Supreme Court New South Wales Medium Neutral Citation: Dean v Aylward [2017] NSWSC 972 Hearing dates: 22 June 2017 Date of orders: 21 July 2017 Decision date: 21 July 2017 Jurisdiction: Equity Before: Parker J Decision: Short minutes of order to provide for sale of property with charge on proceeds for sum or net amount received, whichever is less, and judgment for interest. Catchwords: Equity – purchase of real property – payment by third party to discharge existing mortgage – condition of payment that third party be put on title – failed joint endeavour equity – purchaser's lien – proprietary estoppel – resulting trust – gift on condition of forfeiture Civil Procedure – adjournment – legal representation Cases Cited: Baumgartner v Baumgartner (1987) 164 CLR 137; [1987] HCA 59 Bennett v Horgan (Supreme Court (NSW), 3 June 1994, unrep) Currie v Hamilton [1984] 1 NSWLR 687 Knox v Knox (Supreme Court (NSW), 16 December 1994, unrep) McKay v McKay [2008] NSWSC 177 Muschinski v Dodds (1985) 160 CLR 583; [1985] HCA 78 Priestley v Priestley [2017] NSWCA 155 Texts Cited: K Mason, JW Carter and GJ Tolhurst, Mason and Carter's Restitution Law in Australia (3rd ed, 2016, LexisNexis Butterworths) Category: Principal judgment Parties: Robert John Dean (First Plaintiff) Sandra Joan Dean (Second Plaintiff) Melissa Anne Aylward (Defendant) Representation: Defendant in person at hearing Counsel: S Balafoutis/C Hamilton-Jewell (Plaintiffs) Solicitors: Pritchard Law Group (Plaintiffs) Thompson Cooper Lawyers (Defendant – subsequent submissions) File Number(s): 2016/214543 Publication restriction: Nil Judgment 1. These proceedings concern a sum of $155,000 deposited by the second plaintiff (Mrs Dean) into the bank account of the defendant (Ms Aylward) in June 2015. At the time, the defendant was engaged to be married to the first plaintiff (Mr Dean), who is the second plaintiff's son. 2. Ms Aylward and Mr Dean met in August 2014 and were engaged in November 2014. At the time, Ms Aylward was living in premises in Main Street, Cudal, in the central west of New South Wales. The premises were being operated as a café but they also included living quarters where she was living with a child from her previous relationship. 3. The registered proprietor of the Cudal property was Mr Philip Gavin, who was a business partner, or a former business partner, of Ms Aylward's. The property was subject to a mortgage in favour of the Commonwealth Bank securing a loan to Mr Gavin of slightly more than $150,000. According to Ms Aylward, the property had originally been acquired in Mr Gavin's name because she had a bad credit rating, but she was, by arrangement with the Bank, making the loan repayments. 4. Mr Dean was a truck driver who spent part of his time at Cudal and the rest of his time on the road. His mother, Mrs Dean, was retired and lived in Sydney. 5. Mr Dean and Ms Aylward planned to live together at the Cudal property after they were married. The payment of $155,000 was provided by Mrs Dean in contemplation of that happening. Ms Aylward used the money to repay the Commonwealth Bank; at the same time she obtained a transfer of the property to herself from Mr Gavin for nominal consideration. The Bank's mortgage was discharged and she was registered as proprietor a few days later. 6. Mr Dean and Mrs Dean contend that it was part of the arrangement under which the monies were provided that Mr Dean would be made a joint owner of the property. However, that did not occur. Mr Dean and Ms Aylward quarrelled. Mr Dean broke off their relationship and Ms Aylward returned the engagement ring he had given her. 7. In December 2015, Mrs Dean wrote to Ms Aylward asking for the return of the $155,000. Ms Aylward has declined to pay. She remains the sole registered proprietor of the property and she remains in possession of it. She has since married someone else. 8. At the hearing before me, the Deans were represented by counsel. Ms Aylward was not represented and appeared for herself, with some assistance from her son. Adjournment application 1. At the beginning of the hearing, Ms Aylward sought an adjournment to give her more time to attempt to obtain legal representation. In support of this she tendered a letter from the Law Society Pro Bono Scheme. Ms Aylward also tendered a medical certificate dated 21 June which stated: Mrs Melissa Aylward is consulting with myself and psychologist Toni Smith (ph [number]) for treatment of panic attacks and anxiety. Melissa suffers exacerbations of her panic attacks when faced with court proceedings and minimisation of adjournments would be beneficial to her mental health. She is also awaiting an operation on her cervical spine (neck) with Spinal Surgeon Dr [name] (ph [number]), which has already been delayed due to current pending court case. The date of her surgery is not yet confirmed but has been requested for July/August this year. 1. I refused Ms Aylward's application and indicated that I would set out my reasons in my judgment. Those reasons now follow. 2. Evidence from the Deans' solicitor established that the question of Ms Aylward's representation had been an ongoing issue in the proceedings. In February 2016, solicitors acting for Ms Aylward wrote to the solicitors for the plaintiffs complaining about the lodgement of a caveat on the property. At that time the proceedings had not been commenced. The intervening correspondence is not in evidence, but on 29 June the solicitors for the plaintiffs wrote to Ms Aylward's solicitors advising that a statement of claim was to be filed and enquiring whether they had instructions to accept service. No reply was received from Ms Aylward's solicitors. A statement of claim was filed on 15 July and served personally on Ms Aylward. 3. In the meantime, Legal Aid NSW took over the representation of Ms Aylward in the matter. Apparently, this was on an interim basis because legal aid was ultimately declined and, on 5 October, Legal Aid NSW wrote indicating that they had ceased to act. 4. The proceedings were before the Court on 7 October, and on that occasion Ms Aylward obtained a six week adjournment to enable her to pursue an appeal against the cessation of legal aid. The appeal was apparently unsuccessful and, on 25 October, Legal Aid NSW wrote to the plaintiffs' solicitors confirming that it would have no further involvement in the matter. On the same day a letter was sent to the plaintiffs' solicitors by a new firm, Savage Defence Lawyers, advising that they were acting for Ms Aylward in the proceedings. On 8 March 2017, that firm advised the plaintiffs' solicitors that Ms Aylward had made a fresh application for legal aid. This was apparently on the basis, later confirmed by Savage Defence Lawyers, that that firm would not assist Ms Aylward unless legal aid was obtained. 5. On 9 March, the matter was again before the Court. Counsel appeared for Ms Aylward and sought an adjournment for a further six weeks. The request was refused and the matter was set down for hearing on 22 and 23 June. 6. Presumably, the further application for legal aid came to nothing as Ms Aylward has not since been represented. The letter from the Law Society Pro Bono Scheme tendered by Ms Aylward is dated 26 May. The letter acknowledged a request by Ms Aylward for assistance under the Scheme but stated that her application was incomplete and asked for the provision of further information. There was no evidence that the information had been provided. On the evidence before the Court, therefore, there was no pending application for assistance under the Scheme, let alone any reason to think that such an application had any prospect of being granted. Insofar as medical considerations are relevant, Ms Aylward's own medical certificate stated that adjournments should be minimised. 7. In these circumstances, it would, in my opinion, have been unjust to the Deans to permit an adjournment, particularly as any such adjournment would have been open-ended. None of the parties are well off and the Deans have incurred considerable expense in bringing the matter to trial. It was for these reasons that I refused the application for an adjournment. Subsequent written submissions 1. Pursuant to leave I granted at the hearing, supplementary written submissions were lodged by counsel for the Deans. On 14 July, a notice of appointment was filed for Ms Aylward appointing Thompson Cooper Lawyers to act on her behalf. Her solicitors provided written submissions on the same day. Those submissions went beyond responding to the supplementary submissions and canvassed other issues which had been debated before me at the hearing. However, I have taken the submissions into account. Issues for decision 1. The plaintiffs' case is that the money was paid by Mrs Dean to Ms Aylward on the express condition that Mr Dean would be "put on the title" as a co-owner of the Cudal property. Ms Aylward denies this; her version of events is that the money was an unconditional gift to her. This is the first issue for resolution. 2. If the plaintiffs are successful, further questions arise as to the nature of the legal claims that they have and the relief which would be available to them on those claims. In this regard, the plaintiffs seek: (1) an order for repayment of $155,000 together with an equitable charge on the property securing repayment; or alternatively (2) an equitable lien or charge over the property up to that sum; or alternatively (3) equitable compensation. 1. The plaintiffs claim this relief on a number of alternative bases: (A) an equitable lien as purchaser under a purchase contract which has failed; (B) an equity arising from a "failed joint endeavour", under the principles in Muschinski v Dodds (1985) 160 CLR 583 and Baumgartner v Baumgartner (1987) 164 CLR 137; (C) proprietary estoppel or equitable estoppel; (D) resulting trust; (E) an equity arising from a gift made on a condition which has failed. Conditional payment or unconditional gift? 1. Affidavit evidence from each of the parties was prepared and served prior to the hearing (Ms Aylward's by her former solicitor). Mrs Dean also gave some brief oral evidence by way of reply. In the course of the hearing, I warned Ms Aylward of the difficulties she would face if she asked me to reject the Deans' version of events without having cross-examined them on it. Ms Aylward only cross-examined Mr Dean and Mrs Dean (in reply) briefly, on a couple of peripheral issues. 2. As mentioned, Mrs Dean is retired. She said that in 2015, her only significant liquid asset was a sum of money on a term deposit which was used to make the payment. Mr Dean also said that he had limited assets. He did not own any property. His only savings were approximately $100,000 in superannuation. 3. According to Mrs Dean, in the period when her son and Ms Aylward were engaged, they had visited her in Sydney on two occasions totalling five days. Ms Aylward said the visits were more frequent and more lengthy and pressed Mrs Dean on this in cross-examination, but Mrs Dean adhered to her evidence. 4. As mentioned, Ms Aylward did not own the property in question but was paying the mortgage. She said she had difficulties with Mr Gavin using the money paid by her into the mortgage account to re-draw for his own purposes. Accordingly, she seems to have been under some pressure in maintaining the mortgage payments on the property. 5. Ms Aylward's version of events began in May 2015. She said that she had previously discussed with Mrs Dean paying out the Bank. She said: On about 11 [M]ay, 2015 I received a telephone call from Sandra [Mrs Dean] when she said to me words to the effect: "Melissa, I would like to give you the money to pay out the bank. I have a term deposit which is maturing soon. How much do you need?" I replied words to the effect: "It's about $155,000.00." Sandra said words to the effect: "OK. I will let you know when the money is available." I said: "Thank you". 1. Mrs Dean denied this version of events. She said that Mr Dean had asked her to contribute the money to buy the property, that she had agreed to do so but only if his name was put on "the property deed" with Ms Aylward and that he reported back that Ms Aylward had agreed to this. Mr Dean's evidence was consistent with this. He said that Ms Aylward had first approached various financial institutions in Orange but had been unable to obtain finance from them, at which point he had approached his mother and she had agreed to provide the funds on the condition that both names were to be on the title. He said Ms Aylward had agreed. He also said that he had received a telephone call from Ms Aylward while stopped in Merriwa on a rest break. He was able to fix the date of this conversation by reference to his diary as 11 May 2015. According to Mr Dean, Ms Aylward said: Your name can go on the title deed but it won't be able to go on there immediately. Philip and I made an agreement. The mortgage to the Commonwealth Bank has to be discharged and then the property has to be transferred to me from Phillip. It will be transferred to me up at the Lands Department for $1.00. When I get the title deed back in my name we will be able to transfer the property into both names. 1. Ms Aylward denied that there had been any conversations in these terms. 2. It is common ground that, starting in about May 2015, preparations were set in train for the paying out of the mortgage. Ms Aylward consulted a solicitor, Ms Paris Willis, to assist her. 3. Ms Aylward's evidence was that she subsequently had a telephone conversation with Mrs Dean on Ms Willis' advice in which she (Ms Aylward) suggested that Mrs Dean might wish to get independent legal advice but Mrs Dean declined. On Ms Aylward's account, the next step was that she was telephoned on 2 June by Mrs Dean to tell her that the money would be available. The money was then transferred the next day. 4. Mrs Dean denied this completely. On her version of events, the arrangements to transfer the money were made through Mr Dean. His evidence was that on 2 June he was at his mother's house in Sydney when he received a call from Ms Aylward saying the Bank was about to foreclose. He spoke to his mother who said she had the funds available but repeated the condition that his name had to be on title. He then called Ms Aylward back and advised her that the money could be transferred the following day, but reminded her that his name had to go on the title, which she acknowledged. 5. The sum of $155,000 was transferred on 3 June. The transaction was apparently settled on 4 June. 6. Ms Aylward claimed that a few days later in the presence of her three children (the older two of whom were then aged 27 and 24), Mr Dean described the house as a gift from his mother to Ms Aylward. However, Mr Dean denied this and no evidence was led from the children to corroborate Ms Aylward's version of events. 7. According to Mr Dean, in the months after this he asked Ms Aylward to set up a meeting with Ms Willis, to arrange for him to be put on the title to the property. Ms Aylward denied this. 8. However, there is in evidence a Facebook message sent by Mr Dean to Ms Aylward on 24 September, which reads: "Did you ring Paris?" 9. I thought Ms Aylward's evidence about this was unconvincing. It was inconsistent with her earlier denial and there was no explanation for the inconsistency. Faced with the message, Ms Aylward's evidence was that she had no idea what Mr Dean was talking about, but she had not sought to clarify it with him. She was unable to explain why not. 10. The relationship between Mr Dean and Ms Aylward ended in late November 2015. On 12 December, Mrs Dean sent an email to Ms Aylward as follows: I want my $155,000 back please. I suggest you either sell the property or mortgage it to enable you to pay me back. 1. Ms Aylward did not reply. She later made it clear in text messages to Mr Dean that she did not intend to put him on the title and that she regarded the property as her own. 2. The nature of the payment made on 3 June, and the obligations attached to them, can be analysed in two different ways in terms of the parties affected. One way would be to analyse the payment as one made by Mrs Dean to Ms Aylward with Mr Dean acting as Mrs Dean's agent for the purpose of imposing any conditions on receipt of that money. On that view, if the plaintiffs were entitled to any relief, orders would be made in Mrs Dean's favour. The alternative view is to analyse the payment as one made on behalf of Mr Dean to Ms Aylward, treating the fact that Mrs Dean provided the money as a gift from her to Mr Dean. On this view, it would be Mr Dean who would be entitled to any relief. Counsel for the plaintiffs indicated that it was the second analysis which the plaintiffs propounded. It follows from this that it was Mr Dean's intentions and beliefs, rather than Mrs Dean's, that were relevant and it was the conversations between Mr Dean and Ms Aylward, rather than Mrs Dean and Ms Aylward, which are decisive. 3. I find the evidence of Mr Dean and Mrs Dean on the one hand more credible than that of Ms Aylward on the other. While I appreciate the difficulties that Ms Aylward faced in acting for herself, the fact remains that both Mr Dean and Mrs Dean swore detailed affidavits which were substantially unchallenged. It would not be fair for the Court to downgrade the value of their evidence simply because Ms Aylward did not challenge it. On the other hand, Ms Aylward's evidence, as I have noted, lacks credibility on a key point. Taken as a whole, I did not find it persuasive. She tended to be non-responsive in her answers to questions, especially difficult ones. More than once Ms Aylward referred to the humiliation she experienced as a result of Mr Dean's behaviour when their relationship ended. It is not necessary to go into the rights and wrongs of this, but the impression I formed was that this had coloured her evidence. 4. Of the two versions of events, I find Ms Aylward's inherently much less likely. Her version of events seems too good to be true. Given Mrs Dean's and Mr Dean's financial circumstances, it seems highly unlikely that either of them would have been party to giving what were effectively Mrs Dean's entire savings to Ms Aylward. In April 2015, Mr Dean and Ms Aylward had been engaged for only five months and the relationship between Mr Dean and Ms Aylward had, on Ms Aylward's admission, been somewhat tempestuous. Ms Aylward did not apparently dispute that she and Mr Dean had planned to live at the property together and operate the café there. In my opinion, it is implausible to suppose that they intended to embark on married life together with the only significant marital asset being in Ms Aylward's name alone, especially when the funds to acquire that asset had come from Mrs Dean. There would have been no reason for such an arrangement. 5. Counsel for the plaintiffs submitted that Mrs Dean's email requesting repayment was a contemporaneous record which supported the plaintiffs' case because it showed that Mrs Dean did not regard the payment as a gift. I accept that it did show this, but I am not sure it is sufficiently contemporaneous. In any event, as the plaintiffs' case was that the payment was made on behalf of Mr Dean, it could not be decisive. 6. Taking the evidence overall, I am satisfied that the account given by Mr Dean and Mrs Dean is correct. Accordingly, I find that the payment was not a gift, but rather was subject to an express condition that Mr Dean be put on the title as a co-owner of the property. Purchaser's lien 1. The claim for an equitable lien in favour of Mr Dean as purchaser has its complexities. The starting point would be that there is a contract between Mr Dean and Ms Aylward pursuant to which Mr Dean had agreed to pay $155,000 for a co-ownership interest in the property. An entitlement to restitution of that money would depend upon showing that the contract had been discharged, and that there had been a total failure of consideration: see K Mason, JW Carter and GJ Tolhurst, Mason and Carter's Restitution Law in Australia (3rd ed, 2016, LexisNexis Butterworths) at [915]. 2. A further complicating factor is that any contract was oral, rather than in writing. To the extent that equitable relief was sought, it might be necessary to consider the application of the doctrine of part performance. 3. However, I do not need to go into these complexities for present purposes. A purchaser's lien could only arise if there were a valid and binding contract. Although I have found that the payment was conditional, I am not persuaded that the arrangement between Mr Dean and Ms Aylward can be characterised as a legal contract. The arrangement was made in a domestic context. Mr Dean and Ms Aylward did not use the language of bargain, and were evidently not thinking in commercial terms. The arrangement was an extremely informal one. While it is not impossible to make an informal contract for the sale of an interest in land, in my view the informality of the arrangement supports the conclusion that the parties did not intend to create legal relations of a contractual nature. Accordingly, I reject the purchaser's lien claim. Failed joint endeavour 1. In Muschinski v Dodds, Mr Dodds and Mrs Muschinski were living together. They decided to buy and develop a property with a dilapidated house on it. The property was paid for by Mrs Muschinski but put into the name of the two of them as tenants in common; it was contemplated that Mr Dodds would do the development work and erect a separate prefabricated house for them to live in with money that he was hoping to obtain. The relationship broke up and Mrs Muschinski ultimately succeeded in obtaining from the High Court an order declaring that the parties held their interests in the property on constructive trust to repay their respective contributions, and then to hold the residue in equal shares. Deane J explained the result in terms of an equitable principle which (at 620; citations omitted): … operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do. 1. In Baumgartner v Baumgartner, Mason CJ, Wilson and Deane JJ explained the principle as one (at 148): … which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them. 1. The meaning of the phrase "without attributable blame" was described by Bryson J in Bennett v Horgan (Supreme Court (NSW), 3 June 1994, unrep) in terms which have been followed in subsequent cases, in this way: The concept of attributable blame must be understood and applied with some tolerance; in my view it does not call for a judgment attributing blame among members of a family for the continuing relationship becoming intolerable, unless perhaps in particularly gross cases. Such judgment would be difficult and unreliable, as it is rare indeed that something or other which could be said to be a ground for blame cannot be identified and laid to the charge of each of the persons concerned. Leaving gross cases involving criminality or similarly reprehensible behaviour on one side, it should usually be understood, in my opinion, that where personal relationships deteriorate and the sharing of a dwelling becomes intolerable to some or all of those concerned, there is, within the meaning of Deane J's expressions, no attributable blame and the case is one for an equitable adjustment. 1. I think these statements of principle apply to the present case. It is clear that the whole arrangement whereby the money was provided by Mr Dean (through the gift of Mrs Dean) to Ms Aylward was premised on the two of them sharing the house. As I have said, I do not propose to go into the rights and wrongs of how their engagement was broken off. Whatever criticism may be made of either of them, there was no gross misconduct or criminality of the type mentioned by Bryson J. 2. The only real question is what relief Mr Dean would be entitled to under this equity. In McKay v McKay [2008] NSWSC 177, Brereton J reviewed many of the authorities. He concluded that the "prima facie" remedy was a form of proprietary relief which would secure return to the parties of their respective contributions. However, he emphasised that the remedy is flexible and some different remedy may be appropriate if the return of the contributions would produce an unconscionable result. 3. In the present case, had the joint endeavour proceeded as intended, Mr Dean would have received only a half interest in the property despite having (through his mother) contributed the full cost of discharging the mortgage on it. Ms Aylward would have received a half interest in the property effectively for nothing. In this respect, the facts of the present case are like that of Muschinski v Dodds. Counsel for the Deans argued that it would not be appropriate simply to grant Mr Dean a charge over half of the property on the basis that this is what was intended he would have. I agree. As will be seen, that might be the appropriate remedy if the claim is put on alternative bases, but Mr Dean is entitled to elect the remedy most favourable which is available on the facts, and it is clearly established that the prima facie remedy in the case of the "failed joint endeavour" equity is the restitution of contributions made. In my opinion, that reflects the justice of the situation: the parties never discussed what would happen if their relationship broke up, and to the extent that Mr Dean contemplated a "gift" to Ms Aylward, that was in the context of them marrying and living together thereafter. 4. Counsel for the Deans submits that the appropriate remedy would be a charge over the property for $155,000 plus interest. Consistently with McKay v McKay, I accept this as a starting point. However, there is a qualification. There is no evidence before me as to the value of the property, but I suspect it may not be worth much more than the $155,000 which was paid; it may even be worth less. An order in the terms sought by counsel for the Deans leaves the possibility that Ms Aylward could be ordered to pay more than the property realises on sale. 5. Counsel for the Deans argued that this was no obstacle to the order sought. He pointed to the statement by Brereton J in McKay v McKay that the prima facie remedy involved the return of contributions. However, in McKay v McKay and in the other cases considered by Brereton J (including Muschinski v Dodds itself) it seems to have been assumed that there would be sufficient equity in the property to return the parties' contributions with something left over. I was not referred to any authority where the point had been directly considered. 6. As a matter of principle, I think it is important to remember that the equity is based on the unconscionability of a party retaining a legal interest in property and not making allowance for the other party's contributions to acquiring the interest. In Knox v Knox (Supreme Court (NSW), 16 December 1994, unrep), Young J said (citations omitted): Equity in the current situation, where it finds that it would be unconscionable for a person to take the whole beneficial ownership without recognising a contribution of some other party, only makes the minimal order that is necessary to relieve the conscience of the legal owner. 1. In my opinion, the prima facie obligation on a party holding property to reimburse the other party for contribution must be limited to the value of the property, at least unless the owner of the property has done something wanton to reduce its value. Unconscionability arises to the extent that the party has obtained a legal interest at the expense of the other party; if that party surrenders the whole of the legal interest, there is no unconscionability and no reason in principle for equity to award any more extensive relief. 2. Accordingly, I think the appropriate relief would be an order for sale of the property with a charge on the property for $155,000, or the net proceeds received, whichever is less. I would, however, make an award of interest on the sum secured by the charge against Ms Aylward from December 2015 onwards. This is to reflect the fact that, on my findings, Ms Aylward acted wrongfully, having been asked to sell the property and return the money, in asserting ownership of the property from December 2015 onwards. It also reflects the fact that Ms Aylward has had sole use of the property since December 2015 for her own purposes. If the sale of the property raises sufficient funds to cover the interest, then that should be paid out of those proceeds, but if it does not, then it will be a personal obligation of Ms Aylward to pay. Proprietary estoppel 1. Generally speaking, if a person acting in reliance on a promise of an interest in property expends money on that property, then that will give rise to an equitable entitlement to relief by way of proprietary estoppel. 2. In the present case, counsel for the Deans characterised Ms Aylward's agreement with Mr Dean as a promise to provide him with a half interest in the property. Counsel acknowledged that there was a question as to whether the doctrine applied in circumstances where, as in this case, the person making the promise was not the owner of the property at the time the promise was made; but counsel contended that authority established that a proprietary estoppel arose in such circumstances. 3. I do not find it necessary to determine whether the arrangement made by the parties is appropriately characterised as a promise by Ms Aylward to Mr Dean, or whether counsel's submission concerning the application of the doctrine to the present facts is correct. If proprietary estoppel were established, the prima facie remedy would be relief which would make good the promise: Priestley v Priestley [2017] NSWCA 155 at [164]. That points to relief measured by reference to a half interest in the property (which is what Mr Dean expected to receive) rather than full return of the amount contributed. That relief would be less favourable than the relief available to Mr Dean under the "failed joint endeavour" equity, to which I have already found he is entitled. Resulting trust 1. I will assume for the sake of argument that resulting trust principles are capable of application in the present case, even though the monies provided by Mr Dean (by gift from Mrs Dean) were applied to the discharge of the existing mortgage rather than the purchase of the property, and despite the fact that the monies were provided to Ms Aylward rather than directly to the mortgagee bank. 2. In Muschinski v Dodds, all the Justices of the High Court agreed that, even though Mrs Muschinski provided the whole of the purchase price, the evidence of the agreement between the parties was sufficient to rebut the presumption of a resulting trust in her favour. In my opinion, the present circumstances are relevantly the same. Both parties intended that Ms Aylward would receive a half interest in the property even though she had not contributed to the discharge of the mortgage. 3. Counsel for the Deans argued that this intention was conditional upon Mr Dean and Ms Aylward marrying. The argument continued that, since this condition had not been fulfilled, the whole arrangement between the parties should be ignored and the Court was thrown back on a presumed resulting trust in favour of Mr Dean. Counsel relied on the analysis to this effect by McLelland J in Currie v Hamilton [1984] 1 NSWLR 687 at 690G. 4. The problem I have with this analysis is that it pre-dates Muschinski v Dodds. It would have been equally applicable in that case. Yet all the Justices in Muschinski v Dodds, the majority as well as the minority, rejected a resulting trust analysis. I therefore think that I must treat it as having been superseded by the "failed joint endeavour" equity. 5. Furthermore, a resulting trust analysis could only result in a declaration of ownership of the property. If the value of the property is less than the amount contributed, it would not entitle Mr Dean to recover the excess from Ms Aylward personally. Gift on condition of forfeiture 1. In submissions at the hearing, counsel for the Deans put forward a further basis for the contention that Mr Dean was entitled to recover the whole of the $155,000 (irrespective of the value of the property), together with interest. It was not referred to in supplementary submissions but I have assumed it is still pressed. 2. In Muschinski v Dodds, Brennan J said at 605-6 (citations omitted): A condition annexed to a gift may be of either of two kinds: a condition involving a forfeiture for non-fulfilment or a condition creating merely a personal obligation to fulfil it. A donee who takes a gift to which a condition of the latter kind is annexed incurs an equitable obligation to perform the condition. Lindley L.J. in In re Williams; Williams v. Williams, said: "... there is no difficulty in disposing of one's own property upon condition express or implied that the person who takes it shall do something himself, e.g., shall dispose of his property in a particular way indicated by the owner of the property which he accepts. Moreover, a condition of this kind is enforceable in equity, and need not amount to a common law condition – i.e., a condition involving a forfeiture of the property taken subject to the condition – if that condition is not performed." A condition which creates a personal obligation may be enforced in equity by an order for compensation or, where appropriate, by a decree of specific performance. Whether a condition is such that its non-fulfilment involves forfeiture of the property given depends upon the intention of the donor communicated to the donee at the time when the latter accepts the property, that is, the intention which the donee reasonably understands to be the donor's intention from what the donor has said or done. 1. Counsel argued that the condition in this case was such that its non-fulfilment did involve forfeiture of the property interest in question. 2. I have three difficulties in this analysis. The first is that the judgment of Brennan J in Muschinski v Dodds was a dissenting one. None of the Justices in the majority adopted this analysis. In my opinion, the analysis must give way to the "failed joint venture" equity analysis which was adopted by Mason J and Deane J in Muschinski v Dodds and was then endorsed by the majority in Baumgartner v Baumgartner. 3. My second reservation is that, in order for the argument to be of use to the Deans in this case, it is necessary to find that non-fulfilment of the promise involved forfeiture, rather than simply creating a personal obligation. An order for compensation or a decree of specific performance would be less favourable to the Deans than relief under the "failed joint endeavour" equity. Brennan J conceded that it was "by no means easy" to determine whether the condition was one involving a forfeiture or not on the facts in Muschinski v Dodds (at 606), and I find it equally difficult in the present case. There is simply no evidence that the parties ever turned their minds to what would happen if the property was not put into Mr Dean's name, no doubt because in practical terms that could only arise if the marriage did not proceed and neither party was thinking in those terms. In my opinion, it is, with respect to Brennan J, somewhat unrealistic to seek to attribute a particular intention to the parties to an issue where there has been no relevant communication between them. 4. Third, even if it were established that the gift was made on condition, non-fulfilment of which would involve forfeiture, I do not accept that this would necessarily give Mr Dean the order which he seeks. For reasons given above in connection with the failed joint venture, "forfeiture" in this case would involve the surrender of the legal interest. I do not see that it would go further and require repayment of the whole amount even if that exceeded the value of the legal interest. 5. For these reasons, I conclude that this analysis does not assist Mr Dean for the purpose of this case. Conclusions and orders 1. I have concluded that: (a) the monies paid by Mrs Dean to Ms Aylward, on behalf of Mr Dean, were conditional upon Mr Dean being put on the title of the Cudal property, rather than being an unconditional gift to Ms Aylward; (b) Mr Dean is entitled to relief under the "failed joint endeavour" equity; (c) the proper relief would be an order for the sale of the property with a charge on the proceeds for $155,000 or the net amount received, whichever is less, together with a separate judgment against Ms Aylward for interest on that amount from December 2015 onwards. 1. Costs should follow the event and, accordingly, Ms Aylward should be ordered to pay the Deans' costs. 2. The orders of the Court are: 1. Direct that the plaintiffs bring in Short Minutes of Order to give effect to these reasons. ********** 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 21 July 2017