Fr v DC
[2013] QDC 317
•11 December 2013
DISTRICT COURT OF QUEENSLAND
CITATION:
FR v DC [2013] QDC 317
PARTIES:
FR
(Plainfiff)
AND
DC
(Defendant)
FILE NO/S:
D138/11
DIVISION:
Civil
PROCEEDING:
Trial
ORIGINATING COURT:
Maroochydore
DELIVERED ON:
11 December 2013
DELIVERED AT:
Brisbane
HEARING DATE:
2, 3 and 4th December 2013
JUDGE:
Andrews SC DCJ
ORDER:
Judgment for the plaintiff against the defendant for recovery of possession in thirty days from today of land at 7 Margaret Street, Kenilworth in Queensland, more particularly described as Lot 15 on RP74357 and for damages in the sum of $21,501.82 inclusive of interest. The counterclaim is dismissed. Order that the defendant pay the plaintiff’s costs of the proceeding to be assessed on the standard basis.
CATCHWORDS:
RECOVERY OF POSSESSION OF LAND – whether adverse possession exceeded twelve years – whether registered titleholder constructive trustee – whether agreement to grant beneficial interest in land
Butt Land Law, 6th ed, 2010 p 903 [22 18]
COUNSEL:
Galloway for the Plaintiff
SOLICITORS:
Baldwin Cartwright Lawyers for the Plaintiff
Adrian Hawkes Lawyers for the Defendant
Introduction
The plaintiff is the sole registered proprietor of a house and land at 7 Margaret Street, Kenilworth in Queensland, more properly described as Lot 15 on RP74357 (the property). She was the de facto partner of the defendant. She claims against the defendant for:
1. possession of the property;
2. an account of mesne profits had by the defendant to which the plaintiff was entitled;
3. damages for the use and occupation of the property;
4. damages for the cost of cleaning and maintaining the property and restoring it to habitable condition;
5. interest on damages;
6. costs of and incidental to the proceeding.
The defendant, by counterclaim seeks:
1. a declaration that the defendant owns the property; and
2. an order that the plaintiff transfer legal title of the property to the defendant.
The defendant was unable to bring an application for an adjustment of property interests pursuant to the Property Law Act. The defendant’s counterclaim alleges:
1. the defendant paid the deposit for the purchase of the property; paid all loan repayments; paid all insurance; paid all rates except from about 2008; made structural improvements to increase the value of the property;
2. the defendant paid the plaintiff $11,000 pursuant to an unwritten property settlement agreement that the property would belong to the defendant; that the plaintiff would use the $11,000 to buy a house in France;
3. that the defendant has been in possession of the property adverse to the plaintiff in excess of 12 years;
4. that further or in the alternative, in those circumstances it would be unjust enrichment for the plaintiff to continue to be entitled to the property;
5. that in those circumstances the plaintiff holds the property on a constructive trust for the defendant and it would be unconscionable for her to assert her legal title and to take beneficial ownership.
Other Facts
On 15 March 1951 the defendant was born and he is currently 62 years of age.
On 27 June 1961 the plaintiff was born and she is currently 52 years of age.
In about October 1982 the plaintiff arrived in Australia and she and the defendant commenced residing in a de facto relationship. They were acquainted in France, before the plaintiff’s arrival in Australia. On her arrival the plaintiff was 21 years of age and the defendant 31 years of age. The plaintiff had savings of about $1,000. The defendant owned a property at 5 Elizabeth Street, Kenilworth and shares in a company which owned a 10 acre property with a small shed in Obi Obi, Hunsley Road, Kenilworth (the Obi Obi property). The parties began living together at the Obi Obi property.
On 24 September 1983 GC, the son of the plaintiff and defendant, was born.
In about late 1985 the plaintiff left the Obi Obi property with Guillaume, moved to Brisbane and rented a flat in Jane Street, West End and then a house at Prospect Terrace, Highgate Hill. This was the first of several physical separations between the parties. The plaintiff described this separation and the others as breaks in the de facto relationship. The defendant disputed this and described the relationship as unbroken despite the maintenance of two households. It is unnecessary to determine which was correct.
On 12 September 1986 a joint bank account was opened at a Mackay branch of the ANZ. The plaintiff accepts that this happened though she does not remember it. The records show that the plaintiff and the defendant jointly applied for an ANZ credit card with cardholder limits of $200 per day and $600 per week.[1] Between 12 and 26 September 1986 deposits of $2,000, $1,400, $500 and $2,322 were made to that account. On 3 October 1986 $1,048.33 was paid to that account.[2]
[1]Exhibit 1 pp 26-1 and 26-2.
[2]Exhibit 1 p 119-5.
LC, a daughter of the parties, must have been conceived in about early September 1986. The plaintiff described September 1986 as a time of separation. I reject that. I find September 1986 was a time when her relationship with the defendant was in the nature of a de facto relationship. The defendant was earning less than the plaintiff. She was able to draw on their joint account into which he was the major contributor at that time. She had primary care of their son Guillaume. Whether the relationship continued after September is also disputed.
On 29 May 1987 LC was born. LC’s birth certificate recorded that the plaintiff resided in Brisbane and that the defendant resided in Kenilworth. The plaintiff says that the defendant came to Brisbane when LC was born but for only three or four days to look after GC while the plaintiff was in hospital; that the defendant then returned to his Obi Obi property. The plaintiff contends the parties had then discontinued their relationship and the defendant disputes this.
In October 1987 the plaintiff signed the contract to purchase the property for $39,000. The vendor was the executor or administrator of a deceased estate and this complication somehow resulted in a long period before the contract could settle. The plaintiff contended that she and the defendant were separated at the time she signed the contract. The contract named the plaintiff as purchaser. The defendant had assets. He regarded the assets in his name as his own. His basis is that they were his before the plaintiff’s arrival in Australia. The plaintiff had two children fathered by the defendant and, at law, had no relevant assets to show for her five years in Australia. I accept that the plaintiff intended to purchase the property in her name alone.
On 14 October 1987 $3,000 was withdrawn from the joint account and used as the deposit for the purchase of the property.[3]
[3]Exhibit 1 p 50-1.
On 15 December 1987 the plaintiff deposited $3,000 of her own funds to the joint account. That deposit was funded by a first home owner’s grant to the plaintiff. She had previously applied for that grant to be made to her. She made that application while she resided in Brisbane and apart from the defendant.
On 7 April or 25 May 1988 the purchase of the property settled with funds borrowed by the plaintiff alone from the Queensland Housing Commission. I accept that the plaintiff alone paid the funds due at settlement. It was the plaintiff alone who was liable to repay the Queensland Housing Commission. The repayments due on the loan from the date of settlement were variable. By the time of settlement, the parties had resumed their de facto relationship. The fact of that relationship had a consequence for the amount of the periodic loan repayments due from the plaintiff to the Queensland Housing Commission. The payments due varied in accordance with the combined income of the plaintiff and the defendant.
In April/May 1988 the plaintiff and the defendant and their two children moved into the Margaret Street property. The de facto relationship, if it had ceased, had recommenced by this time. The plaintiff accepted that she and the defendant were then paying off the loan together and explained that she and the defendant were also together paying off the restaurant and kitchen equipment and other things related to the defendant’s business.
On 2 December 1989 the defendants’ restaurant “L’Escapade” opened. The plaintiff worked in the restaurant. Her official wage was fixed after advice from the defendant’s accountant at the rate of about $6,000 per annum. The rate was fixed with a view to minimising income tax rather than with a view to finding the proper remuneration for her effort.
In 19 May 1992 the plaintiff vacated the property. She left for France with the two children of the relationship. Her evidence is that the de facto relationship was ended and that the decision to end it was made by her by the time of her departure. The plaintiff found work in France almost immediately. She received no maintenance from the defendant for their children, then or at any time after she left for France.
The plaintiff said that when she went to France she resided with her mother for about six months and that she also rented an apartment. In 1992 GC would have been about eight and LC about five. There is an issue as to whether the defendant visited the plaintiff in France in 1992. The plaintiff says that he did not visit. She recalls that he kept in touch with the children by telephone fortnightly or monthly; that in November 2003 he contacted her to say he was coming over to visit; that she said “no, no way” to his suggestion; that he came anyway; that he had no possessions at her house in France as he had never lived with her at that house. The defendant contended that he had visited the plaintiff in France between October and December of 1992; that he left possessions when he returned to Australia; that the relationship as de facto partners continued; that he returned to France in 1993; that the plaintiff turned him out of her accommodation with his stored possessions. The plaintiff rejected the contention. It is unnecessary to resolve the disputed evidence. It does not assist me to determine credibility or reliability about the critical issues in the history. I accept that the de facto relationship ended by the time of the plaintiff’s departure for France. During their relationship the plaintiff and the Defendant never married. Their relationship did not involve violence or yelling. I accept that the defendant remained optimistic that there was a future for the relationship despite the plaintiff’s departure.
The defendant visited the plaintiff and the children in France. The frequency was disputed. Whether the visits involved visiting the plaintiff or only the children was disputed. Resolving the dispute will not assist in determining the financial matters in dispute.
During 1993 the defendant did some renovations in the house on the property. The renovations were submitted to be significant and involving an extension. I accept that he installed a modest en suite bathroom. It is not established that the house was extended or that the works added to market value or to rental value. They were done without any request from the plaintiff and without her knowledge.
In November 1993 the plaintiff was in financial difficulties in France. She was not receiving any financial support in France for herself or for the children. She decided to sell the property and instructed a real estate agent. The property was listed for sale for $148,000. There was insufficient interest in the property. Accordingly the plaintiff asked the defendant to contact a real estate agent to act for her as a rental agent.
On 28 January 1994 the plaintiff wrote to the real estate agent for the property to thank her for her efforts in finding a good tenant “for my house in Kenilworth”. She wrote also “you will notice that I have crossed out DC’s name. The reason is that our separation is definitive and being the sole owner of the house I hereby ask you to deal with me only as I give him no authority to act on my behalf.”
From December 1993 until March 1996 the property was rented to third parties. There was a period of two months in June and July 1994 when the defendant rented the property. The plaintiff was receiving monthly documents from the real estate agent showing the rental receipts.
In March 1994 was there an agreement about the property? The defendant’s pleading[4] alleged that “the Defendant paid the Plaintiff the sum of $11,000 pursuant to an informal property settlement agreement whereupon the parties agreed … that the property would belong to the Defendant; that the Plaintiff would use the $11,000 to purchase a house in France … for herself and the parties’ children to live.”
[4]Further amended defence of the Defendant, paragraph 3(d).
The defendant gave oral evidence that he made the agreement “probably” in March 1994 just before he left France; that it was made at the plaintiff’s residence in France; that they stood up to make the agreement; that they agreed that when the plaintiff needed the money the defendant would provide it so she could buy a house in France; that the money the defendant would provide would be about the amount of the equity she had in the property;[5] that she would seek it when her employment was on a more secure, permanent basis. I infer that in France, after an employee had retained continuous employment with an employer for some unspecified period an employer’s freedom to terminate the employment diminished. I infer that the defendant was alleging that the plaintiff was deferring her request for money until she had the capacity to meet loan repayments with less risk of having her employment terminated. The defendant alleged that it was agreed that the house she would buy would be similar in price to the property; that it was an informal agreement; that the defendant said he would keep the house in Australia in trust somehow for their children.[6]
[5]T2-62 l 19
[6]T2-65 l 15
The defendant deposed[7] to an informal property settlement agreement “whereupon I would retain the Margaret Street property and I was to pay her an equivalent amount equal to or similar to the then existing net equity we had in the Margaret Street property” and he deposed that it was in or about March 1994. I note that there is much less detail about the agreement in this version than was given by the Defendant orally. However, the deposed version is consistent with the oral version.
[7]Document 32, affidavit filed 20 November 2013, sworn 16 November 2013, paragraph 2(d).
The plaintiff sent three bank transfers from France to the Maroochy Shire Council for rates. She also sent three payments to the defendant to pay the mortgage accounts. They totalled about $3,700 and the last was paid on 7 October 1994. It is not the case as was pleaded that the defendant made all payments for rates and the mortgage. The plaintiff’s conduct in making a payment in October 1994 is inconsistent with the agreement alleged by the defendant to have been made five month’s earlier that the property was the defendant’s property.
In early 1996 tenants in the property proposed to quit. The mortgage debt was then $14,376. Rates were about $1,000 per year. The defendant proposed to the plaintiff that he move into the property and that instead of paying rent he would cover the cost of mortgage payments, rates and water charges and on the condition that he maintained the property. The defendant took occupation of the property pursuant to that agreement in April 1996.
On 17 August 1996, 42,000 French Francs were withdrawn from the defendant’s bank account in France. He says it was after he had sent a cash cheque to the plaintiff for that sum a month earlier; that it was to allow her to buy a property in France; that it was pursuant to his arrangement with her made in March 1994. The plaintiff denies receipt of the cheque and of 42,000 French Francs.
Curiously, on 4 October 1996 the plaintiff contracted to buy a property in France for 360,000 FF. She deposed that she saved 95,000FF, borrowed 210,000 from BNP Bank and took a loan for an unspecified amount from another entity. If I could be satisfied that she had used the defendant’s money it would mean that she is not credible. I am not satisfied that she used the defendant’s funds. If I could be satisfied that she had used the defendant’s money it would not mean that the defendant had fulfilled the bargain he alleged was made in May 1994. By that alleged agreement he was to pay to the plaintiff their equity in the property. That was much more than 42,000 FF which was then about $11,000. Considering that the property was purchased for $39,000 in October 1987, was offered for sale for $148,000 in November 1993, had rented for $250 per week and had a mortgage debt of less than $14,376, the equity payable by the defendant according to the alleged agreement should have been something in excess of $25,000 if market value had not exceeded the purchase price. If the list price in 1993 was any guide to market value in 1996, the defendant should have paid something in excess of a $100,000 to fulfil his alleged bargain. The notion that the plaintiff would accept $11,000 as full payment for the property she had listed for $148,000 is implausible. That she would accept it as full payment when she was raising the children without financial help from their father is implausible.
I reject the defendant’s evidence of an agreement that the property would belong to the defendant. I accept the plaintiff’s evidence that she accepted the defendant’s proposition in early 1996 that he move into the property and that instead of paying rent he would cover the cost of mortgage payments, rates and water charges and on the condition that he maintained the property.
In 2000 the loan used to purchase the property was repaid. The defendant did not advise the plaintiff that the mortgage had been repaid. The defendant made all payments from the time he moved in to the property in early 1996.
In 2002 GC returned to Australia and moved into the property. He commenced to live at the property with the defendant. GC gave evidence that the defendant remained at the property for about 12 months and that he then moved to his restaurant in Elizabeth Street, Kenilworth but used the shower and bathroom in the house at Margaret Street. GC made efforts to keep the property tidy and became frustrated that his father, the defendant, would use the property as a storage place. I accept that there were times when it was tidy and times when it was anything but.
In June 2003 or possibly 2004 the plaintiff visited Australia. Initially she stayed elsewhere in Kenilworth. Eventually she stayed at the Margaret Street property. The defendant did not reside at the property during her stay.
The defendant made a number of visits to France. There was a dispute as to whether he visited the plaintiff on each occasion when he asserts he visited France. The plaintiff’s evidence was that he did not visit as often as the defendant asserted. It is unnecessary to resolve the dispute. The difference between the plaintiff’s recollection and the defendant’s is as easily explained by fading memory as it is by a lie. The solicitor for the defendant urged that on the occasions when the plaintiff’s recollection about visits to France was inconsistent with documents and that the occasions when her recollections about the termination of a de facto relationship was inconsistent with a joint bank account and photographic evidence of shared events more than 15 years earlier that I should draw the inference that the plaintiff was not credible. I do not. I regard the plaintiff as having been unreliable at times. However the unreliability of her answers is consistent with a fading recollection of events which happened long before. On issues of credit, most discrepancies by the defendant are similarly explained.
In one respect I am satisfied that the defendant was not credible. The defendant was embarrassed by cross-examination about how he obtained possession of the certificate of title for the property and bill of mortgage. After he had paid off the loan, the mortgagee sought to release the documents to the registered proprietor. She was in France and was not told. The defendant collected the documents and the receipt for the documents bears a signature remarkably like the plaintiff’s. The defendant asserts that he did not pass himself of as FR by imitating her signature but merely wrote her name where he was asked to write it by the clerk who held the documents.
In July 2006 GC moved out of the property.
On 1 January 2008 GC reoccupied the property and lived there until about July 2008.
In December 2009 GC reoccupied the property and remained for a year.
On 18 April 2011 the Maroochy Shire Council issued a notice of intention to sell the property for unpaid rates. The plaintiff did not receive the notice from the council directly but was informed of it. She paid the amount demanded.
On 13 May 2011 the plaintiff caused a notice to leave to be served on the Defendant. It was sent by registered post.
On 22 June 2011 the defendant was served with an eviction letter giving him seven days to vacate the property. As at the date this proceeding commenced, the defendant had not vacated the property and he continued in possession until and during the hearing last week.
On 4 July 2011 the plaintiff instructed her solicitors to commence proceedings seeking recovery of possession of the property.
On 5 July 2011 the plaintiff visited the property with her husband. The defendant was not present. The plaintiff entered the house alone. She found and took some documents. While in the house she took numerous photos which are exhibited to her affidavit. They show that the house was crammed full of restaurant equipment. The plaintiff entered the house twice on the same day. She was inside for only long enough to take photographs. One of the photographs reveals what appear to be blue ceramic tiles on a wall. It was suggested that they are in a room which was an en suite bathroom created by the defendant. The plaintiff said that she did not remember. I can accept that she did not remember noticing that an en suite bathroom had been created. She would have been overwhelmed by the quantity of material stored in the rooms and in the state of the yard. The plaintiff denied having seen any extension to the house on the occasion of this visit. The house was crammed with chairs, restaurant equipment and other items. It was as if it was generally for storage.
Adverse possession
As the plaintiff is a registered proprietor of the property, she holds her interest subject only to registered interests affecting the property and free from all other interests,[8] although there are some exceptions to this general rule.[9] One exception is in the case of the interest of a person who, on application, would be entitled to be registered as owner of the property because the person is an “adverse possessor”.
[8]Land Title Act 1994 s 184(1).
[9]Land Title Act 1994 s 185.
The defendant submits that he is, and more importantly, has been continuously an adverse possessor. His pleading alleges that this has occurred since 19 August 1995 and for in excess of 12 years. The defendant’s allegation is based on the premise that the plaintiff agreed in the 1990’s that the property would belong to the defendant and that she abandoned it to him from sometime after that. I have rejected the defendant’s contention about that agreement. I have accepted the plaintiff’s evidence that she gave permission to the defendant to move into the property on her condition that he cover the cost of mortgage payments, rates and water charges and that he maintain the property.
In Butt Land Law, 6th ed, 2010 page 903, Professor Butt explains:
[22 18]Possession is not ‘adverse’ where it has the documentary owner’s permission. However, three situations must be distinguished:
· First, time cannot begin to run in favour of a person who takes possession with the documentary owner’s permission. For example, time cannot run in favour of a person who goes into possession as a tenant, or licensee, or as bailiff or caretaker. Entry in the context of a family relationship between possessor and documentary owner usually suggests that possession is by permission, and is not ‘adverse’.
I am not satisfied that possession was adverse before 22 June 2011. It follows that I reject the allied submissions of the defendant that he has been in adverse possession for more that 12 years and that the plaintiff is not able to bring this proceeding to recover the property because she is statute barred by reason of s 13 of the Limitation of Actions Act 1974. The plaintiff is not statute barred from bringing her claim.
It is unnecessary to make findings on the factual dispute arising from the contradictory evidence of GC and DC as to whether the defendant’s possession of the property was continuous. Whether continuous or broken, the possession was not adverse until 2011.
The defendant’s counterclaim based upon adverse possession is not established.
Constructive Trust
The defendant’s claim is for the entirety of the property. It is not a claim for a proportion of the property or for a charge for payment of a sum of money based upon a comparison of financial or other contributions by the parties to the property’s acquisition. He seeks to establish that it would be unconscionable for the plaintiff to retain any part of the property. He assumes a greater burden in bringing a claim for the entire property than he would if he had brought a claim for less. Perhaps because the defendant claimed everything, there was no detailed analysis of what each party contributed to the property’s acquisition and to the acquisition and conservation of the other assets retained by the defendant.
The defendant has not established the relevant matters pleaded by him that the defendant paid the deposit for the purchase of the property and paid all loan repayments and all rates. The plaintiff was liable to pay the deposit. She paid it from a joint account and reimbursed that account with her own funds derived from her first home owner’s grant. She paid some mortgage repayments and some rates alone. The defendant’s higher financial contributions to the joint account are partly explicable by the defendant’s higher income, in turn partly explicable by the plaintiff’s absorbing more of the burden of raising the two children while the parties were together.
After separation, the defendant retained the restaurant business each of the parties had worked to build, the Elizabeth Street property and the Obi Obi property. That was in spite of some assistance by the plaintiff to the defendant in conserving each of those properties. In terms of value, the defendant retained most of the assets. Upon separation, the plaintiff alone supported the children.
The en suite bathroom and alleged improvements by the defendant have not been proved to have increased the value or amenity of the property.
It is not unconscionable for the plaintiff to retain some of the property. The defendant’s claim that she should retain no part of the property and that he should retain all of the property fails. He made no application for anything less than the whole property. I reject the claim that on the basis of the defendant’s contributions the plaintiff holds her property on constructive trust for the defendant.
Plaintiff’s claim for damages
The plaintiff seeks rent for the period of the defendant’s occupation of the property since 13 May 2011 at a rate of $200 per week. Service of the eviction notice was on 22 June and it gave him seven days to vacate. If rent is due I am satisfied that it is due from 29 June 2011. The estate agent’s evidence, given without entering the property, on the basis of assumptions about how it would appear after restoration to a tidy liveable state, was that it could be rented for $200 per week. She did not depose and was not asked how long it may have remained vacant to achieve that rent or whether it was a market rent either now or in the past two years. Market rent for the period since 29 June 2011 for the property, whether tidied up or not, has not been established. Market rent for the property without the improvements made by the defendant is the relevant issue and that has not been established. The plaintiff has not established that she would have let the property from May or June of 2011, as opposed perhaps to leaving it available for GC if he had chosen to occupy it. Photographs suggested an unkempt yard and interior. There is insufficient evidence to establish that the defendant is alone responsible for the state of the property. On the plaintiff’s case, GC occupied it for five years and with her permission and without the need to pay rent to her.
The plaintiff has not satisfied her onus of proof of the quantum of her alleged lost market rent. In considering the issue of whether to allow some nominal amount for damages, I note that the defendant admits a liability for rates and charges. I am not satisfied that an appropriate nominal rent should exceed the amount of the admitted liability for council rates and charges.
The defendant admits the plaintiff is entitled to reimbursement by him for rates and charges she paid to council since May 2011. They are an agreed amount of $20,898.99. The amount includes council’s legal costs and perhaps some penalties.
The plaintiff also claims for money allegedly paid by GC to the defendant for times when GC may have occupied the property over a five year period. Such money as was paid was not for a period after 29 June 2011 or 13 May 2011. It was for a period when the defendant was permitted by the plaintiff to occupy the property. He demanded payment from GC in return for the promise of services by the defendant and the defendant’s licence to GC to occupy the property. There was no argument by the plaintiff as to why any payment received by the defendant from GC is the plaintiff’s. I am not satisfied that the amount claimed is payable by the defendant to the plaintiff.
Interest
There were no submissions in respect of interest. It was claimed on no specified basis in the claim and from no specified date. I allow interest on damages of $20,898.99 from the date the claim was amended to include a claim for interest: 156 days from 9 July 2013 to 11 December 2013. It is $602.92. Inclusive of interest there should be judgement for $21,501.92.
Plaintiff’s claim for recovery of possession
I am satisfied that the market value of the land is less than $750,000 and that this court has jurisdiction. The plaintiff as registered proprietor is entitled to possession as the defendant has failed to establish any exception to her title.
Conclusion
The defendant failed to establish his counterclaim. The plaintiff established only that part of her claim for damages or mesne profits as was admitted. The plaintiff has established her claim for recovery of possession of the property. On the hypothesis that she would do so, the parties are agreed that the defendant should give possession thirty days from my order and that costs of the proceeding should follow the event. It was implied in the parties’ submissions that costs awarded should be on a standard basis.
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