Chapple v Ghirardi Corporation Pty Ltd
[1999] WASC 237
CHAPPLE -v- GHIRARDI CORPORATION PTY LTD & ORS [1999] WASC 237
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [1999] WASC 237 | |
| Case No: | CIV:1120/1997 | 23-24, 27 AUGUST & 3 SEPTEMBER 1999 | |
| Coram: | WALLWORK J | 30/11/99 | |
| 23 | Judgment Part: | 1 of 1 | |
| Result: | Plaintiff can remain in property for as long as she desires | ||
| PDF Version |
| Parties: | ELIZABETH JANE CHAPPLE GHIRARDI CORPORATION PTY LTD PATRICK JOHN GHIRARDI JOANNE ELIZABETH GHIRARDI |
Catchwords: | Equity Plaintiff contributed money towards purchase of home Condition that she could live there for life Name not on title Whether equity created |
Legislation: | Statute of Frauds , s 4 Property Law Act 1989, s 34 |
Case References: | Bannister v Bannister [1948] 2 All ER 133 Inwards v Baker [1965] 2 QB 29 Baumgartner v Baumgartner (1987) 164 CLR 137 Calverley v Green (1984) 155 CLR 242 Dellaca v PDL Industries (1992) 3 NZLR 88 Jones v Padavatton [1969] 2 All ER 616, [1969] 1 WLR 328 Tracy v Bifield (1998) 23 Fam LR 260 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
GHIRARDI CORPORATION PTY LTD
First Defendant
PATRICK JOHN GHIRARDI
Second Defendant
JOANNE ELIZABETH GHIRARDI
Third Defendant
Catchwords:
Equity - Plaintiff contributed money towards purchase of home - Condition that she could live there for life - Name not on title - Whether equity created
Legislation:
Statute of Frauds , s 4
Property Law Act 1989, s 34
(Page 2)
Result:
Plaintiff can remain in property for as long as she desires
Representation:
Counsel:
Plaintiff : Mr H N H Christie
First Defendant : Mr W J Chesnutt
Second Defendant : Mr W J Chesnutt
Third Defendant : Mr W J Chesnutt
Solicitors:
Plaintiff : Legal Aid Commission
First Defendant : Davies & Co
Second Defendant : Davies & Co
Third Defendant : Davies & Co
Case(s) referred to in judgment(s):
Bannister v Bannister [1948] 2 All ER 133
Inwards v Baker [1965] 2 QB 29
Case(s) also cited:
Baumgartner v Baumgartner (1987) 164 CLR 137
Calverley v Green (1984) 155 CLR 242
Dellaca v PDL Industries (1992) 3 NZLR 88
Jones v Padavatton [1969] 2 All ER 616, [1969] 1 WLR 328
Tracy v Bifield (1998) 23 Fam LR 260
(Page 3)
1 WALLWORK J: Mrs Chapple, who is now 79 years of age, claims that she has an interest in a home in Leon Road, Dalkeith. Her daughter and her daughter's husband (Mrs and Mr Ghirardi), purchased the home early in 1983. Mrs Chapple says that she contributed some money towards the purchase after an agreement with Mr Ghirardi that she could live in the house for the remainder of her life. The house would, after her death, be owned by Mr and Mrs Ghirardi.
2 Mrs Chapple said in evidence that prior to the purchase of the Leon Road home, she and her husband had had to sell their house in Sydney to pay debts. Partly because of the stress caused by that, she and her husband had decided to separate. She then came to Western Australia. She later learned that she would be receiving approximately $23,000 from the sale of their home in Sydney.
3 After she arrived in Perth, Mrs Chapple lived for a time with two of her children. She suggested to her son-in-law, Mr Ghirardi, that if he would assist her in buying a flat or a unit, she would give him the money which she was to receive after the sale of her home in Sydney. The property purchased could be put in the names of Mr Ghirardi and her daughter Mrs Ghirardi and on Mrs Chapple's death, the property would be theirs to do with as they pleased.
4 Mrs Chapple said that Mr Ghirardi had replied that he thought it was a good idea and had told her to have a look around. She had later taken the Ghirardis to see a duplex in Onslow Road, Shenton Park, but they had told her it was not in a good area. Later, Mr Ghirardi had telephoned her and told her that they had found a duplex in Dalkeith and bought it for her. They had told her that they would renovate that home. In due course Mrs Chapple had authorised Messrs Parker & Parker to give the money she had received from Sydney to her son-in-law. That was the sum of $22,565.97.
5 Messrs Parker & Parker had forwarded $22,565 to the Ghirardis on 8 March 1983. Mrs Chapple said that she had intended that money to go towards the purchase of the property in Leon Road. She had then believed that the property would be registered in the names of her son-in-law and her daughter and that it would become theirs entirely on her death.
6 I accept the foregoing evidence of Mrs Chapple.
7 The settlement for the property in Leon Road was on 25 March 1983. The title was transferred into the name of the Ghirardis' company, Larpent
(Page 4)
- Pty Ltd, which was later renamed Ghirardi Corporation Pty Ltd, the first defendant. The Ghirardis had the property renovated as they had promised. Later Mr and Mrs Ghirardi had purchased a home nearby in Jutland Parade.
8 Mrs Chapple had obtained work as a registered nurse at the Home of Peace in Subiaco shortly after her arrival in Perth. She worked there until shortly after her 67th birthday, which was about four years after she arrived in Perth.
9 There was no contest at the trial that the Ghirardis had always been extremely generous to Mrs Chapple. They had opened a bank account for her after she retired and had contributed $1,032 a month into that account. Mrs Ghirardi had advised Mrs Chapple that she could access those funds at will. The payments into the account were reduced to $832 per month on 19 July 1988 but were later increased to $1,027 per month. Mrs Chapple said that she had accepted the financial assistance from the Ghirardis because she had believed that they were well off and could afford it.
10 On Mrs Chapple's 70th birthday Mrs Ghirardi told the family at a picnic gathering, that Mrs Chapple was to be given a new car with power steering to replace the Sigma vehicle which the Ghirardis had previously given to her. Subsequently, the Ghirardis had given her a relatively new Nissan Pintara.
11 Mrs Chapple said that the arrangement with the bank account had continued until approximately 1992. Thereafter she had received some help from her other children who had contributed some money to her monthly. The Ghirardis had always paid nearly all of the expenses associated with the Leon Road property.
12 Mrs Chapple said that in September 1996, Mrs Ghirardi had called on her and said that the Leon Road property was too expensive and needed to be sold. Mrs Chapple said she had wanted to be co-operative. She had said that she could manage in a smaller place and they had discussed an alternative suitable residence. No definite agreement was reached. A short time later she learned from another person that the Ghirardis did not recognise that she had an interest in the Leon Road property, or that they had promised to allow her to stay there for as long as she wished. She said that this was later confirmed in a letter from Mrs Ghirardi to her son, Mr Chris Chapple, dated 11 October 1996.
(Page 5)
13 I accept the evidence of Mrs Chapple which is set out in this paragraph.
14 Under cross-examination Mrs Chapple said she had known approximately how much money she would get from the sale of her home in Sydney when she had approached Mr Ghirardi about helping her to purchase a home.
15 Mrs Chapple said that when the money had come across from Sydney she thought, "Now I can turn over a new leaf, start everything off; not owe anyone a penny; no bankcard; no nothing; and I rang Patrick and asked if he would pay this bankcard thing and he said, yes, that would be fine. Then Jo [Mrs Ghirardi] rang me and said, 'You can pay all that out of your own money, but we're taking the $23,000 and that's it'."
16 In cross-examination Mrs Chapple said that when she had seen Mr Ghirardi about buying the house on the first occasion she had said, "Patrick, I will give you my money on condition that you - we buy this house and it's in your's and Jo's name. When I die it's yours."
17 She said that is how she had thought it up. She thought, "If they will buy me this house that I can live in until I die, they can have my money. … The money - the house would be theirs when I die." She said she had put all of this to Mr Ghirardi at their first meeting.
18 When asked was it a house that would be bought, she said, "Yes, or a unit or a flat." She added that she had picked out a unit in Shenton Park in Onslow Road but the Ghirardis had thought it had not been good enough. She said she was adamant that the arrangement with the Ghirardis was that "for the rest of my life I would live there. … and that when I passed away it would be theirs. It was already in their name, so it seemed quite simple."
19 I accept Mrs Chapple's evidence on this question, which is set out in the last three paragraphs above.
20 It was put to her that it was a very important arrangement that she had been entering into. She said, "I know it was. I had to think about it quite a lot. But then I realised that I could "get the pension and live in a house which I would never be turfed out of."
21 I accept that evidence.
(Page 6)
22 Mrs Chapple said she had gone looking for a unit after the discussion with Mr Ghirardi. She had found a place in Onslow Road at the corner of Union Street. She said that her son-in-law Malcolm had not been all that enthusiastic about the "Ghirardis taking all my money, but I had made up my mind about this."
23 She said that the unit she had found in Shenton Park, "was not suitable for them." By that she meant the Ghirardis. Mrs Chapple denied that she had said to the Ghirardis "Look, I've got this $23,000 coming. I want to give it to you. I want you to throw it in the pot because after all you've done for me and all you are going to do for me, it's only fair that you should have it."
24 Further on in cross-examination, Mrs Chapple said that the money was not going to be used to buy a share of the house. "I was giving it to them to contribute to buying the house on condition that I lived in the house until I died." I accept also this evidence of Mrs Chapple.
25 When questioned about other accounts, Mrs Chapple said "The only thing I knew, they didn't want to pay any of my accounts out of that money. They wanted the lot of it and they got it."
26 It was put to Mrs Chapple that over the years "You got about $150,000 in rough terms out of them." [the Ghirardis]. Mrs Chapple said, "I don't know. Perhaps I did."
27 Mrs Margaret Carson, a daughter of Mrs Chapple, gave evidence that shortly after Mrs Chapple had come to Perth following the separation from her husband, Mrs Carson and her husband had discussed with Mrs Chapple buying a suitable unit for her to live in. They had looked at a number of units in Shenton Park and one in particular in Onslow Road, which Mrs Chapple believed that she could afford with some assistance from the family. Mrs Carson's husband and Mrs Chapple had worked out that with the money from the sale of the property in Sydney she would be able to get a relatively short term mortgage and pay the mortgage off over about five years. Some time later after she knew that the house had been purchased in Leon Road.
28 Importantly, Mrs Carson said that she remembered very clearly Mrs Ghirardi saying to Mrs Chapple: "Don't worry mother. You have purchased your share in this property and it is equally yours." In my view this last mentioned evidence of Mrs Carson is most significant and I accept it.
(Page 7)
29 Mrs Carson said that at that time Mr and Mrs Ghirardi were extremely wealthy and openly displayed their wealth. She remembered Mrs Ghirardi being very generous to their mother. She heard her telling Mrs Chapple that she could retire when she wanted and that as soon as she did, Mrs Ghirardi would give her the difference between her wages and the pension. She remembered Mrs Ghirardi announcing at a family gathering at Kings Park, "Mother, we are giving you a new car. Happy birthday." She said that in 1996 Mrs Ghirardi had told her mother and other members of the family that they were selling the Leon Road property and that Mrs Chapple would have to leave.
30 In cross-examination, Mrs Carson said that she remembered that Mrs Chapple had liked the property they had found in Shenton Park a lot. She had taken the Ghirardis to look at it and they had told her that it was not suitable. She said that that conversation had come back to her. She had not actually heard it.
31 Mr Christopher Chapple, the brother of Mrs Carson and Mrs Ghirardi and the son of Mrs Chapple, said that in 1982 he had taken leave from his work at a bank and flown to Sydney to help Mr and Mrs Chapple develop a plan to take them forward. On arrival in Sydney he had found that both of them were at a loss as to what to do. They were effectively allowing events to run their course. He had assisted his mother and father to sell the house and to deal with their creditors. He had not been involved with the purchase of the Leon Road property.
32 Mr Chapple said that Mr and Mrs Ghirardi had stated to him, or to others in his presence on a number of occasions, that Leon Road was being bought for Mrs Chapple and that they would look after Mrs Chapple for life. He had asked Mrs Ghirardi if Mrs Chapple's name was to be placed on the Leon Road title deed. She had said "No", giving the reason that she did not trust Mrs Chapple. In September 1996 Mrs Ghirardi had told him that Leon Road was to be sold for financial reasons and that Mrs Chapple had to move out.
33 Mr Chapple's evidence is consistent with Mrs Carson's evidence.
34 Mr Chapple was asked whether he remembered telephoning and speaking to his sister, Mrs Ghirardi, about putting Mrs Chapple's name on the title. That was with reference to a file note dated 20 March 1983. Mr Chapple said that he remembered ringing and asking if his mother's name was going on the title deed. Mrs Ghirardi's reaction had been "just to blow a fuse". He said he thought there was some reference made by
(Page 8)
- Mrs Ghirardi to their mother's ability to spend money and "the need to keep her away from the title".
35 Mr Chapple said he had not been involved at any time with the purchase of Leon Road or with the arrangements under which his mother was going to stay there. He said that prior to the signing of the offer and acceptance concerning Leon Road he had had no knowledge of the property at all and had had no discussions with anyone regarding its purchase. That included his mother.
36 In opening the case for the Ghirardis, counsel said that it was their case that there had never been any concluded agreement. That what had taken place had been simply a loose family arrangement where a husband and wife, being the son-in-law and Mrs Chapple's daughter, had taken over a moral obligation to look after an old lady. In the course of family arrangements things were said and eventually a gift of money was made with no clear terms as to its acceptance. It was said that Mrs Ghirardi had felt obliged to put her mother into a house. They had bought an investment property for that purpose, and "at some point along the way a little something was thrown into the pot and that's as far as it ever went - it was just simply a loose family arrangement."
37 In his evidence, Mr Ghirardi said that he had never suggested to Mrs Chapple that he and Mrs Ghirardi would assist her financially in the purchase of a home. He said it was never discussed or agreed that the proceeds from the former home would be a contribution towards an interest in a new property. He said that Mrs Chapple had suggested that whatever she received from that home would go to Mrs Ghirardi and himself as a contribution towards Mrs Chapple's ongoing living expenses. He said he most definitely did not say that having decided to accommodate Mrs Chapple they would do this forever. He said that at sometime it had been suggested by Mrs Chapple to him that the proceeds from her former home should be given to himself and Mrs Ghirardi to be kept for her living expenses. He said that at first Mrs Ghirardi had been reluctant to accept any money. However he had insisted that Mrs Chapple should hand the money over to them to help with her upkeep. He said they were well aware, given Mrs Chapple's past financial track record, that the funds would be at risk if they remained in her control. That was as far as the discussions with Mrs Chapple ever went. It was understood that the proceeds of the sale of her home would be paid over to the Ghirardis but that those funds were Mrs Chapple's and were to be spent on her for living expenses. He said that alcohol had been a continuing problem for Mrs Chapple.
(Page 9)
38 Mr Ghirardi said he believed that Mrs Chapple's home in Sydney had been sold in December 1982. It was on 13 January 1983 that his family company, the first defendant, had signed an offer and acceptance, as trustee for the Ghirardi Family Trust, to purchase the Leon Road property for $70,000.
39 Mr Ghirardi admitted that he and Mrs Ghirardi had written a letter to the other members of the family dated 21 March 1983, which contains the following paragraphs:
"The situation with Leon Road has become untenable. The fact that I was prepared to take on a mortgage for 20 years to pay off a house I did not use myself, for your outlay of less than a quarter of its cost, seems to count for nothing. …
Our final word on this matter is:
(a) for the balance of the proceeds of the sale from Fiddens Wharf Road (22,565-48), we will allow mother to live in Leon Road for as long as she wishes and we will pay
Land Rates
Water Rates
Building Maintenance.
We do not expect to receive any rent from her, however should anyone else set up residence there, we would certainly expect them to contribute, whether family or not.
(b) If (a) is unsatisfactory, we will forward the cheque for $22,565-48 to mother and we will take no further interest in her financial affairs …". (my underlining).
40 Mr Ghirardi said in his evidence that this was never other than an informal family arrangement as far as he was concerned. It was certainly never connected to the receipt of Mrs Chapple's funds.
41 On the face of it that last statement is contrary to the words in the letter "(a) for the balance of the proceeds of the sale from Fiddens Wharf Road (22,565-48), we will allow mother to live in Leon Road for as long as she wishes …".
(Page 10)
42 Mr Ghirardi said that by that they did not mean that the proceeds would be theirs to keep but rather theirs to hold and apply to Mrs Chapple's expenses, which they had done many times over.
43 It was after that letter that the company Larpent Pty Ltd, in its capacity as trustee of the Ghirardi Family Trust, proceeded with the settlement of the property. The last paragraph of that letter states: "That's all I have to say except if I haven't heard within the next 48 hours, I will proceed with Leon Rd, as settlement is due on 24/3/83."
44 Mr Ghirardi said there had never been any agreement pursuant to which Mrs Chapple's proceeds would be applied towards furnishing her with an interest in the title to Leon Road. He said it had never been discussed or agreed that she would take a share in the title. It had never been intended that the proceeds from the Sydney home would be used towards the deposit for the property or any other specific component of the property. There had been no documentation entered into concerning this.
45 Mr Ghirardi said that on or about 10 March 1983 his office had received a letter from Parker & Parker dated 8 March 1983 with a cheque for the money which was due to Mrs Chapple from the sale of the house in Sydney. That money had been banked in the company account. The proceeds had been treated as a loan to the family trust. Mr Ghirardi said that from that fund, various payments, which had been made on behalf of Mrs Chapple, had been deducted until the account had been progressively exhausted over several years. He said that all of those funds had been applied for Mrs Chapple's benefit.
46 Mr Ghirardi said that without any further discussion with Mrs Chapple or her son Christopher, or any formal agreement, Mrs Chapple had moved into and had continued to reside at Leon Road, where she still lives. There had never been any agreement on behalf of the company or himself that she could live there for life. He said that in the intervening years there had been nothing further said about the matter until about September 1996, when he and Mrs Ghirardi had concluded that they could not financially afford to own Leon Road and meet the expenses that went with it.
47 The house at Leon Road was shown in account books as an asset of the Ghirardi Family Trust. Also shown in the books of the company under secured loans, was E Chapple, $21,686 in 1983. That was said to
(Page 11)
- represent a loan from E Chapple to the Ghirardi Family Trust. That was the reduced sum as at 30 June 1983.
48 In the accounts for the year ended 30 June 1986, furniture and fittings at Leon Road were shown at $7,108. At that time the secured loan, "E Chapple", had been reduced to $12,220. The property itself was valued at $75,485. Those accounts had been prepared by a firm of accountants and were part of the Ghirardi Family Trust financial statements for the year ended 30 June 1986. By 30 June 1987 the loan account for E Chapple had been reduced to $5,949. By 30 June 1988 the loan account had been reduced to $1,761.
49 Mr Ghirardi was asked if he accepted that Mrs Chapple had wanted a property to be purchased for her to live in and that she made her wishes known to him. His answer was, "You know that may have been verbalised but I don't see - it certainly had no direct bearing on what we subsequently pursued."
50 Mr Ghirardi conceded that there could have been general discussion between October and December 1982 about the use of the proceeds of the sale of the Sydney property. He said he did not have any clear recollection of what that discussion may have been. Mr Ghirardi said "machinations of how her money would be used" were reached after the Leon Road property was purchased.
51 Mr Ghirardi said that:
"After the shock and the fact that we would be doing what we would be doing, renovations wise, and at some stage or some point in time after all that, whenever it was, mother stated that if we were prepared to do what we were doing, then the least that she could do was to give us the settlement proceeds from Leon Road, which obviously at that stage were known, because the property had been sold, and that was the least that she could do. That is - however else you couch it or inference is made, that was the guts and the significance and what we understood mother was doing with her proceeds."
52 Mr Ghirardi said that prior to the purchase of Leon Road, "there was never any discussion with anybody about it being conditional upon Fiddens Wharf Road, or anything else."
(Page 12)
53 There is a file note of Mr Ghirardi on 25 February 1983, which reads, "PG to ring Trevor Watson and ensure we get cheque." That refers to the cheque for the proceeds from the sale of the Sydney home.
54 On 29 February 1983, there is another note, "I phoned Trevor Watson. He hasn't yet received anything from Sydney. He will ring the Sydney solicitor and ensure all going according to plan. Any problems he would ring back. He understands we to get the cheque …".
55 The letter from Parker & Parker with the cheque for $22,565.97 was acknowledged by Mr Ghirardi to Mr T Watson of Messrs Parker & Parker on 10 March 1983.
56 In my view the cross-examination of Mr Ghirardi makes it clear that he was not prepared to answer frankly and directly, the questions asked of him. I found some of his answers difficult to follow.
57 Mr Ghirardi agreed that the letter dated 21 March 1983 (referred to above) said that Mrs Chapple could stay in the property "rent free as long as she wishes" and that the Ghirardis would pay land rates, water rates and building maintenance. It was put to him "You will allow that to occur for the balance of the proceeds of the sale from Fiddens Wharf Road and I would suggest to you that that was your intention at the time?" Mr Ghirardi's answer was, "Well, that's what it says."
58 Mr Ghirardi said that he did not have the conversation with Mrs Chapple which she said had occurred and in which she had said she put a proposal to him, that if he and Mrs Ghirardi would assist her in buying a property, she would provide her proceeds from the sale of the Sydney property as her contribution, and that the property would be in the Ghirardis' name and that she would live there during her life and that it would be theirs entirely when she died. Mr Ghirardi also said that he had not looked at any property in Shenton Park.
59 Mrs Ghirardi said in evidence that there was never discussion to the effect that her mother would give her and her husband the funds in order to purchase a property for her to live in. At one time Mrs Chapple had said that she wanted the money put towards the cost that the Ghirardi's were going to incur in caring and looking after her, in accommodating her in Leon Road, and that it was only fair that they received something for their efforts.
60 Mrs Ghirardi said that she and her husband had ultimately decided to accept the money as a contribution towards her mother's ongoing living
(Page 13)
- expenses, which they alone would have to meet in the absence of any assistance from the other family members. Mrs Ghirardi said that there had never been any agreement that the money from the sale of Mrs Chapple's home in Sydney would be put towards the purchase of the Leon Road property. She said the money from the Sydney sale was regarded by them as a contribution towards her mother's ongoing personal requirements and was never intended, and was never used as, a payment towards the purchase of Leon Road.
61 The Leon Road property had always been treated by the Ghirardi's as a trust asset. The Ghirardi's had had to pay land tax on the property. Mrs Ghirardi said that this would not have been payable if her mother had had an interest in the property. She said, "I know this because shortly after we purchased Leon Road I rang the State Tax Office and received advice to this effect." She said she had told her brother Christopher that under no circumstances would she put her mother's name on the title deed because it was not entitled to be there.
62 There is no doubt that Mrs Ghirardi and her husband were extremely generous to Mrs Chapple throughout their marriage. They spent very large sums of money on her advancement. That, however, is not the question in this case. The question is what, if any, relationship which is recognised at law, came about between Mrs Chapple and the Ghirardis in connection with her transferring to them her share of the money from the sale of her home in Sydney.
63 It is not in dispute that between 10 September 1987, shortly after Mrs Chapple retired, and 11 June 1992, the Ghirardis allowed Mrs Chapple to draw approximately $57,000 from a bank account which they had set up and maintained for her use. Mrs Ghirardi said that she could no longer afford to pay the money after 1992 because their fortunes had declined.
64 Mrs Ghirardi said in her evidence that at no time could she remember any discussion, agreement or resolution by her husband, herself, or any other family members, as to the use to which her mother's money should be put. She said that in particular there had never been any agreement that that money would be put towards the purchase of the Leon Road property. She said that the money was regarded by her and her husband as a contribution towards her mother's ongoing personal requirements and was never intended, nor was it ever used as, a payment towards the purchase price of Leon Road. She said that at one time her mother had stated that she wanted the money put towards the costs that Mrs Ghirardi and her
(Page 14)
- husband were going to be incurring in looking after her and accommodating her in Leon Road and that it was only fair that they received something for their efforts. She also said that she and her husband had decided to accept the money as a contribution towards her mother's ongoing living expenses, which they alone would have to meet in the absence of any assistance from the other family members.
65 I do not think that the fact that the money was dealt with as a loan account in the books of the company determines the question of whether or not there was a binding agreement between the plaintiff and the defendants. Neither do I think that the fact that the property at Leon Road was treated as an asset of the trust is necessarily indicative of what happened between the parties.
66 Mrs Ghirardi said that she had spoken to her brother Christopher on 20 March 1993 and he had requested that "we consider putting mother's name on the title deed for Leon Road". Mrs Ghirardi said she became very upset at his suggestion, as it had never been raised with her before they had purchased the property. Amongst other things she thought that if her mother's name was on the title she would be able to borrow against the house "and therefore blow the funds" as she had already done with the Sydney house."
67 Mrs Ghirardi said she had told her brother that under no circumstances would she put her mother's name on the title deed because it was not entitled to be there. She had told her brother that "he and the Carsons could take the Sydney house money and take mother as well."
68 The following day Mrs Ghirardi typed the letter which has already been referred to above, and she and her husband both signed it and sent it "Dear Family". Importantly, the letter, which is dated 21 March 1983, says in its second paragraph:
"The situation with Leon Road has become untenable. The fact that I was prepared to take on a mortgage for 20 years to pay off a house I did not use myself, for your outlay of less than a quarter of its cost, seems to count for nothing."
69 I find from the evidence that the words "for your outlay of less than a quarter of its cost" refer to the sum of $22,565.48 which was to be paid over by Mrs Chapple. This is partly because the price of the house and the cost of the renovations, which the Ghirardis paid for, would make the $22,565 equal to approximately one quarter of the outlay on the home.
(Page 15)
70 The letter continues halfway through the first page:
Our final word on this matter is:
(a) for the balance of the proceeds of the sale from Fiddens Wharf Road (22,565-48), we will allow mother to live in Leon Road for as long as she wishes and we will pay
Land Rates
Water Rates
Building Maintenance.
We do not expect to receive any rent from her, however should anyone else set up residence there, we would certainly expect them to contribute, whether family or not.
(b) If (a) is unsatisfactory, we will forward the cheque for $22,565-48 to mother and we will take no further interest in her financial affairs …".
71 The statement of claim in this action reads:
"8 In or about late 1982 or early 1983 the Plaintiff requested the financial assistance of the Second and Third Defendants to enable her to purchase a suitable house in which to live.
9 Shortly following such request the Plaintiff and the Second and Third Defendants reached an oral agreement, inter alia, that the Plaintiff would provide her share of the said nett proceeds of sale of 47 Fiddens Wharf Road towards the purchase of a suitable home, the Second and Third Defendants would fund the balance of the cost of purchase, the Plaintiff would be entitled to live in the said house for her lifetime free of all costs and that on her death the said house would be wholly owned by the Second and Third Defendants free of any interest of the Plaintiff."
72 It is said in the statement of claim that pursuant to that agreement Mr and Mrs Ghirardi had procured the first defendant, Ghirardi Corporation Pty Ltd to enter into a contract for the purchase of the property. It is
(Page 16)
- pleaded that on or about 8 March, Messrs Parker & Parker, with the authority of the plaintiff, forwarded the sum of $22,565.97 to Mr Ghirardi in Kalgoorlie. One or both of the Ghirardis then arranged for the sum of $22,565.97 to be paid to Ghirardi Corporation Pty Ltd. That corporation completed the purchase of the property on or about 23 March 1983.
73 It is pleaded in par 16 of the statement of claim that in accepting the sum of $22,565.97 from Mrs Chapple, Mr and Mrs Ghirardi accepted the same on trust to apply it towards the acquisition of the property. It is pleaded that despite requests made by Mrs Chapple to the defendants, they have failed or refused to acknowledge her interest in the property.
74 It is pleaded that Mrs Chapple holds a beneficial life interest in the property free of the encumbrances which the company has created over the property. In the alternative, it is said that the property belongs beneficially to Mrs Chapple and to the company and/or to Mr and Mrs Ghirardi as tenants in common in shares proportionate to their contribution of the purchase price. Further that Mrs Chapple's beneficial interest in the property is free of the encumbrances which have been created by the company over the property. It is pleaded in the alternative that Mrs Chapple holds a licence for value from the company to reside at the property free of all charges for her lifetime. A declaration is sought that the property is held by the corporation on trust as to a life interest in favour of Mrs Chapple, and an order that the company do execute and deliver to Mrs Chapple a transfer of a life interest in the property in her favour and that the company obtain the registration of such transfer in favour of Mrs Chapple free of any encumbrances created by it subsequent to 23 March 1983.
75 In the alternative declarations are claimed that the property is held by the company on trust for Mrs Chapple and itself and/or Mr and Mrs Ghirardi as tenants in common in the proportion of their respective contributions to the purchase price. An order is sought that the company deliver a transfer of its property reflecting that the parties to the action are tenants in common in such proportions as the court may determine.
76 In the further alternative, Mrs Chapple seeks a declaration that she has a licence for value from the company to reside at the property free of all charges for her lifetime, free of the encumbrances created by the company over the property. In the further alternative, it is claimed that Mrs Chapple holds a licence for value from the company to reside at the property free of all charges for her lifetime.
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77 In the prayer for relief Mrs Chapple claims against the company amongst other things "such further or other order as this Court may determine."
78 It was Mrs Ghirardi's evidence that on 25 March 1983 the company settled the purchase for the sum of $70,000. The further money spent before Mrs Chapple moved into the house was about $25,000. I accept that estimate. The money was spent on renovations, improving the garden, fixing the rear fence, and various other sundry matters. I accept that in May 1998 a sunroom was added to the rear of the house at a cost of approximately $12,000. That sum was paid by the Ghirardis. Some further work was done on the house at a further cost of approximately $3,000.
79 I find that following the abovementioned letter from Mr and Mrs Ghirardi on 21 March 1983, the Ghirardis applied the $22,565.48 in accord with par (a) of their letter dated 21 March 1983, which was that for that sum "we will allow mother to live in Leon Road for as long as she wishes and we will pay Land Rates, Water Rates, Building Maintenance."
80 Mrs Chapple wishes to stay at the property at the present time.
81 I accept that the Ghirardis did everything possible until recently to make Mrs Chapple's life enjoyable. They spent large sums of money on her and generally supported her, particularly after she had retired in 1987. They provided Mrs Chapple with entertainment and all sorts of financial assistance for, expenses and general living, including most of all the costs associated with of the house. Expenses which they did not pay were electricity and telephone costs.
82 I accept that during the period between the opening of the bank account on 10 September 1987 and its closing on 11 June 1992, approximately $57,203 was spent by Mrs Chapple from that account. I also accept that because of financial restrictions upon the Ghirardis they had to close that account. I accept that the Ghirardis gave Mrs Chapple the unrestricted use of a late model Nissan Pintara vehicle and paid all the repairs, insurance and registration payments for that vehicle. Mrs Chapple paid for the petrol. At the present time the Ghirardis are continuing to meet the various costs and rates associated with the house and the insurance on Mrs Ghirardi's vehicle.
83 Mrs Ghirardi said in evidence that she had been shown the apartment in Onslow Road in December 1982. Mrs Ghirardi said that she had left Kalgoorlie to come to Perth somewhere about 10 or 12 December 1982.
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- She went to see the unit with her mother within a couple of days of arriving in Perth. That is consistent with Mrs Chapple's evidence.
84 Mrs Ghirardi did not recall whether or not her mother had been told about Leon Road before or after the offer and acceptance form had been put in on 13 January 1983.
85 However, Mrs Ghirardi was emphatic that the money which her mother was giving the Ghirardis was for recognition of what they had done for her in the past and what they were going to do for her in the future. It had nothing to do with Leon Road.
86 Mrs Ghirardi was asked whether she had intended to put in place a direction "in your wills that your mother could remain in Leon Road for her lifetime in the event of your death?" Her answer was, "That's correct, Mr Christie, because in the event of my death there were very large insurance policies payable and I could afford to be generous in death …". Mrs Ghirardi said that in the event of her death, insurance money would have paid out the mortgage. "I would not have left my daughters with a mortgage to pay out and mother residing in it indefinitely."
87 A note of Mrs Ghirardi's dated 14 March 1983 says:
"I have just finished speaking to G Sheppard on the above matter and in particular with relation to us leaving a direction in our wills that EC is to inhabit Leon Road for the duration of her life … Greg is now to leave a direction in our wills that we wish to have EC reside in the residence for the term of her natural life. As the shareholders of Larpent, our power will have passed over to the trustees of our wills who will be G Sheppard and J Clarkson and they will then carry out our wishes as they have been instructed to do - should the occasion arise."
88 When par (a) of the letter dated 21 March 1983, which is referred to above, was put to Mrs Ghirardi, she was asked whether at that time she had intended that her mother could stay in the house for as long as she wished. Her answer was, "Yes, but she no longer wishes."
89 The final paragraph in the letter of 21 March 1983 is "That's all I have to say except if I haven't heard within the next 48 hours, I will proceed with Leon Road, as settlement is due on 24 March 1983." There was a note at the bottom of the letter as follows: "I have had Patrick sign this also as he is in complete agreeance with the aforesaid."
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90 The last paragraph in the letter about proceeding with Leon Road, in my view indicates that the settlement due on 24 March 1983 was to some degree dependent upon the payment by Mrs Chapple of the $22,565.48.
91 Mrs Ghirardi said that the $22,500, which her mother had contributed, did not get anywhere near "the over $200,000" that they had estimated had been spent on her by them.
92 It was conceded by Mrs Chapple's counsel that, in addition to the purchase price, $19,000 had been spent on the property before Mrs Chapple moved in. Mrs Ghirardi said that $19,500 (a sum which had been referred to) did not represent the complete sum they had spent on Leon Road prior to her mother going into residence.
93 Mrs Ghirardi said she had not made any "deal" with her mother prior to writing the letter of 21 March 1983. When Mrs Ghirardi was asked in re-examination, was it possible that she might have said something to her mother in front of the family to the effect of, "Don't worry mother. You have paid for your share in this property and you can live there as long as you like", Mrs Ghirardi said that she had no recall of specifically saying that specific thing at a specific time.
94 Mrs Ghirardi said that she could not recall saying words to her mother in the presence of Mrs Carson to the effect of: "Don't worry. You've paid your share. You are secure."
95 It was put for the defendants in closing that Mrs Chapple had not become aware of the amount she was going to receive until about 22-23 December 1982 because up until that time it had not been agreed that the home in Sydney was to be sold, and no one knew what was going to be received for that property. In answer to that proposition, counsel for Mrs Chapple said that Mrs Chapple had given evidence that she had a clear recollection that she went to see Mr Ghirardi at the Airlie Street unit and that she had raised with him the proposition that he and Mrs Ghirardi purchase a property for her to live in and she would contribute the money she was getting from a Sydney property. The property would be in their names and it would be theirs to do as they wished on her death. Mrs Chapple had said that that had occurred after she knew of the sale of the Sydney property and before she had looked at the unit in Onslow Road. That was before she had been told by Mr Ghirardi of the purchase in Leon Road. At that time the debts owed by her husband in Sydney were known. Having had that conversation with Mr Ghirardi, she
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- had started to look for properties. She remembered seeing the one in Onslow Road which she had liked.
96 Mrs Ghirardi confirmed in evidence that she had been to look at the property, although she had not been into it. Mrs Chapple said the Ghirardis had not been happy with the area. She had next heard from them when Mr Ghirardi had telephoned her and told her that they had found her a unit and bought it.
97 It is not without significance that there is a file note by Mrs Ghirardi dated 5 October 1982 that "Betty" expects "us to buy her a unit; had seen one for $92,000." There are also other file notes about that time concerning the cost of units.
98 Mrs Chapple said that Mr Ghirardi had arranged for Parker & Parker to act for her and that seems to be consistent with Mr Ghirardi's correspondence to Parker & Parker, although he denied that he had engaged their assistance.
99 There is a note of 25 February 1983 that Mr Ghirardi was to telephone Trevor Watson, "and ensure we get cheque".
100 There is a file note dated 4 March 1983:
"Re Leon Road
Betty Chapple will be giving Larpent P/L 20,000 odd dollars. Is this taxable? …"
101 There is a letter from Mr P J Ghirardi to Mr T Watson of Parker & Parker dated 10 March 1983:
"Thank you so much for your assistance to us and for taking us on at such short notice.
We await your account in due course."
102 Mrs Chapple does not rely on the letter of 21 March 1983 as making the contract but rather as evidence of what it was and as supporting her evidence of what she had said to Mr Ghirardi which had led to the position being advanced to that stage.
103 In my view, the evidence of Mrs Chapple supported by that of Mrs Carson, both of whom I accept as truthful witnesses, plus the correspondence and file notes, overwhelmingly supports Mrs Chapple's
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- case that there was an agreement made between Mrs Chapple and Mr Ghirardi that she would contribute her share of the proceeds from the sale of her home in Sydney, towards the purchase of premises and that she would be entitled to stay in those premises for life, or for at least as long as she wished. The letter of 21 March 1983 strongly supports the other evidence for that agreement.
104 Although I have not referred to some of the other evidence in this case, I have taken full account of it in coming to my decision.
105 In Inwards v Baker [1965] 2 QB 29, the father of Mr Jack Baker had said to Mr Baker, "Why not put the bungalow on my land? …" Mr Baker did that. He built it with his own labour. He then lived in the bungalow for some time. When his father died the trustees for his de facto widow took proceedings to move Mr Baker off the land. Lord Justice Denning said at 36, 37:
"It is quite plain from those authorities that if the owner of land requests another, or indeed allows another, to expend money on the land under an expectation created or encouraged by the landlord that he will be able to remain there, that raises an equity in the licensee such as to entitle him to stay. He has a licence coupled with an equity."
106 At page 37, Lord Denning continued:
"So in this case, even though there is no binding contract to grant any particular interest to the licensee, nevertheless the court can look at the circumstances and see whether there is an equity arising out of the expenditure of money. All that is necessary is that the licensee should, at the request or with the encouragement of the landlord, have spent the money in the expectation of being allowed to stay there. If so, the court will not allow that expectation to be defeated where it would be inequitable so to do. In this case it is quite plain that the father allowed an expectation to be created in the son's mind that this bungalow was to be his home. It was to be his home for his life or, at all events, his home as long as he wished it to remain his home. It seems to me, in the light of that equity, that the father could not in 1932 have turned to his son and said: 'You are to go. It is my land and my house.' Nor could he at any time thereafter so long as the son wanted it as his home … So here, too, the present plaintiffs, the successors in title of the father,
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- are clearly themselves bound by this equity. It is an equity well recognised in law. It arises from the expenditure of money by a person in actual occupation of land when he is led to believe that, as a result of that expenditure, he will be allowed to remain there. It is for the court to say in what way the equity can be satisfied. I am quite clear in this case it can be satisfied by holding that the defendant can remain there as long as he desires to, as his home."
107 Both Lord Justice Danckwerts and Lord Justice Salmon agreed with Lord Justice Denning.
108 Lord Justice Danckwerts said at 38:
"It seems to me that this is one of the cases of an equity created by estoppel, or equitable estoppel, as it is sometimes called, by which the person who has made the expenditure is induced by the expectation of obtaining protection, and equity protects him so that an injustice may not be perpetrated."
109 In my view, the principles discussed in the Inwards decision apply to this case. Mrs Chapple paid over her money with the expectation that she could remain in the home for as long as she lived or as long as she wished, on the understanding that the Ghirardis would own the home when she died.
110 As the agreement between Mrs Chapple and the defendants has been performed for many years, the defences pleaded pursuant to the Statute of Frauds and the Property Law Act (1989) are not sustained.
111 In Bannister v Bannister [1948] 2 All ER 133 the facts were that on the plaintiff's oral undertaking that the defendant would be allowed to live in a cottage rent free for as long as she desired, the defendant agreed to sell him that cottage and an adjacent cottage. The plaintiff's undertaking was not included in the formal conveyance.
112 At 136 when giving the Judgment of the Court, Scott LJ said:
"We, therefore, see no reason why the words of the undertaking should not be given the most favourable construction, from the defendant's point of view, of which they are properly capable … We are, accordingly, of the opinion that the first objection fails, though the interest promised to the defendant by the plaintiff must, we think, be taken to have been a life interest
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- determinable on her ceasing to occupy No 30 and not a life simpliciter as held by the learned County Court Judge." (my underlining).
113 A little further on in the court's reasons it is said:
"It is enough that the bargain should have included a stipulation under which some sufficiently defined beneficial interest in the property was to be taken by another. … We see no distinction in principle between a case in which property is conveyed to a purchaser on terms that the entire beneficial interest in some part of it is to be retained by the vendor (as in Booth v Turle [1873] LR 16 Equity 182) and a case, like the present, in which property is conveyed to a purchaser on terms that a limited beneficial interest in some part of it is to be retained by the vendor."
114 In my opinion, in this case, as in the Inwards decision, it is for the court to say in what way Mrs Chapple's equity can be satisfied. As in the Inwards case Mrs Chapple's equity can be satisfied by holding that she can remain at Leon Road for as long as she desires. This would not prevent the parties, after legal advice, making some other arrangement which might be more suitable to all concerned.
115 I will hear the parties as to the appropriate orders to be made if these cannot be agreed between them. Unless I decide otherwise after hearing from the parties, the costs of the action will be awarded to Mrs Chapple to be taxed.
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