Goldsworthy v Goldsworthy

The plaintiff and the defendant are mother and daughter. They have fallen into dispute over the beneficial ownership of a unit in Gosford that was purchased in the name of the defendant with funds completely provided by the plaintiff. Regrettably, the relationship between them has now soured.

The plaintiff lodged a caveat over the Gosford unit claiming an equitable interest arising "by virtue of beneficial interest in constructive trust". The details supporting the claim are:

The plaintiff has filed a statement of claim. It relies upon three, alternative causes of action for the final relief sought:

The plaintiff has filed detailed evidence in support of her claim. The defendant has also filed evidence refuting the claim.

The defendant, who appeared for herself, was able to articulate with considerable clarity her objections to the application for the extension of the caveat, which was pressed on behalf of the plaintiff by Ms L Sewell of Counsel. Those objections were focussed on her contentions as to the merits of the issues to be litigated at any final hearing. However, in the course of her submissions the defendant acknowledged that she accepted that her mother had provided the entire purchase price for the unit, and that the essential dispute between them was whether or not the funds were provided as a gift (the defendant’s case) or pursuant to some other arrangement (the plaintiff’s case).

As is common in these cases, and with no disrespect intended, the defendant disputes the various accounts given by the plaintiff of conversations between her and her mother which her mother relies upon to demonstrate the arrangements she says were entered into between them. It is the prima facie proof of those arrangements which the plaintiff relies on in support of the claims in the caveat for a constructive trust arising from the failure of a joint endeavour.

While I have noted that one of the claims in the statement of claim is for a resulting trust, Ms Sewell confined her submissions to the evidence in support of the claim made in the caveat which focussed upon the constructive trust aspect of the matter.

It may be accepted that there is a great deal of factual material in dispute between the parties. However, the test for the extension of a caveat, akin to the test for the granting of an interlocutory injunction, is well understood to require the plaintiff to demonstrate that her claim "has or may have substance". In the present case, that requires the Court to determine whether or not the claims based in constructive trust have or may have substance. Having regard to the evidence filed by the plaintiff, I am satisfied that test has been met.

While what was said between the parties is very much in dispute, I have given particular weight to an objective, contemporaneous piece of evidence in favour of the plaintiff's case. That is an email addressed to the plaintiff and defendant from the solicitor acting, perhaps ill-advisedly, for both of them on the purchase of the unit and sent prior to the exchange of contracts for the unit. That email is dated 22 September 2021 and includes:

The advice in that email has proven to be prescient. There is now a serious argument between the plaintiff and the defendant as to what those word of mouth arrangements were. However, based on the evidence provided by the plaintiff, I am satisfied that she has demonstrated that her claim for a constructive trust on either of the bases pleaded (see [3] above) has or may have substance.

The defendant has put the unit on the market, but no purchaser has yet been found. Ms Sewell indicated that her client was prepared to allow any bona fide sale to proceed if an agreement could be reached to preserve the net proceeds of sale pending resolution of this dispute. Given those matters, the defendant has not been able to advance any persuasive argument that the balance of convenience favours refusing the plaintiff’s application.

The Court will extend the caveat until further order and make procedural directions for the further conduct of these proceedings.

The plaintiff seeks her costs of today's application. In the ordinary course, costs follow the event, and the plaintiff has been successful. The defendant resisted the extension application, filed evidence and made submissions in support of that resistance.

I have given the defendant an opportunity to explain why she should not be ordered to pay the plaintiff’s costs. The defendant submitted that she opposes such an order and says that costs should be reserved.

There is no reason why that should be the case. This has been a straightforward application, in which the defendant has been unsuccessful. It is a topic which will never be revisited and now is the appropriate time to determine the costs. Costs should follow the event. Among the orders I will make is that the defendant is to pay the plaintiff's costs of today.