Craig v Craig
[2015] SADC 109
•17 July 2015
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
CRAIG v CRAIG AND ANOR
[2015] SADC 109
Judgment of His Honour Judge Slattery
17 July 2015
EQUITY - TRUSTS AND TRUSTEES - IMPLIED TRUSTS - RESULTING TRUSTS - REBUTTAL OF IMPLICATION - PRESUMPTION OF ADVANCEMENT
The plaintiff is the father of the first defendant and the father-in-law of the second defendant. The defendants are the registered proprietors of a house property at Glandore, disposed as two detached dwellings of unequal size and other improvements. The Glandore property was purchased in 1984. At that time the defendants sold their two existing properties and borrowed a further $50,000 to be in a position to contribute $90,000 to the overall purchase price, the conveyancing costs and the outgoings on the property. The plaintiff and his (late) wife sold their house at Prospect and provided the sum of $70,000 that was used in the purchase of the Glandore property. The borrowing of $50,000 made by the defendants was secured by a mortgage given by them over the Glandore property. The plaintiff and his wife knew of the existence and the registration of the mortgage from 1984.
The plaintiff and his wife moved into the Glandore property in 1984 and lived there until the death of the plaintiff’s wife in 1997. After that time, the plaintiff lived there alone. The plaintiff occupied the smaller of the two dwellings on the property. The defendants commenced paying for all costs and expenses associated with the whole land, including all utilities, rates and taxes for a period from 1984. From some time after 1984, the plaintiff and his wife made contributions to council rates and one quarter of the water bill. The defendants paid for all other utilities. After 1997, the defendant paid almost all of the cost of rates and utilities supplied to the whole of the Glandore property.
From about 1997 the plaintiff was aware that he was not registered as a proprietor of the Glandore property. In 2008, the plaintiff caused a solicitor’s letter to be sent to the defendants claiming an entitlement to be registered as a proprietor of a moiety interest in the Glandore property. The plaintiff continued to live in the Glandore property until 2012 when he left to live elsewhere.
The defendants contend that the arrangements made in 1984 were that the plaintiff and his wife asked them to purchase the Glandore property so that the plaintiff and his wife could live with them for support, care and familial company. The defendants agreed to sell their house, a spare land block owned by them and incur a mortgage obligation to purchase the Glandore property. The defendants contend that they agreed to allow the plaintiff and his wife to live at the property rent free and cost free for their lives, in consideration of the plaintiff and his wife gifting the amount of $70,000 to enable the purchase of the Glandore property. The sum of $70,000 provided by the plaintiff and his wife was used in the purchase of the Glandore property.
The plaintiff claims an interest in the Glandore property under a resulting trust or alternatively, on one of two forms of constructive trust. The defendants contend that the payment of $70,000 made in 1984 was a gift with an associated obligation upon the defendants as proprietors to allow the plaintiff and his wife to occupy a portion of the Glandore land rent free and cost free for their lives.
Whether the defendants hold a moiety interest in the Glandore property under a resulting trust for the plaintiff; whether a constructive trust arises as a matter of law such that the defendants hold 7/16th of the Glandore land in trust for the plaintiff; whether conversely, the plaintiff, his wife and the defendants made an agreement in 1984 that the plaintiff (and his wife) agreed to provide a gift of $70,000 in consideration of the defendants selling their existing real estate assets, to contribute $90,000 to the purchase price of the Glandore property and associated costs, and provide free of expense the occupation of one of the houses on the Glandore property for their lives.
Held:
1. The plaintiff and his wife provided the sum of $70,000 to be used in the purchase price of the Glandore property as a gift; the defendants gave an assurance that they would provide accommodation to the plaintiff and his wife, rent free and cost free for their lives.
2. Insofar as any presumption of a resulting trust arose at the time that the plaintiff and his wife provided the sum of $70,000, the presumption was rebutted by the arrangements made between the parties that allowed the plaintiff and his wife to live in the Glandore property rent free and cost free for their lives.
3. A constructive trust does not arise as a matter of law.
4. The plaintiff does not own any legal or beneficial interest in the Glandore property.
5. The plaintiff continues to have an entitlement to occupy the Glandore property.
Bankruptcy Act 1966 (Cth) s58 and s82; Conveyancing Act 1919 (NSW) s26; Conveyancing Act 1919 (AC) s26; Property Law Act 1974 (QLD) s35; Law of Property Act (NT) s35, referred to.
Piddington v Bennet and Wood Pty Ltd (1940) 63 CLR 533; Goldsmith v Sandilands (2002) 190 ALR; Kungial v Mitsubishi Motors Australia Limited (1990) 54 SASR 125; Downs Irrigation Cooperative Association Limited v The National Bank of Australasia Limited (1983) Qd R 130; Dyer v Dyer (1788) 2 Cox 92; Napier v Public Trustee (WA) (1980) 32 ALR 153; Calverley v Green (1984) 155 CLR 242; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353; Carkeek v Tate-Jones [1971] VR 691; Delahunt v Carmody (1986) 161 CLR 464; Vedajs v Public Trustee [1985] VR 569; Hayden v The Perpetual Executors and Agency Co. (WA) Ltd. (1930) 45 CLR 111; Motor Auction Pty Ltd v John Joyce Wholesale Cars Pty Ltd (1997) 23 ACSR 647; Crichton v Crichton (1930) 43 CLR 536; Re Emery’s Investments Trust [1959] Ch 410; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353; Martin v Martin (1959) 110 CLR 297; Nelson v Nelson (1994) 33 NSWLR 740; Brown v Brown (1993) 31 NSWLR 582; Wirth v Wirth (1956) 98 CLR 228; Noack v Noack [1959] VR 137; Russell v Scott [1936] 55 CLR 440; Knight v Biss [1954] NZLR 55; Anderson v McPherson (Number 2) [2012] WASC 19; Martin v Martin (1959) 110 CLR 297; Sorna Pty Ltd v Flint (2000) 21WAR 563; Pearson v Pearson [1961] VR 693; Stock v McAvoy (1872) LR 15 Eq 55; Shepherd v Cartwright [1955] AC 431; Danberg v Danberg [2001] NSWCA 87; Chief Commissioner of State Revenue (NSW) v Dick Smith Electronics Holdings Pty Ltd (2005) 221 CLR 496; Director of Public Prosecutions (VIC) v Le (2007) 232 CLR 562; Xiao Hui Yang v Perpetual Trustees Victoria Limited [2015] VSCA 124; Plunkett v Ball (1915) 19 CLR 544; Melbourne Orthopaedic Group Pty Ltd v Stamford Aus-Trade and Press Pty Ltd (2015) VSCA 150 (18 June 2015); Muschinski v Dodds (1985) 160 CLR 583; Giumelli v Giumelli (1999) 196 CLR 101; Baumgartner v Baumgartner (1987) 164 CLR 137; Henderson v Miles (Number 2) [2005] NSWSC 867; West v Mead [2003] NSWSC 161; Black Uhlans Inc v New South Wales Crime Commission [2002] NSWSC 1060; Morton v Morton [1999] SASC 31; G v H (1994) 181 CLR 387; Mutual Life Insurance Co of New York v Moss (1986) 4 CLR 311; R v Shaw (1917) 17 SR (NSW) 383; Morgan v Babcock and Wilcox Limited (1929) 43 CLR 163; Jones v Sutherland Shire Council [1979] 2 NSWLR 206; R v Sutton (1983) 32 SASR 553; Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 35 FCR 43; Ryder v Wombwell (1868) LR 4 Ex 32; Hibberson v George (1989) 12 FamLR 273 (NSWCA per McHugh JA); Sweetenham v Wild [2005] QCA 264; Gill v Gill (1921) 21 SR NSW 400; Nathan v Leonard [2003] 1WLR 827; Re Gardiner [1971] 2NSWLR 494; Countess of Bective v Federal Commissioner of Taxation (1932) 47 CLR 414; Williams v Legg (1993) 29 NSWLR 687, applied.
Yoshino v Niddrie [2003] NSWSC 57, discussed.
Hancock Family Memorial Foundation Limited v Porteous (2000) 32 ACSR 124, considered.
CRAIG v CRAIG AND ANOR
[2015] SADC 109
The question for consideration in this proceeding is whether the defendants hold an interest measured as 7/16th of a house property in Glandore on a resulting trust for the plaintiff, or whether they hold an interest in that same property under a constructive trust for the plaintiff. The defendants contend that they hold the legal and beneficial interest in that property free of any interest of the plaintiff.
The plaintiff is the father of the first defendant and the father-in-law of the second defendant.
The Glandore property[1] was disposed as two separate detached and connected homes. An in-ground pool was attached to one of the living areas but it appears to have been placed over both the allotments on the title. The property is more commonly known as 35 and 35A Glengyle Terrace, Glandore.
[1] The property comprised in Certificate of Title Register Book Volume 5711 Folio 817.
The Glandore property was purchased in the name of the defendants as registered proprietors: the plaintiff and his late wife Wanda provided $70,000 in cash to their son Ronald who then employed those funds in the purchase of the Glandore property in the names of himself and his wife Sharon. The defendants paid all of the costs of transfer including stamp duty and other adjustments. The defendants have given a mortgage secured on the title of the property to provide for part of the purchase price. The plaintiff knew of this mortgage from 1984.
In order to purchase the Glandore property, the defendants sold their home property at Hallett Cove and also a vacant block of land in Hallett Cove. The defendants had given consideration in 1984 to developing the vacant block as their new home. That planning ceased at that time in 1984. In order to generate the sum of $70,000, the plaintiff and his wife sold their property at Prospect for about $84,000.
The part of the property occupied by the defendants was 35 Glengyle Terrace (number 35) and the part of the property occupied by the plaintiff with his late wife Wanda was 35A Glengyle Terrace (number 35A).
The parties lived in the Glandore property from 1984 and the plaintiff and his wife made some structural changes to number 35A: they installed ducted air conditioning; they renovated the bathroom to install a walk-in shower; and there was retiling of the bathroom and some of the floors of that portion of the property.
The defendants attended to the general upkeep of painting the whole of number 35 and number 35A; they paid for the cost of building a new carport in number 35A; performing other maintenance on both properties as well as paying for a greater proportion of the other utilities supplied into number 35A during that time. There is no evidence in this case that any correspondence was directed to the plaintiff separately or together with his late wife from any utility supplier or Government department naming him or them as owners, proprietors or persons primarily liable for these expenses associated with any part of the Glandore property.
Although the position is not completely clear, in the period between 1984 to 2008 the plaintiff paid some council and water rates on the number 35A and the defendants paid the council rates and all of the other utilities and expenses for number 35 and 35A. Wanda passed away in 1997. The plaintiff continued to live in number 35A until late December 2012.
The plaintiff contends that if it was the case that Wanda had a right to enjoy indefeasibility of title by registration as a proprietor jointly with her husband in her lifetime, then under the rules of survivorship, the plaintiff would have become the sole registered proprietor of the interest formerly held by both of them. This is because the effect of the order sought by the plaintiff is to be assessed as at 1984, the date of purchase of the Glandore property.
Between 1984 and 2008, no suggestion was made by the plaintiff or the plaintiff and his late wife, that they had any legal or beneficial interest, in or that any interest allegedly belonging to them, should be registered on the title of the Glandore property.
On 28 February 2008, the plaintiff caused a solicitor’s letter to be sent to the defendants. The letter suggested that the plaintiff was surprised to recently discover that he and his wife were not named as registered proprietors of the Glandore property. The defendants were upset by this allegation, sought an explanation from the plaintiff and were assured by him that the letter was nothing to be concerned about. Nothing was heard of that assertion again until 2013. The solicitors instructed to send the letter of 28 February 2008 to the defendants were the same solicitors who were then retained by the plaintiff’s youngest son Konrad. Following the conversation with the plaintiff after the letter of 28 February 2008 and until about 2013, the defendants substantially increased their borrowings secured by a mortgage over the whole of the Glandore property. As had occurred from at least 1997, the defendants continued to pay all of the costs, expenses and outgoings in respect of no. 35 and no. 35A, as well as for their mortgage.
In 2006, the plaintiff had become a co-registered proprietor with his son Konrad of a property at Flagstaff Hill; he had also become a mortgagor of the property. By 2008, Konrad appears to have been in a state of penury.
The mortgagee of the Flagstaff Hill property served notices of default upon the plaintiff and took proceedings for possession of that property due to the default on payment of the mortgage. An arrangement was made for the girlfriend of Konrad to purchase the Flagstaff Hill property. In 2012, the plaintiff left the Glandore property and went to live with Konrad at Flagstaff Hill. The plaintiff now pays rent to Konrad’s girlfriend.
In the period between 1984 and 1997, the plaintiff provided to each of his three sons Ronald, George and Konrad, an amount of $32,000 (in two payments of $20,000 and $12,000) sourced from the corpus of money held by him following a compensation payment for an injury at work. He said that his intention was to assist all of his sons financially, and in particular, he wanted to help them discharge their mortgages. There is no evidence that either Konrad or George had a mortgage at the time of these payments. There is evidence that Konrad and George had mortgages later.
In 2006-2007, the plaintiff provided £30,000 to Konrad to assist him in his then financial difficulties. At around the same time, George made a loan to Konrad of $75,000 unsecured. Konrad became bankrupt and the debts owed to the plaintiff and George fell into the bankruptcy and are thereby compromised by operation of s58 and s82 of the Bankruptcy Act 1966 (Cth).
The sum of £30,000 given to Konrad by the plaintiff was, in 2007, the equivalent of $75,300.[2] Allowing for contingencies and exchange fees, that amount may be assumed to be of the value of $73,000.
[2] XE Currency Charts British Pound to Australian Dollar Chart: based on live mid-market rates in 2007
This action against the defendants was commenced in 2013 by the plaintiff using the same solicitors instructed by Konrad. The plaintiff contends that he is entitled to be registered as a proprietor of an estate in fee simple in one undivided moiety in the Glandore property on the basis that the defendants held such moiety interest on trust for him. The plaintiff contends that the defendants hold such moiety interest under a resulting trust, or alternatively under a common intention constructive trust, or under a windfall equity constructive trust.
The defendants contend that, at or immediately prior to the purchase of the Glandore property, an arrangement was made with the plaintiff and his late wife that the contribution of $70,000 was a gift to them by the plaintiff and his wife. Thus, they contend that the question of any form of trust does not arise in respect of that money or any property purchased using that money, or alternatively, that there was never an intention to the plaintiff and his wife to become registered as proprietors of the property, or that the only interest of the plaintiff in the land is a life interest.
The questions which arise here for my consideration are as follows:-
1. Whether the defendants hold a moiety interest in the Glandore property for the plaintiff under a resulting trust;
2. Whether a presumption of advancement arises in favour of the defendants;
3. Whether a common intention of the parties may be identified that the plaintiff (and his late wife) should own a moiety interest in the Glandore property on the basis that the sum of $70,000 was contributed to the purchase price by the plaintiff, and that it would be a fraud on the plaintiff to assert that he owns no interest in the property;
4. Whether it would be unconscionable for the defendants assert a legal and beneficial ownership of the Glandore property;
5. Whether the sum of $70,000 was provided by the plaintiff to the defendants as a gift; and
6. Whether the defendants and the plaintiff operated under an agreement whereby the defendants were entitled to maintain their indefeasible interest as registered proprietors, and were required to maintain the property and the right to the plaintiff (and his wife Wanda) to remain in occupation of the Glandore property for life under the terms of that gift.
A question of procedure
The plaintiff opened his case and outlined his claim in relation to the question of the claimed resulting trust, common intention constructive trust and “windfall equity” constructive trust. The plaintiff then relied upon the following admissions in the pleadings of the defendants:-
1. In 1984, the plaintiff and his late wife sold their home at Stuart Road, Prospect in the State of South Australia for the sum of $84,000 or thereabouts; (Statement of Claim paragraph 4, Second Defence paragraph 4)
2. At about the same time, the defendants also sold their home (Statement of Claim paragraph 5; Defence paragraph 5)
3. The defendants purchased the house and land situate and known as 35 and 35A Glengyle Terrace Glandore, being the land described and comprised in Certificate of Title Register Book Volume 5711 Folio 817 (Statement of Claim paragraph 6; Defence paragraph 6)
4. The Glandore property was purchased for the sum of $155,000 or thereabouts. The plaintiff and his late wife contributed one half of the purchase price and the defendants contributed the other half of the purchase price of the Glandore property (Statement of Claim paragraph 7)
In the Defence at paragraph 7, in answer to the Statement of Claim, the defendants plead as follows:-
5. As to paragraph 7 of the Statement of Claim:
5.1 admit that the Glandore property was purchased for $155,000;
5.2 say that when the Glandore property was purchased, the defendants paid all expenses associated with the purchase (including conveyancing fees and stamp duty);
5.3 say that the plaintiff and his late wife contributed a sum of $70,000 toward the purchase of the Glandore property as a gift;
5.4 say that at the time the Glandore property was purchased, the plaintiff and his late wife did not seek to be registered on the title and did not otherwise claim or intend to have any beneficial interest in the Glandore property (but rather intended the plaintiff’s purchase price contribution to be provided to the defendants as a gift); and
5.5 otherwise deny paragraph 7.
The plaintiff therefore submits that he has proved that: the Glandore property was purchased; the defendants paid all the expenses on the transfer; the plaintiff (and his wife) contributed $70,000 to the purchase price (alleged in the Defence to be a gift); that the plaintiff (and his late wife) occupied one separate living area in the premises (no. 35A); the plaintiff paid half the council rates and one quarter of the water rates per annum but less regularly after 1997 and none since 2008; that some improvements were made to the property by the plaintiff, namely air conditioning, electrical re-wiring and some painting.
The plaintiff’s evidence about the allegation that he did some painting apart from a small amount in the lounge room is scant. There is insufficient evidence for me to make any finding that the plaintiff did any painting of value. I am also unable to make any finding on the question of the quality of the work or the regularity of the electrical wiring issue. On one view, those matters are irrelevant because there is no evidence that the work done added any particular value to the property.
The plaintiff then tendered Exhibit P1, a tender book, by consent. It contained: a title search for the Glandore property; property and value information showing that the property is currently valued at $740,000; a contract note for the sale of one of the defendants’ properties for $59,950 (but no information about the amount of mortgage that is to be discharged from that property); a contract note for the sale of the Prospect home of the plaintiff for $84,000; the auction notice showing the detail of the rates payable and the layout of 35 and 35A Glengyle Terrace Glandore and their semi-detached status; the contract of sale for 35-35A Glengyle Terrace Glandore; a mortgage over the Glandore property in the names of the defendants securing a loan of $50,000 and signed by the defendants; the 20 February 2008 letter from the solicitors for the plaintiff (and Konrad) and a copy of a now lapsed caveat lodged by the plaintiff on the Glandore property title.
The plaintiff then closed his case. No oral evidence was led by the plaintiff in his case in chief on any agreement or other evidence indicating a common intention that the plaintiff should have an interest in the Glandore property. No evidence was led about any joint endeavour, the substratum of which, if removed without any blame upon a party, means that the other party unconscionably enjoys the beneficial interest on that property sufficient to ground a finding of a constructive trust.
The pleadings make some admissions about the contribution to council rates and some expenses for water. The defence puts in issue the length of time over which such payments were made, as well as the amount of payments and the accounts that were paid. Without more, the position on the pleadings is that the defendants paid for electricity, council rates, and the majority of the water rates for both number 35 and number 35A.
The election made by the plaintiff occurred in the background of that position in the evidence and on the pleadings: there were real and substantive disputes about those payments said by the plaintiff to be consistent with his understanding that he was a proprietor of the Glandore property (and the matters in respect of which the payments were made). All of those matters were in contention on the pleadings.
The plaintiff was not called in the plaintiff’s case in chief to give evidence in support of the constructive trust claims that he made. The plaintiff was therefore content to rely upon the evidence led on the plaintiff’s case in chief most, if not all of which, was directed to the plaintiff’s resulting trust case. The plaintiff also implicitly relied upon his counsel’s cross examination of the defendants to assist his pleaded case on the issue of a resulting trust and the two forms of constructive trust. In the absence of any evidence led by the plaintiff about any agreement with or any understanding actually or implicitly arising from what transpired between him, his wife and the defendants then, strictly speaking, such cross examination on the aspects of the pleaded constructive trusts would be on collateral issues. The plaintiff also contends that consistent with authority, the constructive trust case can arise as a matter of inference.
There would be no limit upon the plaintiff’s ability to cross examine the defendants upon the issues arising upon the pleadings. Such cross examination would generally be limited to issues of credit apart from the resulting trust case. In the usual course the answers of a witness on collateral issues are final and cannot be contradicted by other evidence (Piddington v Bennet and Wood Pty Ltd (1940) 63 CLR 533 at 546; Goldsmith v Sandilands (2002) 190 ALR 370 at [3]; Kungial v Mitsubishi Motors Australia Limited (1990) 54 SASR 125 at 130).
In my consideration of the evidence led by the defendants, the cross examination of their witnesses and the evidence led by the plaintiff, it is necessary to keep these principles firmly in mind. Because of the other findings that I have made in this matter, little turned on this particular point. The defendants then led their evidence and their witnesses were cross examined.
At the end of the defendants’ case, the plaintiff sought to lead rebuttal evidence. The plaintiff’s primary position was that he did not need to obtain the leave of the Court to lead that evidence because the topic upon which the plaintiff wished to lead evidence was one upon which the defendants carried the onus of proof. It was common ground that these submissions could only refer to the plaintiff’s resulting trust case and that the plaintiff otherwise relied on the evidence and cross examination of the defendants in his constructive trust case. The plaintiff contended that on his resulting trust case, once it had been proved that the plaintiff and his late wife provided to the first defendant Ronald Craig (and by extension Sharon because she became a proprietor) the sum of $70,000 used in the purchase of the Glandore property, then the burden fell upon the defendants to discharge the presumption of a resulting trust arising as a result.
The plaintiff’s resulting trust case is that (as he contends is admitted on the pleadings), the plaintiff and his wife contributed some $70,000 to the purchase price of $161,000 (inclusive of outgoings) for the Glandore properties. There is a presumption of a resulting trust where part or all of the purchase money for a property is provided by the plaintiff and his wife to the defendants but the property is registered only in the name of the defendants. That presumption may be displaced if, for example, there is a sufficiently close relationship between the parties (typically a parent and child relationship) that gives rise to a presumption of advancement (i.e. a presumption that the parents, wish to confer a benefit on their children and have no intention to take a beneficial interest in the property). There must be evidence led by, for example, the defendants here in order to rebut the presumption. Another analogous situation is where the defendants may seek to prove that the payment was a gift.
Thus the plaintiff contended that the evidential onus fell upon the defendants to prove those matters and that the plaintiff was entitled to call rebuttal evidence.
In Downs Irrigation Cooperative Association Limited v The National Bank of Australasia Limited,[3] Connolly J, who wrote the decision of the majority of the Court of Appeal, held that in a trial, if there are issues where the burden of proof falls upon the defendant and others on the plaintiff, then the plaintiff is not required to lead evidence in its case on these matters where the burden of proof of which falls upon the defendant. Once the defendant has given evidence on those matters, the plaintiff is entitled to adduce rebuttal evidence in answer to the defendant’s case. This is a right in the plaintiff and the usual rules about seeking the leave of the Court (in the exercise of its discretion) to adduce rebuttal evidence do not apply. On my reading of the authorities, the discussion of Connolly J sets out the principles that are to be applied in this case.
[3] (1983) Qd R 130, 130-135.
There is one matter of some controversy here. In this case, the plaintiff did not give any notice at the close of his case that he intended to call rebuttal evidence. He also contended that he was not under any obligation to give such notice.
In his judgment in dissent, Thomas J in Downs Irrigation considered that in this situation, no party has a right to call rebuttal evidence or any right to reserve the right to call rebuttal evidence upon a defendant’s issues. In holding that view, Thomas J was in dissent (see page 140). At the same time, his Honour held that as a matter of practice and not as a matter of legal principle, where a plaintiff desires to reserve the right to call evidence in answer to a defendant’s issue, he should disclose that intention to the Court before finally closing his case so that the Judge may decide upon the preferable course (at page 142 B-C). The majority held that the trial Judge should be careful to avoid a party such as the plaintiff here splitting his case (at page 138 E-G). Connolly J concluded that (inferentially) once notice has been given by the plaintiff’s counsel of an intention to lead evidence in rebuttal, then it would be a matter for the trial Judge to rule on that topic at the end of the plaintiff’s case. Implicitly at least, the majority assumed that notice of the intention would be given to the trial Judge at the close of the plaintiff’s case. This accords with the more strident view of Thomas J. Both views suggest that this is a matter of practice, not legal principle.
Be that as it may, I think it should be a matter of invariable practice that notice is given by the plaintiff at the close of the plaintiff’s case of an intention to lead rebuttal evidence, so that such a practice becomes indistinguishable from principle. The reasons are obvious enough – both the Court and the defendant are fully informed as a matter of fairness of the matters about which rebuttal evidence will be sought to be led from prior to the defendant’s case beginning. The Court will then be aware of issues about a party potentially splitting its case from the outset, and defendants would then be in a position to object to evidence led in rebuttal.
Here, the plaintiff did not give notice of his intention to lead evidence in rebuttal at the close of his case. In my opinion, as a matter of practice, the plaintiff should have given notice of his intention; by failing to do so, some unfairness was occasioned to the defendants. I formed the view that such unfairness was not sufficient for me to exercise any supervisory jurisdiction over the plaintiff. I allowed the plaintiff to lead evidence in rebuttal on only one topic, namely the resulting trust issue. The result was that some of the cross examination of the defendants on collateral issues fell within the principle of the finality of the answers of the defendants (in cross examination). That was a position that must have been in the contemplation of a plaintiff at the time of his election. It was a risk that he was necessarily prepared to take.
The facts
The plaintiff John Craig, was born in Glasgow Scotland in 1922. He is 93 years of age. The plaintiff’s late wife Wanda was born in Poland in 1916. They met in 1945 while the plaintiff was serving in the British army in Germany. They married in 1947 and then lived in Scotland. The plaintiff reenlisted in the British army and served in Germany, North Africa, Borneo and then the family moved to Australia where they settled in Adelaide in 1966.
At that time they purchased a property in Prospect. It was a typical bungalow style house which was in original condition. It was on a large block with a large garden. The kitchen and wet areas of the house had not been renovated. There was an outside toilet accessed from the back door and across the back porch area.
There are three children of the marriage, George born 3 August 1948, Konrad and Ronald born 10 December 1955. The first language of George was Polish and he spoke both Polish and English to his mother as did the plaintiff Ronald. The plaintiff and his wife spoke fluent Polish and German. Wanda passed away in 1997.
The defendants called evidence from three witnesses, Ronald and Sharon Craig, and George Craig. Ronald and his wife Sharon purchased a home at Hallett Cove as their first home. Later they bought a vacant block of land in the same area as an investment and they were considering developing that block for a new home. In 1984 they were looking to move into the next price bracket of housing according to the evidence of Sharon, which I accept. Up to that time, Sharon worked as a nurse at Parkwynd Hospital and Ronald worked in the northern suburbs. Both of them had considerable contact with Wanda at the Prospect home at that time. Ronald would take evening meals there several times per week. Sharon would spend time there regularly in between split shifts at the hospital where she worked as a nurse. A close relationship between the three of them was maintained throughout this time. At the same time, it appears that Ronald’s siblings, George and Konrad spent some time living overseas. Konrad later married in the U.K.
John was employed full time as a meat inspector but was very heavily involved in union activities as a State secretary, especially in 1984. In 1984, there was a prosecution of 22 meat inspectors arising from events that were centred in the Northern Territory. The position held by John was honorary and it fell to him to arrange for solicitors and counsel to be appointed and to make all necessary arrangements for the representation of the union members.
At the time of the sale of the Prospect property and the purchase of the Glandore property, John Craig was largely absent from the home environment as he had to fulfil his work obligations as well as to attend to his union duties. The impression that I formed from the evidence was that he was assiduous in attending to his obligations for the union. These were difficult times for some of the union members. Consistent with that position, the defendants said that in their dealings, they largely dealt with Wanda as John was absent.
As English was not Wanda’s first language, and as she apparently comprehended the English language better than she could speak the language, she spoke predominantly in Polish and used some English intermittently. George only spoke Polish to his mother. I have taken into account the possibility of some miscommunication between the defendants, Wanda and John about the arrangements concerning the property. Having done so, I am satisfied from the evidence that Ronald and Sharon had a clear understanding of Wanda’s requirements and wishes.
The defendants’ evidence is that Wanda wished to live closer to her children, all of whom live south of the Adelaide CBD. This had been raised by Wanda from about 1982.[4] There were several reasons. By that time, Wanda’s health had started to fail. She was then 68 years of age and suffered arthritic and other conditions that were becoming increasingly debilitating for her. The house at Prospect was not renovated. It had an outside toilet that was accessed from the rear door; it was some 8 metres or so from the rear door. The bathroom did not have a walk-in shower and there was a shower over a stand alone bathtub.
[4] T58.3.
The possibility of moving into more modern smaller accommodation was very attractive to Wanda. So also was the fact that she would have family close by to her. Wanda made it clear to Ronald and Sharon that she wished to live close to her family. Implicitly at least, Wanda was aware of her disabilities and her needs and what may be necessary in the future to cater for those needs.
At the urging of Wanda, and with the agreement of the plaintiff, Ronald started to look for suitable properties that they could each occupy. It was implicit that each of them would have to sell their existing residences to pay for the new property. This was in the background of Sharon saying that the defendants were considering moving up a price bracket in housing. Therefore, it was also implicit that there would be a pooling of funds from both sides.
It was left to the defendants to find suitable premises. Wanda could not do so and John was busy with his own obligations and he had little or no time. Ronald and Sharon identified one property at Cross Road which, though large, was inspected by the parties and was thought to be unsuitable. John does not recall inspecting this property. I am satisfied on the evidence that he did so and that his memory on the issue is not reliable. I think that he has now forgotten what occurred. I am satisfied that the four of them, John, Wanda, Ronald and Sharon made the decision not to go ahead with any further investigation of the Cross Road property.
Following that, the defendants became aware through a real estate friend of Sharon’s of the Glandore property. It was for sale. It was a property on one Certificate of Title comprising two detached homes, one larger than the other. This was an ideal structure physically for the parties; the parents could occupy the smaller dwelling and the defendants who intended to enlarge their family could occupy the larger dwelling. In order to generate the purchase price, the defendants would need to sell both their properties and the plaintiff and Wanda would need to sell the Prospect property.[5] The evidence discloses that all of the participants accepted this outcome and no other possibility was considered. This is what occurred.
[5] T54.27.
When each of the witnesses gave their evidence, they were each trying to recall events that had occurred between 1982 and 1984. It could not reasonably be expected that any of the parties would have completely reliable memories of what actually occurred at the time. As a result, there was some degree of reconstruction by all of the witnesses. Although he is an obviously intelligent and comparatively alert man, the plaintiff’s memory has suffered worst from the passage of time. He has a number of ailments that have been with him for some time, including his faulty hearing. There is no evidence of the period over which this hearing deteriorated. The plaintiff was a member of the British army service for a very long time in many theatres of operation.
In the evidence, a number of issues became clearer over time. Wanda was the matriarch of the family and wanted to live closer to her children for a number of interrelated reasons: her health, the proximity of one of her sons to her at all times (including his family); the proximity of Ronald’s wife and later their children living next door to her; the availability of familial help when required; the long absences from home of John, familial company and reassurance. These are qualities, circumstances and interests that are intangible in part. They do form part of the background of the events in this action. It is important to understand that a distinction is to be made between matters of usual love and affection arising between family members and background matters that inform the arrangements that people make. The former is ordinarily central to a family relationship where elderly and infirmed parents are provided with an increasingly high level of care by their children and extended families. The provision of such care would not usually involve the displacement of the presumption of, for example, a resulting trust or ‘contra indicate’ the declaration of a constructive trust. There are exceptions to that position.
Those circumstances are to be distinguished from a position where parties who are family members actively participate in a particular transaction whilst having an identifiable intention and purpose in mind. The transaction or its end result provides to them a benefit which is not otherwise immediately attainable by them and where there may otherwise exist a time imperative. I have kept this in mind when considering the proven facts in this matter.
It is clear in this matter that very little thought was given by the parties jointly to the formal arrangements that might be made about the registered proprietors of this property. The defendants gave evidence that they would not have entered into the transaction if the plaintiff and his wife Wanda had wished to become registered as proprietors. But there is no evidence that the parties ever sat down and discussed the matter. The defendants became the registered proprietors and nothing appears to have been spoken of about that situation. This is a peculiarity for a number of reasons. In the sale of the Prospect property, the plaintiff and Wanda were represented by the firm of solicitors Piper, Bakewell and Piper. It may well be that this firm acted for both sides of that transaction. There is no evidence one way or the other on this point. That firm behaved as if the plaintiff and his wife were the clients. That firm attended to all of the necessary conveyancing arrangements: discharge of rates and utilities; dealing with the transfer; advice to council and Government departments and preparation of a settlement statement. Implicitly at least, the plaintiff and his wife were aware of the process of the transfer of the Prospect property and all that that process required. This is how they generated an amount of money, $70,000 of which went to the purchase of the Glandore property which Ronald says was a gift. The plaintiff was aware of his status as a co-registered proprietor of the Prospect land. He was also aware of what was required to transfer that interest to another party. By extension, he knew what was required to become a registered proprietor of the Glandore property.
In May 2006, the plaintiff signed a transfer and mortgage documents to become a co-registered proprietor and a co-mortgagor with his son Konrad of the property more commonly described as 135 Black Road Flagstaff Hill. Although the plaintiff disclaimed any knowledge of that status at the time, he was aware of that status later. I am satisfied on all the evidence that in 2006, John was aware of what arrangements were being made in respect of that property and, by effluxion of time, and his age, he has forgotten those things. This is another of the many examples of John’s failed and failing memory.
The plaintiff and his wife had professional help at the time of the sale of the Prospect property. He signed a transfer for that transaction but not for Glandore. He had no subsisting mortgage on Prospect but he knew from the outset that the defendants had registered a mortgage over the title at Glandore to secure a borrowing of at least $50,000. This enabled them to contribute some $90,000 to the purchase price and to pay all of the costs associated with the transfer, including stamp duty. The plaintiff did not receive any settlement statement for the Glandore property and he took no part in the arrangements for the selection of that property for purchase. All of that activity was done by Wanda. When a comparison is made between this involvement of the plaintiff and his wife in the sale of Prospect when compared with the absence of any involvement of them in the purchase of the Glandore property, a quite stark contrast emerges.
It is apparent that something different happened in connection with the Glandore property or at the least some different arrangements were made that did not require the active involvement of John and Wanda. Part of that is referrable to the fact that at the time, John was almost completely involved in his work and in his union duties both in South Australia and the Northern Territory. There is no evidence to suggest that he could do or did do all of those things as well as make the arrangements for the purchase and transfer of Glandore. All of that was left to the defendants. There appear to have been some conversations between the defendants and the plaintiff and Wanda at the time but it appears the majority of the conversations occurred between Wanda and the defendants. It is apparent that John left to Wanda the task of making the arrangements about the Glandore property purchase. There is no evidence that he gave any directions to the solicitors about the disposition of the purchase price paid for the Prospect Property. There is evidence that Wanda had earmarked the sum of $14,000 (from that consideration paid) for her own purposes. It is also apparent that Wanda (and so also John) left the task of finding and the arranging for the purchase of a suitable property to Ronald and Sharon Craig.
The first defendant Ronald was left to negotiate the purchase of the Glandore property.[6] The plaintiff and his wife had no input to that process. In that period, the defendants say that they understood from what was said to them by Wanda and John that the plaintiff and Wanda were providing a gift for the purchase of Glandore in the sum of $70,000 in consideration of allowing the following: allowing John and Wanda to live in the smaller unit rent free for life;[7] that the outgoings on the property would be paid by the defendants including utilities; and that the defendants would be responsible for all mortgage payments arising under any borrowings secured by mortgage over the property.
[6] T56.6, T56.8.
[7] T56.
There is little doubt that in conversations between them, Wanda said to Ronald and Sharon that she and John intended give the sum of $70,000.[8] The issue is what objectively is the meaning of that statement and its legal effect. For example, is it to be said that in so saying she legally intended to make a gift to Ronald or Ronald and Sharon. There is no evidence that she would have understood the difference in saying that she would give an amount of money to them and saying that she gifted the money to them without recourse. The evidence is that Wanda’s first language was Polish and she used that language regularly in her dealings with her sons. It is necessary in those circumstances to exercise particular care in making an assessment of what was said by Wanda to the defendants and what objective meaning may be derived from the statements that I accept that she made. The statements made by Wanda must be assessed in the whole of the background circumstances of this case. It will be necessary to make any finding in this regard upon a firmer than usual foundation of fact having regard to these circumstances.
[8] T55.
I am satisfied on the whole of the evidence that Wanda made the statement i.e. we will give you the sum of $70,000 from the Prospect house sale. She always intended to keep the balance. I am also satisfied on the evidence that Wanda made that statement in the circumstances of the quite fluid nature of the arrangements between the parties. An important feature of that background is that Wanda wished to benefit all of her children. There is no suggestion in the evidence that Wanda would have behaved otherwise. I am satisfied that when Wanda made that statement she genuinely intended to gift that fund to her son (and by extension, daughter in law) for the express purpose of binding them to an arrangement under which they would purchase the Glandore property and they would provide all the support services and advantages to she and John as they both aged. This was important to her because of her health issues; she was 6 years older than John.
There is also another countervailing consideration here. There was no discussion at the time about what would be the position once both Wanda and John died and whether the defendants would be forced, for example, to sell the Glandore property in the administration of their deceased estates. None of these issues were discussed at the time. The defendants gave evidence that they were concerned about this potential issue and the reaction of George and Konrad to these arrangements. They said that they both received assurances from Wanda that the brothers would be looked after by their parents.[9]
[9] T57.
Ronald was conscious of the possibility of an adverse reaction by his brothers to this arrangement. He specifically raised the issue with Wanda that there may be an adverse reaction to the possible view of his brothers that he was receiving favoured treatment and that this may upset family stability. He received sufficient assurances from Wanda to allay his concern. There are a number of features here. The fact that the question was asked emphasises the nature of the transaction. Ronald would not have needed to raise the matter if the implied or apparent intention was for John or Wanda to become registered proprietors of the Glandore land. Conversely, the comfort given to Ronald by the statements of Wanda were sufficient to obviate his concerns, and Wanda said sufficient to Ronald, to identify the intention of the plaintiff and she about the transaction. There is no evidence from John that he discussed these matters with Wanda. That absence of memory is attributable as much as anything to John’s loss of memory. I am unable to accept that John and Wanda would not have discussed some or all of these matters, even if only at the most superficial level. John and Wanda had been assisted by a firm of solicitors to act on the conveyance of the Prospect home and it is not reasonable to suggest that the Glandore transaction occurred without any active participation of John and Wanda. I am satisfied that John was aware of what was being discussed between Ronald and Wanda and that he agreed with the proposals. I accept the evidence of Sharon that the agreements made occurred during discussions of the four of them: John, Wanda, Ronald and Sharon.[10]
[10] T197.33.
The defendant Ronald also raised concerns about the fact that the majority of the discussions were with Wanda. John and Wanda were entering into this relationship with the defendants. On the occasions when this situation arose, Wanda said that the defendants should leave John to her, that she would talk to him.[11] This evidence of the defendants does elevate the status of these discussions into a different level of importance. Implicitly, the defendants were concerned that the arrangements for Glandore were being made largely in the absence of John. There was no formality involved, including any formal recording of the arrangements.
[11] T56.34.
John knew the importance of properly recording arrangements made. This was his evidence. He was in the throes of formally dealing with the Prospect property. The concern of Wanda was that arrangements be made to ensure a balance for the other brothers of Ronald, namely George and Konrad.
John and Wanda were typical middle class people. John was a salary earner and Wanda did a small amount of paid work but it was not of any significance. Wanda’s principal role was in the home as a homemaker and parent. The couple owned one car largely driven by John; they did not own a holiday home, and as most families in that position, had learnt to survive day to day. By their sacrifices they were able to educate their sons at a private school.
John had served in the British army for a long period of time: he had an entitlement to a pension arising from that service. Implicitly, he also had other pension entitlements, including a Comcare pension arising from a work injury; the other pensions may have been related to injuries received in service but there is insufficient evidence on that topic to make a finding one way or the other. What is clear is that in 2006/2007, John Craig had a fund set aside in Scotland in the amount of £30,000 that he could provide to Konrad to assist Konrad to avoid bankruptcy. It therefore was the case that the plaintiff and Wanda had the benefit of a repository of funds in Scotland accumulated over some unascertained period of time. There is no evidence of the history of this fund and when it was accumulated. I do not need to make a finding on that matter. The position is that implicitly at least, Wanda had some understanding of the existence of the fund and so it may be assumed that there was some basis for her saying that all of her sons would be looked after in light of the fact that most of the value of the house asset was given to one of her sons.
Entirely unrelated to that money held by John in a bank account in Scotland, in about 1986-7 the plaintiff also received an injury compensation payment, the surplus of which he divided equally amongst his sons in two tranches, one of $20,000 and the other of $12,000. The plaintiff said that his intention was to assist his sons pay off their mortgages. He knew that Ronald and Sharon had registered a mortgage over the Glandore land. After this payment, he appears to have made no enquiry about whether that mortgage was discharged. On one view, this might appear to be a reasonable enquiry to have been made by John in light of the effluxion of time between the grant of the mortgage and the payment made. Conversely, he may have assumed that his intention for the money was fulfilled but there was no evidence from Ronald that this intention was communicated to him.
Another matter is quite clear: that Wanda was a very generous woman who had the welfare of her family at the forefront of her mind. Because she was intrinsically involved in the process of the transaction for the purchase of the Glandore property, the greater likelihood is that she was the person who could most be relied upon to reflect the attitude of her and the plaintiff about the purchase of that property. There was no evidence led from the plaintiff of any conversation with Wanda about the arrangements for the purchase of the property. The plaintiff gave evidence that when the $70,000 was handed over to Ronald and Sharon, he intended that he and Wanda were buying half of the property. There is no evidence that such a wish or intention was ever communicated to Ronald and Sharon. It would be a peculiar development for John to have had that intention but not to have communicated it to his children. At the time of the transaction, the greater likelihood is that any expectation or intention that he had were matters that he would have discussed with Wanda. There is no force in the suggestion that the plaintiff made his views known to the defendants. Such a circumstance would raise the possibility that the defendants ignored the plaintiff’s request and ensured that they were registered as the proprietors of the Glandore property to the exclusion of John and Wanda. Such a suggestion is in the face of the evidence and of plain common sense.
The greater likelihood is that the topic was the subject of discussion between Wanda and John. It is unknown what may have been decided between them in such conversations. The issue for me is, as a matter of inference, to discern from the facts what the consequence of those conversations may have been. In so deciding, it is necessary to consider the evidence of George, which in my opinion, assists in ascertaining and better understanding the attitude of Wanda at the time.
The evidence of George Craig
George is the eldest of the three Craig children. George gave evidence that he lived away from Australia for a period of time.[12] He worked for one of his cousins in an electronics business in South Africa. He met his future wife while he worked there. They did not enjoying their experiences in South Africa and decided to return to Australia. When George returned, he lived with his parents at Prospect. He and his wife then married, they initially lived at Glenelg and then purchased a property at Trott Park where they built a home.[13]
[12] T170.16-17.
[13] T170.19-22.
George was very close to his mother. He always spoke Polish with her. He said that his father was away working a lot and his mother was, to a greater extent, alone in Adelaide. He maintained a close and loving relationship with Wanda.
George said that when he returned to live with his parents was about the time that the Glandore property was purchased in 1984.[14] He said that his mother constantly discussed with him the arrangements that she and John were making. It appears that Wanda was using George as something of a ‘sounding board’ and may well have been looking to see what his reaction was to the issues and suggestions that she was making. He recalled her telling him that she wanted to live closer to family and that Prospect was really a bit far from the family.[15] She told him that she and the plaintiff were thinking about selling the house because the garden was too big, the shower arrangements were inadequate and the house was just not suitable for her anymore.[16] George was aware of the deficiencies in the Prospect home because of the lack of renovation. He was aware of the increasing frailty of his mother’s health.
[14] T170.38-T171.1.
[15] T171.27-31.
[16] T171.31-36.
Wanda asked him whether he would have any objections if she and John moved out of the Prospect property, sold it and went to live with Ronald and Sharon.[17] He understood that conversation to mean that she was asking him permission to give some money to Ronald and Sharon to enable them to buy another property where the plaintiff and she could live. This was his surmise from everything that was said to him. George could not now recall the precise sequence of the conversations and the topics discussed. He can recall the overall impression created in his mind that these were the arrangements being made. His mother Wanda appears to have wanted to be sure that he would raise no objection to the proposal. George obviously had some interest in what his parents were thinking of doing with their assets. His response was that he would be happy with any arrangements that she made if it meant that she was happy and able to live comfortably.[18]
[17] T171.36-T172.4.
[18] T172.4-10.
In one of those conversations, Wanda told George that it was her and the plaintiff’s intention to give $70,000 to Ronald (and Sharon).[19] It was in that context, that he was asked whether or not he would have any objection to such an arrangement being made. He told her that if that arrangement was made, he would not be upset by missing out on anything being given to him from the Prospect property if it made her happy and kept her comfortable. His understanding from what was said to him was that his parents were making a gift of this money to his brother and he was being asked if he wanted to make any objection or had any objection to such an arrangement. In everyday life, this is a conversation that foreseeably will occur where parents must deal with multiple siblings. Wanda was demonstrably a loving parent and she would likely have been alert to such issues. It was apparent that the intention was to provide some benefit to one of the siblings. The reaction of the others was obviously and naturally important to her.
[19] T172.29-32.
George said that he did not ever discuss that topic with his father. He had no discussions with his father about the concept of any gift to Ronald. His only further involvement in the matter was in 1984, at the time of the purchase of the Glandore property where, he helped his parents move from the house at Prospect to Glandore.[20] At that time, he was not present at any discussion when any aspects of the finance of the Glandore property arose. In the years that followed, he had no discussions with his father that indicated or implied to him that his father and Wanda were registered as proprietors of the Glandore property.
[20] T174.14-15.
George does recall that at the time that the property was purchased, he was told by his mother that he should not be concerned about the fact that they were giving $70,000 to Ronald under this arrangement because she said that none of the brothers would suffer and that they would all be looked after.[21] He was very much in favour of the arrangement that his parents would live next to Ronald and Sharon for safety and health reasons.[22] He raised no objections to a gift being given to Ronald. On a number of occasions between 1984 and 1997, his mother expressed to him her pleasure at living at Glandore so that she could have company, be close to her grandchildren who were born during that time, and so that she could get assistance in the home.[23] This was important to George, because at least at the time in 1984, he had no reason to believe that his father would be any less busy in his employment or into the foreseeable future. That position changed in 1986-7 because John was forced to retire from work after a work injury.
[21] T176.8-14.
[22] T176.16-17.
[23] T176.24-28.
In my opinion, the evidence given by George on this topic was both reliable and credible. A significant attack was made by the plaintiff upon the evidence of George. I am unable to accept the criticisms made by the plaintiff of George’s evidence. In my opinion, the evidence was both cogent, credible and reliable. I accept his evidence. The plaintiff’s attack on the credibility of George was misplaced.
The evidence given by George is consistent with the characterisation of the position that I have previously described. Wanda appears to have been the dominant spouse in the dealings with the property owned jointly with John. It may also be assumed that John was aware of this situation and was prepared to allow it to continue due to his long absences with other responsibilities. It may also be safely assumed that Wanda was aware of any other asset in the control of herself, John or both of them. I accept that she announced to two of her sons in apparently different circumstances, that despite the benefit given to Ronald that was demonstrably disproportionate, the other brothers would be taken care of by John and Wanda. This form of expression carries many different meanings but it appears at least to have been an attempt by her to give comfort in circumstances where resentment may arise. Family relationships are very often the genesis of feelings of resentment where one sibling appears to have been preferred by parents.
Wanda attempted to assuage such feelings. She reassured Ronald and George who were both receptive to what she was saying. The focus of George was slightly different. His first thought appears to have been about his mother’s welfare. He was satisfied with the proposed arrangements if his mother was happy because she was safe and comfortable, living with and close to family members and was supported by them. He was aware of the deficiencies of the house at Prospect and the increasing dependence of Wanda. John was also aware of these matters. Despite his awareness, he does not appear to have been prepared to expend funds on correcting those problems such as renovating the wet areas or in doing something as simple as getting in a gardener for the house.
The attitude of George was thus slightly more egalitarian than Ronald. Ronald appears to have had a more self interested approach to potential consequences of what he understood to be his parents’ willingness to provide a benefit to him by the provision of $70,000 to the purchase price of Glandore.
The evidence of John Craig
There is no evidence from John about what he recalled actually happening in 1984. At one level this is completely understandable because these events happened over 30 years ago and memories fade. The state of the evidence is that the $70,000 was provided, the Glandore transaction occurred and John and Wanda made some immediate changes to 35A including installing air-conditioning but Ronald paid for the carport. John and Wanda knew of the registered mortgage on the whole of the property but they were not asked to sign any documents as if they were a mortgagor(s). Subject to some other matters that I will mention later, that is the way things stayed until 1997 when Wanda passed away, and then until 2008.
After 1984 no correspondence was received by John and Wanda consistent with them ordinarily holding a registered interest as a proprietor in a property: e.g. rates, utilities and other like impost notices. These are the unavoidable certainties of property ownership. Nothing was said or discussed about property ownership. Wanda was alert to the financial circumstances of Ronald and Sharon, particularly because Ronald was retrenched twice in the period between 1990 and 1995 and I will deal with that aspect later.
At a different level, it is a little surprising that John did not know what had transpired in 1984. The solicitors Piper, Bakewell and Piper were retained to act as conveyancers of the Prospect property. There seems no reason for that firm to have been acted in that transaction but not to have been retained by John to act in the Glandore transaction if there was to be any participation by John and Wanda as persons about to become owners of an indefeasible interest in that property. One explanation may be that he did not wish to use two conveyancers if Ronald had already selected a conveyancer. That may be the case, but it does not explain why John did not make some enquiry about why he had no involvement in that transaction, such as signing a transfer or consenting to the giving of a mortgage to the Bank.
In the correspondence sent by solicitors on behalf of John to the defendants on 20 February 2008[24] the solicitors said as follows:-
“Our client instructs us that in 1984 he and his wife sold their house at 14 Stuart Road Prospect for the sum of $88,000 or thereabouts.
We are instructed that a plan was made for the two of you and our client and his wife to purchase together the property at 35 and 35A Glengyle Terrace Glandore.
We understand that the property was purchased for the sum of $155,000 or thereabouts and that our client and his wife contributed one half of the purchase price.
We are instructed that our client and his wife resided in one part of the property and you have resided in the other part.
Our client instructs us that he was surprised to discover that he and his wife were not ever registered as the proprietors of an estate in the property, but instead, the property was registered only in your names.”
[24] Exhibit P1 page31-32.
There is no evidence of the plan of joint purchase referred to in this letter and I will leave that to one side. The letter suggests that John was surprised. In his evidence, John volunteered that he became aware in 1997, at the time that Wanda passed away, that he and his wife were not the registered as two of the proprietors of the Glandore property.[25] There are likely to be only two sources of that information. The first is that of a family member advising him of the fact in any number of possible factual contexts depending on which family member provided the information. The second is in a more formal sense, where advice is received from a professional person upon enquiry. One possibility is, for example, an enquiry about the registration of the death of Wanda on the title to facilitate the rules of survivorship operating. There is no evidence to this effect, and to the contrary, the evidence suggests that no effort was made to even enquire about those matters. Nothing was done. All that is known is that in 1997, John learned that he and Wanda were not registered as the proprietors of an interest in the Glandore land. Having learnt that fact, John did nothing for eleven years. He gave no explanation for this failure, and on a number of levels, this is peculiar based on the plaintiff’s own case.
[25] T289.29-38.
In the usual course, time must be allowed for John to go through the grieving process at the loss of his wife after 50 years of marriage. There is no evidence of the effect that such grief had upon him. There is no evidence to suggest that his grief now overwhelms his memory. As would be expected for a man of his years, John was unable to give real detail when giving his evidence. He was very forgetful. Consistent with that position, it appears that in 2008 (when the solicitors letter recorded his surprise) John had forgotten that he had learned in 1997 that he was not a registered proprietor of the property and had never been so registered. His memory had quite apparently failed him. His initial evidence was that he learned this fact before 1997. He later said that he must have learned these facts after his wife’s death.[26] There are other examples of his faulty and frail memory. He is a man of almost 93 years.
[26] Compare T289.37 and T290.22.
Again, I think he was confused about the precise date, but what is clear is that he learned these facts, some 11 years earlier and he still did nothing about it until the letter of 2008. I am unable to accept any suggestion that he was somehow overborne in his will (unconscionably), that he was vulnerable, that he was unable to raise the issue earlier and that he could not look after his own affairs. The greater likelihood is that he did nothing about the situation because the status quo ante at that time was the correct legal position or that he accepted it as the correct legal position, bound as he was by the arrangements that Wanda had made.
In the period between 2007 or thereabouts and 2012, Konrad borrowed the sum of $75,000 from his brother George. By this time, George’s wife had passed away. George mortgaged his home property at Trott Park to lend this money to Konrad. No security was taken by George to secure this loan. Konrad is now an undischarged bankrupt and the debt owed by Konrad to George falls into the bankrupt estate of Konrad.[27]
[27] T175.
On 6 September 2012 and apparently after Konrad became bankrupt, Konrad made a statutory declaration in the following terms:-
“I Konrad John Craig… do solemnly and sincerely declare that… I hereby am receiving a loan from George… Craig… for the sum of $75,000 which is to pay my bankruptcy debt. This loan (inclusive of costs) will be paid back in full with interest to George after I pay my bankruptcy and obtain my home at 135 Black Road Flagstaff Hill SA 5159 back, until the loan is repaid in full I shall pay monthly interest for the loan of $75,000 at the same rate incurred by George. The repayment of the debt to George will be either by selling my home or refinancing at my cost, within 12 months of receiving the loan…”
It is unnecessary for me here to comment upon the enforceability of this document. The evidence is that prior to this time John had also given Konrad $32,000 from his insurance payout, as well as the equivalent of about $73,000 (the conversion of £30,000) and he had also received a further $75,000 from George. John suggested in his evidence that George had not provided the full $75,000 to Konrad This was not a proposition put by his counsel in cross examination and I think it is another matter where John’s memory has failed him and he is quite mistaken. At the same time in evidence, John made some quite disparaging comments about George and questioning George’s mental competence. This evidence given by John was not responsive to a question from his counsel. It occurred in response to a clarifying question from me and was spontaneous.[28] There was some vehemence in these comments and this was a little surprising. The context was the arrangements made by George to lend to Konrad $75,000, acknowledged by Konrad in writing and that ultimately was not repaid. It was unclear what had been the genesis of this vehemence, but I am satisfied on the evidence that it was wrong and completely misplaced. It is sufficient to say that Konrad has signed the agreement acknowledging the receipt of the sum of $75,000 from George.
[28] T241.15.
Konrad had previously also received money or monies from Wanda. After 1984 and the date is uncertain but I need not make a finding about it, Wanda paid a large proportion of the costs of Konrad’s marriage in England, the cost of his wife’s wedding dress[29] and a HECS debt of $6,000.
[29] T263.7-15.
Konrad and John purchased a property at 135 Black Road, Flagstaff Hill in their joint names under a transfer dated 1 May 2006. It is to be expected that the contract for the purchase of the property in the names of the purchasers would have been executed some time in March or April 2006.
John did not recall that he had become a purchaser of the Black Road Flagstaff Hill property and he therefore did not obtain an understanding that he had become an owner of the property.[30] The purchase price was $282,500. John and Konrad, as mortgagors gave, to Perpetual Trustees Victoria Limited as mortgagee, a mortgage over the property to secure a loan of $273,575.52. John did not recall this mortgage, although he accepted that he had signed the transfer and the mortgage.
[30] T254.8-31.
In time there was a default on this mortgage. John did not understand nor did he recall that he was, with Konrad, jointly responsible under the contract of debt recorded in the mortgage. John did not recall or know of the proceedings taken by the mortgagee for possession of the property upon default. He has no recollection now of having been served with the relevant documents preparatory to a claim being made for vacant possession and mortgagee sale.[31] It is beyond doubt that he was served with all of those documents. He has no recollection now of the service of those documents upon him. Again, his memory has failed him on those matters. He does know that the Flagstaff Hill property was sold to the girlfriend of Konrad, implicitly to pay out the mortgage and so avoid the mortgagee sale. John now rents the property with Konrad from Konrad’s girlfriend. The total rental is some $300 or so per week. I have assumed that John only pays a portion of this sum as he is only one of the renters of the property.
[31] T272.31-T273.3.
I have received this evidence in the trial and I have recited all of these facts for one main and one subsidiary purpose. The main purpose is to demonstrate the failed and failing memory of John. He is not able to recall transactions into which he entered some 7 or 8 years ago. He has no recollection of the mortgage given to Perpetual Trustees. He has no recollection of receiving any information about the default on the mortgage nor the intention of the mortgagee to take possession of the property and sell it by mortgagee sale. He clearly had no understanding that on the contract of debt recorded within the mortgage (and, in the usual course in any commercial transaction, in a document of loan as between the borrowers and the mortgagee) he was jointly responsible with Konrad to repay the debt and any residue of debt in the event that there was a shortfall upon the mortgagee sale of a property. He had no knowledge or recollection of the fact that he would have been the person primarily liable in respect of that shortfall as Konrad had become an undischarged bankrupt. Potentially, John was in a very precarious position under these arrangements. He had no knowledge of that position or his exposure as a borrower.
The subsidiary purpose is to demonstrate that John has entered into transactions jointly with his son Konrad that he did not understand or comprehend. On one possible scenario, on the bankruptcy of Konrad and where there was a shortfall on the mortgagee sale, John would have been the person primarily liable to discharge the balance of the debt to the mortgagee. John knew nothing of this and my observation of him whilst giving evidence was that he could barely contemplate that possibility. The very obvious implication also arises here: John left to one of his family members the tasks surrounding the entry by him into real estate transactions. He implicitly trusted Konrad to look after his interests in the Flagstaff Hill transactions. That is obvious enough. John did not comprehend the obligations he was undertaking by his signatures on the various documents. He certainly did not understand the seriousness of the matters arising on the documents that quite obviously were served upon him by the mortgagee. John did not suggest any subterfuge on the part of Konrad relating to this transaction. It is unnecessary that I consider that matter further. My assessment of John is that he was as much forgetful as he was confused. He was significantly confused about the issues connected with the Flagstaff Hill property purchase and mortgage.
I do not think that in 1984 John would have been as forgetful or as confused as he presents in 2015. In 1984, he was only 62 years of age. He was working in full time employment and he was fully occupied in his honorary duties as a union official. The evidence indicates that in 1984, John was extraordinarily busy with his work and his union duties.[32]I would not attribute to John in 1984, the same fundamental difficulties he had in comprehension of matters in 2015. There is a 31 year difference punctuated by the death of his wife Wanda. He lived alone from 1997 until about 2012.
[32] T229.22-23.
Although the position is quite different, it is the case that in 2006, John left to Konrad the arrangements to be made about the purchase of the property at Black Road, Flagstaff Hill. It could ordinarily be assumed that Konrad informed his father of the need to borrow almost the whole of the purchase price on that property, the need for the property to be secured by a registered mortgage and the liability of the mortgagors, John and Konrad on the mortgage. The absence of any understanding about those matters on the part of John is explicable by virtue of the fact that John trusted Konrad to attend to all of those arrangements and to ensure that his own interests were protected. The absence of John’s understanding of those matters in 2015 is attributable to his failed or failing memory. It would be quite extraordinary for him to have entered into those transactions in 2006 and not have at least some rudimentary knowledge of what was occurring.
The position in 1984 was different and I do accept that John would have been in far better command of his faculties at that time. Even so, on the evidence it is quite apparent that because of the other pressures upon him, John left to Wanda the responsibility for making the arrangements about the purchase of the Glandore property.[33] These are the arrangements made intra family. I accept the evidence of all witnesses that Wanda’s first language was Polish and that she spoke Polish only to her son George and mixed Polish and English to her son Ronald. The plaintiff is fluent in English, Polish and German. It could not be assumed that John did not have some involvement in the arrangements at least for the sale of the Prospect home because the firm of solicitors Piper, Bakewell and Piper acted as conveyancers. It is not known whether that firm also acted on behalf of the purchasers of the Prospect property. There is no evidence on the topic. However, it may be assumed that John attended to all of the arrangements necessary for the conveyance of the interest of himself and his wife in the Prospect property. However, because it appears to be the case that the transaction in relation to the Glandore property was happening at or about the same time, there is no evidence to suggest that John ensured the retainer of that firm of solicitors to act as conveyancers of the interest of John and Wanda in the property. Conversely, it would be expected that John may have decided not to retain separate solicitors because no doubt Ronald and Sharon would have retained conveyancers. That aspect of the matter does not point in one direction or another.
[33] T234.25-31.
These facts must also be viewed in the background of an essential fact that occurred in 1984. At that time John and Wanda transferred the sum of $70,000 from their control to the benefit of the vendor of the Glandore property. It does not matter how this may have been physically done. The transfer occurred and the sum involved was a very large proportion of the total assets of John and Wanda.
It is difficult to accept that John and Wanda would have transferred such a large amount of money to their son, in a way that may be described as laissez faire and without regard to any formal arrangements that the plaintiff now say he expected were being made. This would be a surprising development for John and Wanda to have had such a casual attitude to the disposal of such an important asset. I would not accept such a possibility.
On 20 February 2008, John caused a letter to be sent from his solicitors (the same solicitors retained by Konrad) to the defendants. I have earlier set out some of the paragraphs of the letter. The other paragraphs of the letter are also important. They read as follows:-
“Our client instructs us that over the years he has given you money to pay the rates and taxes assessed in respect of the property, and has made improvements to the property.
Our client takes the position that the two of you have held one undivided moiety in the subject property upon trust for him and his wife and that you now hold the undivided moiety upon trust for him.
At the very least our client would take the position that he is entitled at equity in some at present undefined interest in the subject property, having contributed one half of the purchase price for the same.
We are instructed to enquire if you are prepared to acknowledge that you hold one undivided moiety in the subject property upon trust for our client. If so, we would propose preparing a document to declare that trust.
If you do not accept our client’s position then our client has every intention of taking the matter further. Our client would prefer to resolve the matter by mediation rather than litigation… however this notice should not be regarded as any indication of unwillingness on our client’s part to resolve the matter without litigation.”
At the time this letter was sent, John was co-registered proprietor of the property at 135 Black Road, Flagstaff Hill. His proprietorship of that property had occurred without the knowledge of any other member of the family and in circumstances where, over time, John did not maintain a full understanding of the obligations upon him as mortgagor under a mortgage for almost the full amount of the purchase price of the property. The loan amount secured under the mortgage was in excess of 90% of the purchase price of the property. John appears to have had no involvement in the arrangements made for the securing of this level of finance and he left these arrangements to Konrad.
The evidence points largely in one direction, that John and Wanda would provide the sum of $70,000 to Ronald for use by him in the purchase of the Glandore property to provide the necessary accommodation for John and Wanda for their lives rent free and debt free. That obligation also included the provision of services such as water and power to the home, maintenance and upkeep.
The circumstances as they are known that surround the arrangements made between 1982 and 1984 indicate that the relevant conversations took place between Wanda and Ronald and that there was some involvement by John and Sharon. The evidence also discloses that Wanda’s focus was upon the equal treatment of all of her children. This in part explains the equal distribution of a portion of John’s compensation payout. That is consistent with what is known of Wanda’s approach. Even though George and Konrad were not providing the same benefit to them as did Ronald and his family after 1984, there was no reason to apportion that distribution any differently.
That is to be expected but that is also indicative of the intention of Wanda to treat her sons equally. It does not matter about what may become the reality, the issue for consideration is Wanda’s intention at the time which is on balance likely to be the intention of she and John.
There are a number of cogent reasons that disclose the intention of John and Wanda in 1984 to provide a gift of the sum of $70,000 to Ronald in 1984 so that they could, in turn, obtain the benefit that they sought in the provision of more modern accommodation with the added security of the proximity of family. They are:-
1.The facilities of the Prospect home were no longer suitable for the needs of Wanda without a renovation, particularly of the wet areas and the provision of an inside toilet.
2.The garden of the Prospect home was too large to be cared for by Wanda; implicitly it largely fell to Wanda to do the garden in John’s absence on his union duties.
3.John was increasingly absent from home because of the demands of his work and his union duties. There was no obvious sign of abatement of this position. John’s position was honorary and he took his role very seriously.
4.Wanda was 6 years older than John. Her health was failing and she suffered a number of maladies that required medical attention. At 68 years of age, she wished to be living close to family members for their company and especially their support.
5.Wanda wished to live in the same property as Ronald. She had been discussing that possibility from at least 1982; Wanda had been raising the proposal of she and John living together with Ronald and Sharon for a long period of time.
6.The burden of the task of finding suitable premises in which all could live, and with an eye to the enlargement of Ronald and Sharon’s family fell to Ronald. He made that search and identified one potential site on Cross Road that needed construction of a separate new premises for Wanda and John: they rejected this possible site for that reason.
7.Wanda and John placed the Prospect property on the open market and it sold for $84,000 before expenses. The greater likelihood is that John either retained the firm of solicitors Piper Bakewell & Piper to do the conveyancing or he allowed the purchaser to appoint that firm and it acted for both sides of the transaction. Another firm of solicitors, Lempriere Abbott McLeod acted for the union; it needs little imagination to suggest that if John was to appoint solicitors in the conveyancing of the Prospect property he would have used that firm.
8.The conveyancing of Prospect occurred and it required the execution of a number of documents including a transfer to finalise that task. John was fully aware of the necessity to formalise the transaction by the execution of documents – including as a minimum the contract of sale and the transfer. Because of Wanda’s language difficulties that fell to John.
9.Wanda wished to keep back a capital sum of somewhere between $10,000 and $14,000 from the sale of the Prospect property. As matters developed it is apparent how she wished to use these funds in the future.
10.Prior to the sale of Prospect, the Glandore property was identified. It was owned by a real estate agent friend of Sharon’s family. It was on the market and was to be sold by auction. Following the interest shown in the property, the listing was changed and the property was available for sale by private treaty. This change was negotiated by Ronald and Sharon.
11.Ronald and Sharon could not afford the purchase price of Glandore based upon their own capital resources and capacity to borrow at the time. In order to enter into the Glandore transaction, they needed to sell their Hallett Cove home and investment block to generate capital. They were then required to borrow a further $50,000 to make up the shortfall to about $90,000 that they contributed from their own resources. The net capital raised from their assets therefore was in the order of $40,000. A borrowing of some $120,000 to achieve the sum of $160,000 at the then current interest rates would have been beyond their financial resources.
12.At the time Ronald and Sharon had commenced looking at the possibility of moving into the next price bracket of homes. They were therefore considering increasing their borrowings (within acceptable limits). Those plans did not include the need to accommodate John and Wanda and then to be responsible for the care and costs of the burden of keeping them.
13.Ronald (and by extension Sharon) agreed with Wanda and John that they would go into the Glandore transaction. In doing so they agreed to provide accommodation to John and Wanda to pay for all rates, taxes and outgoings for the whole property, so that John and Wanda lived rent free and debt free. Part and parcel of that obligation was also to provide care and familial support to Wanda, then 68 years old and whose health had started to fail. Therefore the primary burden was to fall upon their shoulders. This was at a time when they were about to start their own family. Therefore Ronald and Sharon were prepared to then accept the debt onus and the higher responsibilities and the burdens of the Glandore transaction viewed as a whole.
14.There is no evidence that John and Wanda ever gave consideration to making the same arrangements with George and his wife or Konrad. It appears that sometime later, Konrad’s marriage had failed and he had returned to live in Australia.
15.There was no discussion of Wanda and John ever becoming the owner of an interest in the Glandore property. The focus of Wanda’s intention was to live in suitable accommodation with family, where she could obtain the support that she considered she required. The focus of her approach was to give Ronald the financial resources that he required to enter into this transaction. That financial resource had to be sufficient to allow Ronald and Sharon to assume a liability secured by mortgage that was at a level that they could manage.
16.At the same time Wanda assuaged a number of concerns: she assured Ronald that the giving of this money by his parents would not create a source of internecine sibling friction and jealousy that would or could become destructive. Implicitly Ronald understood that in this transaction he was receiving a benefit in preference to his brothers but that there would in the future be a balancing of that position. He was not aware how that would be achieved as, from what he knew, the Prospect property was his parents’ major asset. However that was a matter for his parents.
17.Wanda also assured Ronald that John Craig would agree to this proposition. Obviously enough Ronald had considered that John may not agree with Wanda’s wishes and that his view would prevail. This is a reasonable apprehension. John did not raise with Ronald (or Sharon) any objections to the arrangement made by Wanda.
18.There was then no involvement of John in any aspect of the transaction: the execution of the contract of sale; instructions to a conveyancer; procuring an insurance cover note until settlement; the execution of a transfer; the payment of the costs of stamping the transfer at ad valorem rates on a value (of $155,000); payment of costs of conveyancing such as General Registrations Office fees; agreeing to the registration of a mortgage on the certificate of title; payment of the costs of attendance of the mortgagee and other bank fees; attending to settlement; consent to the mortgagee holding the duplicate certificate of title until discharge of the security.
19.All of these tasks, obligations and payments were discharged by Ronald (and Sharon). John and Wanda took no part in the process even though they had just participated in the transfer of Prospect and had involvement with conveyancers, saw to the finalisation of settlement statements, executed transfers and were represented at settlement by an agent. Ronald (and Sharon) were then operating on their understanding of the position as it then existed.
20.In turn Ronald (and by natural inclusion Sharon) were required and obliged to do a number of things. They were obliged to make number 35A available to Ronald’s parents for life. They were required to maintain the property, pay rates, outgoings and other expenses on the property; pay for the utilities supplied into number 35A; pay for the cost of such things as a new carport, external and internal painting and other maintenance. At the same time Ronald, Sharon and their family were living with, but slightly independent of his parents: they were living in a state of proximity that they would not otherwise have contemplated and they were aware of the health issues of Wanda and her needs.
It is not to the point that some of those arrangements may have changed from time to time. I am satisfied that in the period between 1990 and 1995 and earlier, Wanda and John gave financial assistance to Ronald (and Sharon) because of the employment issues he experienced as well as other life exigencies. It is to be recalled that in 1990, South Australia experienced a most extraordinary downturn in economic conditions and activity due to a number of reasons, including the collapse of the State Bank and the rescue package of that Bank. In those times, contributions to rates and other costs were made. There was a contribution to the water bill. Before that time, it is apparent that there were also contributions to rates and water costs.
These payments do not affect the arrangements that were made in 1984. In the period post-1984, John and Wanda did not receive accounts for rates, power, water, and any other utilities. No emergency service levy accounts (when that levy was introduced) were delivered to number 35A. Apart from the accounts that they sought out and voluntarily paid, the situation as it subsisted at settlement in 1984 continued. It so subsisted for a period of 24 years and even after the 2008 letter from the solicitors, John maintained his assurance to Ronald and Sharon that there was nothing for them to be concerned about.
There are two other matters that need to be addressed. Earlier I identified that Wanda kept back some money from the settlement of the Prospect property. Some of that money appears to have been spent on travel. Implicitly the balance was spent on renovating the bathroom in number 35A to create a walk in shower, bathroom tiling and floor tiling elsewhere in the house. The plaintiff contended this action was consistent with aspects of ownership of a beneficial interest or was an improvement. I am unable to accept these submissions. John and Wanda were at liberty to make changes to the living arrangements in number 35A to suit themselves. For example, they also attempted to change a wall colour in a lounge room. These are matters for their own convenience; this includes the installation of an air conditioner. As the expression suggests, an improvement ordinarily is viewed as something that adds to the value of the premises. The renovation of a wet area in 1984 may well have had that effect; so also the installation of an air conditioner. For reasons already expressed by me, that is no longer the result some 31 years later. A realistic assessment must be made that takes into account the passage of time and the effect of use.
Findings
I am satisfied that the arrangements made in 1984 were that John and Wanda agreed to provide $70,000 to Ronald (and Sharon) as a gift for the purpose of the purchase of the Glandore property on the clear understanding that John and Wanda would occupy number 35A for their collective and separate lives. Ronald and Sharon were required to discharge the costs of holding those premises, the rates associated with it and the cost of utilities supplied to it. Any variation to those arrangements was voluntary and necessitated by circumstances. That is the situation that pertained until 2013, despite the letter of February 2008.
It follows that Sharon also has the benefit of the gift made, the promise and the agreements fulfilled. Her interest in the Glandore property is not merely a legal interest held beneficially for any other person. She holds a beneficial interest in that property.
I am conscious that these findings of fact largely contradict the assertions made by John about what occurred in the period between 1982-1984. I have made allowance where necessary for the failing of memories over time. I would be very sceptical of any witness who claimed to have a clear memory of what was said and done back then. I have also allowed for the fact that events do not happen in a linear sequence and that matters as important as this are discussed often and sometimes with different results. It is often the case that in family disputes about statements and promises there will be about diametrically opposed views. The reality is that when understandings are created within families, the arrangements are not repeated or reduced to writing and the Court is left to do the best that it can. In this type of case even when there is some repetition of a promise, memories will differ.[136]
[136] See Morton v Morton [1999] SASC 31.
I have formed the view that because of his age, the passage of time and other pressures upon him, John has now forgotten the arrangements that were made 31-33 years ago and some 24-26 years before he first raised any issue about the matters in 2008. I am satisfied that John Craig is not able to properly remember the arrangements that were made between 1982-84. I am also satisfied that the version of events put forward by the defendants is on balance correct even though a part of these findings are based upon inferences that I am prepared to draw from the available evidence. That is an approach that is open to me for the drawing of inferences is “an exercise of the ordinary powers of human reason in light of human experience”.[137]
[137] G v H (1994) 181 CLR 387 at 390 per Brennan and McHugh JJ; Mutual Life Insurance Co of New York v Moss (1986) 4 CLR 311 at 317; R v Shaw (1917) 17 SR (NSW) 383 at 388; Morgan v Babcock and Wilcox Limited (1929) 43 CLR 163 at 173; Martin v Osborne (1936) 55 CLR 367 at 375 and 381; Jones v Sutherland Shire Council [1979] 2 NSWLR 206 at 222 and 224-5; R v Sutton (1983) 32 SASR 553 at 554 and 568-9; Eastern Express Pty Ltd v General Newspapers Pty Ltd (1992) 35 FCR 43 at 72; and Ryder v Wombwell (1868) LR 4 Ex 32 at 40.
Finally, it is necessary that I address some of the arguments put by Mr Ower in his closing submissions. He submitted that both of the defendants did not believe that the amount of $70,000 was given to them voluntarily, without any expectation of return, compensation or consideration. That assertion is not supported by the evidence. Ronald gave evidence that Wanda said that she and John would give $70,000 to him to help purchase the Glandore property, and the proviso was that John and Wanda would move into number 35A and they would be able to live there rent free and debt free and they would look after them for the rest of their lives.[138]
[138] T54.27-T56.34.
The plaintiff also contends that the statements or conduct of the plaintiff were not made in any promissory way. In my opinion that is not in any sense fatal to the rebuttal case led by the defendants. On occasions Ronald said that John would have been present at some of the conversations.[139] Sharon gave the same evidence. The plaintiff also criticised the fact that there was no evidence given by the defendants about any statement made by John to Ronald at the time concerning an intention to provide a gift or any conduct which could rise to that inference. I am unable to accept that submission. I have already set out earlier in this judgment the factual substratum upon which I have relied in forming the conclusion that as a matter of fact and inference, John both knew of, consented to and was content to abide by the arrangements that had been made. I am also satisfied that he was party to these arrangements. To suggest otherwise is inconsistent with the evidence.
[139] T55, T105, T160.
The plaintiff also criticises the fact that, in part, the intention of John arises as a matter of inference. I have already dealt with that matter in detail. I am satisfied that my finding that the agreement in relation to the provision of the $70,000 as a gift was made in fact, arises from the whole of the evidence and as a matter of inference.
The plaintiff cautioned against relying upon communications with deceased persons. I have dealt with that matter and I am unable to accept the submissions of the plaintiff on that basis.
The third criticism related to Wanda’s use of the Polish language. For the reasons which I have already expressed, I am of the view that the conversations between Ronald and Wanda and between George and Wanda were all in Polish but there was no misunderstanding between them in relation to the intention of Wanda and John. Furthermore, the evidence given in Court was in English. It could not be suggested that the evidence given by the witnesses was other than the manifestation of a conversation in English as between Ronald and Wanda and between George and Wanda between 1982 and 1984.
Fourthly, the plaintiff attacked the credibility of Ronald. I have already indicated earlier in this judgment those aspects of evidence of Ronald that I am unable to accept. I refer, for example, to exhibit D3. However, such evidence is not given in a vacuum. The evidence given by Ronald must be assessed in the totality of the whole of the evidence in the action. I have made the same allowances in respect of the evidence of Ronald as I would for any witness who was giving evidence of matters that occurred 31-33 years ago. There will be an aspect of reconstruction arising in the evidence of any witness giving such evidence and due allowance must be made for that fact. I have made that allowance. The basis of my findings that I have set out in this judgment have taken those matters into account.
The plaintiff then made a series of criticisms of the evidence given by the defendants concerning the conversations that Ronald had with Wanda in the period between 1982 and 1984. In my assessment of the evidence, I have made due allowance for the passage of time and the exigencies of life and memory. Memories will change and differ. Different forms of expression will come to mind to witnesses from time to time as they deal with the pressures of attempting to give a court an honest account of events that took place some 31-33 years ago. It is correct to say that there were variations in the expression of the content of conversations. This is to be expected. The variations were not so significant as to cast doubt upon the veracity of the evidence or its reliability or accuracy. I do not accept the criticisms made by the plaintiff in relation to those matters. Nor do I accept the criticisms of the content of the expression of the promises made by Wanda on behalf of herself and John to Ronald. I accept the evidence of Ronald.
I am unable to accept the plaintiff’s case that there was a joint endeavour of the nature considered in Muschinski v Dodds and Baumgartner. I also am unable to accept the submissions of the plaintiff based upon the decisions in Hibberson v George[140] and Sweetenham v Wild.[141] In my opinion, both of those cases turn on their peculiar facts. They do not deal, as here, with the relationship that lasted under the arrangements as understood by the parties for some 24 years or alternatively for almost 30 years.
[140] (1989) 12 FamLR 273 (NSWCA per McHugh JA).
[141] [2005] QCA 264.
I therefore also am unable to accept the submission of the plaintiff that a constructive trust arises. In my opinion, there is no substratum which may be pointed to by the plaintiff.
The plaintiff also made submissions in relation to the content of the evidence of John. He was described as an unreliable witness. I have already made my findings in relation to evidence of John. Albeit that I do not consider that at any time he attempted to obfuscate, I was satisfied upon hearing his evidence and upon reconsidering the whole of his evidence that his memory has failed him. I am satisfied that, on the balance of probabilities, the version of events given by Ronald corroborated by the evidence of Sharon discloses an intention of John and Wanda to provide a gift to Ronald in the sum of $70,000 in return for the right of John and Wanda to occupy number 35A for their lives and the provision to them, of the services as they agreed in 1984. I am satisfied that any variation of those arrangements was voluntary and was dictated by circumstances.
There are a number of findings that arise out of the above decision. They are: I am unable to accept the proposition that a resulting trust arises because I am satisfied that the arrangement made between John and Wanda and Ronald (and by extension Sharon Craig) was that a gift of $70,000 be made on the understanding that it would be used to purchase the Glandore property and that John and Wanda would live in that property cost free for their lives at the cost of Ronald and Sharon.
Alternatively in the event that a presumption of a resulting trust arises I find that the presumption of resulting trust has been rebutted for the same reasons as I have set out above.
I provide the following answer to the questions posed by me in paragraph [20] of this judgment:-
1. No;
2. Unnecessary to answer;
3. No;
4. No;
5. Yes;
6. Yes.
I return to the question of the nature of the gift that I find was made by the plaintiff and Wanda to the defendants in 1984. There is no evidence of a condition having been imposed on the defendants, the breach of which will lead to forfeiture. I would treat the assurances that were given to the plaintiff and Wanda by the defendants in 1984 as amounting to equitable personal obligations upon the defendants to perform the condition.
These personal obligations are enforceable and the remedies available to the court include an order for compensation or, if necessary a decree for specific performance. I am also of the view that although the question is always one of fact concerning what assurances were given, generally and in intra familial relationships made for the benefit of (for example) ageing parents, the rule of equity affords flexibility to the court in deciding what may be necessary to be done to satisfy the assurances that were given. As an example, one matter about which a court will have an interest is the need to make proper arrangement for the comfortable living of, for example, a man of 93 years, such as the plaintiff.
The effect of my decision is that the plaintiff continues to have the right to occupy number 35A rent free and cost free for his life. Properly construed, and in context, this court would view this obligation as being greater than merely paying the outgoings on the property comprising number 35A. If necessary, the court will hear the parties further on this matter.
In the result, I dismiss the plaintiff’s claim. I will hear the parties as to ancillary orders and in relation to costs.
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