviser Mr Price to Mr Lauritz of AMP Financial Planning reads in part as follows: "Patricia has agreed to purchase for her sister a property in Lennox Heads NSW. To aid in the process a mortgage will be raised on Patricia's freehold investment property at 380 Bayview Street Hollywell. The property at Bayview Street will be placed on the market for sale by calendar years end, upon satisfactory sale the mortgage associated will be repaid." 21 The plaintiff was cross-examined about this but seemed vague and confused in her answers. The most illuminating answer was: "I left Mr Price to do the managing, to manage the finances and things." 22 I refer next to evidence of the second defendant. She reports Mrs Bromhead as having said to her in February 2000, "Trish is going to buy me a nice house". The second defendant's affidavit also records the circumstances in which a contract showing the plaintiff and Mrs Bromhead as co-purchasers was received and discussed, as already related. The affidavit goes on to relate a telephone conversation between the plaintiff and the second defendant in which the plaintiff said, among other things, "Your mum should be in her new house by November", and the second defendant said, "Thanks so much, Trish. It's an unbelievable gift". The second defendant says that, in the course of that conversation, the plaintiff spoke fondly of Mrs Bromhead, referring back to their childhood days and to episodes that had caused the plaintiff to be grateful to Mrs Bromhead. The plaintiff agrees that she had such a conversation with the second defendant but places it at a different time. 23 I should note here evidence given by Mr Price. He advised the plaintiff that the property should be bought by her and Mrs Bromhead as joint tenants. I am satisfied that it was that advice that caused the contract naming two purchasers to be issued. Mr Price also testified that it was he who had crossed out the plaintiff's name on the contract: "MAIDEN: Q. If you could tell us those conversations leading up to the striking out of the name on the contract? A. The conversations leading up to the striking off of the name is that I had been requested by Kim Bromhead to obtain the $7,000 first home owner's grant for her mother. Kim had subsequently rung my client, Patricia Drakeford -- OBJECTION Q. You must use the conversation. Who said what? A. I said to Patricia Drakeford that if her name is taken off the contract it becomes extremely messy with regard to ownership of the property. She insisted that her name be taken off so that her sister could obtain the $7,000 first home owner's grant. Q. Was there any other discussion about the ownership or what ownership of the property meant? A. I had explained to Patricia the various methods of ownership. Q. Could you again, as best you can, say what you said and what she said? A. I had explained to her the difference between joint tenants and tenants in common. I had discussed with her that tenants in common would be preferable in a 99/1 ratio between her and her late sister. Q. What did the plaintiff say? A. She was not happy with 99/1 in regards to herself. She wanted her sister in there at fifty-fifty joint tenants purely to give her sister some sense of having control over the property. Q. What were the words that were said about that? What did she say? A. 'I want her to have some dignity'." 24 It is also pertinent to quote from a letter of 12 March 2001 from Mr Price to the first defendant, the executor of Mrs Bromhead's will (she had died on 17 February 2001): "As you are aware Trish gave your mum, $25,000 to act as a deposit and subsequently purchased a home for Jule in October of last year. Trish was very happy to do this, to enable Jule to live in a house she could call her home. With the sudden passing of Jule, Trish now finds herself in an embarrassing position both emotionally and financially. To enable the purchase of 3/24 Stewart Street Lennox Head, Trish placed a mortgage on a freehold property on the Gold Coast. Trish is still paying this mortgage off. I have been asked by Trish to request the property at Lennox be sold and the mortgage paid out. Trish wishes to provide funds to Jules family in the memory of Jule. Trish is aware that you improved the home at Stewart Street and wishes to compensate you for the work done." Findings as to plaintiff's intentions 25 I proceed now to findings as to the plaintiff's intentions. There can be no doubt that, at the time of the purchase, the plaintiff intended that Mrs Bromhead should become the sole registered proprietor of the Stewart Street property. In taking that line, she went against the advice of Mr Price who warned of things becoming "messy" as a result. According to Mr Price's evidence of what the plaintiff said at the time of the purchase, the plaintiff wanted her sister's name alone on the contract to give her "some dignity" and so that she would have "some sense of having control over the property". There was, in my judgment, an intention of the plaintiff, born of her affection for her sister, so to arrange matters that Mrs Bromhead would derive comfort from seeing her name alone on the title. Mrs Bromhead was upset about the notion that the two of them should be shown as co-owners and the plaintiff took steps to cause Mrs Bromhead's name alone to appear on the title to protect Mrs Bromhead's feelings. But the plaintiff did not intend to make a gift to Mrs Bromhead: she only wanted Mrs Bromhead to have the comfort and satisfaction of having a home registered in her own name, as well as the use of that home. That desire was an adjunct to a pre-existing desire or intention corresponding with that which pertained in relation to Mrs Daniel, namely, that the plaintiff should buy a property of which the plaintiff was the owner and which the sister could occupy indefinitely and therefore regard as her home. References there may have been at the time to the plaintiff's buying a home "for" Mrs Bromhead can be no more than equivocal on the subject of ownership. It is a quite natural use of language for someone to say that they are buying something "for" someone else when the intention is that the other person should have the use and enjoyment of the thing, as distinct from ownership of it. 26 Mr Price's letter of 12 March 2001 to Mrs Bromhead's executor provides further insights into the way things were viewed from the plaintiff's side a few months after the purchase. The purpose and result of the purchase are seen as having been "to enable Jule to live in a house she could call her home". The operative words are "she could call her home", not "that was her own". In addition, sale of the Stewart Street property (something only the executor could effect, in a direct sense) was presented as the logical means of seeing the mortgage on the Bayview Street property paid out, so that a close connection was drawn between satisfaction of the debt owed by the plaintiff and sale of the Stewart Street property. Finally, the expressed desire of the plaintiff to compensate Mrs Bromhead's son for work done by him on the property is consistent with a view on the plaintiff's part that she was the true owner to whom the benefit of the work had accrued. 27 The evidence given by the second defendant refers to Mrs Bromhead having said, "Trish is going to buy me a new house". That, of course, is consistent with an intention on the plaintiff's part of herself becoming the owner of a house set aside for the use and occupation of Mrs Bromhead. Likewise, the second defendant's statement to the plaintiff, "It's an unbelievable gift" is consistent with a gift of occupancy or possession rather than ownership. In any event, these statements are pertinent only in so far as they throw light on the plaintiff's intentions, whatever may have been the understanding of Mrs Bromhead and the second defendant. I am satisfied that the plaintiff did make, in that or another conversation with the second defendant, affectionate statements about Mrs Bromhead. But that, to my mind, says nothing about her intention in relation to the purchase of the property beyond acknowledging that it was motivated by a general desire to look after Mrs Bromhead. It cannot be said to be consistent only with an intention that beneficial ownership should reside in Mrs Bromhead. It is equally consistent with an intention to provide rent free accommodation for her. 28 The plaintiff's statements in her affidavits and in the witness box as to her intentions really cannot be taken into account except to the extent that they may militate against the case she seeks to make: Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353. The plaintiff, as I have said, seemed vague and confused in cross-examination. It is true that a question as to whether her intention, when providing the purchase moneys, was that she would never obtain any ownership in the property was answered, "I suppose so". But that followed another answer in which she said that she was not fully aware that she would never obtain any ownership, given that the property was put into Mrs Bromhead's name. My assessment is that the cross-examiner and the witness were somewhat at cross purposes in referring to "ownership". Mr Henry, clearly (and naturally) enough, was referring to beneficial ownership of the kind that is at the heart of this case. But I think that the witness was equating the name on the title with ownership. This comes through from some questions she was asked about her understanding of what happens to property owned in the name of one person when that person dies. Her answer, referring obviously to the particular case at hand, was: "Because I was the provider, I would have, so that it would actually come back to me." The cross-examination continued: "HENRY: Q. I take it what you are suggesting is that, prior to providing money for the purchase of the Stewart Street property, you say that you then understood that the property would come back to you, upon your sister's death, because you provided the purchase of [sic] funds; is that what you say now? A. Yes." 29 The plaintiff's apparently confused ideas about "ownership" are, I think, illuminated by this exchange. It seems that she equated the face of the register with ownership and, in that sense, saw Mrs Bromhead as having ownership because her name alone was on the documents. But that view of ownership was accompanied by two important aspects of the plaintiff's mental processes: first, she attached an importance to her role as "provider" – that is provider of the funds – that would cause the property to "come back" to her; and, second, there is the crucial answer in her cross-examination, "No, I did not give her a gift, no". According to the plaintiff's affidavits and cross-examination, any giving that was perceived by the plaintiff was, in my judgment, confined to allowing the property to be bought in the sole name of Mrs Bromhead so that she would be able to see herself on the title as sole owner and would thereby be afforded the mark of dignity her sister wished to bestow on her. However, as I have said, it would be wrong to attach weight to the plaintiff's recent evidence in so far as it advances her case. I therefore put it to one side in favour of the evidence to which I have already referred, being Mr Price's statements of what the plaintiff said at the time of purchase and the content of the 12 March 2001 letter. 30 I find that the plaintiff, in allowing the Stewart Street property to be purchased in Mrs Bromhead's name with funds wholly provided by the plaintiff, intended to do a kindness to her sister by allowing Mrs Bromhead to appear on the face of the record as the sole owner of a property bought by the plaintiff for Mrs Bromhead's use but that, as to beneficial ownership of that property, she had the same intention as in relation to the property she had previously bought to accommodate her other sister, Mrs Daniel, namely, an intention that beneficial ownership should reside in the plaintiff. The evidence does not enable me to conclude that, at the time of the purchase, it was the intention of the plaintiff that beneficial ownership should accrue to Mrs Bromhead. Conclusion on claim relating to property 31 It follows that the presumption of resulting trust in favour of the plaintiff by reason of her having provided the whole of the purchase moneys is not rebutted by evidence that the plaintiff intended that Mrs Bromhead should take beneficial ownership. I emphasise that the presumption prevails unless positively overborne by evidence of such intention. In my judgment, the evidence does not support a finding of such intention on the plaintiff's part. The claim in respect of the $25,000 32 I turn now to the plaintiff's claim in relation to the sum of $25,000. There is a preliminary question here as to whether the moneys paid over to Mrs Bromhead by the plaintiff continue to exist in some traceable form enabling them properly to become the subject of the relief the plaintiff seeks. The plaintiff says that account with the Commonwealth Bank in the name of Mrs Bromhead reflecting a credit balance of $25,047.59 at the date of death must be taken to contain the money paid by the plaintiff to Mrs Bromhead. The second defendant says that there is no basis for any such conclusion and, in effect, that the money in question has not been shown to be still in existence. 33 The inventory forming part of the probate shows that, apart from the Stewart Street property and the bank account, Mrs Bromhead left minimal assets. There were no cash resources and only a bare minimum of personal possessions, being furniture ($3,500) and a car ($3,500). She lived with the plaintiff for about a year at Tinba Court before moving to Lennox Head. Having arrived at Lennox Head, she lived in a rented flat that she is reported by the second defendant to have described as a "flea pit". The second defendant also refers to a conversation with her mother in which the second defendant said, "It's not as if we've ever had anything anyway." The plaintiff deposes that Mrs Bromhead had "a rather unusual habit of carrying all of the money that she had earned and saved, in cash, in a bag". The plaintiff says that she saw the bag on several occasions and chatted with Mrs Bromhead about it when she was living with the plaintiff at Tinba Court. Mrs Bromhead told the plaintiff that there was "about $10,000 to $12,000 in cash in that bag" and that she had been carrying it over the years and adding to it from time to time when she found seasonal or other work. So far as the plaintiff knows, Mrs Bromhead took the bag with her when she went to live at Lennox Head. 34 I infer from the whole of this evidence that Mrs Bromhead was a person of very limited means and was in the habit of keeping her savings in the form of cash that she carried with her. I also infer that, if she had a bank account, she kept little, if anything, in it on a continuing basis and that, as and when any funds were accumulated, she preferred to put them in her bag in the form of cash. When the plaintiff paid $25,000 to Mrs Bromhead, she did so by means of a cheque. There is specific evidence from the plaintiff to that effect. Having come into possession of a cheque for $25,000, Mrs Bromhead could not obtain the funds except through some appropriate dealing with the cheque. The logical dealing would have been deposit of the cheque by Mrs Bromhead into a bank account. I infer that, at that point, Mrs Bromhead deposited the cheque into either a bank account she already had or one she opened for the purpose. There is evidence from the plaintiff that, after the purchase of the Stewart Street property had been completed, she had a telephone conversation with Mrs Bromhead about the $25,000 in which Mrs Bromhead said, "I must get that money back to you." This conversation took place in mid December 2000 and I am satisfied that, at that time, the $25,000 received by Mrs Bromhead from the plaintiff was held intact in Mrs Bromhead's bank account. Mrs Bromhead was, it appears, mindful of the need to restore the $25,000 to the plaintiff and it may be accepted that she kept that sum in her bank account so that she would be able to do so. On that basis, the money paid by the plaintiff to Mrs Bromhead must be regarded as continuing to exist in a form that makes it capable of becoming the subject of the orders the plaintiff seeks. 35 I have already quoted the plaintiff's statement in her first affidavit about the circumstances in which she handed the sum of $25,000 to Mrs Bromhead (see paragraph 6 above). This is a clear statement as to the plaintiff's intention. In her affidavit in reply, the plaintiff said, after referring to Mrs Bromhead's wish to leave Tinba Court and to live in the Ballina-Lennox Head area rather than occupying the other unit in the duplex occupied by Mrs Daniel: "To that end, I invited the deceased to look for a property in that area which I would buy, and I gave her a cheque for $25,000 for the purpose of lodging a 10% deposit on a property if she found a property that she liked. I recall saying to my late sister:- 'You can look for any place up to $250,000' and then I gave her the cheque for $25,000." 36 The question whether the sum of $25,000 held in Mrs Bromhead's bank account was, at her death, held by her on trust for the plaintiff is to be resolved by reference to the intention of the plaintiff at the time of handing over the money. It is clear, on the evidence, that the money was made available to Mrs Bromhead for a specific purpose, namely, for use as a deposit if and when Mrs Bromhead found a property in the Ballina- Lennox Head area in which she wished to live. It is also clear, on the findings I have already made, that Mrs Bromhead placed the $25,000 in a bank account where it remained untouched at her death. That is consistent with her having taken steps to keep it intact for the designated purpose which, of course, became exhausted when the plaintiff provided the whole of the funds for the purchase of the Stewart Street property. 37 In Gilbert v Gonard (1884) 54 LJ Ch 439, North J said: "It is very well known law that if one person makes a payment to another for a certain purpose, and that person takes the money knowing that it is for that purpose, he must apply it to the purpose for which it was given. He may decline to take it if he likes; but if he chooses to accept the money tendered for a particular purpose, it is his duty, and there is a legal obligation on him, to apply it for that purpose." 38 The nature of this duty was explained by Lord Millett in Twinsectra Ltd v Yardley [2002] 2 AC 164: "The duty is not contractual but fiduciary. It may exist despite the absence of any contract at all between the parties, as in Rose v Rose (1986) 7 NSWLR 679; and it binds third parties as in the Quistclose case itself. The duty is fiduciary in character because a person who makes money available on terms that it is to be used for a particular purpose only and not for any other purpose thereby places his trust and confidence in the recipient to ensure that it is properly applied. This is a classic situation in which a fiduciary relationship arises, and since it arises in respect of a specific fund it gives rise to a trust." 39 The trust concerned is of the "Quistclose" variety: Barclays Bank Ltd v Quistclose Investments Ltd [1970] AC 567. It is properly to be regarded as a resulting trust back to the provider of funds upon the failure of the purpose for which the funds were provided: Rose v Rose (1986) 7 NSWLR 679 per Hodgson J. Conclusion on claim relating to $25,000 40 The sum of $25,000 handed by the plaintiff to Mrs Bromhead was paid on the footing that it was to be used exclusively to meet the deposit on a home to be purchased for Mrs Bromhead's occupation. It was never Mrs Bromhead's money to do with as she wished. Once the purpose related to payment of a deposit on a home for Mrs Bromhead's use was overtaken by the events that saw the plaintiff pay the whole of the purchase moneys for the Stewart Street property, there was no longer anything that Mrs Bromhead could do with the money in furtherance of that purpose, so that the plaintiff's equitable right to see it used as a deposit became instead an equitable right to have it back upon failure of the purpose. I hold, therefore, that the sum of $25,000 held in the bank account included in the probate inventory was, at Mrs Bromhead's death, held by her upon trust for the plaintiff. Disposition of proceedings 41 The plaintiff is entitled to relief to the effect sought in paragraphs 2, 3, 4 and 5 of her summons filed on 20 December 2001. The appropriate course is that short minutes of orders be brought in. I direct that agreed short minutes be filed by delivery to my Associate within 14 days and, in default of agreement, that my Associate be so informed within that period so that further directions may be made. 42 The summons leaves me in doubt as to precisely what the plaintiff seeks in relation to costs. I shall hear the parties on costs at a time to be fixed. ********** Last Modified: 04/17/2003 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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