Parente v Parente

[2006] NSWSC 1154

CITATION:	Parente v Parente [2006] NSWSC 1154
HEARING DATE(S):	30, 31 October 2006
JURISDICTION:	Equity Division
JUDGMENT OF:	Young CJ in Eq
EX TEMPORE JUDGMENT DATE:	10/31/2006
DECISION:	Proceedings by plaintiff claiming equitable interest in land dismissed.
CATCHWORDS:	TRUSTS [103]- Constructive trust- Purchase of property by father- Son contributed wages towards purchase- Father intimated to son that son would receive half share in property when father died- Whether constructive trust arises by promissory estoppel- Promise vague- Reliance on promise not established- Monies paid because of filial duty of son to family- Held no constructive trust.
CASES CITED:	Allen v Snyder [1977] 2 NSWLR 685 Attorney-General of Hong Kong v Humphreys Estate (Queen's Gardens) Ltd [1987] AC 114 Barns v Barns (2003) 214 CLR 169 Baumgartner v Baumgartner (1987) 164 CLR 137 Grant v Edwards [1986] Ch 638 Hewett v Court (1983) 149 CLR 639 Jennings v Rice [2002] EWCA Civ 153 Muschinski v Dodds (1985) 160 CLR 583 Orr v Ford (1989) 167 CLR 317
PARTIES:	Emidio Antonio Parente (P) Berardino Parente (D)
FILE NUMBER(S):	SC 4712/05
COUNSEL:	R Sergi (P) S Austin (D)
SOLICITORS:	Palmieri Law Firm (P) Paul Gowran & Co (D)

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

YOUNG CJ in EQ

Tuesday 31 October 2006

4712/05 – PARENTE v PARENTE

JUDGMENT

1 HIS HONOUR: These proceedings are brought by a son against his father, claiming a half interest in the family home. That home is at 6 Pokolbin Street, Broadmeadow and I will refer to it subsequently in these reasons as "the Property".

2 The plaintiff's statement of claim says that he and his father arrived in Australia from Italy in October 1967. Initially they both lived with the plaintiff’s elder sister, Nina Di Claudio, in the Newcastle area and they both went to work as labourers at Electric Power Transmission at Carrington in Newcastle, commonly called EPT.

3 The plaintiff says that shortly after commencing work at EPT he and his father entered into an arrangement whereby he was to pay his father all his earnings for the purpose of assisting his father to buy a residence. In return, he was promised by his father that he would be a half owner in that property one day. He says, as is common ground, that the father purchased the property in late 1969 and that the title was put in the father's sole name. The evidence shows that with on-costs, the purchase cost was $9,275, of which $5,450 was raised by mortgage from the Commonwealth Bank, so that about $3,825 was paid by the defendant and there is little doubt in my mind that part (though I do not know what part) of this $3,825 originated from moneys paid by the plaintiff to the defendant.

4 The rest of the family had been left in Italy. They comprised the wife of the defendant and mother of the plaintiff, Rosa Parente, and seven other children. They came to Australia in March 1970. The family in Italy had been supported by moneys sent back by the defendant to Rosa, though she complained that she had been deprived of the capacity to grow food provided by the plaintiff and the defendant when they were all in Italy and she was starved of money because the defendant told her that because he was saving up for a house he could not send her as much money as she wanted. Just how much was sent over to Italy and how much of it originated from the plaintiff's wages is quite unclear.

5 The family was reunited in Newcastle in March 1970 and they all lived on the Property. From this time until 1975 the plaintiff says he gave his pay packet to his mother and the mother paid the mortgage and other household expenses so that the mortgage was discharged in March 1975, the last payment being made earlier in 1975. The plaintiff says he continued to hand his pay packet to his mother until he left Australia in mid-1979 to get married. He got married in Italy, returned at Christmas 1979 with a wife and commenced his own business as a concreter in early 1980.

6 So the plaintiff says that between 1967 and June 1979 he gave his pay packet to either the defendant or his mother, which contained all his earnings. The plaintiff says that he never opened any bank account until 1978 and that his father in the initial period would give him back between $5 and $8 a week for entertainment and he realised that some of the money which he had given to his father was going to go towards food and board and for the support of the rest of the family back in Italy in the initial period but that the balance was going to be saved for a deposit on a house in which the whole family could live.

7 There is contention between the witnesses as to whether the plaintiff did in fact hand over his entire pay packet to his father or mother. The facts should really be put into three periods:

(a) from 1967 to 1970 when the family came out;

(b) from 1970 until when the mortgage was paid off in early 1975; and

(c) from 1975 until 1979.

8 In period (c) it is quite clear that nothing given by the plaintiff should affect the ownership of the house, as it had already been fully paid for. However, it is significant that even though the house had now been fully paid, the plaintiff, if he is to be accepted, was still paying money to his mother each week. The evidence varied as to whether it was the custom for all the children in a family of Italian origin in the 1970s to pay over their pay packet each week to their parents and then be paid pocket money so that the moneys could be pooled to pay expenses. It would seem that this did happen with some of the children but perhaps not all.

9 However, in period (a), which is the principal period because it was there that the alleged promise was made, the plaintiff kept saying that at 17 or 18 he was really too young to know what was going on, that he handed his whole pay packet to his father and there is some corroboration of this. There is also corroboration that the defendant said from time to time to various members of the family that if it had not been for the plaintiff assisting, that he would not have been able to buy the house. Both the plaintiff and the defendant at the time were on what we today would consider a very low wage of 96 cents an hour. The plaintiff probably brought home about $46 to $48 a week in this period. The defendant may have brought home more because he worked more overtime. If the plaintiff brought home $46 to $48 a week, then with a deduction of $8 for entertainment and a further deduction of $10 for food we are looking in period (a) at a contribution of something like $3,000. All of that could not have gone towards the house because at least some of it went towards maintaining the family in Italy. Partly because it is so long ago and partly because no-one kept records it is impossible to work out just how much of the plaintiff's contribution was used on the house.

10 Although there is a dispute as to whether the plaintiff did pay over his pay packet, I accept on the balance of probabilities that he did. I appreciate that there are conflicts in the evidence but I consider that the plaintiff was a far more reliable witness than the defendant was.

11 The defendant did not inspire confidence in his evidence. He denied he ever took the plaintiff’s pay packet. He gave evidence in a most confused manner. He spoke of working 250 hours a week, which was obviously a gross exaggeration as there are not that many hours in a week. He spoke of walking from where he worked at Carrington to the Commonwealth Bank at Hamilton, which is a rather odd thing to do and even denied the truth of para 35 of his own affidavit. His evidence was inconsistent with that of the plaintiff and Mrs Rosa Parente, Antonio Parente and Nina and Giovanni Di Claudio, who were far more impressive witnesses. Thus, I accept on the balance of probabilities that the plaintiff did, in period (a) and period (b), pay over his pay packet but period (c) does not really concern me.

12 However, the main dispute was not so much as to whether the pay packet was handed over, but whether it was handed over because of a promise that the plaintiff would have half the house or because it was the custom or because it was merely something that all young men would do in a struggling family in a new country.

13 The authorities show, see eg Allen v Snyder [1977] 2 NSWLR 685, 691, that mere proof of expenditure or handing over wages for the benefit of a household is insufficient, standing alone, to show that the person who made the contribution is to get some interest in the property. It is necessary, if a claim is to be made, that the evidence goes further.

14 The statement of claim in the instant case in para 5 onwards says that very shortly after commencing employment at EPT the plaintiff and the defendant had a conversation concerning the purchase of a residential property and as a consequence of that conversation they had an arrangement whereby the plaintiff agreed to pay the defendant all of his earnings from his employment for the purposes of assisting the defendant to purchase a residential property but in return for the payment the defendant promised the plaintiff a half share in the ownership of the property.

15 Now it would seem to me that that claim just has not been made out by the evidence. The claim was more refined in the outline of submissions that were made at the end of the evidence and I will come to that in a moment.

16 Although the proceedings were commenced in May 2005 the plaintiff's claim was only put in statement of claim form recently and indeed the statement of claim was only filed on the first day of the hearing, though a draft had been given to the other side some months beforehand.

17 The proceedings came on for hearing before me yesterday and today. Mr R Sergi appeared for the plaintiff and Mr S Austin appeared for the defendant and I am indebted to both of them for the calm and learned way in which they have presented their clients’ cases.

18 Evidence was given on the plaintiff’s side by the plaintiff, his mother, his brother, Antonio, and his sister, Mrs Nina Di Claudio and her husband, Giovanni Di Claudio and all those persons were cross-examined. Other witnesses gave minor pieces of evidence and were not cross-examined. On the defendant’s side the defendant gave evidence, as did two of his daughters, though the defendant alone was cross-examined.

19 It would seem from the evidence that up until September 2003 the parties got on fairly well together but in September 2003 the defendant accused the plaintiff of poisoning some of his prized trees and plants, an allegation the plaintiff denied. Thereafter relationships deteriorated and in 2005 it became clear to the plaintiff that if the defendant ever intended to leave him half the house when the defendant died, that was now unlikely to occur and so these proceedings were commenced.

20 Although the statement of claim put the claim as having a half interest in the house now and although that claim was not abandoned, the way in which Mr Sergi put the principal claim of the plaintiff was that he did not intend to have his father removed from the property before the father died. Further, whilst he was still insisting on an order under s 66G of the Conveyancing Act 1919 for sale, he would not enforce that until after his father died. However, as Mr Austin points out, certainly up until yesterday this stronger claim was being pursued.

21 In his written outline of submissions for his final address Mr Sergi put that the defendant was bound by a constructive trust to hold a half share of the property for the plaintiff beneficially and that that constructive trust arose on any of three bases: (1) because the plaintiff and the defendant had a common intention that the plaintiff should have a beneficial interest and the plaintiff acted to his detriment based on that common intention; (2) a constructive trust arose by proprietary estoppel by encouragement because the plaintiff assumed that he would be the owner of a half share of the property and the defendant played such a part in inducing that assumption that it would be unjust to allow him to depart from it; and (3) because the plaintiff made contributions to the joint endeavour of the parties that had as its object the purchase of a property in equal shares.

22 I do not really consider that the first and third of these can be made out in the present case. The evidence to which I will come to in more detail shortly does not indicate that there was any common intention that the plaintiff should have a beneficial interest in the property. The highest it seems to me to go is that on the defendant’s death the plaintiff would be devised an interest in the property and again as to the third head, the contributions were made but they were made for household expenses and for the maintenance of the family in Italy and only partly to enable the deposit on the property to be made. It must be remembered in the instant case that as opposed to cases between de facto spouses, in this case the plaintiff had no liability under the mortgage at all. The liability was solely on the defendant.

23 Now, the basic evidence given by the plaintiff was in paras 5 and 8 of his first affidavit and para 6 of his second affidavit. In the first affidavit he says that he gave all his pay to his father each pay day and that the defendant had said to him words to the effect:

“I need you to help me buy the house and support the family. Without you I can't save a deposit and buy a house and bring the family over here to Australia. You will have a share of the house one day."

24 He says in para 8 of that affidavit that from time to time his father would say:

“I could not pay off the house and support the family without you. One day half of this house will be yours."

And on other occasions:

“In my will I will give you half of this house because you deserve it for helping me pay for it."

25 Indeed, there does not appear to me to be anything more in those statements than appealing to a son to assist with the family expenses and indicating that in gratitude the father would give the son an interest in the house, perhaps half the house, in the father's will.

26 In the second affidavit, para 6, the plaintiff says:

“I began giving all of my pay to my father on the understanding that in return I would own half the house. At the time I began giving my pay to my father he said to me words to the following effect, ‘You have to give me all of your pay every week. If you need money for something or to go out, I'll give it to you. If you help me save money, we can bring the family here, make a deposit on the house and support the family. Without you I can’t do it. If you help me, half the house will be yours.’”

27 He then said that as a result of that understanding that he would own half the house, each pay day he gave the whole of his pay packet to his father and that occasionally he forgot and when he did, his father would ask where his pay packet was. He said in para 48, which I admitted as his contention:

“I gave my pay to my father, and later, to my mother, because my father had told me I would have a half share in the Pokolbin Street house. Had I not been giving my pay to my father and my mother, I would have used my pay to purchase my own house."

28 In cross-examination the plaintiff said he did not want to dispossess his father and his claim was really one to have half the property after his father died. He said that the arrangement was, "On the day they died, they would give me half the house."

29 Because the statement of claim was only filed at the commencement of the hearing, there is no statement of defence. I asked Mr Austin to state his client’s defence in open court and he did so and the defences, in summary, were:

(1) The defendant denied the facts relied on by the plaintiff.

(2) It was not appropriate to categorise the facts in the way pleaded by the plaintiff.

(3) There was no writing.

(4) The plaintiff had not demonstrated that either there was a definite promise, nor the amount that he paid. In particular, if there was to be weight given to the alternate claim of equitable lien, he put that judges cannot use guesswork even to quantify the equitable lien. There must be evidence, which was absent in this case; and

(5) Laches.

30 As to facts, I have already said that I prefer the evidence of the plaintiff to the evidence of the defendant, though I do not overlook some inconsistencies between the evidence given by the plaintiff's witnesses.

31 I do not, however, accept that through all the periods the plaintiff gave either his father or his mother the whole pay packet but my main doubts are in period (c) which, as I have said, is not really relevant to the issues I have to decide. It is very difficult to accept that the plaintiff was giving all his pay packet to his mother in period (c). We know that he was on workers’ compensation and received a lump sum which swelled his capital but he must have spent a lot of money on going back to Italy, getting married and commencing his own business and it is a little difficult to marry that up with his statement that this whole pay packet went to his mother in period (c).

32 However, the evidence does tell me that in period (a) almost certainly he gave something like $28 a week to his father and in period (b) he handed his pay packet mostly to his mother, though what allowances she gave him and what expenses she paid on his behalf is not completely clear.

33 So then I accept that the plaintiff did pay money over to his father in period (a) and the question is whether I am satisfied on the balance of probabilities that there is a case of proprietary estoppel by encouragement, as argued in the second of Mr Sergi’s contentions.

34 I now turn to examine the principles involved in the claim for an interest under the principle of proprietary estoppel by encouragement.

35 Generally speaking, the court of equity should interfere with ownership under the general law only to the extent to which it is necessary to prevent unconscionable conduct. The general rule is that no equitable proprietary interest arises, nor any claim for reimbursement, merely because a person expends money on improving the property of another or contributes to another purchasing the property; see for instance Hewett v Court (1983) 149 CLR 639. Proprietary estoppel is a long-standing exception to this general rule and although recently it has been said that equity is not based on contract and must be considered to be a flexible principle to be applied in a broadbrush way, Grant v Edwards [1986] Ch 638, it is a principle which is to be kept within bounds because of the general public policy principles that I have set out earlier.

36 In Jennings v Rice [2002] EWCA Civ 153, which for some reason or other has never been reported in any leading set of law reports, though probably it is one of the most useful cases on the topic, Robert Walker LJ, as his Lordship then was, said at [44]:

“Any summary formula is likely to prove to be an over-simplification. The cases show a wide range of variation in both of the main elements, that is the quality of the assurances which give rise to the claimant's expectations and the extent of the claimant's detrimental reliance on the assurances. The doctrine applies only if those elements in combination, make it unconscionable for the person giving the assurances … to go back on them."

37 His Lordship later noted that the equity arises not from the claimant's expectations alone, but from the combination of expectations, detrimental reliance and unconscionability (see para 49).

38 In dealing with this sort of case, as Mr Austin reminded me, one has got to be careful to avoid what Deane J said in Muschinski v Dodds (1985) 160 CLR 583, 616 that the judge makes a ruling because he or she thinks it would be unjust or unfair for the owner of the legal estate to assert his ownership against another. It is not a question of the idiosyncratic subjective view of fairness of individual justices which is to govern, but rather what, on the precedents, shows that it is jurisprudentially unconscionable to allow to continue.

39 Although it is wrong to try and set out some general formula, the cases do show that there must be a fair amount of certainty in the assurances on which the plaintiff relies. For instance, no equity will arise in circumstances where the detriment is incurred in circumstances where the person incurring the detriment knows that the other person may change his or her mind, because in such cases there is really no relevant representation; see Attorney-General of Hong Kong v Humphreys Estate (Queen's Gardens) Ltd [1987] AC 114 at 124.

40 Although, as Toohey J said in Baumgartner v Baumgartner (1987) 164 CLR 137 at 154 it is not necessary to prove exact contributions, even so the court must be fairly convinced that the contributions were made of such a nature and of such a quantum as would proportionately justify the grant of an equitable proprietary remedy.

41 With those principles in mind I need to consider what Mr Austin says about the evidence of the plaintiff, even if I accept it. He says what was the promise actually made and what does the alleged trust mean? The promise, if it be a promise in the terms of the plaintiff's affidavit, was very vague and in any event it was never contemplated that an interest in the property would be obtained by the plaintiff until the defendant died.

42 Now examining that submission in the light of the cases shows the difficulty in the plaintiff's case. Putting aside for the moment the basic problem that the plaintiff has of inducement, we have a situation where the reality was that the plaintiff never believed that he was going to get an interest in the property until after his father died. Now he must have contemplated that his father had many years to live, that the property may be disposed of by his father and that his father could change his intention so far as the will was concerned. These matters very severely weaken the case that there was a definite promise which it would be unconscionable for the defendant to depart from.

43 Secondly, whilst in period (a) if it were not for periods (b) and (c) one might say that the only reason why the plaintiff paid money to the defendant was because of a promise, the fact that during period (b) the moneys were paid not to the father but to the mother and were for general household expenses, then in period (c) further money was paid even though the house was paid off, again weakening the view that the detriment was the payment of the money and that it was induced by the promise. It would seem to me on the whole of the material, including what happened in periods (b) and (c), that whilst the defendant did make reference to leaving property to the plaintiff after his death, half an interest perhaps, that was in gratitude for what the plaintiff had done and it was not the other way around, that the money was only paid over because of the promise or assurance that was made. In other words there was no reliance on any promise, even if the promise were sufficiently free of vagueness, that caused the plaintiff to pay over the moneys. The moneys were paid over because it was the filial duty of the plaintiff to support his father and his family.

44 Accordingly, in my view the case on proprietary estoppel fails. In any event the highest that the promise would have been is that after the defendant's death the plaintiff would obtain an interest by will.

45 There were some questions put to the defendant about how his will was and he declined to answer those questions. At one stage it would appear that the will gave a quarter interest to each of the two sons and the other moiety of the property was to be shared amongst the six daughters. However, there is material from which I can infer that at present the plaintiff is not likely to benefit, but the plaintiff is not without rights.

46 Even if I were to make some sort of order in these present proceedings, in view of what the High Court said in Barns v Barns (2003) 214 CLR 169, the interest that the plaintiff would receive would be amenable to being whittled away by applications made by his siblings under s 7 of the Family Provision Act 1982. On the facts that I have found if the defendant does not honour the obligation he undertook as head of the family back in 1967 to receive his son's contribution to the family, if the defendant does not carry out his duty as a father, then the facts that I have found in this case would give the plaintiff considerable comfort I would think if he brought his own application under the Family Provision Act. It may be he is so wealthy that he would not want to do so, I just don’t know. It seems to me that had I made an order in this case, it would have been that the Property was held on the basis that the plaintiff had an interest after the defendant's death (an interest in remainder in equity). Whether the Property could have been sold under the Settled Lands legislation (Conveyancing and Law of Property Act 1898, s 48) is debatable. All these matters are far better dealt with under the Family Provision Act in due course.

47 That, however, is not the reason why I am dismissing the claim. It is because it has not been made out as a matter of evidence.

48 Because of my finding it is not necessary to deal with the defence of laches. Mr Austin seriously raised laches and relied on the judgment of the High Court, particularly Deane J, in Orr v Ford (1989) 167 CLR 317. He says that the delay in this case has meant that valuable evidence has been lost, namely records from EPT and from the Commonwealth Bank. Whilst that is so, it does not seem to me that it was reasonable for proceedings to be commenced at least until after 2003 when the damage would have already been done because up until that time the father gave every intention of honouring his obligations. So I would not, had it become necessary, have dismissed the suit on the ground of laches.

49 It follows, however, from what I have said that the proceedings must be dismissed with costs and the exhibits only being documentary can be retained except those produced on subpoena, which can be returned to the person producing them.

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