New South Wales Supreme Court CITATION : Dulhunty v Dewhirst [2005] NSWSC 350 HEARING DATE(S) : 28 & 29 October 2004 and 4 & 31 March 2005 JUDGMENT DATE : 15 April 2005 JURISDICTION : Equity JUDGMENT OF : Hamilton J DECISION : Claim that defendant ought repay to deceased's estate moneys taken by her from his building society account fails. CATCHWORDS : EQUITY [102] - Trusts and trustees - Constitution and classification of trusts generally - Classification of trusts in general - Implied trusts - Constructive trusts - Independent of intention - General principles - Breach of fiduciary obligations - Daughter made signatory on aged father's building society account and given power of attorney - Authority given by father for her to use funds for own benefit - No question of principle. Judith Anne Dulhunty (P) PARTIES : Patricia Mary Dewhirst (D) FILE NUMBER(S) : SC 2486/03 I D Roche (P) COUNSEL : L J Ellison (D) McGlynn & Partners (P) SOLICITORS : Turnbull Hill Lawyers (D) LOWER COURT JURISDICTION : IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION HAMILTON J FRIDAY, 15 APRIL 2005 2486/03 JUDITH ANNE DULHUNTY v PATRICIA MARY DEWHIRST JUDGMENT 1 HIS HONOUR: These proceedings concern the removal from an aged father's bank account of considerable sums of money. The allegation that those moneys were taken by a daughter without authority and in circumstances where they ought to be restored by that daughter to the estate of the father, now deceased ("the deceased"). Essentially the daughter alleges that the moneys were taken and, in so far as they were used by her for her own purposes, were so used with his authority and consent. That daughter is the defendant in these proceedings. The plaintiff is her sister, who was the deceased's only other child. There were heard, concurrently with these proceedings, proceedings brought by the plaintiff against the defendant as executor of the deceased's estate for provision under the Family Provision Act 1982 ("the FPA"). Although the evidence has been taken in both sets of proceedings, the parties have invited me to deliver judgment first in these proceedings, so that the extent of the estate is finally determined before I deal with the FPA proceedings. 2 The following facts are not disputed or are not substantially disputed and are easily found. 3 The deceased, Robert George Dulhunty, was born on 16 October 1917 and died on 8 August 2000 at the age of 82. He had two children, the defendant, who was born on 24 April 1947, and the plaintiff, who was born on 24 January 1949. It is clear from the evidence of both parties that the defendant had during their joint lives a much closer relationship with the deceased than with the plaintiff. It appears that in their youth the defendant was more accepting of her parents' wishes and the plaintiff more rebellious. The defendant lived with her parents until she married in 1968. She lived with her husband and had four children. In 1978, the deceased's wife and parties' mother committed suicide. The defendant's marriage broke up in 1979 and she returned with her children to live with her father in the family home at Ryde. She continued to live there until 1981, rendering the deceased domestic services and herself being afforded accommodation. In 1981, she moved back into her own home at Dudley, a suburb of Newcastle. In about 1987 or 1988, the defendant sold her home in Dudley, but at about that time started living with Vince Della-Bianca in premises of his, also in Dudley, which then became her home. She says that, between 1981 and 1998, she and her father lived between his home at Ryde and her home at Dudley spending considerable periods in each residence. She still performed domestic tasks for him and looked after him when he was ill. In about 1995, the deceased lost his driver's licence and the defendant did all the driving between Newcastle and Sydney, which had previously been shared between them. This did not change the pattern of alternation between Ryde and the defendant's home in Dudley. 4 During the 1990s, the defendant's health deteriorated. In 1997 and 1998, he was suffering from some dementia. However, no suggestion is made that his mental condition was such as to invalidate a power of attorney granted by him to a solicitor on 20 April 1998, his will made on the same day, or a power of attorney granted by him to the defendant on 23 September 1998. By his will, the deceased appointed the defendant his executor, gave the major benefit in the form of real estate to the defendant and the residue to his two children equally. 5 In 1998, the deceased also engaged in major real estate transactions. On 28 February he contracted to sell the Ryde property for some $750,000. On 18 March he bought 16 Goulburn Street, Dudley, ("Goulburn Street") for $447,000. It seems clear that the intent was for him to live closer to the defendant. On 20 May he completed the purchase of Goulburn Street and moved to live there full time. The defendant lived there with him part time, the other part of her time being spent with Mr Della-Bianca. 6 On settlement of the sale of the Ryde property, the surplus of the proceeds over what was necessary for the purchase of Goulburn Street was deposited into an account in the deceased's name with the Newcastle Permanent Building Society ("the account"). In August 1998, the deceased sold a property in Port Macquarie for $68,000 and the proceeds were also paid into the account, which then contained more than $300,000. At about the time that the surplus of the proceeds of the Ryde property was put into the account, the deceased made the defendant a signatory on the account with power to effect transactions by her sole signature. As I have said, on 23 September 1998 he granted a power of attorney to the defendant ("the power of attorney"). The power of attorney contained a clause 2 in the following terms: "In the exercise of the authority conferred on him/her/them by Section 163B of the Conveyancing Act 1919, my attorney(s) is/are authorised to execute an assurance or other document or do any other act, whereby a benefit is conferred on him/her/them." The deceased's execution of the power of attorney was witnessed by his solicitor. On 29 October 1998, the deceased moved into the Dudley Nursing Home. In May 1999, the defendant's relationship with Mr Della-Bianca broke up and she moved to live full time in Goulburn Street. 7 At this stage there is no need to say more about the plaintiff than what follows. She went in early adulthood to live in the USA. Since then she has been in Australia for only a few periods of weeks and one period of some months. Her contact with her father has been much less than that of the defendant. There were various breaches in her relationship with her father, but none proved permanent, and she continued till his death to have a relationship with him, although much more distant than his relationship with the defendant. 8 The plaintiff's case is that between the time that she was made a signatory on the account and the day before the deceased's death, the defendant took sums out of the account totalling $142,624.93. A full list is provided of the transactions that make up this total. The plaintiff says, in my view accurately, that the transactions can be divided into four classes as follows: (a) payments for the provision of nursing and medical services for the benefit of the deceased; (b) transfers to the account of the defendant; (c) payments to various retailers for the supply of household and other goods; (d) payments to cash. The plaintiff says that with the exception of those in (a) above, these payments should be treated as taken by the defendant without authority and in breach of fiduciary duty and should be ordered to be repaid to the deceased's estate. 9 Essentially, the defendant's case is that all sums that were taken by her, including those avowedly applied for her own benefit, were taken and applied by her with the authority of the deceased. She does not claim that there was a separate authorisation in the case of each transaction, particularly in respect of those which occurred after the deceased went into the nursing home. She relied on the following passage in one of her affidavits: "40 After my father sold his property at Ryde and moved to Dudley he put the surplus proceeds of sale in to [sic] his Building Society account. He then gave me authority to withdraw funds from his bank account, when he did this he said 'you've got your inheritance early'. I said 'what about Jude?'. He said 'stuff her, she's never done anything for me.'" 10 The plaintiff says that the Court should not accept that the deceased said any such thing to the defendant or authorised her in any way to make drawings on the account for her own benefit. In support of this submission, the plaintiff relies on a strict and niggardly attitude towards money on the part of the deceased earlier in his life. The existence of that attitude in earlier times does not seem to be contested by the defendant. 11 So far as the credit of the defendant as a witness is concerned, I do not find that it has been substantially compromised by any attack made on it on behalf of the plaintiff. It was suggested that she changed her story about the purchase of a Holden motor car, originally making it seem that it was an asset of the deceased that was brought from Sydney up to Newcastle when the deceased moved there, but later claiming that it was bought on his express authority as a birthday present to her. In my view, it is not established that the defendant was attempting to be deceptive about this matter and I accept her version about the birthday present. In fact, it appeared to me from her demeanour and the content of her evidence that she was a substantially truthful witness attempting to give the Court an accurate account of facts. 12 The credit of the plaintiff is not important to the questions to be determined in these proceedings, but I did form the view that the plaintiff's evidence had to be approached with some caution by reason of her admitted dishonesty in relation to her US tax affairs and her taking of items from the house when she was there after the deceased's death. With regard to that, it seems to me that it was demonstrated by her recent return of certain items that she had not previously admitted taking that she had indeed taken them as the defendant had inferred. I draw the inference that she also took the box of receipts which the defendant swore went missing at about the same time as the recently returned items. I accept the defendant's evidence that she kept receipts in a shoe box as she deposed and as to when the box went missing. 13 I accept that the events deposed to in par 40 of the defendant's affidavit quoted above occurred substantially as deposed to. Whilst I accept that the deceased was niggardly with money early in his life, I do not think it improbable that his attitude changed in his latter days when substantial cash funds became available to him and his generosity was towards a daughter who had done and was doing a great deal to look after him. His subsequent inclusion of clause 2 in the power of attorney, which I infer was explained to him by his solicitor, was significant in showing a relaxed attitude to the use of his money. It is not really suggested that the transactions under consideration were carried out under the authority of the power of attorney. It was not necessary to resort to that power, when the defendant was a sole signatory on the account. But the inclusion of clause 2 does seem to confirm that the deceased, whatever his inclinations earlier in life, was contemplating that the defendant would take money and carry out transactions with his money for her benefit. 14 The conclusion I have come to is that the deceased gave the plaintiff a general authorisation to use the money in the account for her own benefit as she has alleged. In those circumstances, the plaintiff has not established that any of the relevant moneys have been taken from the account without authority and ought therefore be repaid to the deceased's estate. ********** 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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