Equuscorp Pty Ltd v Jimenez

Case [2002] SASC 225

EQUUSCORP PTY LTD v MANUEL JIMENEZ & ORS

[2002] SASC 225

Civil

BESANKO J

Introduction

  1. The plaintiff is a finance company.  It was formerly known as Equus Financial Services Limited.

  2. Mr Manuel Jimenez is the first defendant.  He met the second defendant, Mrs Elma Maria Jimenez, in 1975.  They were married on 5 June 1976.  Mr Jimenez had no assets of substance at the time of the marriage.  There is one child of the marriage, Mr Ramon Jimenez, the fourth defendant, who was born on 2 February 1979.  I will refer to the fourth defendant as Ramon.

  3. Mrs Jimenez was born on 13 October 1949.  Her father migrated to Australia in 1938 and her mother in 1947.  Mrs Jimenez has two brothers.  She trained and obtained qualifications as a teacher.

  4. Mrs Jimenez’s father conducted a business involving property development in rural areas in Victoria.  The business was very successful.  He contributed approximately $42,000 towards the purchase of Mr and Mrs Jimenez’s first home at 8 Vine Court, Doncaster, in the State of Victoria.  Thereafter he gave Mr and Mrs Jimenez the sum of $250,000 in about 1976 and the sum of $600,000 at some time between 1978 and 1981.  Mr and Mrs Jimenez used these funds in a business involving property development in rural areas in Victoria.  This business was also very successful.  Between 1976 and 1986 the business involved the purchase of broadacre land, the subdivision of that land and the sale by instalments of the allotments created thereby.  In 1986 the business expanded to include investment in the commercial property market.

  5. Mr Jimenez was the principal operator and manager of the business.  Mrs Jimenez gave evidence which I accept that she was not involved in the day to day operation of the business and that she had little knowledge of the workings of the business. The business was conducted through various companies.  Mrs Jimenez was a director and probably a shareholder of some of those companies.

  6. Mr and Mrs Jimenez lived in the house at 8 Vine Court, Doncaster, until they sold the property in 1989 for the sum of approximately $420,000.  They then purchased a house in Howard Street, Kew in the State of Victoria for the sum of approximately $1.7 million.

  7. Ultimately, the business conducted by Mr Jimenez and Mrs Jimenez failed.  Although the precise details were not made clear by the evidence, it seems that in 1993 Mr and Mrs Jimenez each entered into an arrangement with their respective creditors under Part X of the Bankruptcy Act 1966 (Cth). Mrs Jimenez was made bankrupt on her own petition on 31 August 1995. She was discharged from bankruptcy on 31 August 1998.

  8. The marriage between Mr and Mrs Jimenez also failed, and they separated in April 1995. 

  9. Mrs Petra Jimenez is the third defendant.  I will refer to her as Petra. She is Mr Jimenez’s mother.   She is the registered proprietor of a residential property at 541 Torrens Road, Woodville, in the State of South Australia…

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Details
AGLC
Equuscorp Pty Ltd v Jimenez [2002] SASC 225
Case
[2002] SASC 225
Decision Date

CaseChat Overview and Summary

The case of Equuscorp Pty Ltd v Jimenez involved a dispute regarding the enforceability of a trust over a property, held by the defendant Ramon Jimenez. The dispute came before the court, which had to determine whether an oral trust had been created in favour of Ramon over a property that was held by his father. The plaintiff, Equuscorp Pty Ltd, sought to establish the enforceability of a trust, while Ramon Jimenez and his mother, Mrs Jimenez, argued that such a trust existed and was enforceable. The court was required to assess the credibility of the parties' evidence and the applicable legal principles concerning the enforceability of oral trusts.

The central legal issue before the court was whether an enforceable trust existed in favour of Ramon over the property. The court had to consider the evidence provided by Mrs Jimenez and Ramon, as well as the documentary evidence, to determine the existence and enforceability of the trust. Specifically, the court needed to assess whether an oral trust was sufficiently evidenced and whether it complied with the statutory requirements for enforceability under the relevant legislation. Furthermore, the court had to evaluate the credibility of the parties' evidence and decide which parts of the testimony to accept or reject.

The court found that, although Mrs Jimenez claimed that she had agreed to a trust arrangement in favour of Ramon, the evidence did not support the existence of such a trust. The court accepted that Mrs Jimenez was largely unaware of the business operations and the details of the property transactions. However, the court found that her evidence was unsatisfactory in some respects and did not accept certain aspects of her testimony. The court concluded that the trust, if it existed, would be unenforceable under section 29(1) of the relevant legislation. Therefore, the court decided that the caveat lodged by Ramon should be removed, and it prepared to make declarations and orders accordingly.

The court's final orders included declarations regarding the property and the unenforceable trust, as well as an order for the removal of the caveat lodged by Ramon. The court indicated that it would hear further submissions from the parties regarding the formal orders to be made and any other matters, including costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

Mr Russo conceded that the plaintiff had no contact with Mrs Jimenez either before the Deeds were executed or indeed at any time before the defaults under the Deeds occurred.The Evidence called by Mrs Jimenez and Ramon Mrs Jimenez and Ramon gave evidence and they called two witnesses, a Mr Alphonso Herminio Perez and a Mr Xavier Perez. Although I accept a good deal of what Mrs Jimenez said, her evidence was unsatisfactory in some respects. At times she seemed very defensive. At other times she gave me the impression of a witness who had convinced herself of matters she believed were favourable to her case. For reasons I will state after summarising her evidence, there are aspects of her evidence which I do not accept. Mrs Jimenez gave evidence that she knew very little about the way the business operated, or the companies involved, or the assets and liabilities of those companies. Mr Jimenez did not involve her in the day to day operation of the business. He expected her to sign documents relating to the business without enquiry. He did not welcome the attempts she made to learn about the business. In general terms I accept her evidence on these matters. Mrs Jimenez said that she did not have any conversations or communications with the plaintiff before signing the Deeds or thereafter until her bankruptcy. I accept her evidence on this matter. It is consistent with the evidence of Mr Russo. Mrs Jimenez said Mr Jimenez’s parents lived in South Australia in what she described as a government assisted apartment or flat. Mrs Jimenez said that towards the end of 1987 she and her husband discussed the purchase of a house for his parents. Mr Jimenez told her that in order to get the benefit of some form of government concession the property would have to be put into the names of his parents. Mrs Jimenez said that she was concerned about purchasing a property in the names of her husband’s parents because of the possibility that her husband’s parents would leave the property to their other grandchildren (ie other than Ramon). Mrs Jimenez said,“but I agreed only if he were to secure the house for Ramon on their – to secure the house for Ramon, and I also said that they would have a life tenancy of the home” Mrs Jimenez said her husband promised her that he would call his solicitor and arrange for papers to be prepared whereby the house would be held in trust for Ramon. Mrs Jimenez said that sometime later she had a conversation with her husband wherein,“I asked him if he had effected the documents we discussed, the trust that we discussed, and he said that it had been done” Mrs Jimenez said that she was “absolutely shocked” when for the first time in 1995 she saw the Declaration of Trust. She said that it did not represent what she had agreed with her husband. Mrs Jimenez said she lodged the caveat that she did in September 1995 on the advice of her solicitor, Mr Ian Kennedy of Wisewoulds in Victoria, who told her to do it in that way because at the time Ramon was a minor.

Decision

Reasons for decision

For these reasons, I conclude that even assuming there was a trust created orally in favour of Ramon that trust was unenforceable by reason of the provisions of s 29(1) of the LPA.Conclusions In the circumstances I am prepared to make the declarations to which particular defendants have consented (ie paragraphs AA (excluding the reference to the second defendant) and AC). As I have reached the conclusion that there was and is no enforceable trust in favour of Ramon, I am prepared to make an order that the caveat lodged by Ramon be removed. I will hear the parties as to the formal orders to be made and any other matters including costs.

Ratio Decidendi

Legal Principle Established

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