Field v Hemming
[2010] SADC 88
•13 July 2010
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
FIELD v HEMMING & ORS
[2010] SADC 88
Judgment of His Honour Judge Burley
13 July 2010
EQUITY
TRUSTS - CONSTRUCTVE TRUST - RESULTING TRUST
Claim by plaintiff for beneficial ownership of land – plaintiff owned the subject land which consisted of three allotments – all allotments were transferred to the first and second defendants “for no monetary consideration” – defendants alleged that the transfer was pursuant to an oral agreement for purchase for $10,000 - plaintiff alleged that the transfer was made in accordance with a common intention or understanding that one of the allotments would be developed in a particular manner to be implemented by the lst and 2nd defendants - the defendants did not implement the common understanding and later transferred the land “on trust” to their son, the third defendant – whether lst and 2nd defendants guilty of equitable fraud such that a constructive trust should be imposed - whether at the time of transfer a resulting trust in favour of the plaintiff arose - requirement that plaintiff repay rates, taxes and other expenses paid by defendants with compound interest.
Law of Property Act 1936 s 26, referred to.
Avondale Printers and Stationers Ltd v Haggie [1979] 2 NZLR 124; White City Tennis Club Ltd v John Alexander’s Clubs Pty Ltd (2009) 261 ALR 86; John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd (2010) 266 ALR 462, considered.
FIELD v HEMMING & ORS
[2010] SADC 88
These proceedings consist of a claim by the plaintiff to the beneficial ownership of three blocks of land at Port Germein (the land). The plaintiff purchased the land in 1953 for approximately £25. It then consisted of four quarter acre allotments – 264, 265, 281 and 282. In about 1989 the plaintiff successfully applied to have the four allotments subdivided into three allotments of one-third of an acre which were then numbered 484, 485 and 486.
The plaintiff met the first and second defendants in about 1985. The plaintiff and the second defendant became friends. The first defendant was and remains the de facto husband of the second defendant. The third defendant is their son. In these reasons, when referring to both the first and second defendants I shall refer to them as the defendants.
Factual summary
The following consists of a summary of the respective evidence of the parties. There is very little common ground between them but a summary of the evidence (as opposed to setting out my findings of fact) assists with the understanding of the issues, both factual and legal, raised in the pleadings and at the trial. During the course of the trial, both parties materially departed from their pleadings.
Early on in their friendship, the plaintiff told the second defendant about the land at Port Germein. They went together to look at the blocks which were then four in number. At some later stage, they talked about the possible sale of some of the land to the second defendant. Their versions differ: the plaintiff said the discussion was, initially, about the purchase of one of three blocks (lot 484) for $10,000; the second defendant said that, initially, the discussions were to the effect that she would purchase two of four allotments (lots 264 and 265) for $6,000. According to the plaintiff, $4,800 was paid by the second defendant towards the $10,000 purchase price in respect of lot 484 between July 1999 and July 2000[1].
[1] See Exhibit P1 – 13.
Further discussions took place. The second defendant said that the agreement to purchase two of the four allotments was not pursued (presumably because in the meantime the plaintiff had subdivided the land from four to three allotments); instead, in about October 1999 or 2000, the plaintiff and the second defendant discussed by telephone a different proposal, namely, that the second defendant would purchase the three allotments for $10,000. The second defendant says that by then she had paid $6,000 and that the plaintiff required payment of the additional $4,000. The second defendant ultimately said that she paid this amount between October 2000 and 21 December 2000. The latter date is the day on which all three allotments were transferred to the defendants.
The plaintiff denied:
(i)that such an agreement was reached;
(ii)that $6,000 had been paid prior to October 2000; and
(iii)that $4,000 was paid between October and 21 December 2000 or at all.
She said that the plan or agreement to purchase one of three allotments for $10,000 was followed by a proposal by her to develop the land. It was not clear whether the proposal replaced the agreement to purchase lot 484. The plaintiff said the proposal to develop the land as discussed between all three of them was to the following effect:
(a)the plaintiff would transfer all three allotments to the defendants;
(b)that the first defendant would apply for planning and building approval to build a house on allotment 486;
(c)that upon the necessary approvals being obtained, a bank loan would be obtained (it is not clear by whom) with the three allotments being offered as mortgage security for the loan;
(d)that the first defendant would arrange for and supervise the construction of the house;
(e)that the house would be sold and the profits would be divided equally between the plaintiff on the one hand and the defendants on the other hand;
(f)that lot 485 would be transferred by the defendants to the plaintiff; and
(g)lot 484 would be retained by the defendants.
According to the plaintiff, prior to 21 December 2000, a common understanding was reached between them that the matters referred to in paragraphs (a) to (g) above would be implemented. No time limit was set, the nature and extent of the proposed house, and the amount of the proposed loan and by whom any repayment instalments were to be paid were not specified.
It is not in dispute, and I find that, on 21 December 2000, the parties attended at the office of Mr Manolakis, a conveyancer, for the purpose of signing a transfer of the land by the plaintiff to the defendants “for no monetary consideration”[2]. On that occasion, the plaintiff signed a statutory declaration in which she stated that she instructed the conveyancer “to transfer the land ... for no monetary consideration” and that her decision to do so was “made voluntarily”[3]. The plaintiff confirmed the correctness of those statements in her evidence. There is thus no suggestion that she was pressured into transferring the land to the defendants.
[2] Exhibit P1 – 24.
[3] Exhibit P1 – 25.
It is common ground that after the transfer, no steps were taken by the defendants or either of them to implement the alleged common understanding. On the contrary, on 10 May 2004, the defendant transferred the land to the third defendant. Prior to this, the third defendant had no relevant dealings with the plaintiff. It was not necessary for him to give evidence at the trial. The transfer to him was said to be “on trust”, but the nature of the trust is unclear.
The plaintiff’s claim
The plaintiff says that she is entitled to the return of the land. She asserts that it was transferred to the defendants at a time when the three of them had a common understanding that upon the transfer of the land, the matters referred to in paragraphs (b) to (g) above would be put into effect. The plaintiff contended that the failure by the defendants to implement the common understanding constituted equitable fraud such that the Court would impose a constructive trust on the defendants to the effect that they held the land on trust for the plaintiff.
The plaintiff’s claim for the imposition of a constructive trust was based on the decision of Avondale Printers and Stationers Ltd v Haggie[4]. The decision was to the effect that if there was a common intention between parties to a transaction that the denial of which by one party amounted to equitable fraud, the court would impose a constructive trust in favour of the party who seeks to uphold the arrangement. An important factor in considering such a case is whether or not the transferor of the property would have parted with the property but for the oral common intention existing between the transferor and the transferee. This case was referred to by the New South Wales Court of Appeal in White City Tennis Club Ltd v John Alexander’s Clubs Pty Ltd[5]. The decision of the Court of Appeal went on appeal to the High Court: John Alexander’s Clubs Pty Ltd v White City Tennis Club Ltd[6]. In that case the High Court at least implicitly approved of the decision in Avondale[7].
[4] [1979] 2 NZLR 124.
[5] (2009) 261 ALR 86 at [78].
[6] (2010) 266 ALR 462.
[7] At [65] – [68].
The plaintiff accepts that, on her case, she should repay to the defendants any monies paid by them in relation to the proposed purchase of lot 484, including compound interest and that she should reimburse the defendants for any payment of council and other rates and expenses made by them and the third defendant since December 2000 together with compound interest thereon. She accepts that the land should be charged in favour of the defendants with the repayment of such monies.
The schedule of council and other rates and expenses was tendered by consent[8]. They amount to $9,345.64.
[8] Exhibit D16.
On the plaintiff’s case, the sum of $4,800 should be added to those expenses.
Any calculation of compound interest in respect of the amounts paid for council and other rates and expenses, should be divided by two to allow for the fact that those payments were made progressively between December 2001 (the date of the first payment) and the date of trial.
The defendants’ case
The defendants’ case at trial (as opposed to what was pleaded in the various defences filed by them) was that by October 2000 the parties had reached an agreement orally that the defendants would purchase all three allotments for $10,000 and that, by then, $6,000 had already been paid. The balance of $4,000, according to the second defendant, was paid between October and 21 December 2000 when the land was transferred to the defendants.
The existence of such an agreement was based entirely on the evidence of the second defendant. It is not clear whether the $6,000:
(1) consisted of either a payment or payments in relation to the originally proposed purchase of two of four allotments (allotments 264 and 265) which by subsequent agreement, was to be applied as part of the purchase price of all three allotments (allotments 484, 485 and 486); or
(2) was the amount of a number of loans allegedly made by the defendants to the plaintiff the liability to re-pay which was to be offset against the requirement to pay the purchase price of $10,000.
The only reliable evidence about payment of the purchase price, as opposed to the advance of loans, was that of the plaintiff relating to the payment of $4,800. Those payments may have been in relation to an agreement for the purchase of all three allotments as contended for by the defendants or, on the plaintiff’s case, in relation to the agreement to purchase allotment 484 for $10,000.
A resulting trust
Although it was not raised in the pleadings, during the course of the trial I asked counsel to consider, and to deal with in their respective addresses, the question of whether or not a resulting trust of some sort may have arisen on the transfer of the land to the defendants on 21 December 2000. It was clearly a topic that had to be considered because much of the evidence of the parties was uncertain, given that more than 10 years have elapsed since any relevant dealings between the parties took place. I raised the issue because it was possible that, if the plaintiff failed to make out a case for a constructive trust, she may have transferred all three (or at least two of three) allotments for no consideration, in which event a resulting trust may have arisen in her favour.
The Third Defendant
As stated earlier, the defendants transferred the land to the third defendant on 10 May 2004. According to the defendants, only the legal interest was transferred; they retained the beneficial interest. It is not in dispute that the third defendant made no payment for the land. Given that he is the son of the defendants, a presumption of advancement might have applied but for the position taken by all three defendants that only the legal interest passed to him. In any event, if a resulting trust had arisen as at the 21 December 2000 or if a constructive trust were to be imposed operative prior to the conveyance to the third defendant, the only interest which could have passed to him was the legal interest in the land.
The parties’ respective positions in equity
If the plaintiff establishes a case for the imposition of a constructive trust, she would, conditionally, be entitled to have either the three allotments or allotments 485 and 486 reconveyed to her. The entitlement to the three allotments depends on whether or not the alleged proposal to develop the land purported to replace or to be in addition to the alleged agreement to sell lot 484 for $10,000. If the alleged development proposal did not displace the alleged agreement to purchase lot 484 for $10,000, there was an agreed purchase price for lot 484 part of which has been paid ($4,800). In that event the transfer of that allotment to the defendants was supported by consideration. A resulting trust could not have arisen in those circumstances in respect of that allotment, nor would a constructive trust be imposed. At best, the plaintiff would be entitled to enforce a vendor’s lien over lot 484 for any unpaid part of the purchase price.
The Issues
In light of this analysis, it is necessary to determine:
(1) Whether there was an agreement for the sale of lot 484 for $10,000;
(2) Whether a common understanding regarding the development of lot 486 was reached such that a departure by the defendants from that common understanding constituted equitable fraud;
(3) If so, whether the development proposal replaced or was in addition to the sale agreement;
(4) Whether a resulting trust arose in favour of the plaintiff as at the 21 December 2000 in respect of either all three allotments or lots 485 and 486.
If the defendants establish that the plaintiff agreed to sell to the defendants all three allotments for $10,000, the plaintiff’s claim must fail because, on 21 December 2000, even though the transfer was expressed to be for no consideration, the defendant nevertheless obtained both the legal and beneficial interest in the land (subject to the vendor’s lien referred to above, if it has arisen) because the transfer followed the oral agreement for sale and purchase. It will be necessary to determine whether there was such an agreement and, if so, whether the purchase price has been paid in full either by payments totalling $10,000 or by an offset of existing indebtedness of the plaintiff to the defendant totalling $5,200 or by a combination of both payments (beyond $4,800) and offset.
If the defendants fail to establish the relevant agreement, and if the plaintiff makes out a case for equitable relief, it will be necessary to consider the defence of laches. The defendants also raised in their defence a plea based on the contention that the plaintiff did not come to equity with clean hands. As I understand it, that defence was all but abandoned during the trial. In any event, there is no basis for such a defence. It was based on the contention that the plaintiff did not at any relevant time disclose to the government department which administered aged pensions that she owned the land. I accept the plaintiff’s evidence to the contrary[9].
[9] See Exhibit P6.
In addition, the defendants pleaded s 26 of the Law of Property Act 1936 because of the absence of writing relating to the plaintiff’s alleged proposals to develop the land. The plaintiff, by her counsel, specifically disavowed reliance upon a contract between the parties to support her claim for the return of the allotments. Hence, s 26 of the Law of Property Act does not apply.
Factual findings
Some of the matters to be decided depend for their outcome on what view I take of the evidence. The most important issue in this regard is the nature of the dealings between the parties. The evidence of the plaintiff and the second defendant requires close scrutiny. Parts of what they each said are clearly unreliable due, to a large part, to the effluxion of time. I found parts of the evidence of each of them to be unconvincing, although for different reasons.
In the case of the second defendant, important parts of her evidence were confused and inconsistent. The primary example of this was the topic of the alleged agreement to sell the three allotments for $10,000. In examination-in-chief she said the initial agreement was for two of four blocks for $6,000. She next said[10] that in about mid-1999 the plaintiff asked for $4,000 (in addition to $6,000 allegedly previously paid) in return for which all the allotments would be transferred to the second defendant. At this time her understanding was that there were four allotments. She said[11] that she didn’t learn of the subdivision into three allotments until late 2000. Why the plaintiff would, on the second defendant’s evidence, sell two allotments for $6,000 and the additional two (or the balance of the land) at a much later stage for $4,000 has not been satisfactorily explained. The second defendant said that the government valuation of all the land was in excess of $9,000 but this, it seems to me, can only be taken as an attempt to rationalise the position taken by the second defendant relating to purchase of all (three) allotments for $10,000.
[10] T271/4.
[11] T260/18.
This was the only evidence in examination-in-chief which dealt with the change of agreement from the purchase of two out of four allotments for $6,000 to the purchase of all the land for $10,000. By itself, it is unconvincing. But the waters were muddied further when the second defendant was cross-examined.
In cross-examination, she said for the first time[12] that the agreement to purchase all the land for $10,000 was reached not in mid-1999 but in a telephone conversation between the plaintiff and her in about October 2000. She said that by then $6,000 had been paid towards the purchase price of the allotments. She said the further $4,000 was paid between October and December 2000. None of this was pleaded nor was it put to the plaintiff when she was cross-examined by Mr Britton, counsel for all three defendants.
[12] T342/38 – 344/2.
She gave such evidence when she was pressed in cross-examination to explain the difference between the various versions of the defence relating to payments or loans allegedly made to the plaintiff and the differences in her evidence as to that topic. Her responses to the questions of Mr Ower, counsel for the plaintiff, on this topic had all the indicia of recent invention. Nothing was done or said by Mr Britton to diminish that impression.
A perusal of the whole of the second defendant’s evidence reveals that it is replete with inconsistencies and that it is often vague and unclear. There are substantial changes of position such as the one just referred to. On the payment of the purchase price, she has alternated between payment of the price by instalments and payment consisting of an offset of loans made by the second defendant against the purchase price[13].
[13] Compare T335 with T269/12.
Her evidence about what payments and loans were made is hopelessly confused. It is largely unsupported by documentary evidence specifically identifying the plaintiff as the payee. On one version of the second defendant’s evidence, she and the first defendant have made loans or payments to the plaintiff many times.
When addressing loans to the plaintiff to meet university expenses, the contradictions in the second defendant’s evidence have increased my doubt about her evidence[14]. I do not intend to set out minutely the flaws in the second defendant’s evidence. It is sufficient to say that I do not accept her evidence unless it has been corroborated by credible evidence.
[14] Eg compare T326/33 with T339/6 and T340/28.
It is for this reason that I reject the second defendant’s evidence that the defendants acquired all three allotments pursuant to an oral agreement to purchase the three allotments for $10,000. In addition, I reject the second defendant’s evidence that $6,000 was paid by the defendants towards the purchase of any land. The defendants’ pleaded case in that regard was a movable feast, and the evidence given by the second defendant, when it was not consistent with the pleading, was also quite confusing. In particular, little or no distinction was drawn by the second defendant between loans of varying amounts of money, payment of rates and taxes and payments towards the purchase price. It has been impossible to ascertain from her evidence a clear view of what payments were meant to be payments towards or offsets against a purchase price, apart from the $4,800 allowed for by the plaintiff in her evidence.
The evidence of the first defendant does not assist the defendants’ case in this regard. He was not, on the defendants’ case, a party to material conversations which were said by the second defendant to give rise to the oral agreement to purchase three allotments for $10,000.
As to the plaintiff’s evidence, much of it was unreliable. I accept that the plaintiff was attempting to tell the truth, but her memory was poor and as a result she was unable to give clear evidence about important parts of her case. Although I accept that she had wanted to broach with the second defendant the possible development of the three allotments along the lines set out at paragraphs (a) to (g) above, her evidence fell far short of establishing that there was a coherent discussion between herself and the second defendant in which all of those points were identified and agreed upon. It has been impossible to ascertain from her evidence those matters which it was her intention to implement in order to develop the three blocks and the relevant conversations between her and the second defendant (and to some degree the first defendant) to that effect.
In addition, even if I were to make findings that there was a common understanding between the parties as to the matters referred to in paragraphs (a) to (g), I am far from satisfied that that understanding was one which was sufficiently clear to give rise to equitable fraud if it was departed from by the defendants. There is too much uncertainty about what the parties were to do, including the time within which the proposal was to be implemented, the nature and the extent of the proposed house, and the nature and extent of the funding and by whom it was to be obtained and repaid. These are important areas which would call for further discussions and agreement between the parties before the overall plan could be implemented. It is for these reasons that, even if I were to make findings as to the existence of the common understanding contended for by the plaintiff, it would not be in sufficiently precise terms to support the further contention that the defendants, in failing to implement the proposals, were guilty of equitable fraud.
I make it clear that in arriving at these conclusions I am not purporting to apply contractual standards of clarity of language to the concept of parties reaching a common understanding, the failure to implement which leads to the imposition of a constructive trust. Nevertheless, there is a similarity between the two concepts in that, in the case of the imposition of a constructive trust, the common understanding must be such that a departure there from would constitute equitable fraud. That is a serious consequence and something more than the imprecise proposal advanced by the plaintiff is required.
It is for the above reasons that the plaintiff has failed to make out a case for the imposition of a constructive trust in her favour. What then is the consequence of the transaction on the 21 December 2000 when all three properties were transferred to the defendants?
The possibilities are:
1. There was still in existence an oral contract for the sale of two out of the four original allotments for $6,000.
2. That if there was a contract for the sale of the three allotments for $10,000, there was an effective transfer of both the legal and beneficial interest in the land to the defendants on the 21 December, subject to any vendor’s lien that might exist in favour of the plaintiff for any unpaid purchase money.
3. There was a contract for the sale of allotment 484 for the sum of $10,000 in which event the legal and beneficial interest in lot 484 passed to the defendants subject to the vendor’s lien, if applicable.
As to the first possibility, if there had been a contract between the parties at a time when there were four rather than three allotments and it was for the sale of two of the allotments for the sum of $6,000, whatever may have been the case before the subdivision of the land, after the subdivision it could not be given effect to. I can put such a possibility to one side because, although rights of action may have accrued in favour of the defendants in respect of such a contract, it was not evidenced in writing and it is possible that the parties may have mutually abandoned such a contract after the subdivision. Those are matters which do not fall for determination in these proceedings.
As to an oral agreement for the sale of all three allotments to the defendants for the sum of $10,000, I have already indicated why the unreliability of the second defendant’s evidence precludes such a conclusion. In short, I do not accept the second defendant’s evidence that such an oral agreement was reached in about October 2000 (or at any previous time) and that the balance of the purchase price, namely $4,000, was paid by the defendants prior to the 21 December 2000.
That leaves for consideration the question of whether or not, as alleged by the plaintiff, an oral agreement was reached prior to 21 December 2000 that she would sell allotment 484 to the defendants for the sum of $10,000. In my opinion, even when allowance is made for the general uncertainty surrounding the evidence of the plaintiff, the most likely agreement reached between the parties (and I so find) is that she would transfer allotment 484 to the defendants for the sum of $10,000. The contract remained on foot at all material times even though the plaintiff may have intended to develop the land. It was consistent with a theme which was common to the evidence of both the plaintiff and the defendants, namely that the plaintiff wished to make over to the defendants some of the Port Germein land and that the defendants desired to purchase the land. The fundamental difference between their respective cases is that the plaintiff said it was one of three allotments for $10,000 and the second defendant asserted that the agreement was that she would transfer all three allotments for $10,000. I have already stated why I have rejected the second defendant’s evidence that the agreement was for the sale of all three allotments for $10,000. There are additional reasons. Although the second defendant said on a number of occasions that the $10,000 represented a value of the three allotments consistent with the government valuation for rating purposes, other evidence adduced by the plaintiff (that she had obtained advice from a land agent that possible selling prices for each of the three allotments, when combined, would be considerably in excess of $10,000), is convincingly consistent with the plaintiff’s evidence that the $10,000 was to be for the purchase of one as opposed to three allotments.
I accept the plaintiff’s evidence that the payments totalling $4,800 were towards the purchase price of $10,000.
These conclusions do not necessarily assist the plaintiff. She has sought the return of all three allotments to her, but, if there was a contract for the sale by her of allotment 484 for the sum of $10,000 to the defendants, and if $4,800 of that purchase price has been paid, it follows that the transfer of allotment 484 to the defendants on the 21 December 2000 was supported by consideration, namely the promise to pay the purchase price of $10,000. In those circumstances a resulting trust could not be said to arise in relation to allotment 484.
In arriving at that conclusion I have not overlooked the fact that the contract was made orally but that, in my opinion, is of no significance because the transfer of the allotment has already taken place; there is nothing left to enforce apart from any vendor’s lien that the plaintiff may have. Thus, s 26 of the Law of Property Act does not prevent the transfer of lot 484 to the defendants from being effective. Section 26 only affects the enforceability of an oral contract where part performance cannot be made out. Once the property has been transferred, if it is for consideration, the beneficial and legal interest passes on the transfer, unless there is some other vitiating factor. There is no such additional factor disclosed in this case.
The position with regard to allotments 485 and 486 is different. I accept the plaintiff’s case that those allotments were transferred to the defendants in the belief (on the part of the plaintiff) that the proposals for the development of lot 486 would be implemented. There was no consideration for such a transfer and consequently, upon the transfer of those two allotments, a resulting trust arose in favour of the plaintiff. This means that since 21 December 2000 the defendants have held allotments 485 and 486 on trust for the plaintiff. They are obliged to return those properties to the plaintiff subject to reimbursement for necessary holding costs and compound interest thereon.
The statement of claim is directed to the plaintiff’s claims based on alleged unconscionability or alleged equitable fraud. The plaintiff has not succeeded in obtaining the primary relief of imposition of constructive trust. However, subject to the defence of laches, the plaintiff has established that she is entitled to a return of two or three allotments. Given that the relief to which the plaintiff is entitled (subject to the defence of laches) is based on the existence of a resulting trust in respect of two of the allotments, as a matter of fairness the defence of laches should be considered by reference to this result even though it has not been specifically raised in the defence. The reason for that is the plaintiff did not plead in her Statement of Claim a reliance upon a resulting trust.
The resulting trust arose on the 21 December 2000 when there was a transfer for no consideration of those two allotments. The plaintiff did not commence proceedings for about eight years. After the year 2000, over a number of years, there was desultory correspondence between the parties whereby the plaintiff, in a rather oblique manner, asked for progress in relation to the development of the allotments. She said in evidence that she wanted to know what progress had been made in implementing the proposal for the development of the allotments. This was far from clear from the terms of the correspondence itself.
The plea of laches is set out in paragraph 4 of Part 2 of the Further Amended Defence as follows:
4. The first and second defendants rely on the doctrine of laches that:
4.1 The plaintiff acquiesced by delay in seeking legal redress for any alleged unconscionability or alleged fraud in that:
4.1.1 From 21 January 2001 the plaintiff took no steps to agitate any alleged claim in law or in equity until October 2004.
4.1.2 The plaintiff after November 2004 took no steps to agitate a claim of law or equity until May 2008 and claims and interest in relation to land which valuation is in excess of the value of the property as at 20 January 2001.
The defence of laches can involve both acquiescence and alteration of position[15]. In this case the defendants’ plea is confined to an allegation of acquiescence. It is clear that the delay by itself is not enough to constitute either laches or acquiescence[16]. Delays of 26 years and 20 years have been countenanced in Australia[17].
[15] Lindsay Petroleum Co v Hurd (1874) LR 5 PC 221.
[16] See Meagher, Gummow and Lehane Equity Doctrines and Remedies 4th ed [36-055] where the learned authors refer to Jones v Stones [1999] 1 WLR 1739.
[17] (Ibid) [36-070] and the cases referred to therein.
The pleading makes reference to delays from January 2001 to October 2004 which is the period during which desultory correspondence was exchanged between the parties. It was not until late November 2004 that it became clear that the parties were at loggerheads. The plaintiff said at that point she decided to take no action because she had been told that it was her word against the word of the first and second defendants which could well result in her losing any proceedings she might bring. Her interest was revived in pursuing the return of the land a number of years later when a relative urged her to take proceedings.
In my opinion, any relevant delay is the delay that took place from the time at which the parties ascertained that they were in fundamental disagreement as to the ownership of the land. That occurred in late 2004. The plaintiff, as accepted in paragraph 4.1.2 of the Amended Defence, took up her claim again in May 2008. In the meantime, nothing had occurred in relation to the land other than the transfer of the legal interest by the first and second defendants to the third defendant. In those circumstances, it seems to me that the defence of laches is not available to the defendants because, in essence, all that they rely upon is the delay, up to the time of commencement of proceedings. For those reasons, I consider that the defendants have failed to make out a defence based on laches and/or acquiescence.
Balance of purchase price – compound interest
The plaintiff will have to reimburse the defendants for their expenses since December 2000. That sum amounts to $9,350 in round figures. However, in determining what amount has to be brought into account (and calculating interest thereon) I must also deal with the question of what, if any, amount remains to be paid of the purchase price of $10,000. It is clear that at least $4,800 has been paid. Whilst I accept that there may have been payments by the defendants to the plaintiff in excess of $4,800, the evidence of the 2nd defendant is so confused and otherwise unreliable, I can make no finding on the balance of probabilities as to whether any particular payment or advance was a loan or an instalment in respect of the purchase price. Nor does the evidence permit me to make a general finding that in respect of one or more amounts received by the plaintiff as a loan, it was agreed that the repayment of those loans was to be offset against the purchase price. In those circumstances, I consider that the difference between the purchase price and the $4,800 must be brought into account before compound interest is calculated for the 9.5 year period between December 2000 and the date of judgment. Thus the principal sum will be $9,350 less $5,200, namely $4,150. The interest rate to be applied is 6.8%, being roughly the average interest rate over the 9.5 year period set by the rules of court relating to judgments. Annual rests are to apply. This approach and the resulting percentage were more or less agreed upon at the very end of addresses. Compound interest so calculated for the period of approximately 9.5 years amounts to $3,604. It is to be halved to reflect the progressive payments made by the defendants over the period. The amount to be paid by the plaintiff is therefore the sum of $4,150 and $1,802.
The plaintiff must pay the costs and fees relating to the re-transfer of the two allotments to her. Given that she has always retained the beneficial interest, only nominal stamp duty may have to be paid but I do not decide that point as it was not argued before me. Whatever stamp duty is payable should be paid by the plaintiff.
For the above reasons I propose to make the following orders:
1. That upon payment of the sum of $5,952 by the plaintiff to the defendants;
(a) the third defendant do transfer to the plaintiff the whole of the land contained in Certificates of Title Register Book Volume 5436 Folios 779 and 780; and
(b) the defendants do produce to the plaintiff’s solicitors the respective duplicates of the Certificates of Title referred to in sub-paragraph (a).
2. That if the third defendant fails, refuses or neglects to sign a Memorandum of Transfer in registrable form in accordance with paragraph (1) of this order within seven (7) days of the tender of same and the sum of $5,952 by the plaintiff’s solicitors to the defendants’ solicitors:
(a) the plaintiff pay into court the said sum of $5,952; and
(b) the said transfer be signed by the Registrar on behalf of the third defendant.
3. That the plaintiff pay the costs of and incidental to the preparation and stamping of the said Memorandum of Transfer and of the tender of same to the defendants’ solicitors.
4. Permission to the parties to apply for further orders and directions to implement the judgment of the Court.
5. Costs reserved.
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