Bateman v Bateman
[2012] NSWSC 1539
•19 December 2012
Supreme Court
New South Wales
Medium Neutral Citation: Bateman v Bateman [2012] NSWSC 1539 Hearing dates: 26 November 2012 Decision date: 19 December 2012 Before: Young AJ Decision: 1. Declare that the defendant holds his interest in the property Folio 101 DP707514 on trust for the plaintiff.
2. Order that the defendant transfer the said interest to the plaintiff at his own expense.
3. Order that the defendant pay the plaintiff's costs of the proceedings.
4. Dismiss the Cross Claim.
5. Exhibits other than those in the court book to remain in the file.
6. Any variation of the above may only be sought by motion filed within 14 days of today (subject to the Rules of Court).
Catchwords: EQUITY - legal title of real property - whether title was held on trust for plaintiff - entitlement of defendant to equitable compensation Category: Principal judgment Parties: Heather Bateman (Plaintiff)
Geoffrey Bateman (Defendant)Representation: Counsel:
P Newton (Plaintiff)
S Foda (Defendant)
Solicitors:
Marsdens Law Group (Plaintiff)
Mulally Mylott (Defendant)
File Number(s): SC316512 of 2010 Publication restriction: None
Judgment
This is a claim brought by a mother against one of her sons over a property at Wedderburn. The legal title in the property is registered in the names of the plaintiff and the defendant as tenants in common (after the plaintiff severed the previous joint tenancy in 2009). The plaintiff was the sole proprietor of the property up to 27 July 2000. She says that prior to that date the defendant had urged her to transfer the property or a half interest in it to him in order to protect it in any divorce proceedings between herself and her husband.
The plaintiff seeks re-transfer of the defendant's interest in the land on the basis that it had always been held on trust for her. The defendant cross claims on the basis that it was agreed that he should have the whole fee simple in the property subject to a life estate to the plaintiff.
The defendant also makes a subsidiary case that, if the plaintiff is to have relief, she should make equitable compensation to cover the expenses he has paid in relation to the plaintiff and the property.
On 27 July 2000, the plaintiff transferred the property to herself and the defendant as joint tenants. The transfer appears at page 392 of the court book. The transaction was handled by Marsdens Law Group (Marsdens) of Campbelltown principally by an employed solicitor who is now Mrs Suares.
The defendant denies that the property was only conveyed to him in order to protect it from his mother's divorce. He says that there was an arrangement between himself and his mother whereby he would have half the property as joint tenant and that he would look after his mother and pay expenses.
I conducted the hearing on 26 November 2012. Mr P Newton of counsel appeared for the mother and Ms S Foda of counsel appeared for the son. The only evidence for the plaintiff was that of the plaintiff and Susan Bateman (the plaintiff's daughter and the defendant's sister) and Mrs Suares (solicitor). The defendant gave evidence and read an affidavit from a builder.
The plaintiff had married young and had six children. The defendant is the fourth eldest of these children.
However, it is common ground that the plaintiff's marriage was not always a happy one and that from time to time she would talk of separation.
In 2000, the parties as well as the plaintiff's husband lived on an orchard at Wedderburn known as "Liana".
In 1984, the plaintiff had become registered as proprietor of the land the subject of the present dispute as joint tenants with a Mr Scattergood. When Mr Scattergood died in about 1999, the plaintiff became the sole proprietor of the land.
The plaintiff says that in late 1999 and early 2000, her brother who lived in the Bathurst area was dying. The defendant would drive with her to Bathurst and they would talk then (and on other occasions as well) among other matters about the plaintiff's marriage and the subject land.
The plaintiff says that she told the defendant that she was thinking of leaving his father but was worried that if she did she was unclear as to what property she would get. She did not know if she would be able to survive on her own. However, all she wanted was the block of land (the subject of the present dispute) and enough money to build a house on it.
She says that the defendant's reaction was to advise that the block be put into joint names as that would save it or at least half of it from being claimed by his father.
The defendant denies that this was the situation. He says that on at least 20 occasions in 1999-2000 the plaintiff expressed concern that no-one would look after her in her old age. The defendant said he would do so: he would look after her and pay the rates and other expenses if he had an interest in the property.
However in cross-examination, the defendant said:
Our agreement reached because she didn't want anyone else to get the property. I was the only one she wanted to have the property (T48).
The background to this idea seems to be that the defendant was the only one of the children who was siding with the plaintiff in her disputes with her husband (a scenario which Susan Bateman denied in her evidence).
As I will elaborate later, neither version really fits all the facts. However, I believe that part of the reason for this is that the parties' situations changed from year to year and they adjusted their thinking accordingly. Whilst, in 2000 neither party may have had much in the way of property or income, that situation changed as the 21st century progressed.
It is fairly clear that there must have been some consensus between mother and son in July 2000. My task is to find what was the arrangement between the parties when the land was placed into the joint names of the parties in July 2000.
The plaintiff was extensively cross-examined. The cross-examination was not searching and I must confess I felt a little peeved at the constant "you're just making this up as you go along" form of Browne v Dunn cross-examination. The plaintiff survived the cross-examination well and I accept her as a witness of truth.
The parties or one or other of them instructed Marsden's Solicitors to act for them on the transaction to transfer an aliquot share of the land to the defendant.
Marsden's file of the matter was archived in some electronic form and in a situation that is likely to re-occur more and more with "upgrading" of computer records some of the notes and other records which Mrs Suares said were present when she was dealing with the matter in 2000 are no longer on the electronic file.
The evidence of what occurred with the solicitors is not completely clear. Mrs Suares was then a junior solicitor employed by the firm. She was working under the supervision of a partner, Mr Peter Crittenden.
It would seem from the firm's records which I will shortly reproduce, that the initial contact with the firm was with Mr Crittenden, probably by both parties. Mr Crittenden passed the file on to Mrs Suares. Mr Crittenden had experience in Family Law matters: Mrs Suares had not.
The solicitors asked for stamp duty of $1990. There is no dispute that this was paid by the defendant. The defendant says that he withdrew two separate sums of $1000 from his bank and gave the cash to the solicitors. Mrs Suares says that she obtained a cheque in favour of the Stamp Duties Office. On this basis, the transaction did not pass through the firm's trust account. No-one subpoenaed the trust records so it is difficult for me to make a finding on this point, not that I need to do so.
The first relevant document in Marsden's files is a file note of 4 July 2000 from Mr Crittenden to Mrs Suares which says:
I spoke to Mrs Bateman on 3 July 2000.
She requested advice as to whether her husband could put a caveat on the title of her property at Minerva Road, Wedderburn. I indicated that from the information that I had he could not from a commercial viewpoint but in view of the Family Law Act he certainly would have a interest that could be protected by way of a caveat.
The client instructed me to transfer one half interest in the property to her son, Geoffrey Adam Bateman. The client instructed me to a valuation. I briefly discussed with the client fees including fees of the valuer and stamp duty. The client is to drop off to our office on 4th July 2000 the sum of $300 to cover the valuer's fees.
The client specifically requested that we do not forward any correspondence to her and that she be contacted through her son on (phone number).
On 25 July 2000, Mr Crittenden wrote a note to Mrs Suares that he attached the file and wrote:
this client is transferring an interest that she holds in her property at Wedderburn to her son. This is a rather strange matter in that I am not allowed to write to the client and you can only contact her through her son. . . .
I have prepared the transfer and I would like you to liaise with the client's son whose phone number is on the outside of the file to meet with both them and have the transfer signed and stamped. . .
Mrs Suares did meet with both the mother and the son on 25 July 2000 and she says that she met them in the company of Mr Crittenden. Mr Crittenden was not called and no explanation was given as to why he was not called, though it was conceded that he was alive and well and living in the greater Sydney area. However, there seemed to be some doubt as to whether Mrs Suares' recollection that Mr Crittenden was present was accurate.
Mrs Suares says that although she did not recall everything that was said at the meeting on 27 July 2000, she does remember that the mother said:
I am worried about what will happen to my property if my marriage breaks down. I am worried my husband will try to take it. I want to transfer the property to Geoff to prevent my husband from getting it.
Mrs Suares has not worked at Marsdens for about ten years and, indeed, is not currently working as a solicitor. She was cross-examined on the meeting and it was put to her that she could not remember very much about the meeting and was not it odd that she could remember so clearly that particular statement.
Mrs Suares said that as a relatively new solicitor, this was the first time that she had done this sort of transaction and she paid particular attention and the conversation was very strong in her memory.
I am quite sure that I should accept what Mrs Suares says. She was completely independent of either party; she only attended because she was subpoenaed to give evidence; she stood up to cross-examination well and maintained her answers. She gave a quite credible explanation as to why she had remembered that particular part of the meeting.
I must note that I was not at all impressed with counsel putting to the witness that she was just making up her evidence. We are not used to having a professional independent person accused of making something up when it would not appear that there was any basis for that question.
Accordingly, I accept Mrs Suares' evidence and it is evidence which confirms the plaintiff's version of the transaction.
Susan Bateman made an affidavit and was cross-examined on it. However, her evidence was not as significant as that of other witnesses. Her main contribution was to confirm that the plaintiff had said to her in February 2001 that she had signed the property over to the defendant so that "dad' could not get it.
Susan Bateman was cross-examined on this paragraph. It was put to her that the conversation did not happen and that "this is completely made up for the purposes of the hearing?" She denied that accusation. There is no reason to doubt her evidence.
Thus, the plaintiff has made out a strong case with some corroboration. There are, however, some aspects of the evidence which do not neatly fit it.
First, when the plaintiff did separate from her husband and enter into a divorce settlement, she actually disclosed the value of the whole fee simple of the subject land as one of her assets. This goes some way to doubting why there was any need to put the transaction through in the first place.
The answer may well be that circumstances had changed and the plaintiff had better advice as to her entitlement. Even after disclosing the asset, she received cash of about $365,000.
Indeed the disclosure says two things in favour of the plaintiff (1) she was not being dishonest in her dealings with her husband and (2) disclosing the full value of the subject land is consistent with her present case.
Next the defendant paid the $1990 stamp duty. Why would he do this if he was not to get an interest in the property?
This point was not very thoroughly dealt with in the evidence. However, the payment is a little equivocal. The defendant was obtaining a benefit even on the plaintiff's account as if she predeceased him, the defendant would take the whole land as survivor.
Thirdly, although the plaintiff says she asked for a re-transfer in 2003, she did not actually take any steps to recover the land until she severed the joint tenancy in 2009.
Finally, there are the subsequent dealings with the land to which I will come shortly.
The defendant was also cross-examined. Again, he appeared to me to be endeavouring to give truthful answers. The problem with his evidence was that it was hard to fit it into the financial position that the defendant occupied in 2000.
The defendant's basic theme was that the half interest (or the whole interest subject to the plaintiff's life estate in at least half) was in consideration of him looking after the plaintiff for life and paying all the expenses of the land and the plaintiff.
Although when he became more prosperous, the defendant was able to provide for his mother, there was no real possibility of him doing so in 2000.
The evidence clearly shows that as at July 2000, the defendant had very limited resources.
The key part of the cross-examination of the defendant was as follows:
Q. When you say you offered to her that you would look after your mother and the property, what precisely did that mean?
A. At the time it was a vacant black [sic] so rates and then any improvements that might have been made to the property in the future.
Q. What sort of improvements did you anticipate might be made to the property in the future?
A. Possibly in five or so years there might be some sort of dwelling put on the property.
Q. If you or your mother decided to put a dwelling on the property, under the agreement you say you reached with your mother, would you be responsible to pay for the cost of the construction of the dwelling?
A. More than likely.
Q. What was another possibility?
A. There is always other possibilities.
Q. What would they be?
A. I have no idea what other possibilities would be.
Q. Did your mother say to you before you made this offer she was thinking of leaving your father?
A. No. She made it very clear she wasn't leaving her husband.
Q. In fact the account statement from the Illawarra Credit Union for the period 2 January 2000 to 1 April 2000 records total credits to the account of $3,334, total debits to the account of $6,872.93 and a closing balance of $3,543.84.
Doing the best you can, would you accept that was representative of your income and expenditure and savings at as 1 April 2000?
A. It would be close to it, yes.
Q. I take you to one more account and I will tender these in due course. This is an account statement from Illawarra Credit Union for the period 2 April 2000 to 4 July 2000 showing total credits to the account of $10,679.86, total debits to the account of $8,699.50 and a closing balance of $5,524.20. Do you accept as at 4 July 2000 your total savings comprised $5,524.20?
A. If that's what it says.
Q. You didn't have any other assets or cash at the time, did you?
A. No.
Q. When you reached this agreement with your mother in July 2000 your savings comprised approximately five and a half thousands dollars?
A. Yes.
Q. You didn't have any other spare cash, savings or assets?
A. No.
Q. In July 2000 when you reached this agreement you say you reached with your mother, how were you going to pay for her personal living expenses and to pay for expenses in relation to the property?
A. At the time the expenses for the property were only the rates.
Q. You assert that the agreement was that you would look after your mother?
A. Yes.
Q. Part of that agreement must have been and correct me if I am wrong must have been paying for her day-to-day living expenses?
A. At that time it wasn't. Her day-to-day living expenses were with her husband.
Q. You accepted a moment ago that under this agreement your mother effectively became a dependant of yours?
A. She would have become a dependant if the circumstances changed.
Q. So you needed to have sufficient money to took [sic] after your mother?
A. Yes.
Q. Where was that money going to come from?
A. It would come from more work.
On this evidence the defendant was in no position in July 2000 to carry out his part of what he says was the agreement he made with his mother.
Indeed in July 2000, the plaintiff was not in need of income or other support from the defendant as she was being supported by her husband.
Thus as I have accepted the plaintiff's evidence and find that the defendant's version of the arrangement was unlikely on the surrounding admitted facts, the plaintiff should succeed.
However, I need to deal with subsequent events. These are only relevant if they throw light on what was agreed in July 2000 or if they show some variation of the initial arrangement between the parties.
There is virtually no dispute about what physically occurred on the land from 2001 onwards.
In late 2001 or early 2002, the defendant paid a builder friend $600 to level part of the land so that a shed could be erected on the land.
A shed was then erected at a cost of approximately $20,000 paid by the plaintiff. The shed must have been more elaborate than a simple garden shed as one or other of the parties lived in it for eight years.
The plaintiff lived in the shed until 2003 when the house erected on the land was completed at which time she moved into the house. The erection of the house was paid for by the plaintiff at a cost of approximately $126,000.
In 2003, a "granny flat" was added to the shed and Susan Bateman and her then partner lived in it.
The defendant lived in the shed between 2003 and 2009, rent free.
The plaintiff's divorce was finalised in 2003. The husband kept Liana; the plaintiff, the subject land and also received $365,000 which appears to be half the value of Liana.
Accordingly, the plaintiff did not want for cash or a home and had no need of maintenance by the defendant.
However, it is clear that for at least two periods, one in January to August 2004 and the other from May 2007 to January 2009, the defendant did supply his mother with cash.
The defendant says that these payments were made pursuant to the agreement he had made with his mother in 2000. The plaintiff did deny the receipt of the payments, but the defendant has tendered a receipt book in which she has signed for the receipt of a series of payments in 2004. The defendant's evidence for the latter group of payments was entries in his diaries.
The defendant in more recent years has been manufacturing some device which is used in traffic control lights and it is common ground that the plaintiff was assisting him with a component for this device and that she was being paid for her work. The plaintiff says that any payments she received was for this work. It is likely that some payments made in 2004 were for this work but the amount of the payments in the receipt book would seem to be too large for this to be the whole explanation.
These payments do give some support to the defendant's version. However, they are by no means conclusive, as a son who is earning good money, as the defendant was at the time of the payments, may well feel generous towards his mother who had virtually made him the heir to her principal asset.
There were some singular aspects to the payments. The defendant said his custom was to put a large number of fifty dollar notes into a smallish jar in the plaintiff's house rather than hand her money. He says that she knew he was putting the money in the jar and signed the receipt. This situation was not really explored, though it sounds a little bizarre.
I do not consider the fact of the payments outweighs the evidence in favour of the plaintiff's case. The payments may, however, go to the defendant's back up case that he is entitled to some equitable compensation for his expense in and about the property and in making payments to the plaintiff on the faith of what he considered was the arrangement between them.
To turn to another aspect of the case, the plaintiff says she asked the defendant to reconvey the land in 2003.
There is corroborative evidence of this from Susan Bateman who swore that she overheard two conversations between the parties in August/September 2004 when the plaintiff said to the defendant:
"Geoff it's time to sign the property back".
Susan Bateman says that she asked the defendant why he was arguing with the plaintiff and the defendant replied that he had stood by his mother in the divorce and that she now owed him something.
Although the defendant denied that these conversations took place, Susan Batemen was not cross-examined on this evidence.
I accept, despite the defendant's denial, that the plaintiff did in 2003 and 2004 ask for the property to be reconveyed.
Defendant's counsel puts that even if there was such a request, the plaintiff did not follow that request through. It is agreed, however, that the plaintiff severed the joint tenancy in July 2009, the defendant not opposing the process.
The defendant says that 2009 is significant because at this time the allegiances within the family changed. The defendant fell out of favour with the plaintiff and another son, James, and daughter Susan became installed in his stead. It was only because of this that the plaintiff demanded the reconveyance.
The defendant says that in 2009, his mail was interfered with and he was virtually forced to leave the property. This may be an exaggeration, but even were it not, it does not take the case for the defendant anywhere as it is equally consistent with the plaintiff not wishing to cause bad blood in the family until it was clear that for other reasons that situation was actually happening.
Thus, on the balance of probabilities, the plaintiff has made out her case.
One of the defences raised was that the plaintiff is estopped by her representations and conduct from denying the defendant's claim to the property. It follows from what I have said above that this defence must fail.
The only remaining matter is whether the plaintiff should only have relief on condition of paying some compensation to the defendant.
The defendant claims in his affidavit of 3 September 2012 that he has been prejudiced in the sum of $135,814.95 as follows:
(1) Plaintiff's personal expenses $37,782.05
(2) Property Expenses $62,392.90
(3) Rent $35,640 00
The claim for rent is made because the defendant says that he was forced out of the property by the activities of the plaintiff or her son, James, as her agent and that instead of living in his own property without fee, he has had to pay rent for his living accommodation.
In view of what I have said above, this claim cannot be sustained. However, it is significant that the defendant has claimed equivalent accommodation for 18 months at the rate of $440 per week. This gives some guide as to the value of the defendant's occupation of the shed for six to eight years at somewhere close to $150,000.
The personal expenses are detailed at page 639 and following of the Court Book. They fall into two categories (a) mobile phone expenses and (2) cash payments.
As to the former, the defendant had a "plan" with Vodafone whereby he received two telephones. He let his mother have one of them. He used his telephone for both business and private purposes. She says that she only used her telephone occasionally. However, the defendant seeks to charge his mother with one half the fees paid to Vodafone under the plan. This claim, totalling $1860 is clearly not allowable. There is no proper evidence to show that the plaintiff ever accepted the telephone on these terms or that the defendant provided it because of the alleged agreement, even if his version of the agreement had been proved.
The cash payments total $35,922.05. They come in three tranches, (a) $9,700 in 2004, $ 27,222 in 2007-9 and $1022.05 for a digital set top box and car repairs.
As I noted earlier, some of the first tranch may have been for work which the plaintiff did for the defendant. However, the balance is unexplained. As I have rejected the defendant's version of the arrangement, that cannot be the reason for the payments. There is no obvious nexus with the transaction relied on by the plaintiff, there was no cross-examination to suggest that they were made because of some misunderstanding of the defendant's engendered by the plaintiff. Thus one is left only with the view that they were gifts of gratitude for the mother virtually nominating the defendant as the beneficiary of the land. The mere fact that she later changed her mind is no reason why she should repay gifts.
As to the property expenses, almost all the claims relate to the shed. There is a claim for electricity which the defendant paid for, but then he was the occupant of the shed using the electricity. Insurance is partly in the same category. There is a claim for rates paid up to 2006, the plaintiff evidently paid the rates from some time in 2006. As there was no occupation fee paid or offered as a contra, it is not unfair that the defendant pay part of the rates. The rest of the claim is for incidental repairs plus the $600 for levelling the site referred to earlier.
I do not see, in the circumstances, why it would be inequitable to give the plaintiff the relief she claims without ordering compensation.
Accordingly, I make the following orders:
1. Declare that the defendant holds his interest in the property Folio 101 DP707514 on trust for the plaintiff.
2. Order that the defendant transfer the said interest to the plaintiff at his own expense.
3. Order that the defendant pay the plaintiff's costs of the proceedings.
4. Dismiss the Cross Claim.
5. Exhibits other than those in the court book to remain in the file.
6. Any variation of the above may only be sought by motion filed within 14 days of today (subject to the Rules of Court).
**********
Decision last updated: 19 December 2012
0
0
0