Calverley v Green
High Court of Australia · 1984
Calverley v Green (1984) 155 CLR 242
Two people buy a house in both names, but one puts in far more of the purchase price. Who owns what when they separate?
The presumptions are a fallback, not a first step. Kiefel CJ and Gleeson J: the presumption of a resulting trust "can be rebutted by evidence from which it may be inferred that there was no intention on the part of the person providing the purchase money to have an interest in land (or other property) held on trust for him or her", and it "cannot prevail over the actual intention of the party paying the purchase price as established by the overall evidence"; where more than one person pays, "regard is necessarily had to evidence of each of their intentions" ([13]). The presumption of advancement is described the same way -- it "allows an inference as to intention to be drawn from the fact of certain relationships" ([14]). Ms Bosanac held the Dalkeith property in her sole name and the Commissioner failed to establish that Mr Bosanac intended a beneficial interest; the appeal was allowed. A student who reaches for the presumption before reading the evidence of intention has the order backwards.
What happened?
Arthur Calverley and Dianne Green lived together from 1968 to 1978 in a de facto relationship. In 1973 they bought a house at Baulkham Hills for $27,250. Calverley paid the $9,000 deposit from the proceeds of his own former house; $18,000 was borrowed on a mortgage under which both were jointly and severally liable; the remaining $250 appears to have come from him. The land went into their joint names because the finance company required it, and Green signed a loan application describing her as his wife. Their arrangement was that he would meet the mortgage repayments while they lived together and she, who was in work, would carry the household expenses. She left in April 1978.
Rath J held the joint names were for finance only and that Green had no beneficial interest at all. The Court of Appeal held them joint owners in equity as well as at law — half each.
What did the Court decide?
Neither. The High Court held them equitable tenants in common in proportion to their contributions to the purchase price, and sent the matter back to work the proportion out.
Two steps produced that. Gibbs CJ frames the inquiry as one of intention — whether the other party "acquires a beneficial interest in the property depends on the intention of the purchaser" — and only then reaches the presumption. Then the mortgage: the $18,000 was contributed equally, because the liability to repay was joint and several, and who actually paid the instalments was "not relevant in determining the extent of the interests of the parties in the land, although it may be relevant on an equitable accounting". On that footing Gibbs CJ put Green's interest at 9,000/27,250 — but conditioned on Calverley having provided the whole deposit, the evidence being "unsatisfactory" with "no distinct finding". Mason and Brennan JJ said only that the proportion "has not been precisely ascertained". The figure illustrates the method; it is not the holding.
On advancement the Court divided. Mason and Brennan JJ held it "would be wrong to apply either the presumption of advancement or Lord Upjohn's inference to a relationship devoid of the legal characteristic which warrants a special rule affecting the beneficial ownership of property by the parties to a marriage"; Deane J agreed in the result. Gibbs CJ alone would have held that a man who buys property in the name of a woman he lives with as his wife intends her to have a beneficial interest. Murphy J would have discarded the presumption of advancement altogether.
Proposition
What is the principle?
Where one person pays some or all of the purchase price for property conveyed into another's name, or into joint names, equity presumes a resulting trust in proportion to the contribution — unless a presumption of advancement or contrary evidence of intention displaces it.
Why does this case matter?
Look at the three answers. On one set of facts a trial judge found Green had nothing, the Court of Appeal found she had half, and the High Court sent it back on a basis that made it something under a third. Nobody disagreed about what happened in 1973. They disagreed about which starting point to use and what it took to displace it — so in this area the doctrinal choice is the outcome, and an answer that arrives at a number without showing that choice has skipped the case.
The second thing to take is the date at which the shares are fixed. Mason and Brennan JJ: as there was no agreement after the purchase to alter the equitable interests then acquired, "the payments made under the mortgage work no alteration in those interests". A client who has paid every instalment for years finds that surprising, and it is the misconception this case most often corrects.
Exam and application relevance
Start with the evidence of intention, not the presumption. A presumption is what a court uses when the evidence does not establish what the parties actually intended; it is not a filter the evidence must get past.
Then identify the contributions to the purchase price: deposit, cash at settlement, and the borrowed money, which is contributed by whoever is liable to repay it rather than by whoever repays it. On facts like these, later instalments do not enlarge a share in the purchase-money resulting trust — though Mason and Brennan JJ noted that repayments can quantify interests where the property was bought as a mortgage-free investment, that a payer may be entitled to contribution and an equitable charge, and expressly left open whether a constructive trust could arise later where property is maintained or improved in different proportions. None of that was argued in this case; do not assume equitable accounting is the only possible consequence.
Finally, ask whether the relationship is one in which equity infers a gift. After Calverley a de facto relationship is not.
Check your understanding
Green paid none of the deposit and, by their arrangement, none of the mortgage instalments. Why did she still end up with a substantial share of the house?