GADSDON & ORS -v- GADSDON & ANOR [2003] WASC 48
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASC 48 | |
| Case No: | CIV:1916/2001 | 29-31 JANUARY 2003 | |
| Coram: | PULLIN J | 18/03/03 | |
| 31 | Judgment Part: | 1 of 1 | |
| Result: | Claim allowed in part Declaration of constructive trust | ||
| A | |||
| PDF Version |
| Parties: | GEOFFREY JOHN GADSDON DAVID WILLIAM GADSDON JUDITH ANN HAVERCROFT MARGARET JUNE GADSDON GEOFFREY JOHN GADSDON AS EXECUTOR OF THE ESTATE OF GEOFFREY FRANK GADSON |
Catchwords: | Trusts Constructive trust Breach of trust Real property Torrens system Indefeasibility of title Fraud Whether indefeasibility provisions apply to volunteer Caveat Claim for property settlement not a caveatable interest |
Legislation: | Transfer of Land Act, s 68, s 82, s 134 Trustees Act 1962, s 65 |
Case References: | Bahr v Nicolay (No 2) (1988) 164 CLR 604 Baumgartner v Baumgartner (1987) 164 CLR 137 Clay v Clay (2001) 202 CLR 410 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 Conlan v Registrar of Titles (2001) 24 WAR 299 DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 Durbin v Perpetual Trustee Co Ltd [1995] ANZ ConvR 280 Forbes v Git [1922] 1 AC 256 Foskett v McKeown [2001] 1 AC 102 Hayes v O'Sullivan (2001) 24 WAR 40 Ioppolo v Ioppolo (1978) 4 Fam LR 124 LHK Nominees Pty Ltd v Kenworthy [2002] WASCA 291 Lindsay Petroleum Company v Hurd, Farewell & Kemp (1874) LR5PC 221 Lloyd v Tedesco (2002) 25 WAR 360 Maile v Jennings [1956] VLR 45 Metcalf & Kerr v Permanent Building Society (in liq) (1993) 10 WAR 145 Permanent Building Society (in liq) v Wheeler (1992) 10 WAR 109 Tokenhouse Enterprises Pty Ltd v Commissioner of Stamp Duties (Qld) [1986] 1 Qd R 155 Truesdale v Federal Commissioner of Taxation (1970) 120 CLR 353 Allen v Snyder [1977] 2 NSWLR 685 Assets Co Ltd v Mere Roihi [1905] AC 176 Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Australian Guarantee Co Ltd v Balding (1930) 43 CLR 140 Baburin v Baburin (No 2) [1991] 2 Qd R 240 Baburin v Baburin [1990] 2 Qd R 101 Baird v BCE Holdings Pty Ltd (1996) 40 NSWLR 374 Barry v Heider (1914) 19 CLR 197 Boranga v Flintoff (1997) 19 WAR 1 Breskvar v Wall (1971) 126 CLR 376 Butler v Fairclough (1917) 23 CLR 78 Calverley v Green (1984) 155 CLR 242 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 City of Belmont v Link Interiors Pty Ltd, unreported; SCt of WA (Wheeler J); Library No 990114; 12 March 1999 Composite Buyers Ltd v Soong (1995) 38 NSWLR 286 Constandinidi v Ralli [1935] Ch 427 Ex parte Goodlet & Smith Investments Pty Ltd [1983] Qd R 792 Forster v Hale (1798) 3 Ves 696; 30 ER 1226 Hide & Skin Trading v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 IAC (Finance) Pty Ltd v Courtnay (1963) 110 CLR 550 King… |
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- Gadsdon v Gadsdon [2003] WASC 48
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- [2003] WASC 48
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CaseChat Overview and Summary
This case involved a dispute over a home unit, Unit 29, located in Kings Park Road, Crawley. The protagonists were the first defendant, Mrs Gadsdon, who was the second wife and now the widow of Mr Gadsdon senior, and the plaintiffs, who were the children of Mr Gadsdon senior and his first wife. The plaintiffs alleged that their father, Mr Gadsdon senior, was guilty of fraud in that he instigated, and participated in, a fraudulent breach of trust by the trustee when the home unit was transferred from the trustee of the family trust to Mr Gadsdon senior. Mrs Gadsdon lodged a caveat prohibiting any transfer of the home unit by Mr Gadsdon senior. The plaintiffs commenced these proceedings, seeking declarations that Mr Gadsdon senior held the home unit on trust for the plaintiffs, and that Mrs Gadsdon had no caveatable interest in the home unit.
The court held that the plaintiffs were entitled to a declaration that Mr Gadsdon senior held the home unit on a constructive trust for the plaintiffs in accordance with the proportions specified in cl 5(a) of the Trust Deed. The court also held that Mrs Gadsdon did not have any estate or interest in the home unit. The court further held that the plaintiffs were not entitled to a declaration that the Vesting Day of the Trust was 9 March 1995. Instead, the home unit would be held by the estate on constructive trust for the persons who were the Beneficiaries before the Vesting Day. The court also held that the plaintiffs were not entitled to an order that the caveat be removed, as the second defendant would have to seek such an order. The court would hear submissions from the second defendant about this if it sought leave to counterclaim.
The court's decision was based on the following reasoning. Firstly, the court held that the plaintiffs were entitled to a declaration that Mr Gadsdon senior held the home unit on a constructive trust for the plaintiffs in accordance with the proportions specified in cl 5(a) of the Trust Deed. The court held that the transfer of the home unit from GFG to Mr Gadsdon senior was a breach of trust and that Clause 22 of the Trust Deed prohibited the transfer. The court held that Mr Gadsdon senior was guilty of fraud because he had taken active steps to bring about the transfer of the land to himself, without consideration, when he had been advised about the content of Clause 22 and given legal advice to "shelve" the proposal unless he obtained counsel's opinion approving the proposed transaction, which advice he ignored.
Secondly, the court held that Mrs Gadsdon did not have any estate or interest in the home unit. The court held that there was no foundation for the caveat, and the plaintiffs were entitled to the declaration they sought. The court held that the caveat was not a proper foundation for sustaining a caveat, as it did not show that the caveator had "an estate or interest" in the land. The court also held that there was no evidence of any joint endeavour between Mrs Gadsdon and Mr Gadsdon senior, and therefore, there was no basis for a constructive trust in favour of Mrs Gadsdon.
Thirdly, the court held that the plaintiffs were not entitled to a declaration that the Vesting Day of the Trust was 9 March 1995. The court held that the resolution passed on 9 March 1995, which terminated the Trust, could not be construed as being "the Vesting Day". The court held that GFG, through its directors, did not think there was any property left to be dealt with in accordance with cl 5(a), and as a result, it did not appoint a Vesting Day earlier than 30 June 2052. The court held that the home unit would be held by the estate on constructive trust for the persons who were the Beneficiaries before the Vesting Day.
Lastly, the court held that the plaintiffs were not entitled to an order that the caveat be removed, as the second defendant would have to seek such an order. The court would hear submissions from the second defendant about this if it sought leave to counterclaim. The court held that the plaintiffs had no standing under s 138 of the Transfer of Land Act to apply for an order that the caveat be removed. The court held that the second defendant would have to seek leave to counterclaim under s 138 of the Transfer of Land Act for an order removing the caveat lodged by Mrs Gadsdon.
In conclusion, the court held that the plaintiffs were entitled to a declaration that Mr Gadsdon senior held the home unit on a constructive trust for the plaintiffs in accordance with the proportions specified in cl 5(a) of the Trust Deed. The court also held that Mrs Gadsdon did not have any estate or interest in the home unit. The court held that the plaintiffs were not entitled to a declaration that the Vesting Day of the Trust was 9 March 1995. Instead, the home unit would be held by the estate on constructive trust for the persons who were the Beneficiaries before the Vesting Day. The court held that the plaintiffs were not entitled to an order that the caveat be removed, as the second defendant would have to seek such an order. The court would hear submissions from the second defendant about this if it sought leave to counterclaim.
The court held that the plaintiffs were entitled to a declaration that Mr Gadsdon senior held the home unit on a constructive trust for the plaintiffs in accordance with the proportions specified in cl 5(a) of the Trust Deed. The court also held that Mrs Gadsdon did not have any estate or interest in the home unit. The court further held that the plaintiffs were not entitled to a declaration that the Vesting Day of the Trust was 9 March 1995. Instead, the home unit would be held by the estate on constructive trust for the persons who were the Beneficiaries before the Vesting Day. The court also held that the plaintiffs were not entitled to an order that the caveat be removed, as the second defendant would have to seek such an order. The court would hear submissions from the second defendant about this if it sought leave to counterclaim.
The court's decision was based on the following reasoning. Firstly, the court held that the plaintiffs were entitled to a declaration that Mr Gadsdon senior held the home unit on a constructive trust for the plaintiffs in accordance with the proportions specified in cl 5(a) of the Trust Deed. The court held that the transfer of the home unit from GFG to Mr Gadsdon senior was a breach of trust and that Clause 22 of the Trust Deed prohibited the transfer. The court held that Mr Gadsdon senior was guilty of fraud because he had taken active steps to bring about the transfer of the land to himself, without consideration, when he had been advised about the content of Clause 22 and given legal advice to "shelve" the proposal unless he obtained counsel's opinion approving the proposed transaction, which advice he ignored.
Secondly, the court held that Mrs Gadsdon did not have any estate or interest in the home unit. The court held that there was no foundation for the caveat, and the plaintiffs were entitled to the declaration they sought. The court held that the caveat was not a proper foundation for sustaining a caveat, as it did not show that the caveator had "an estate or interest" in the land. The court also held that there was no evidence of any joint endeavour between Mrs Gadsdon and Mr Gadsdon senior, and therefore, there was no basis for a constructive trust in favour of Mrs Gadsdon.
Thirdly, the court held that the plaintiffs were not entitled to a declaration that the Vesting Day of the Trust was 9 March 1995. The court held that the resolution passed on 9 March 1995, which terminated the Trust, could not be construed as being "the Vesting Day". The court held that GFG, through its directors, did not think there was any property left to be dealt with in accordance with cl 5(a), and as a result, it did not appoint a Vesting Day earlier than 30 June 2052. The court held that the home unit would be held by the estate on constructive trust for the persons who were the Beneficiaries before the Vesting Day.
Lastly, the court held that the plaintiffs were not entitled to an order that the caveat be removed, as the second defendant would have to seek such an order. The court would hear submissions from the second defendant about this if it sought leave to counterclaim. The court held that the plaintiffs had no standing under s 138 of the Transfer of Land Act to apply for an order that the caveat be removed. The court held that the second defendant would have to seek leave to counterclaim under s 138 of the Transfer of Land Act for an order removing the caveat lodged by Mrs Gadsdon.
In conclusion, the court held that the plaintiffs were entitled to a declaration that Mr Gadsdon senior held the home unit on a constructive trust for the plaintiffs in accordance with the proportions specified in cl 5(a) of the Trust Deed. The court also held that Mrs Gadsdon did not have any estate or interest in the home unit. The court held that the plaintiffs were not entitled to a declaration that the Vesting Day of the Trust was 9 March 1995. Instead, the home unit would be held by the estate on constructive trust for the persons who were the Beneficiaries before the Vesting Day. The court held that the plaintiffs were not entitled to an order that the caveat be removed, as the second defendant would have to seek such an order. The court would hear submissions from the second defendant about this if it sought leave to counterclaim.
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Background
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