Anderson v Anderson

[2016] NSWSC 1204

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Anderson v Anderson [2016] NSWSC 1204

Hearing dates:

4, 5, 6 and 7 April 2016

Date of orders:

01 September 2016

Decision date:

01 September 2016

Jurisdiction:

Equity

Before:

Hallen J

Decision:

The parties are to consider the form of orders, which should include an order that the further amended Statement of Claim and that the Cross-Claim be dismissed.

 

If agreement cannot be reached on how costs are to be paid, any argument regarding the costs of the proceedings is to be heard on a date to be arranged at the time of the publication of these reasons.

The Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005 following the determination of the costs of the proceedings.

Catchwords:

REAL PROPERTY – Torrens title – Unilateral severance of joint tenancy under s 97 Real Property Act 1900 – Claim of agreement not to sever

 

POWER OF ATTORNEY - Whether unilateral severance validly occurred - Deceased executed Power of Attorney in favour of second Defendant as substitute attorney - Whether specified attorney was “unwilling or unable to act” – Whether the second Defendant had power to execute a Statutory Declaration in support of registration of a Transfer by the deceased, unilaterally severing joint tenancy.

REAL PROPERTY - Indefeasibility - Whether s 42 Real Property Act 1900 operated so as create indefeasible title - Claim of statutory fraud.

SUCCESSION - In the alterative, if no valid severance, Cross-Claim by the first Defendant for a family provision order under Chapter 3 of the Succession Act 2006 out of the estate of the deceased – First Defendant was the wife of the deceased – If no valid severance, no actual estate, but potential notional estate of half the property which the deceased owned as a joint tenant –Unnecessary to decide.

Legislation Cited:

Conveyancing Act 1919 (NSW)
Evidence Act 1995 (NSW)
Matrimonial Causes Act 1959-1966 (Cth)
Powers of Attorney Act 2003 (NSW)
Real Property Act 1900 (NSW)
Real Property and Conveyancing Legislation Amendment Act 1999 (NSW)
Succession Act 2006 (NSW)
Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Adventure Quest Paintball-Skirmish Pty Limited [2016] NSWSC 188
Australian Guarantee Corporation Ltd v De Jager [1984] VicRp 40; [1984] VR 483
Bahr v Nicolay (No 2) [1988] HCA 16; (1988) 164 CLR 604
Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Cassegrain v Cassegrain [2015] HCA 2; 254 CLR 425
Codelfa Construction Pty Ltd v State Railway Authority (NSW) [1982] HCA 24; 149 CLR 337
Corin v Patton (1990) 169 CLR 540
Davis v Williams [2003] NSWCA 371
Day v Couch [2000] NSWSC 230
Dimitrovski v Australian Executor Trustees Limited [2014] NSWCA 68
Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89
Freed v Taffel [1984] 2 NSWLR 322
Goyal v Chandra [2006] NSWSC 239; (2006) 68 NSWLR 313
Grgic v Australian & New Zealand Banking Group Ltd (1994) 33 NSWLR 202
Hughes v St Barbara Mines Ltd [No 4] [2010] WASC 160
Learn & Play (Rhodes No1) Pty Ltd as Trustee for
Rhodes 1 Childcare Centre Unit Trust v Lombe
[2011] NSWSC 1506
Leybourne v Permanent Custodians Ltd [2010] NSWCA 78
Lincolne v Williams [2008] TASSC 41; (2008) 18 Tas R 76
McCoy v Caelli [2010] NSWSC 1233
McCoy v Estate Peter Anthony Caelli [2008] NSWSC 986; 13 BPR 25,515
McNab v Earle [1981] 2 NSWLR 673
Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133
National Commercial Banking Corporation of Australia Ltd v Hedley (1984) 3 BPR 9477
Orr v Slender [2005] NSWSC 1175
Peldan v Anderson [2006] HCA 48; (2006) 227 CLR 471
Perpetual Trustees Victoria Limited v Belcastro (No 2) [2013] NSWSC 1189
Perpetual Trustees Victoria Limited v Menzies [2012] NSWSC 1066
Plunkett v Bull (1915) 19 CLR 544
Public Trustee v Grivas [1974] 2 NSWLR 316
Quest Rose Hill Pty Ltd v the Owners Corporation of Strata Plan 64025 [2012] NSWSC 1548
Re Hodgson (1885) 31 Ch D 177
Sang v Choy [2004] NSWSC 1121
Sansom v Westpac Banking Corporation (1996) 7 BPR 14615
Scott v Scott [2012] NSWSC 1541
Schultz v Corwill Properties Pty Ltd (1969) 90 WN (Pt. 1) (NSW) 529
Secured Income Real Estate (Aust) Pty Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596
Spina v Conran Associates Pty Limited; Spina v M&V Endurance Pty Limited [2008] NSWSC 326
Spina v Permanent Custodians Limited [2008] NSWSC 561
Stanford v Stanford [2012] HCA 52; 247 CLR 108 Stirling v Maitland & Boyd (1864) 22 ER 143
Thomas v The Times Book Co [1966] 2 All ER 241
Tobin v Broadbent [1947] HCA 46; (1947) 75 CLR 378 Vella v Permanent Mortgages Pty Ltd [2008] NSWSC 505; (2008) 13 BPR 25, 343
Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd [1926] AC 101
Webb v Ryan [2012] VSC 377
Weeks v Hrubala [2008] NSWSC 162
Westpac Banking Corporation v Sansom (1994) 6 BPR 13790
Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 77 ALJR 1598
Williams v Davis [2003] NSWSC 453
Zahra v Francica [2009] NSWSC 1206
Zisti v Ryde Joinery Pty Ltd (1996) 7 BPR 15,217

Texts Cited:

Professor Butt, Land Law (6th ed, 2010)
Law Reform Commission, Community Law Reform for the Australian Capital Territory: Third Report, Enduring Powers of Attorney (AGPS, 1988)
Natalie Skead and Penny Carruthers,"Fraud against the Registrar - An Unnecessary, Unhelpful and Perhaps, No Longer Relevant Complication in the Law on Fraud under the Torrens System" (2014) 40(3) Monash University Law Review 821

Category:

Principal judgment

Parties:

Stephen Wayne Anderson (Plaintiff)
Marilyn Anderson (first Defendant)
Natalie Elizabeth Anderson (second Defendant)

Representation:

Counsel:
Mr R Wilson SC and Mr D Steirn (Plaintiff)
Mr V Russoniello (first Defendant)
Mr J Simpkins (Estate of Norris Frank Anderson)

  Solicitors:
Stacks/Family Law (Plaintiff)
Greg Walsh & Co (first Defendant)
Carroll & O’Dea (Estate of Norris Frank Anderson)

File Number(s):

2014/98304

Judgment

Introduction

1. HIS HONOUR: In barest outline this litigation as now constituted concerns, firstly, the ownership of a property in the southern Sydney suburb, Sans Souci (“the Sans Souci property”), and whether the unilateral severance of the joint tenancy of that property, which severance took place in 2012, validly occurred. More particularly, the dispute relates to whether the second Defendant, Natalie Elizabeth Anderson, as substitute Attorney, had power to execute a statutory declaration on 30 July 2012, in support of the registration of a transfer, by one joint tenant, her father, Norris Frank Anderson (to whom I shall refer as “Norrie”) to himself as tenant in common, and if not, for that and other reasons, whether the fraud exception to the indefeasibility provisions of the Real Property Act 1900 apply since the transfer has been registered. I shall refer to the Plaintiff’s claims for relief in more detail, later in these reasons.

2. At the time of the purported severance, the other joint tenant registered on the title to the Sans Souci property, and in the events that happened subsequently, the survivor of the two joint tenants, was Miriam Veronica Anderson (to whom I shall refer as “Minnie”), the former wife of Norrie. The Plaintiff, Stephen Wayne Anderson, is their son, and the executor of Minnie’s Will, she having died after the events which are the subject of dispute.

3. The claims made were strenuously resisted and shortly prior to the hearing, the first Defendant, Marilyn Anderson, the wife of Norrie at the date of his death, sought leave to file a Statement of Cross-Claim, in which she sought a family provision order out of the notional estate of her deceased husband. She wished to propound that claim only in the event that the Plaintiff was successful in setting aside the severance of the joint tenancy.

4. (It was agreed by the parties that Norrie had no actual estate if the severance of the joint tenancy was set aside since the Sans Souci property would then pass to Minnie by survivorship.) The first Defendant accepted that if the Plaintiff was unsuccessful, the Cross-Claim should be dismissed: T3.11 – T3.14.

The Course of the Hearing

5. It is unnecessary to encumber these reasons with the procedural history of the matters that brought the parties to the hearing before me. It is a somewhat long and tortuous history which included the matter being listed for an earlier hearing before Lindsay J, in November 2015, which hearing was aborted.

6. However, it is to be noted that as long ago as December 2013, similar proceedings were brought by the Plaintiff against the Defendants, and that in those proceedings he also made a claim for a family provision order out of Norrie’s estate. During the course of those proceedings, in February 2014, I had ordered that a tutor be appointed for Minnie. In April 2014, the Plaintiff’s wife was appointed to act as her tutor. These proceedings were discontinued by the Plaintiff following Minnie’s death.

7. The second Defendant, who is a daughter of the first Defendant and Norrie, appeared at the hearing without legal representation, she having terminated the retainer of her solicitors and counsel on the Friday before the hearing began. She stated that she had then instructed them not to appear at the hearing: T1.41 - T1.42.

8. At the commencement of the hearing, she stated that she “did not wish to take an active part in the proceedings”; that she wished “to take a back seat role”; that she was present in Court as a result of the service of a subpoena to give evidence (T1.46 – T1.48); and that she agreed to abide the orders of the Court save as to costs (T5.06 – T5.07). (There had been a falling out between the two Defendants, “from the evening of 6 November 2015”, the reasons for and the extent of which do not require elucidation.)

9. As the second Defendant, since the commencement of the proceedings, has been an “active party” (relevantly, a party who has an address for service in the proceedings as defined in the Dictionary to the Uniform Civil Procedure Rules 2005 (NSW) (“the UCPR”)), she remains at risk as to costs in the event that the Plaintiff is successful.

10. Despite her stated wish, during the course of the hearing, the second Defendant was permitted to sit at the Bar table and to cross-examine witnesses after counsel had done so. She also gave evidence and was cross-examined.

11. Then, at the hearing, another daughter of the first Defendant and Norrie, Frances Margaret Rae, sought leave to appear by counsel. She was prepared to represent the estate of Norrie, in respect of the Cross-Claim, propounded by the first Defendant.

12. However, in the course of exchanges between the Bench and counsel, it was agreed, in the event the Cross-Claim is to be determined, and because it is Minnie’s estate that will be adversely affected by any notional estate order (i.e. Norrie’s interest as joint tenant in the Sans Souci property, or the proceeds of sale of that property), the appropriate person to act as the contradictor in the Cross-Claim was the Plaintiff.

13. As the Plaintiff is the executor of Minnie’s Will to whom Probate has been granted, and as the first Defendant sought a family provision order to be made out of property to be designated as notional estate, he will be bound to satisfy any family provision order, any notional estate order and any costs order made in favour of the first Defendant.

14. Furthermore, upon enquiry from counsel who appeared for Frances, he indicated that he did not propose to “put forward anything about the way in which the Court should deal with the Cross-Claimant’s application for provision or an extension of time, [or] notional estate… [but] would be essentially adopting a neutral stance and not saying anything, leaving it to [the Plaintiff’s] side to argue what needs to be argued”: T5.39 –T5.43.

15. In all the circumstances, the only persons interested to argue the factual and legal issues that arise are the parties to these proceedings. For this reason, it was noted that “consideration has been given to the joinder of an independent person to represent the estate and notional estate [of Norrie] but since the only claim for provision is out of notional estate, and as the only party who would be relevant in those proceedings is [the Plaintiff], as the executor of Minnie's estate, there is no need to join anyone else”: T6.22 – T6.26.

16. The parties were also able to agree, in the event the Plaintiff is successful, or the first Defendant is successful on the Cross-Claim, that the costs and disbursements of Frances for the work done by her legal representatives and the appearance, estimated to be $3,102, would be paid out of Minnie’s estate. In the event the Plaintiff is unsuccessful, those costs and disbursements will be paid out of Norrie’s estate. In view of the result, the costs should be borne out of Norrie’s estate.

17. The hearing was set down for three days but, regrettably, it was not completed within that time. The submissions took more than one day as there were so many issues of fact and law raised by the further amended Statement of Claim and by the Cross-Claim. The only witnesses relied on were the parties themselves and the wife of the Plaintiff.

The Pleadings

18. The most recent pleading by the Plaintiff is a further amended Statement of Claim, filed in Court on 5 November 2015, in which the following relief is claimed (correcting minor typographical errors and omitting, for privacy reasons, the relevant title details and omitting the full address of the Sans Souci property):

“1.   A Declaration that in the events which have happened, the Second Defendant was not authorised by Power of Attorney dated 28 March 2006 and registered Book No. xxxx/xxx granted by the late Morris Frank Anderson, also known as Norris Frank Anderson, (‘the Deceased’) to execute a Statutory Declaration on 30 July 2012 in support of a Transfer by the Deceased severing the joint tenancy he held in the property known as xx xxxxx Street, Sans Souci (Folio Identifier x/xxxxx) (‘ the Sans Souci Property ‘) with the First Plaintiff.

2.   An Order that Transfer AHxxxxxxD dated 30 July 2012 severing the joint tenancy in the Sans Souci property be set aside.

2A   In the alternative to 2, a declaration that in the events which have occurred, the first defendant as executor of the estate of the late Norrie Anderson, holds a one half interest as tenants in common in the Sans Souci property upon constructive trust for herself and the plaintiff as executor of the estate of Minnie Anderson as equitable joint tenants.

3.   A Declaration that in or about December 1970, Minnie Veronica Anderson (‘the Late Mrs Anderson’) and the Deceased entered into an Agreement incidental to the Orders for Property Settlement made between them under the Matrimonial Causes Act 1959 on 29 December 1970, by which they agreed to retain the Sans Souci property as joint tenants and not take any steps to sever that joint tenancy so that the Sans Souci property would pass in any event, to the survivor.

4.   A Declaration that in breach of the Agreement entered into by the Late Mrs Anderson and the Deceased in or about December 1970, the Deceased, by his Attorney, the Second Defendant, severed the joint tenancy in the Sans Souci property.

5.   An Order that the Defendant, as Executor of the Estate of the Deceased, holds one half interest as tenant in common in the Sans Souci property on trust for the Estate of the Late Mrs Anderson.”

19. The Plaintiff asserted that the “Agreement” identified in Paragraph 3 was to the effect that Norrie and Minnie would retain the ownership of the Sans Souci property “as joint tenants in equal shares”; that neither could sever the joint tenancy; and that the title to the Sans Souci property would pass to the survivor. It was also asserted that the agreement was made by Norrie and Minnie “in about November 1970”.

20. In particulars, the Plaintiff asserted:

“The agreement was partly in writing and partly implied. Insofar as it was in writing, it arose from the Terms of Settlement entered into by the Late Mrs Anderson and the Deceased on 24 November 1970 and from the Orders subsequently made on 26 November 1970. Insofar as it was implied, the said agreement arises from the fact that the scheme of the Late Mrs Anderson and the Deceased was that title to the Sans Souci property would pass solely to the survivor of them on the death of the first of them and the only means by which this could be achieved was to maintain their joint tenancy of the property notwithstanding their separation and divorce.”

21. The Plaintiff then asserted that there had been a breach of the Agreement by virtue of the registration of a dealing which had resulted in the joint tenancy being severed and Norrie and Minnie, thereafter, being registered as tenants in common in equal shares. In addition, the Plaintiff claimed consequential relief.

22. In the alternative, the Plaintiff asserted that the second Defendant had no authority to execute a statutory declaration in support of the severance of the joint tenancy; that the Power of Attorney upon which she relied was a General Power of Attorney that had ceased to have any operation by virtue of Norrie’s mental state at the time of the transfer; that the second Defendant’s conduct in lodging the statutory declaration and transfer amounted to “fraud” within the meaning of that term in s 42 of the Real Property Act 1900 (NSW); and that by virtue of the breach of the Agreement, the first Defendant, as the devisee of Norrie’s one half interest as tenant in common, held that one-half interest upon constructive trust for Minnie.

23. The Plaintiff did not assert, in the pleadings, that Minnie had adopted an assumption that the joint tenancy would not be severed, or that she had acted upon that assumption so that it would be unconscionable for the first Defendant, as Norrie’s legal personal representative, to depart from the assumption.

24. Nor was it asserted by the Plaintiff that Norrie and Minnie had reached some arrangement or understanding, short of a binding agreement, which, nonetheless, gave rise to an equitable obligation to the same effect, which obligation equity would enforce by disregarding a severance of the joint tenancy.

25. The Defendants filed a further amended Defence, which made very few admissions and asserted that any alleged agreement was unenforceable by reason of s 54A of the Conveyancing Act 1919 (NSW) (or in the alternative, by reason of s 23C of the Conveyancing Act); that the first Defendant, as a result of the registration of title, obtained an indefeasible title to the one half share, as tenant in common to the Sans Souci property; that the conduct of the Defendants did not amount to fraud within the meaning of that term in s 42 of the Real Property Act 1900 (NSW); and that if the second Defendant lacked authority (which lack of authority was denied), the first Defendant had ratified the transfer and the severance of the joint tenancy.

26. The first Defendant filed a Cross-Claim on 8 March 2016, pursuant to leave granted, without opposition, on 7 March 2016, in which she sought the following relief:

“1. An order for an extension of time in which to commence these proceedings up to the date of filing of this Statement of Cross-Claim pursuant to section 58(2) of the Succession Act 2006.

2. An order pursuant to s. 59 of the Succession Act 2006 making provision out of the Estate of Late Morris Frank Anderson (“the Deceased”) for the Plaintiffs’ maintenance, education and advancement in life.

3. An order pursuant to s. 78 and s. 80 of the Succession Act 2006 that the deceased’s interest in the property known was xx xxxxx Street, Sans Souci [sic] (Folio Identifier x/xxxxx)(“the Property”) be designated as notional estate of the Deceased.”

27. At the hearing, the Plaintiff, as Cross-Defendant, without objection, filed a Defence to the Cross-Claim, in which he effectively denied the first Defendant/Cross-Claimant’s entitlement to a family provision order and notional estate order. However, the Plaintiff could not deny that the first Defendant, as the wife of Norrie at the time of his death, was an eligible person within the meaning of that term in s 57(1)(a) of the Act.

27. Senior counsel for the Plaintiff foreshadowed one of the issues for determination in the Cross-Claim, in the following exchange (which was predicated on the assumption that the severance of the joint tenancy would be set aside and, as a result, that the whole of the Sans Souci property would be held by Minnie’s estate, she having survived Norrie) (T3.25 – T3.43):

“HIS HONOUR: So there’s no actual estate. Then the issue is whether his interest as a joint tenant could be designated as notional estate.

RUSSONIELLO: Correct, your Honour.

HIS HONOUR: I assume, Mr Wilson, you accept that it could be. The issue is whether it should be. Is that the position or something else?

WILSON: It could be if the cross-claimant proves a related property transaction, yes.

HIS HONOUR: But it’s the interest in the joint tenancy. So it would be whether or not, as a matter of discretion, the Court ought to--

WILSON: It’s more than discretion, your Honour. Our case will be that the deceased lacked capacity in 2006 when he went into the nursing home and so, going back three years from his date of death in 2012, there couldn’t have been any related property transaction, but that’s I said what I’ve said, your Honour….”

29. The parties seemed to agree, in the event that the first Defendant was successful on the Cross-Claim, and if a family provision order were made by way of lump sum legacy for her, then the Plaintiff should be given a reasonable opportunity to pay the lump sum legacy and any costs ordered to be paid without ordering the sale of the Sans Souci property. Only if he was unable to do so, should an order for the sale of the Sans Souci property be made.

30. Neither party, in the pleadings, sought an order for the appointment of trustees for sale in the event that the Plaintiff was unsuccessful and following the dismissal of his claim and the dismissal of the Cross-Claim. They will need to consider whether orders under s 66G of the Conveyancing Act 1919 (NSW) will need to be made so that further litigation between them will be avoided.

31. I shall allow the parties an opportunity to consider these reasons and stand the proceedings over to a mutually convenient date to enable orders to be prepared reflecting the reasons and any argument about costs.

Some General Matters

32. The Court is required to determine, on the balance of probabilities, taking into account s 140(2) of the Evidence Act 1995 (NSW), which version of events is the more likely and plausible.

33. Since both Norrie and Minnie are dead, it is also necessary to bear in mind the careful scrutiny to which evidence about conversations with, or between, them should be subjected: Plunkett v Bull (1915) 19 CLR 544, per Isaacs J, at 548-549. This is because neither was available, at the hearing, to admit, or directly deny, specific allegations.

34. McLelland CJ in Eq cited Plunkett v Bull in Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 789, in which case his Honour wrote that "in a claim based on communications with a deceased person, the court will treat uncorroborated evidence of such communications with considerable caution". Whilst there is no absolute legal requirement for it, the Court should look for some corroboration: Re Hodgson (1885) 31 Ch D 177 at 183; Day v Couch [2000] NSWSC 230 at [9]; Weeks v Hrubala [2008] NSWSC 162 at [20].

35. Also, I remember what Bryson AJ said in Zahra v Francica [2009] NSWSC 1206 at [1]:

“In these proceedings the plaintiff makes claims against the deceased’s estate and the facts that he alleges depend for proof very largely upon his own evidence. In approaching his evidence and making findings on a matter he alleges, I bear in mind the need for careful scrutiny to which evidence in such a case should be subjected. This need is well established and was stated clearly by Isaacs J in Plunkett v Bull (1915) 19 CLR 544. Two more modern statements appear in the judgment of McLelland CJ in Eq in Eyota Pty Limited v Hanave Pty Limited (1994) 12 ACSR 785 at 789 in a passage which was cited with approval in the judgment of Sheller JA in Eggins v Robinson (2000) NSWCA 61 at [26].”

36. On the question whether to accept the evidence of one witness or the other, I also remember that in Thomas v The Times Book Co [1966] 2 All ER 241; [1966] 1 WLR 911 at 916, Plowman J stated:

"... [N]ot only in this case is the onus of proof on the defendants, but I am enjoined by authority to approach their story with suspicion, having regard to the fact that the other actor in this story, the late Dylan Thomas, is dead and cannot therefore give his own version of what took place."

37. (The reference to the Defendants in the case identified would be a reference to the Plaintiff in the present case since he bears the onus of proof in relation to matters in the further amended Statement of Claim.)

38. Whelan J in Webb v Ryan [2012] VSC 377 at [22], referred to the difficulties in assessing evidence in such circumstances, stating:

“An important matter which may arise in these kinds of cases is the difficulty of assessing evidence concerning things allegedly said by a person who is dead. The court can never be certain it knows all the circumstances, and more often than not one may be sure that the court knows few of them. It is impossible to hear what the other party to the conversation, the deceased, says about it. There is a significant risk of reconstruction. There are dangers in relying on evidence of what may have been a casual observation made to a person who at the time had no reason to remember the exact words used. In the light of these concerns, a substantial burden is placed upon an applicant whose case relies upon such evidence. Such evidence must be very carefully examined.”

39. Furthermore, a Court, in cases involving events, some of which occurred long before the litigation, usually prefers to rely upon contemporaneous, or near contemporaneous, documents, which will often provide valuable and, usually, more revealing, information than what may be flawed attempts at recollection of those facts by persons with an interest in the outcome of the litigation: Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5) [2012] FCA 1200 at [1247] (Jagot J). Greater weight is usually accorded to such documents, as often they provide a safer repository of reliable fact, particularly when it is clear that they have been prepared by a person with no reason to misstate those facts in the documents and where there is no suggestion that the documents are other than genuine: Hughes v St Barbara Mines Ltd (No 4) [2010] WASC 160, at [157] (Martin J).

40. Because it may be relevant, particularly to the evidence of the second Defendant, what Kirby J, although in dissent, wrote in Whisprun Pty Ltd v Dixon [2003] HCA 48; 77 ALJR 1598, at [119]-[120] must also be remembered:

“… Some judges in the past regarded untruthful evidence - even about

peripheral or irrelevant matters - as fatal to a litigant. Most judges today understand that the evaluation of evidence involves a more complex function, requiring a more sophisticated analysis. Courts, after all, are not venues for the trial of the parties’ morality or credibility, as such. As judges often explain to juries in criminal trials, people sometimes tell lies in court and elsewhere for extraneous and irrelevant reasons, having nothing to do with the legal issues in the trial. If this is true in criminal trials, it is equally true in civil trials. What is important is not the proof of untruthfulness, as such, but the significance (if any) of any demonstrated falsehoods for the issues at trial. That significance can only be judged when measured against the entirety of the relevant testimony. By its logical force, that testimony may well require that the falsehoods be ignored as irrelevant or immaterial to the decision-maker’s ultimate conclusion. In particular cases, it may require the decision-maker, within the pleadings, to consider and decide a case different from - or even contrary to - that advanced by the party, because such is the legal entitlement of the person concerned.

Obligations of this kind recognise the ultimate duty of the decision-maker in an Australian court to decide a case according to law and the substantial justice of the matter proved in evidence, not as some kind of sport or contest wholly reliant on the way the case was presented by a party. Litigants are represented in our courts by advocates of differing skills. Litigants are sometimes people of limited knowledge and perception. Occasionally, they mistakenly attach excessive importance to considerations of no real importance. In consequence, they may sometimes tell lies, or withhold the entire truth, out of a feeling that they need to do so or that the matter is unimportant or of no business to the court. This is not to condone such conduct. It is simply to insist that, where it is found to have occurred, it should not deflect the decision-maker from the substance of the function assigned to a court by law.” [Footnotes omitted]

Some Salient Facts – Norrie and Minnie

41. I am satisfied that the following facts have been established, and that they provide a useful background. In relation to any disputed matters, the following facts should be regarded as the findings of the Court.

42. Norrie was born in July 1928, and he died on 15 May 2013, aged 84 years.

43. Minnie was born in November 1918, and she died on 1 February 2015, aged 96 years.

44. Minnie was married, first, to Gregory James Thomas Horgan, but the marriage was dissolved by this Court (in its then Matrimonial Causes Jurisdiction), by decree absolute dated 18 June 1950.

45. Subsequently, Minnie and Norrie married on 24 December 1951 and they remained married until 26 November 1970, when a decree nisi for the dissolution of their marriage was granted by this Court (in its then Matrimonial Causes Jurisdiction).

46. There were two children of the marriage of Minnie and Norrie, being the Plaintiff, who was born in June 1956, and Karen Fay Robson (“Karen”), who was born in February 1958. (Minnie had a daughter from her prior marriage, namely Jeanette Frances Martin, who was born in October 1937. Neither of Minnie’s daughters has played any part in the proceedings.)

47. In August 1958, Minnie and Norrie purchased, as joint tenants, the Sans Souci property for £1,200.

48. The Sans Souci property, at the time of purchase, was, and it currently is, registered under the Real Property Act 1900 (NSW). It follows that the indefeasibility provisions of that Act, to which I shall later refer, operate.

49. Between the date of its purchase and late 2012, Norrie and Minnie remained the joint registered proprietors of the Sans Souci property. Thereafter, the title to the Sans Souci property was, and currently is, registered, in their names as tenants in common in equal shares.

50. In about late 1959, Minnie and Norrie erected a home on the Sans Souci property at a cost of about $8,000. From about 1960, they lived there together with their children, until their separation in October 1968, when Minnie left, after being the victim of domestic violence.

51. Norrie and Minnie borrowed money from Metropolitan Homes No 13 Building & Investment Co-operative Society Limited, to enable the purchase of the Sans Souci property, or to enable the construction of the home, and a mortgage securing that borrowing was registered on the title to the Sans Souci property.

52. As at 1 December 1968, the amount owing under the mortgage was $4,443.12, which amount included arrears of $843.02 (Ex. 11). A discharge of this mortgage was registered in November 1984.

53. Norrie operated a mechanical repair business, on weekends, on part of the Sans Souci property.

54. The relationship between Norrie and Minnie, after their separation, was acrimonious. In March 1969, Minnie initiated family law proceedings against Norrie seeking orders for a decree nisi for the dissolution of their marriage, interim maintenance, injunctive relief, and property settlement, in this Court, pursuant to the Matrimonial Causes Act 1959 (Cth). Those proceedings were determined by Carmichael J on 26 November 1970. His Honour granted Minnie’s application for dissolution of the marriage on the grounds of cruelty.

55. In the Petition for Dissolution of their marriage, a copy of which is Ex. 11, paragraph 16 provided:

“The petitioner seeks an order under Section 86 of the Matrimonial Causes Act 1959-1966 for a settlement of the property to which she and the respondent are jointly entitled at … Sans Souci, and of the household furniture, chattels and affects therein contained vesting the whole of the respondent’s interest in the petitioner. In the event of this order being refused then the petitioner seeks an order that she be permitted to reside in the premises and have the use of the household furniture, chattels and effects during her life or until her remarriage or in any event during the minority of the infant children of the marriage to the exclusion of the respondent…”

56. Notice dated 6 November 1968, of Minnie’s application, was given to The Secretary, Metropolitan Homes No. 13 Building & Investment Co-operative Society Limited, the registered mortgagee.

57. It appears that shortly prior to the determination of the proceedings, Minnie and Norrie entered into “Terms of Settlement”, dated 24 November 1970, in accordance with part of which the Court made orders as follows:

“2.   That Orders be made in accordance with the terms of Paragraphs Nos. 1 to 5. Inclusive and No. 7 of the document titled “Terms of Settlement” dated the twenty-fourth day of November 1970 signed by the Petitioner and the Respondent initialled by His Honour and filed herein as set out hereunder:

‘1.   The petitioner is to have the right to reside rent free in the former matrimonial home situated at Number xx xxxxx Street, Sans Souci for her lifetime or until her remarriage.

2.   Whilst the petitioner occupies the former matrimonial home, the respondent is to be responsible for mortgage repayments and for the payment of rates, taxes and repairs and maintenance on the said home.

3.   The respondent will pay to the Clerk of Petty Sessions, Kogarah for payment out to the petitioner by way of permanent maintenance the sum of $15.00 per week.

4.   The respondent will pay to the Clerk of Petty Sessions, Kogarah permanent maintenance for each of the children of the marriage, the sum of $8.00 per week otherwise usual order.

5.   The custody of the two children of the marriage is to be granted to the petitioner with reasonable access to the respondent.

7.   The respondent is to pay the petitioner’s costs of an incidental to the suit including the costs reserved of the Application of Interim Maintenance and Injunction dated the 3rd day of March, 1969.’

3.   That the maintenance ordered to be paid pursuant to Order No. 2. sub-paragraphs 3. and 4. herein continue in respect of the Petitioner during the joint lives of the parties and in respect of Stephen Wayne Anderson and Karen Fay Anderson the children of the marriage until each of such children respectively shall have completed secondary education or shall have become self-supporting whichever event shall first occur as from the twenty-sixth day of November 1970 and that the first of such payments be made on the third day of December 1970.

AND THE COURT NOTED that the maintenance ordered to be paid pursuant to Order No. 2., sub-paragraph 3., herein, includes a contribution towards the electricity account at the aforesaid premises.

AND THE COURT FURTHER NOTED the undertaking of the Petitioner that whilst she occupies the former matrimonial home she will permit the Respondent to have the full use of the garage portion of the premises for the purpose of his carrying on his Car Repair business.”

58. Norrie continued to conduct his mechanical repair business on part of the Sans Souci property until about late 1974, when, apparently, he was no longer permitted to do so by the local Council.

59. The financial relationship of Minnie and Norrie, particularly as it related to the Sans Souci property, did not end at the time of the dissolution of their marriage and the making of the orders by the Court.

60. By letter dated 1 November 1984, Norrie’s then solicitors, McDonnell Morgan Milne & Salier, informed Minnie that:

“We advise that we have received from Mr. N. F. Anderson, the sum of $107.50 for costs and disbursements in respect of registration of Discharge of Mortgage over the property at xx xxxxx Street, Sans Souci. Such registration has now been completed in the Registrar-General’s Department and the Title documents returned to this office. As the Title is registered in the name of N. F. Anderson and M. V. Anderson as joint tenants, we would require an authority from both parties in order to release the Title documents.

In the meantime, pending receipt of such authority, we propose to lodge the documents in a safe custody packet in joint names.”

61. (There was no suggestion that the statements made in this letter should not be treated as proof of the truth of what was stated.)

62. In a letter dated 10 August 1991, from Norrie’s then solicitors, Werry Altobelli, to Messrs Philip Wood & Co, the following passage is found:

“…

In relation to the Sans Souci property we are instructed that our client’s former wife has already indicated that she is not in the least interested in severing her joint tenancy in the property. Please remember that even if our client could unilaterally sever the joint tenancy, it would be worth absolutely nothing to him because of the life tenancy of his former wife. Seen in that light, and with great respect, the offer contained in your letter of 25th July, 1991 is quite inadequate...”

63. In a letter dated 7 June 1995, from Norrie’s then solicitors, Dear & Lonergan, addressed to Minnie, the following passage appears:

“We act for your former husband Norris Frank Anderson.

We wish to advise that our client would be agreeable to the sale of the above property if you desire to effect a sale in due course.

Our client has requested us to advise you of his offer as follows:

1.   His agreement to sell the property will remain open to you for a period of 12 months from the date of this letter.

2.   That upon the sale of the above property and after payment of the usual agent’s commission, legal fees and outstanding rates (if any), that the proceeds of the sale be distributed as follows:

(i)   the sum of $30,000.00 to you to cover out of pocket and relocation expenses;

(ii)   the balance to be divided equally between yourself and our client.

If you wish to effect a sale of the above property, please contact this office or our client so that arrangements can immediately be put into place for you both.”

64. In a letter dated 20 June 1995, from Minnie’s then solicitors, Adrian Twigg & Co, the following response appears:

“…

We note that your letter commences in heavy capitals with the following words, “RE: PROPOSED SALE XX XXXXX STREET, SANS SOUCI”.

In case you are unaware, there can be no sale of the property during our client’s lifetime unless she earlier remarries. She has not remarried and has no intention of so doing.

The terms of the Orders contained in the decree nisi between our client and your client are clear.

We are further instructed by our client that your client is in arrears with his maintenance payments and his payments of rates on the property and maintaining maintenance of the property in proper repair. We believe from our client that your client received a substantial superannuation lump sum and we should be obliged if you would forward to us a Statement of Financial Circumstances sworn by your client setting out full particulars of his income, assets and liabilities,”

65. (The Plaintiff said that he was unaware of these letters and that Minnie had not discussed the contents of either letter with him.)

66. On 24 July 1996, a caveat on the title to the Sans Souci property was lodged on behalf of Minnie, claiming an interest as “a registered proprietor”. The address for service of notices on the caveator was shown as the Sans Souci property.

65. (Again, the Plaintiff said that he was unaware of the caveat and that Minnie had not discussed it with him.)

66. Other than as set out above, there is no evidence of any written communication between Norrie and Minnie regarding the Sans Souci property.

67. Some of the evidence suggests that Norrie was not aware of the caveat having been lodged until about March 2006 when he attended upon a solicitor to have a Will and a Power of Attorney drafted, and when he was informed of the caveat. However, there is evidence to the contrary, given by the Plaintiff, which evidence I accept, that in a conversation with him in December 2004, Norrie referred to the caveat and that he “found out that the caveat she had Twigg put on the place means nothing”.

68. Also contrary to the suggestion that Norrie did not know about the caveat is the evidence of the Plaintiff’s wife, upon which she was not cross-examined, that in December 2004, Norrie had visited the Plaintiff and her, and he had referred to “that bloody caveat your mother has on the house down there at Sans Souci”. I accept her evidence also.

69. Apart from a short time immediately following their separation, Minnie continued to occupy the Sans Souci property until 15 November 2010, when she was admitted to a nursing home. Then, the Sans Souci property was left vacant, except for brief periods when it was occupied by Karen.

70. Between late November 1970 and May 2013, neither Minnie nor Norrie brought proceedings, in any Court of competent jurisdiction, to vary, or discharge, the Orders made in the family law proceedings.

71. For completeness, I should mention Ex. M, which is a copy of a document dated 31 July 2006, from Centrelink, addressed to Norrie, which has attached “Your Assets Summary Statement”. Next to the heading “Real Estate and Business Interests” is the amount $35,000, although to what asset this amount relates is not disclosed. The first Defendant accepted that there was no reference to the Sans Souci property in this document: T138.00 – T138.07.

Some Salient Facts – Norrie and the First Defendant

74. The first Defendant was born in November 1949. She met the deceased in 1966. Their relationship commenced in about 1968. They moved in together in early 1969. They married in March 1971 and they remained married to each other until Norrie’s death.

75. There were three children of their marriage, being the second Defendant, who was born in April 1972; Frances, who was born in March 1974; and Norrie Jnr, who was born in May 1975.

76. The first Defendant gave evidence of some turbulent periods during her marriage to Norrie. She attributes their marital problems, during these periods, to Norrie’s excessive consumption of alcohol.

77. The first Defendant and Norrie separated in December 1990. A short time later, each sought legal advice regarding a property settlement.

78. In about April 1992, Norrie and the first Defendant had what she described as “a legal property settlement” pursuant to which she received a 63 per cent share of a property that they had purchased in Beverly Hills. They agreed that she would purchase Norrie’s 37 per cent share for about $60,000, which she did in about April 1992. Thereafter, the Beverly Hills property was registered in her sole name until its sale in 2002, whereupon she purchased, in her name alone, a property at Wood Street, Swansea.

79. The description “legal property settlement” appears to relate to Consent Orders, dated 20 December 1991, signed by each of them, filed in the Family Court of Australia, a copy of which Consent Orders forms part of the first Defendant’s evidence.

80. It is not necessary to set out all of the contents of the Consent Orders, but the following passages appear (correcting some typographical errors):

“NOTATIONS

…

G.   The Husband and his former wife Miriam Anderson co-own … the Sans Souci property as joint tenants in equal shares.

…

I. At the time of the parties marriage (being the Husband’s second marriage) there was a mortgage secured over the Sans Souci property and under a matrimonial settlement with the Husband and his former wife, the Husband paid out the said mortgage from matrimonial income of the Husband’s second marriage and over a period of approximately 15 years.

J.   The Wife has agreed to relinquish any right title and interest in the Sans Souci property.

…

M. Pursuant to Section 81 of the Family Law Act 1975, the parties intend that that these orders shall, as far as practicable finally determine the financial relationship between them and avoid further proceedings between them.

ORDERS

…

9.   The Wife shall transfer to the Husband her right title and interest in…(b) the Sans Souci property.”

81. Despite the events referred to above, the first Defendant and Norrie reconciled and he returned to live with her in the Beverly Hills property.

82. In December 1992, Norrie purchased a property at Kandos, a small town about 235 kilometres north-west of Sydney. The property, initially, was registered in Norrie’s name only, but in July 1996, he transferred ownership so, thereafter, it was held as joint tenants with the first Defendant. He and the first Defendant moved there at about this time.

83. The first Defendant says that she and Norrie never spoke about the Consent Orders following their reconciliation. Neither party sought to set aside those Orders. Furthermore, it appears that both parties complied with his, and her, obligations thereunder, respectively, so far as their property was concerned.

84. In any event, as will be read, the interest of the first Defendant in the Sans Souci property arises because of Norrie’s Will, which was made many years after the Consent Orders were entered into.

The Wills, the Probate, and the administration of each Estate

85. Norrie left a Will dated 6 April 2006, Probate of which Will was granted, on 20 August 2013, to the first Defendant as the executrix appointed under that Will.

86. Relevantly, Clauses 6, 7 and 9 of Norrie’s Will, provided:

“…

6.   IN THE EVENT that I own the property situate at and known as xx xxxxx Street, Sans Souci then I GIVE this said property to my Trustee UPON TRUST as follows:-

6.1   As to a one half share to my said wife for her own use and benefit absolutely

6.2   As to the remaining one half to my children STEPHEN WAYNE ANDERSON, KAREN FAY ROBSON, NATALIE ELIZABETH ANDERSON, FRANCES MARGARET LEWIS & NORRIE FRANCIS BENJAMIN ANDERSON as tenants in common in equal shares for their own use and benefit absolutely;

7.   IN THE EVENT that I only own half of the property situate at and known as xx xxxxx Street, Sans Souci then I GIVE this said property to my Trustee UPON TRUST as follows:-

7.1   As to a one half share to my said wife for her own use and benefit absolutely

7.2   As to the remaining one half to my children NATALIE ELIZABETH ANDERSON, FRANCES MARGARET LEWIS & NORRIE FRANCIS BENJAMIN ANDERSON as tenants in common in equal shares for their own use and benefit absolutely…

9.   In the event that I am not the registered proprietor of that property situated at and known as … Street Sans Souci then I GIVE the whole of my Estate of whatsoever nature and wheresoever situate to my said Wife for her own use and benefit absolutely.”

87. At the date of his Will, Norrie knew that he and Minnie owned the Sans Souci property as joint tenants. He appears to have known, also, that when one joint tenant died his, or her, interest in the jointly held property would pass, by survivorship, to the other.

88. The terms of Norrie’s Will demonstrate that he contemplated three alternatives, the first being that he might come to be the sole registered proprietor of the Sans Souci property by survivorship (Clause 6); the second being that the joint tenancy would be severed and that he would be registered as to one-half of the Sans Souci property (Clause 7); and the third being that he would not survive Minnie, with the result that she would come to be the sole registered proprietor of the Sans Souci property (Clause 9).

89. Indeed, I infer that, by inserting Clause 7 in the Will, Norrie and his legal advisers believed that the Sans Souci property remained held in joint tenancy, but that the joint tenancy, at some time in the future, may be severed. The Will, on its own, does not, necessarily, negative the Agreement not to sever the joint tenancy alleged by the Plaintiff.

90. In the Inventory of Property placed inside, and attached to, the Probate of Norrie’s Will, his estate was disclosed as having an estimated value of $400,027. The estate was said to consist of money in bank ($27) and Norrie’s interest, as tenant in common in equal shares, in the Sans Souci property ($400,000). In addition, there was disclosed, as jointly held property at the date of death, Norrie’s interest as a joint tenant with the first Defendant, in a property situated at Kandos, NSW ($95,000).

91. (I should mention that Clause 4 of Norrie’s Will provided that if he was the registered proprietor of the Kandos property at the date of his death, he gave it to the second Defendant, Francis and Norrie Jnr, as tenants in common in equal shares.)

92. At the hearing, the parties were able to agree that the current value of the Sans Souci property is $1,250,000. It follows that the gross value of Norrie’s share, assuming the severance of the joint tenancy is not set aside, is about $625,000. Alternatively, if it is set aside, the maximum gross amount that may be designated as the notional estate of Norrie is about $625,000.

93. Minnie left a Will dated 12 May 2006, Probate of which Will was granted on 10 June 2015 to the Plaintiff, as substituted executor, the instituted executors having renounced Probate.

94. In Minnie’s Will, there is no specific reference to any interest that she might have in the Sans Souci property. By the Will, after directing the payment of debts, funeral and testamentary expenses, State Death Duty, Federal Estate Duty, and all other duties or taxes whatsoever payable by reason of her death, she gave one third of the residue of her estate to her daughter, Jeanette; one third of the residue of her estate to the Plaintiff; and she divided the balance, as to 20 per cent for her granddaughter, Belinda Jane McFarlane, and 80 per cent to Karen.

95. As identified above, the gross value of Minnie’s share of the Sans Souci property, assuming the severance of the joint tenancy is not set aside, is about $625,000. If the severance is set aside, the whole of the Sans Souci property falls into Minnie’s estate by survivorship, although up to half of its value could possibly be clawed back into Norrie’s estate if a notional estate order is made.

96. As at 31 August 2013, the amount outstanding for Council rates on the Sans Souci property was $24,388. At the hearing, the amount outstanding was $29,238. It was accepted that the amount payable by Norrie’s estate, or from notional estate if his interest as joint tenant is designated as such, is $26,813, being the amount of rates outstanding as at 31 August 2013 (accepted as at about the time of Norrie’s death), and one half ($2,425) of the balance of the rates ($4,850). A reference to the amount to be paid to Minnie’s estate should be included in any orders to be made.

97. At the hearing, it was also agreed that if the Plaintiff is successful, and if an order for the sale of the Sans Souci property was required, that there would be costs and expenses of sale, estimated to be about $30,000.

The diminution of Norrie’s estate on account of legal costs

98. The first Defendant gave evidence that in the event that Norrie’s actual estate comprises a one half interest in the Sans Souci property, she does not wish to proceed with the Cross-Claim. She accepted that she will then receive, pursuant to Clause 7 of Norrie’s Will, one half of the share of the proceeds of sale that will have to be paid to her as executrix of Norrie’s Will to whom Probate has been granted. She also accepted that the balance of the proceeds of sale passing to his estate will be divided between her three children.

99. However, subject to submissions that may be made on the question of costs in a claim for a family provision order, usually, in calculating the value of the estate, or notional estate, finally available to be distributed, the costs of the proceedings, (at least so far as they relate to the Cross-Claim) should be considered, with circumspection.

100. The first Defendant/Cross-Claimant, if successful, normally, will be entitled to an order that her costs, calculated on the ordinary basis, be paid out of the notional estate of the deceased, whilst the Plaintiff/Cross-Defendant, as the appropriate contradictor, irrespective of the outcome of the Cross-Claim, normally, will be entitled to an order that his costs of defending the Cross-Claim, calculated on the indemnity basis, be paid out of the estate or notional estate.

101. Because the Cross-Claimant’s costs, as the first Defendant, in defending the proceedings might be relevant, an affidavit of costs was filed, without objection, on the second day of the hearing. Mr G Walsh, solicitor, estimated the first Defendant’s costs of the proceedings to be about $115,000 (about $45,000 of which had been paid by the second Defendant to her former solicitors).

102. Of the total amount of costs and disbursements, the Court was informed from the Bar table, without demur or objection, that her costs and disbursements, so far as they relate to the Cross-Claim, are $25,000. (It was accepted that the Court should treat the figure as an estimate only.)

103. Ms L M Young, solicitor, estimated the Cross-Defendant’s costs of defending the Cross-Claim, calculated on the indemnity basis, to be $35,000.

Other Eligible Persons

104. Each of the three children of Norrie and the first Defendant, as an eligible person, has stated that she, and he, respectively, does not wish to make a claim for further provision out of Norrie’s estate or notional estate.

105. The Plaintiff, as an eligible person, has stated that he, also, does not wish to make a claim for further provision out of Norrie’s estate or notional estate. Accordingly, it is unnecessary for a prescribed form of notice to be served on him.

106. On the third day of the hearing, senior counsel for the Plaintiff sought leave to file in Court an affidavit of his instructing solicitor, Ms Young, in which she set out, on information and belief, the financial and material circumstances of Karen, a beneficiary named in Minnie’s Will and an eligible person in relation to Norrie’s estate.

107. I infer that Karen does not wish to make a claim for a family provision order in respect of Norrie’s estate, but that she advances her claim, as a competing claimant, in the event that the Court finds it necessary to determine the Cross-Claim.

108. Whilst neither of the Defendants objected to the affidavit of Ms Young being filed in Court, counsel for the first Defendant did object to the Court reading the affidavit since its contents could not be tested. When an adjournment upon the basis that Ms Robson could swear an affidavit and be made available for cross-examination was discussed, and counsel for the Plaintiff confirmed that the Plaintiff would not be asserting that the obligation and responsibility of Norrie to Karen was greater than his responsibility to the first Defendant, as his widow of a very long marriage, counsel for the first Defendant sought instructions, and then withdrew his objection to the affidavit being read.

Norrie’s Medical Condition after 2005

109. Between 19 and 28 April 2006, Norrie was an in-patient at the John Hunter Hospital, Newcastle.

110. In a report dated 28 April 2006, headed “To Whom it May Concern”, Dr Judy Luu, a Neurology Registrar, opined that Norrie had been:

“admitted for investigation of declining memory and neurological symptoms. During this period, he was noted to have poor short term memory and findings consistent with normal pressure hydrocephalus [an abnormal accumulation of cerebrospinal fluid in the brain]. As a result, he is not able to make fully informed legal or financial decisions at the moment. He will need further treatment and reassessment before he can be deemed competent to undertake any legal or financial decisions.”

111. The first Defendant gave evidence that following Norrie’s discharge from that Hospital, he returned to live with her for a short time, but “he suffered setbacks and in late 2006, he went into high dependency nursing home care at Belmont NSW”.

112. Each of the Defendants, whilst prevaricating somewhat in cross-examination, accepted that between April 2006 and June 2012, Norrie’s medical and mental condition deteriorated. Whilst each endeavoured to suggest that his condition fluctuated, the contents of various copy medical records, which were tendered, to my mind clearly reveal that in the years between 2006 and 2012, his condition was deteriorating quite significantly.

113. In an Admission Form dated 14 August 2006 (Ex. B), Norrie was diagnosed as suffering from Dementia (Frontal Lobe), depression, hypertension, having sustained recurrent trans-ischaemic attacks (“TIA’s”), and atrial fibrillation (“AF”).

114. In an Aged Care Assessment Team Central Register Form dated 11 July 2006 (Ex. H), Norrie was assessed as suffering from short term memory problems, confusion, and disorientation of time, place and other people. He was dependent in many activities of daily living (including shopping, preparing meals, eating, drinking, and oral hygiene). Again, he was shown as requiring residential high care. He was described as being unable to “manage personal hygiene”, “location, change, mobility and transfers”, his “own medication” or “specialised treatment”.

115. Exhibit H also reveals a diagnosis of “progressive dementia”, “short and long term memory problems, confusion, disorientation of time place and other people”. Norrie is described as needing “high level (permanent) nursing home care”.

116. The last page of this document includes the signature of the first Defendant and under the heading “Why was the applicant unable to sign”, the word “Dementia” is written.

117. In a report dated 30 August 2006 (Ex. K), Norrie was diagnosed as continuing to suffer frontal lobe dementia and recurrent transient ischaemic attacks, and as having a limited concentration span and short term memory loss. Part of the “interventions” suggested included “re-orient Norrie to time and place as often as needed”.

118. There is another document, described as a “Uniting Church Resident Care Plan” (Ex. J) in relation to Norrie’s condition in December 2006, which supports the evidence of the first Defendant that by the end of 2006, he had suffered a sudden deterioration as a result of which he was unable to attend to his personal hygiene requirements.

119. Part of this document covers the period between 17 November 2006 and 27 February 2010. It is clear that Norrie’s condition did not improve over this period.

120. A Resident Movement Form with Uniting Care dated 5 March 2007, which forms part of Ex. A, identified Norrie as being in need of “Permanent” and “High Care” assistance.

121. In the copy of a document entitled Progress Notes, which forms part of the same Exhibit and which covers the period to 21 February 2010, Norrie, as at January 2010, was said to be “completely dependent in all aspects”.

122. The Death Certificate, dated 25 May 2013, relating to Norrie, reveals that one of the causes of his death was “Cerebrovascular accident, 8 years”.

123. I am satisfied, from all of the evidence, that, from about August 2006, Norrie was suffering from a number of different medical conditions that would have significantly affected his capacity. There can really be no dispute that he had suffered numerous transient ischaemic attacks which are also likely to have affected his cognitive abilities.

124. I did not find very convincing the second Defendant’s evidence that she could not be specific about Norrie’s state of health in 2012:

“because his health generally fluctuated to extremes. It was never the same day to day, week to week, even hour to hour, minute to minute. You could go there some days and he’d talk, talk, talk. You could go there others and he wouldn’t speak at all” (T119.15 – T119.20).

125. In my view, her evidence is inconsistent with the contemporaneous medical evidence that was tendered in the proceedings. I do not accept her evidence on this topic as reliable.

126. I am satisfied, on the balance of probabilities, that by about 2007, Norrie was not likely to have had capacity to give instructions to sever the joint tenancy of the Sans Souci property. He is also unlikely to have been able to comprehend the steps that the Defendants were taking to sever the joint tenancy in 2012.

The Power of Attorney given by Norrie

127. Norrie appointed the first Defendant as his Attorney pursuant to a document described as a General Power of Attorney dated 28 March 2006, the original of which is Ex. C. It is a printed form signed, sealed and delivered by Norrie in the presence of a witness, Peter Kilpatrick, solicitor.

128. It is clear that the first Defendant, alone, was appointed by Norrie as what I shall describe as “the specified Attorney”. There was no dispute that she accepted her appointment as Attorney by signing the Power of Attorney on 28 March 2006.

129. The Power of Attorney went on to provide that, “should my said wife be unwilling or unable to act, I appoint my daughter [the second Defendant] to be my attorney”. It is clear that the second Defendant, alone, was appointed by Norrie as what I shall describe as “the substitute Attorney”. It follows that there was, in each case, only a single Attorney appointed.

130. (Neither of the terms “specified attorney” or “substituted Attorney” is used in the Powers of Attorney Act in 2006. However, “attorney” was defined, in s 3, as meaning, in relation to a power of attorney, “a person to whom the power is given”.)

131. It will be necessary to return to the question when the second Defendant executed the acceptance of her appointment. The submission made on behalf of the Plaintiff was that the Court should not be satisfied that it was executed by her on the date the Power of Attorney bears, but rather that it was “backdated” some years later.

132. Clause 2 of the General Power of Attorney signed by Norrie provided that it is given:

“with the intention that it will continue to be effective if I lack capacity through loss of mental capacity after its execution”.

133. Yet, Part 2 of the General Power of Attorney, under the heading “ADDITIONAL POWERS & RESTRICTIONS”, Clause 8 provided:

“This power of attorney is subject to the following conditions and limitations.

should I become incapacitated by physical illness or injury.

should I become incapacitated through unsoundness of mind.”

134. Then, the paragraphs of the Power of Attorney, under the heading “Acceptance by attorney”, contemplate that what follows was “[t]o be used for enduring Powers of Attorney only” and the acceptance of the appointment by the Attorney “under this enduring Power of Attorney”.

135. There was, initially, a dispute concerning whether Norrie’s Power of Attorney is a General, or an Enduring, Power of Attorney. It is headed “General Power of Attorney”. Although as stated above, the Plaintiff asserted, in the further amended Statement of Claim, that the Power of Attorney was a “General Power of Attorney” and that it had ceased to operate from about August 2006 as a result of the conditions and limitations identified in it, during submissions, senior counsel for the Plaintiff seemed to accept that since the form of the Power of Attorney was the same as the form of the Power of Attorney signed by Minnie at about the same time, which was clearly an enduring Power of Attorney, Norrie’s Power of Attorney should also be regarded in the same way: T207.49 – T208.21.

136. It follows that one of the issues raised by the pleadings regarding the construction of Norrie’s Power of Attorney ceased to be an issue.

137. The Power of Attorney signed by Norrie gave no additional powers to the Attorney. Relevantly, the power to confer benefits was expressly omitted by the striking out of Clauses 5, 6 and 7.

138. The evidence reveals that Mr Sean Peters, a solicitor to whom reference will be made later, sent the original Power of Attorney and one copy to his Law Agents, for registration, on about 27 June 2012: Ex. 5. The Power of Attorney was registered by the Registrar General on 28 June 2012: Ex. C.

When did the first Defendant accept her Appointment as Attorney?

139. A factual matter that loomed large in the proceedings related to when the second Defendant accepted her appointment as the substitute Attorney. (This was despite the fact that in the submissions dated 23 March 2016, senior counsel for the Plaintiff wrote that “the First and Second Defendants would appear to have both accepted their appointments as Attorneys on 28 March 2016”.)

140. As will be obvious from the Power of Attorney itself, there was a need for acceptance by the specified Attorney and also by the substitute Attorney. The acceptance by each was to be express, not simply by acquiescence or by some other less formal way, as the Power of Attorney provided for each to sign.

141. What acceptance by an attorney is designed to do is to “convey to the attorney that he or she is accepting serious responsibilities”: Law Reform Commission, Community Law Reform for the Australian Capital Territory: Third Report, Enduring Powers of Attorney (AGPS, 1988) p 13.

142. In Lincolne v Williams [2008] TASSC 41; 18 Tas R 76, at [4] and [9], Blow J referred to the giving and acceptance of a Power of Attorney as follows:

“The giving and acceptance of the power of attorney created a relationship of principal and agent between the parties…

… in my view the giving and acceptance of an enduring power of attorney, without more, cannot amount to the making of a contract. The legislative requirement of written acceptance contained in the 1934 Act, s 11A(2)(b), and now to be found in the 2000 Act, s 30(2)(c), serves important non-contractual purposes. It protects the donee of an enduring power against the risk of becoming a trustee without his or her knowledge and consent. It also protects the donor of the enduring power from the risk that, once it is too late to make alternative arrangements, the donee will turn out to be unwilling to act.”

143. The date identified by the second Defendant as the date of acceptance on Norrie’s Power of Attorney, was 28 March 2006. The second Defendant said that she believed that she had signed the document “in the afternoon of that date”: T92.30 – T92.31.

144. Although, as will be read, a substitute attorney may accept the appointment at the time the instrument creating the enduring power of attorney is executed, or at any time after it is executed (s 20(3) and 20(4) Powers of Attorney Act 2003 (NSW)), senior counsel for the Plaintiff submitted that the placing of a date on the Power of Attorney which was incorrect, supported the assertion that the second Defendant knew that what she was doing was beyond power and demonstrated actual, or constructive, fraud.

145. It was submitted, also, that the determination of this question was relevant to whether the second Defendant should be accepted as a witness of truth.

146. There are a number of problems in relying only upon the date shown in the Power of Attorney itself in resolving the question. The following evidence, in particular, supports the conclusion that the date on which the second Defendant signed the acceptance of appointment was not the date shown on the Power of Attorney. It also provides reasons to doubt the reliability of the second Defendant’s evidence on the topic:

1. Despite such a serious allegation being levelled against her, the second Defendant seemed to withdraw any denial of the allegation that her signature on the Power of Attorney was placed on it at a date other than the date shown on it. Indeed, she became unsure, having reflected on the matter, whether she had signed it on the date stated on the Power of Attorney under her signature: T102.13 – T102.40.

The following passage of cross-examination, at T104.46 – T105.01, does not assist the second Defendant:

“Q. Was it someone at Mr Peters’ office who suggested that it be backdated to 28 March 2006 or did you discuss that with your mother that it be backdated to 28 March 2006?

A. That’s making a very big assumption, Mr Wilson.

Q. You can deny it, if you wish.

A. I’m unsure.”

And at T118.00 – T118.05:

“Q. I'm suggesting to you that the separate legal constraint which made your declaration in paragraph 1 incorrect was that you hadn't signed the power of attorney on 28 March 2006 but much later when you saw Mr Peters, or shortly thereto.

A. I'm just going to say I'm unsure to that question.”

2. The second Defendant’s evidence that she attended the solicitor’s office late in the afternoon of 28 March 2006, following a telephone call from her parents, does not seem likely, if the first Defendant’s evidence that she and Norrie only returned from the solicitor’s office between 3:00 p.m. and 5:00 p.m. (she could not be sure which) is correct. The second Defendant would have had to travel from Beverly Hills, Sydney, to the solicitor’s office in Swansea, about 25 miles from Newcastle. There was no suggestion that any arrangements were made to meet the solicitor to attend to the signing of the Power of Attorney.

3. The first Defendant’s affidavit of 28 March 2014, does not refer to the acceptance by the second Defendant of her role as Attorney on 28 March 2006, when she says the Power of Attorney was prepared and signed by Norrie and when the appointment as Attorney was accepted by her. Nor does the first Defendant state, in that affidavit, that she was informed by the second Defendant, on that date, or subsequently, that the second Defendant had accepted the appointment on 28 March 2006.

4. Ex. A included a copy of the Power of Attorney which was produced by Uniting Care Hunter Central Coast New England and appears to have related to Norrie’s admission to Narla Village Nursing Home in August 2006. That copy, dated 6 April 2006, by Mr P Kilpatrick, the solicitor who had prepared the Power of Attorney, described as “a true and correct copy of the original document”, did not include the signature of the second Defendant under the heading “Acceptance by Attorney”. Had the Power of Attorney been signed on 28 March 2006, one would have expected the verified copy to include the second Defendant’s signature.

5. The date “28th March 2006” which appears under the signature of each of the first Defendant and the second Defendant appears to be in different handwriting. (This, on its own, would not be determinative, since neither of the Defendants suggests that each placed her signature on the Power of Attorney in the presence of the other.)

6. Part of Ex. A is a copy of a document headed “Appointment of Enduring Guardians”. The signature of the first Defendant under the heading “Acceptance of appointment” bears the date “28.03.06”. Then, underneath that date, is the reference to the second Defendant. Her signature then appears and underneath it is the date “21.04.06”.

7. Ex. B was an Admission Form dated 14 August 2006. Although both Defendants are named as next of kin, only the first Defendant is referred to next to the term “Relationship” as “POA/Enduring Guardian”. The second Defendant next to the term “Relationship” is referred to as “Daughter”.

8. The solicitor who gave the Certificate on the Power of Attorney under s 19 of the Powers of Attorney Act, Mr Peter Kilpatrick, was not called to give evidence. Furthermore, no diary entry, contemporaneous file note, or any other document, prepared by the solicitor, was relied upon in evidence by the Defendants. No explanation for not calling the solicitor or producing any diary or contemporaneous diary note was given.

9. Ex. O is a Uniting Care “Consent to Disclose Information” form, which was signed by the first Defendant on 15 August 2006. In this document, there is a reference to the first Defendant as “POA” and a further reference to the “Person Responsible/Next of Kin”. The first Defendant is referred to, but next to the reference to “Other”, the following appears:

“NATALIE ELIZABETH ANDERSON – DAUGHTER – Natalie & Marilyn Anderson Power of Attorney only.”

147. Having heard and read all of the evidence, I am not satisfied that the second Defendant accepted the appointment as Attorney on 28 March 2006.

148. However, this conclusion does not mean that the second Defendant did not accept the appointment some time later, and certainly by the time she took the steps that she did to sever the joint tenancy. Norrie’s Power of Attorney was registered on 28 June 2012. There is no suggestion that the second Defendant had not accepted the Power of Attorney by that date, which, of course, is prior to the date of her signing the statutory declaration and transfer. Indeed, in that statutory declaration, she identified herself as “Attorney under registered Power of Attorney Book 4634/249”. This statement, which is undoubtedly correct, makes clear that it had been registered by that date.

149. Nor am I satisfied, having come to the conclusion that the General Power of Attorney was not signed by the second Defendant on the date it bears, that the insertion of the incorrect date demonstrates any knowledge of fraud. As stated, the acceptance by the substitute Attorney could take place at any time before she acted as such.

Benefit to the Attorneys

150. At the time of the severance, it cannot be said that to sever the joint tenancy would not have been in Norrie’s best interest. Since it was not known who would die first, the certainty of a one half interest as tenant in common of the Sans Souci property, as compared with the uncertainty of coming to be registered as the sole registered proprietor if Minnie died first, or not being registered as a proprietor at all if she did not, might very well have been in his best interest.

151. The first Defendant gave evidence that one of her motives in seeking advice about the severance of the joint tenancy in 2012 was “to fulfil my husband’s wishes that were in his will” (T152.41). This evidence is inconsistent with her denial that the second Defendant had proceeded to sever the joint tenancy because she “knew that, in due course, when Norrie died, Sans Souci would pass into his estate and you would benefit from it to some extent”: T152.34 – T152.41; T157.28 – T157.32.

152. The second Defendant was cross-examined upon her motive in taking the steps to sever the joint tenancy. It was put to her that she was aware of the terms of Norrie’s 2006 Will, and that she knew that she, her siblings and the first Defendant, would receive a share of Norrie’s estate, (and thus a share of the proceeds of sale) in the event that the severance of the joint tenancy occurred. She admitted that in 2012, she knew of the 2006 Will, but she denied that her interest under that Will motivated her to take the steps that she did. She did, however, admit that a consequence of the severance was that she would benefit under the terms of that Will: T125.38 – T125.40.

153. The second Defendant asserted that a motive for the severance of the joint tenancy was to improve Norrie’s lot in life. She gave by way of example, the fact that he required extensive dental work and, perhaps, a desire to have him move into the Sans Souci property.

154. She admitted that even after the steps taken to sever the joint tenancy, no further steps were taken to sell the Sans Souci property and no request was made to permit Norrie to move back into the property even though Minnie was no long living in it: T132.32 – T133.07.

155. Neither Defendant could explain, however, how improving his lot in life would be achieved unless, following the severance of the joint tenancy, the Sans Souci property was sold, with the result that there would be one half of the proceeds of sale available to improve Norrie’s financial circumstances. In these circumstances, it is difficult to accept the asserted motive for doing what was done.

156. There was no immediate benefit to either of the Defendants as a direct result of the severance of the joint tenancy. Had the severance been effective, what would have occurred was that he would hold his interest therein as a tenant in common in equal shares with Minnie, and upon his death, Norrie’s interest, as tenant in common in equal shares, would form part of his estate, with the consequence that Clause 7 of his Will would take effect. Only then would the named beneficiaries, including the first and second Defendants, each receive a benefit under the Will.

Conversations about the Sans Souci property

157. The Plaintiff gave evidence that in about 1982, following a request made by the Plaintiff to Norrie to repair a fence at the Sans Souci property, Norrie said to him that “[t]he bloody house is going to be yours and Karen’s in the end anyway”. However he did not say that he had agreed with Minnie words to the effect that “there will be no severance of our joint tenancy and she inherits if I die”: T54. 07 – T54.23; T56.08 – T56.14; T57.13 – T57.26.

158. (There is evidence in a Statement of Costs and Disbursements, that in November 1982, a search was conducted by Norrie’s solicitors at the Registrar of Births Deaths and Marriages. However, the correspondence referred to, addressed to the Registrar General, is not in evidence.)

159. The Plaintiff also accepted, later in the cross-examination, that whilst Norrie had said that he had “no intention of selling anything”, he did not say that he had made an agreement with Minnie that he would not do so: T54.49 – T55.14.

160. Rather, the deceased had said that he was not pushing Minnie to do anything she did not wish to do; that if the Sans Souci property were sold “it would bugger up my pension”; and that he had earlier agreed with Minnie not to sell: T58.07 – T59.03.

161. The Plaintiff also agreed that when he went with Minnie to make her Will in 2006, there was a discussion with her and the solicitor about the joint tenancy and the ability to have the joint tenancy severed. He accepted, at T61.03 – T61.24, that Minnie had said:

“Absolutely not, I don't want to give his wife and kids anything. I fought hard over the years to get the house for my kids and I'm not going to give it away. If I did that the next thing the old man would be wanting to sell it on me", but she had not said "I'm afraid I've agreed with Norrie that I will never sever the joint tenancy.”

162. The Plaintiff also gave evidence that in April 2006, when he visited his father in hospital, Norrie had told him that he “had been to see a local solicitor at Charleston to get my affairs in order. I've made no changes to Sans Souci and I've told Marilyn the house there is for your mother, eventually going to you and Karen when the time comes and Kandos and Swansea is for Marilyn and my other kids”.

163. The Plaintiff denied that he had fabricated this conversation. Whilst counsel for the first Defendant put to him that the conversation had not taken place, and “that the reason you have told what I've said to be a lie is because you wish to advance your interests in the case” (T60.45 – T60.46), the second Defendant, who was said to have been present during the conversation, only put to the Plaintiff that “our father was seriously ill at the time and under the influence of medication in a hospital and the words should not have been taken literally”: T65.36 – T65.48.

164. Later, the following exchange occurred at T67.11 – T67.32:

“HIS HONOUR: --if you are going to say to me that I should accept that the conversation asserted by Mr Anderson in paragraph 36, whilst you were present, did not occur, then you have to put to him that it did not occur. Do you, firstly, wish to put that to him that the conversation that he has asserted did not occur? At the moment all you’ve put to him was that because of the medical condition--

SECOND DEFENDANT: Sure.

HIS HONOUR: --from which he suffered - what you need to decide upon is whether you’re going to suggest to him that the words that he attributes to Norrie did not occur, if you say they did not occur. That may mean that you have to give some evidence about what you say the conversation was at a later time, because you haven’t said so in any affidavit but, in fairness to this witness, if you’re going to put to me that I should not believe the conversation that is in paragraph 36, then you have an obligation to put to the witness that the conversation in those terms did not occur, if you say they did not occur. If they did occur, then you don’t have to say anything. I’ll leave for you to decide.

341. Importantly, the existence of the caveat lodged by Minnie on title to the Sans Souci property would not have prevented the registration of the dealing which was to effect a severance of a joint tenancy: s74H(5)(x) Real Property Act. The caveat lodged by her was not one with the prohibition clause amended to prohibit the registration of a unilateral severance.

342. Section 36(11) of the Real Property Act provides:

“(11) Upon registration, a dealing shall have the effect of a deed duly executed by the parties who signed it.”

346. It follows that the method adopted to sever the joint tenancy of the Sans Souci property was available.

347. Section 97(2), however, does refer to the power of the Registrar-General to require the names and addresses of the joint tenants or, if the addresses are unknown, evidence of the efforts made by the person to locate the addresses of the joint tenants and also a statement that the person is not aware of any limitation or restriction on his or her capacity or entitlement to sever the joint tenancy.

348. The sub-section suggests the importance of each of these two matters.

349. An issue that was next raised related to the giving of the notice of the lodgement of a dealing for registration or recording that may sever a joint tenancy to Minnie as the only other joint tenant, as required by s 97(5). It was submitted that the address shown on the transfer completed by the second Defendant, to which notice was sent, was not her address, and no evidence was provided as to the second Defendant’s efforts made to locate her address. It was then submitted that since notice of the lodgement of a dealing to sever the joint tenancy “must” be given to all joint tenants, the sub-section would appear to have not been complied with.

350. Regrettably, the submission did not go on to state what would result if the submission made was accepted.

351. As stated, it is clear that neither Minnie, nor the Plaintiff, as her Attorney, received the notice sent by the Registrar-General. There is no evidence that the Registrar-General required the second Defendant to provide the Registrar-General, before recording the instrument that severs the joint tenancy, with evidence of the efforts made to locate Minnie’s address. Presumably, however, that was because it was not suggested that her address was “unknown”.

352. Section 170(2A) of the Conveyancing Act provides that the provisions of that section extend to notices required to be served by any instrument affecting property (including any dealing under the Real Property Act 1900) executed, made, or coming into operation, after the commencement of the Conveyancing (Amendment) Act 1930, unless a contrary intention appears in the instrument or dealing or in the Real Property Act.

353. Thus, s 170 applies to the notice requirement in s 97(5) of the Real Property Act. It deals with the service of notices in general. Section 170(1)(b) states that any notice required, or authorised, to be served shall be in writing, and shall be sufficiently served, if sent by post to the last known residential address in, or out of, New South Wales, of the person to be served.

354. In this case, there can be no doubt that the notice sent by the Registrar General was in writing. It was in dispute that the Sans Souci property was Minnie’s last known residential address but, on balance, since notification under s 97 appears to be the responsibility of the Registrar General, the Sans Souci property would be regarded as her last known residential address.

355. It follows that that I am satisfied that the Registrar General gave “notice of the lodgement of a dealing for registration or recording that may sever a joint tenancy to all joint tenants in the joint tenancy”.

Indefeasibility of title to the Sans Souci property

356. Since I have concluded that the second Defendant was not authorised to take steps to sever the joint tenancy as the substitute Attorney under Norrie’s Power of Attorney, the question arises whether the transfer, once registered, nevertheless created an indefeasible title under which Norrie and Minnie held title to the Sans Souci property as tenants in common in equal shares.

357. The Plaintiff, relevantly, alleged that the second Defendant had no authority to execute the statutory declaration or the transfer in support of the severance. He went on to submit that her conduct, in executing each, without authority, without disclosing that Minnie was not living in the Sans Souci property, and then causing the transfer to be registered, thereby severing the joint tenancy, constitutes “fraud”.

358. In other words, the Plaintiff alleged that there was actual fraud perpetrated by the second Defendant upon the Registrar-General in the preparation and certification of some of the information contained in documents lodged for registration in the Registrar-General’s Office as a result of which there was the extinguishment of the interest of Norrie and Minnie as joint tenants (including the incident of survivorship), and the creation of interests as tenants in common in equal shares.

359. There was no suggestion that if the second Defendant had authority to act as the substitute Attorney, she was not acting as his agent. Since I have concluded that she did not have the authority, a question arises whether she was acting as Norrie’s agent.

360. The Plaintiff also alleged equitable fraud. It was submitted that “the position of …Norrie would be equivalent to a person who obtains property by deception and who is not a bona fide purchaser without notice. Such a transferee will be held to hold the property upon constructive trust for the transferor” (See Young, Croft, Smith On Equity, 2009 at para 6.709).

361. The first Defendant denied these allegations. She submits:

“1.   The transfer severing the joint tenancy was a registered dealing with the land comprising x/xxxx (San Souci property).

2.   The effect of registration of that transfer was that title to the San Souci property was held by the registered proprietors as tenants in common in equal shares.

3. The executor of Mr Anderson’s estate holds an indefeasible title to the land, subject to the statutory exceptions: s 42 Real Property Act 1900 (NSW).”

362. Counsel placed reliance on the following passages in Quest Rose Hill Pty Ltd v the Owners Corporation of Strata Plan 64025 [2012] NSWSC 1548 at [78] and [96] (Sackar J):

“Subject to any relevant exception to s 42 it seems to me that while it is clear various provisions of the relevant legislation may not have been complied with, once registered by operation of s 42 the interest has the benefit of indefeasibility. The whole point of s 42 is that, subject to the fraud exception, it is intended to overcome voidness in the instrument. In relevant circumstances it can cure a forgery, Frazer v Walker [1967] 1 AC 569. It can certainly provide a cure where there has been a lack of authority to authorise the execution of an instrument: Broadlands International Finance Ltd v Sly (1987) 4 BPR 9420.

…

There are many authorities where a lack of authority as well as other irregularities have been cured by registration. For example the cases discussed by Professor Peter Butt in Land Law, 4th Edition, at [2017] where, for example, powers of attorney have been deficient, statutory provisions concerning subdivisions breached, etc. In other words there are many cases where instruments were created and sealed and registered without there being any authority to do so and yet registration provided the cure.”

363. Section 41(1) of the Real Property Act 1900 (NSW) provides, in part, that upon registration of a dealing, "the estate or interest specified in such dealing shall pass, or as the case may be the land shall become liable as security in manner and subject to the covenants, conditions and contingencies set forth and specified in such dealing ...".

364. Section 42(1) provides in part:

"Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates or interests that are not so recorded ...".

365. The “fraud” spoken of has been described as “statutory fraud”.

366. Section 118 provides that:

“(1) Proceedings for the possession or recovery of land do not lie against the registered proprietor of the land, except as follows:

..

(d) proceedings brought by a person deprived of land by fraud against:

(i) a person who has been registered as proprietor of the land through fraud ….

367. The Real Property Act does not define “fraud”. So far as the Real Property Act is concerned, the only assistance that can be derived is from s 43(1) which provides that notice is expressly excluded from the statutory concept. The provision provides, in substance, that a registered transferee of an interest in land is not to be affected by actual or constructive notice of any pre-existing unregistered interest or trust.

368. It is well settled, however, that the “fraud” spoken of in s 42 is actual fraud, not constructive or equitable fraud where there is no dishonesty or intention to cheat. The statutory fraud exception arises where there is dishonest conduct on the part of the registered proprietor, or his agent, whose title is challenged. It includes "dishonesty on the part of the registered proprietor in securing his registration as proprietor": Bahr v Nicolay (No 2) [1988] HCA 16; 164 CLR 604 at 614 (Mason CJ and Dawson J).

369. In Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; 230 CLR 89, at [192], the requirement that there be actual fraud or moral turpitude was confirmed.

370. In Waimiha Sawmilling Co Ltd v Waione Timber Co Ltd [1926] AC 101 at 106-107, Lord Buckmaster, in delivering the judgment of the Privy Council, wrote:

“If the designed object of a transfer be to cheat a man of a known existing right, that is fraudulent and so also fraud may be established by a deliberate and dishonest trick causing an interest not to be registered and thus fraudulently keeping the register clear. It is not, however, necessary or wise to give abstract illustrations of what may constitute fraud in hypothetical conditions, for each case must depend upon its own circumstances. The act must be dishonest, and dishonesty must not be assumed solely by reason of knowledge of an unregistered interest.”

371. Thus, the critical elements of statutory fraud are dishonesty, moral turpitude, a want of probity, and a wilful and conscious seeking to defeat or disregard another’s rights.

372. In Grgic v Australian & New Zealand Banking Group Ltd (1994) 33 NSWLR 202 at 221, Powell JA wrote:

“ ... the position still remains that, for the purposes of s 42 of the Act, "fraud" comprehends actual fraud, personal dishonesty or moral turpitude on the part of the registered proprietor of the subject estate or interest or of that registered proprietor's agents: see Bahr v Nicolay [No 2] (at 614) per Mason CJ and Dawson J; (at 631-632) per Wilson J and Toohey J.”

373. Fraud may also be established where the actionable fraud is said to be a “fraud against the Registrar”. Natalie Skead and Penny Carruthers, in "Fraud against the Registrar - An Unnecessary, Unhelpful and Perhaps, No Longer Relevant Complication in the Law on Fraud under the Torrens System" (2014) 40(3) Monash University Law Review 821, at 822, wrote:

“Fraud in this sense arises when a person becomes registered pursuant to an instrument and the person has actual knowledge of, or is recklessly indifferent to, the fact that the instrument does not comply with the formalities for the execution and attestation of the instrument. The fraud lies in the misrepresentation to the Registrar that the instrument is a valid document that may properly be acted upon, when in truth the person registering the instrument knows that this is not the case.”

374. If registration is obtained by a fraud practised on the Registrar-General, that will be fraud for the purposes of s 42 of the Real Property Act which may be sufficient to deprive the registered proprietor of the advantage of registration: Australian Guarantee Corporation Ltd v De Jager [1984] VicRp 40; [1984] VR 483; National Commercial Banking Corporation of Australia Ltdv Hedley (1984) 3 BPR 9477 (“Hedley”); Grgic v Australian & New Zealand Banking Group Ltd; Westpac Banking Corporation v Sansom (1994) 6 BPR 13790; Sansom v Westpac Banking Corporation (1996) 7 BPR 14615. The “fraud” must be “practised with the aim either of depriving someone of an interest in land or of deceiving the Registrar-General”: Butt, Land Law (6th ed, 2010) at [20-73].

375. In the present case, it was submitted that Norrie became registered as a tenant in common in equal shares with Minnie pursuant to the combination of the statutory declaration and the transfer and that his agent, the second Defendant, was recklessly indifferent to the fact that the statutory declaration was inaccurate as to her power to complete it and as to Minnie’s address. The fraud would lie in the misrepresentation to the Registrar that each was a valid document that could properly be acted upon; when in truth the second Defendant knew that this was not the case.

376. In Hedley, Hodgson J, as his Honour then was, concluded that a bank employee’s dishonesty, whilst was not “directed specifically to dishonestly depriving Mrs Hedley of her interest in the property”, was, nevertheless, statutory fraud because:

“[…] Mr Grace put his signature to the document with the intention of obtaining registration by representing to the Registrar General something which he knew to be false or at the very least was reckless about, namely that he had seen Mrs Hedley sign and he knew her personally. In my view that conduct does amount to actual dishonesty within the authorities concerning the meaning of the word ‘fraud’ under s 42 and s 43 of the Real Property Act …”

377. The fraud must be brought home to the person whose registered title is impeached or to his agent. In this case, this means that the second Defendant must either have committed a fraud, or known that the transaction was tainted with fraud.

378. There is little doubt that the acts of the agent will be relevant. In Schultz v Corwill Properties Pty Ltd (1969) 90 WN (Pt. 1) (NSW) 529 at 537-8, Street J explained:

“If the fraud in question is the immediate act of the person whose title is impeached, then the position is not open to doubt. If, however, the fraud is that of an agent for the person whose title is impeached, the principle of respondeat superior, with all its limitations and qualifications, is applicable. The matter is to be tested by investigating whether or not the principal is, in the particular circumstances under consideration, liable to the person who has been defrauded for the acts of the agent. On this topic one need not delve more deeply than the general statement in Bowstead on Agency, 13th ed., p. 242:

‘An act of an agent within the scope of his actual or apparent authority does not cease to bind his principal merely because the agent was acting fraudulently and in furtherance of his own interests. This principle is general, applicable to cases of actual and apparent authority; in tort; in the disposition of property; a similar result even appears in criminal cases. But the mere fact that the principal, by appointing an agent, gives that agent the opportunity to steal or otherwise to behave fraudulently does not without more make him liable: the agent must normally be acting within the scope of his actual or apparent authority for the principal to be responsible.’”

379. His Honour also wrote:

"It is not enough simply to have a principal, a man who is acting as his agent, and knowledge in that man of the presence of a fraud. There must be the additional circumstance that the agent's knowledge of the fraud is to be imputed to his principal. This approach is necessary in order to give full recognition to (a) the requirement that there must be a real, as distinct from a hypothetical or constructive, involvement by the person whose title is impeached, in the fraud, and (b) the extension allowed by the Privy Council that the exception of fraud under s 42 can be made out if 'knowledge of it is brought home to him or his agents'."

380. In Cassegrain v Cassegrain [2015] HCA 2; 254 CLR 425 at [40], 102, the High Court endorsed the remarks of Street J, and stated that reference to fraud being “brought home” to the registered proprietor should be understood as posing “questions about scope of authority and whether the agent’s knowledge of the fraud is to be imputed to the principal” and whether the registered proprietor was “knowingly involved” in the dishonest conduct.

381. In Zisti v Ryde Joinery Pty Ltd (1996) 7 BPR 15,217, the landlords’ solicitors registered a lease after crossing out the signatures of the earlier registered proprietors and substituting the signatures of the present registered proprietors, and crossing out reference to a previous mortgage and substituting a reference to a new mortgage. The alterations were done with the view to registering the lease despite the lack of co-operation from the lessee, who appears to have wished for the roof to be fixed first. Young J held that it was not fraud in the relevant sense, and that “in registering the document the Registrar General was just doing what the parties originally had intended but might otherwise have been frustrated by the chance event of the transfer being registered before the lease”.

382. In Williams v Davis [2003] NSWSC 453, a case between the executor of an estate and the former wife of the deceased, a registration clerk (without the knowledge or instructions of any of the parties) altered a transfer prior to registration by deleting the term “joint tenants” and substituting the term “tenants in common” in the mistaken belief that the alteration may save stamp duty, Davies AJ, at [22], wrote:

“Fraud in this context has sometimes been referred to as “fraud for the purposes of the Act”. It takes into account the need of the Torrens scheme for those persons who are responsible for the preparation, execution, certification and lodgement of documents to undertake their tasks responsibly, so that officers of the Registrar-General’s Office may act on the basis that the documents lodged for registration are what they purport to be.”

383. In the Court of Appeal case, Davis v Williams [2003] NSWCA 371; (2003) 11 BPR 21,313, Gzell J, in dissent, at [253], wrote:

“In the instant circumstances, by altering the instrument and lodging it, the registration clerk falsely represented to the Registrar-General that New South Wales Land and Housing Corporation had transferred the land to the first opponent and her husband as tenants in common in equal shares. The false lodgement of the altered document was, in my view, enough to constitute fraud. That finding did not depend upon direct evidence that might have been given by the registration clerk as to her state of mind.”

384. Hodgson JA, at [26] – [27], commented:

“…If the registration clerk made a representation to the Registrar-General, knowing it to be false in a material respect, and intending that the Registrar-General be induced by the representation to act in a way materially different from what otherwise would have been done, then I think that would be sufficient dishonesty or moral turpitude, irrespective of whether she had any intention that anyone be disadvantaged by this. If a lie is material in respects such as these and understood to be so, I do not think that lack of intent to harm can justify treating it as a "white lie" and as excluding dishonesty or moral turpitude.

Should it then be inferred that the registration clerk appreciated (1) that the Registrar-General would make entries reflecting the altered form of the transfer because induced to have a false belief that the altered transfer was the transfer as signed and certified by the parties, (2) that the misrepresentation that this was so was material (where the same effect would have been achieved by the two documents) and (3) that this action by the Registrar-General was materially different from what would have been done if the two documents had been submitted? I would draw inference (1); but in circumstances where the registration clerk did not give evidence for the reasons referred to above, and where the only plausible motives for what she did was concern for efficiency and possibly some small saving for Mr Williams in respect of government charges, I would not draw inferences (2) and (3). Appreciation of (2) and (3) would mean that the registration clerk appreciated that what she did was truly dishonest and not merely a convenient fiction of no consequence; and I am not prepared to infer that she appreciated this. In the absence of appreciation of (2) and (3), I do not think her conduct amounted to fraud.”

385. Young CJ in Eq wrote, at [86]:

“… it is clear that statutory fraud is actual fraud, not constructive or equitable fraud and that actual fraud connotes personal dishonesty or moral turpitude, but that this does not mean that all species of equitable fraud stand outside the statutory concept of fraud … [T]he fraud or dishonesty is ‘dishonesty on the part of the registered proprietor in securing his registration as proprietor’.”

386. I should say, at the outset, that the mere fact that the Defendants invoked the statutory mechanism available to seek the unilateral severance by Norrie of the joint tenancy with Minnie does not amount to trickery or deception.

387. I turn to the contents of the statutory declaration. The second Defendant said that the last address at which Minnie was living known to her was the Sans Souci property: T113.14 – T 113.23. She also gave this evidence:

“Q. And you put her address down as [the Sans Souci property] because you knew she didn't live there and you knew that by putting it down there she wouldn’t get notice of your actions to sever the joint tenancy, correct?

A. That was not a deliberate move on my part Mr Wilson. I didn't prepare the document, my solicitor did. He made endeavours to find out whether or not she was deceased or located somewhere else. That was the last known address that we could rely upon.”

388. She later went on to add that she assumed that “perhaps [the solicitor] followed up with the nursing home information that we provided to him”, but this assumption is clearly without a reasonable factual basis as she admitted that she could not confirm that he made enquiries other than trying to obtain a copy of Minnie’s Death Certificate.

389. In this case, in setting out Minnie’s address as the Sans Souci property, it was submitted it appeared that the second Defendant acted without caring whether her action in stating that address was correct. In fact, she ought to have known that the information provided, more likely than not, was incorrect. She made no enquiries as to Minnie’s then residential address.

390. It was also submitted that the second Defendant must have expected the Registrar-General to act upon the information as to Minnie’s address, as, in fact, occurred. She did not give evidence that she did not know the significance of her inclusion of the address in the transfer and its importance in the process of registration of the Transfer. Rather, she seemed to deny that she knew that it was not Minnie’s then address, a denial which I cannot accept bearing in mind the other evidence.

391. However, it should be noted that the second Defendant did not assert that the address was Minnie’s “residential” address.

392. With some hesitation, I have come to the view that the second Defendant’s failure was to make further enquiries, which is not fraud, rather than wilful blindness as to the existence of fraud, which is fraud. “Wilful blindness” was described by Tadgell JA in Macquarie Bank Ltd v Sixty-Fourth Throne Pty Ltd [1998] 3 VR 133, at 146, as:

“a form of cognisance which law and equity alike equate to subjective knowledge from which dishonesty may be inferred. ... [which is] more than a failure to see or look … [and] connotes a concealment, deliberately and by pretence, from oneself — a dissembling or dissimulation. In other words wilful blindness connotes a form of designed or calculated ignorance …”

393. The other aspect of fraud relied upon is that the written statement made by the second Defendant that she was not subject to any legal constraint which would prevent Norrie severing the joint tenancy. It was put that she was under a legal constraint because the first Defendant was not unwilling or unable to act as the Attorney.

394. I accept the second Defendant’s denial that she was not aware of this, believing that the first Defendant was unable to sign the documents because of the geographical distance and because of the other impositions on her time. In this regard, there was a legal practitioner involved in her doing what she did. He does not appear to have turned his mind to the terms of limitation in the General Power of Attorney upon the second Defendant acting as the substituted Attorney. There is no suggestion that he informed either of the Defendants of the meaning of the General Power of Attorney in this respect.

395. It follows that reliance on this allegation of fraud has not been established. There is also no evidence that the second Defendant appreciated the limitation on her power and authority to act under the General Power of Attorney.

396. Bearing in mind the seriousness of the allegations of fraud, having seen and heard the second Defendant, I am not satisfied that she really had it in mind to dishonestly mislead the Registrar-General in any material respects and, thereby, influence the Registrar-General to do something materially different from what otherwise would have been done. Nor am I satisfied that there was a deliberate and dishonest trick by her causing Minnie’s interest to be converted from a joint tenancy to that of a tenancy in common. More than a lack of bona fides is required. In my view, it has not been shown that the second Defendant’s conduct in completing the statutory declaration and the transfer had the element of dishonesty or moral turpitude required for fraud to be established.

397. Finally, I am not satisfied that the second Defendant’s conduct lead the Registrar General to act in a way materially different from what otherwise would have been done. In this regard, I have earlier referred to s 170 of the Conveyancing Act as to service of notices by the Registrar General.

398. If I am wrong concerning the second Defendant’s conduct in circumstances where she was not authorised to act under the General Power of Attorney, and if she was, in fact, guilty of fraud, would this fraud affect Norrie’s title? As a result of my view concerning fraud, this question does not have to be decided. However, I think it is appropriate to express my view on it, albeit briefly.

399. Leaving aside all of the difficult questions which would arise concerning the authority of agents, in various circumstances, or in this case, the lack of authority, because of the first Defendant not being unwilling or unable to act, Norrie, because of his medical condition, could not have had knowledge, or notice, of what the second Defendant had done. Nor, for the same reason, would he have been able to hold any suspicion, upon which he failed to act by making further inquiries for fear of learning the truth.

400. It follows that fraud has not been established with the consequence that the severance of the joint tenancy and the registration of Norrie, as a tenant in common in equal shares with Minnie, prior to his death, is an indefeasible title.

Claim for a family provision order

401. Having reached these conclusions, it is unnecessary to deal with the first Defendant’s claim for a family provision order.

402. In the circumstances, the further amended Statement of Claim must be dismissed. The Cross-Claim must also be dismissed.

The Proceedings hereafter

403. I shall give the parties the opportunity to determine the form of orders that will finalise the proceedings. They should consider whether it is now necessary to sell the Sans Souci property, and if so, how that is to be achieved. It will, of course, be necessary for the unpaid Council rates to be paid out of the gross proceeds of sale if the property has to be sold.

404. They should also give consideration to the amount payable out of Norrie’s estate for arrears of rates on the Sans Souci property that he was required to pay to Minnie.

405. I have not heard the parties’ submissions on costs. My present tentative view is that even though the Defendants have succeeded on the substantive issue, this is a case where the Plaintiff succeeded on a number of the issues that were agitated. The fact that I did not accept some of the evidence of the Defendants is also relevant in determining the order for costs, as is my real hesitation in not finding that statutory fraud had occurred to avoid indefeasibility.

406. Unless the parties wish to argue to the contrary, my current view is that there should be no order as to the costs of either party with the intent that each party should bear his, and her, own costs, respectively, of the proceedings. If agreement cannot be reached on how costs are to be paid, any argument regarding the costs of the proceedings, and whether any orders under s 66G of the Conveyancing Act, is to be heard on a date to be arranged at the time of the publication of these reasons.

407. Finally, the Exhibits should be dealt with in accordance with the Uniform Civil Procedure Rules 2005 following the determination of the costs of the proceedings.

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Amendments

17 May 2017 - [147] "26 March 2006 changed to "28 March 2006"

09 September 2016 - [5] "February 2015" changed to "November 2015"

Mr D Steirn added to Plaintiff's representation

05 September 2016 - [40] "not real importance" changed to "no real importance"

[363] "set forth in specified" changed to "set forth and specified"

Decision last updated: 17 May 2017