| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : PERPETUAL TRUSTEE COMPANY LIMITED -v- WESTPAC BANKING CORPORATION LIMITED & ANOR [2002] WADC 236 CORAM : DEPUTY REGISTRAR HEWITT HEARD : 31 OCTOBER 2002 DELIVERED : 14 NOVEMBER 2002 FILE NO/S : CIV 2027 of 2002 BETWEEN : PERPETUAL TRUSTEE COMPANY LIMITED (ACN 000 001 007) Plaintiff
AND
WESTPAC BANKING CORPORATION LIMITED (ABN 33 007 457 141)
First Defendant
AND
MIGNON MAREE BOUWER
Second Defendant
Catchwords: Practice Western Australia - Summary judgment - Monies had and received - Limitation Act - Equitable fraud
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Legislation:
Limitation Act 1935
Result: Judgment granted Representation:
Counsel:
Plaintiff : Mr S M Temby
First Defendant : No appearance
Second Defendant : Mr K Burgoyne
Solicitors:
Plaintiff : Phillips Fox
First Defendant : No appearance
Second Defendant : Kevin Burgoyne
Case(s) referred to in judgment(s):
Hawkins v Clayton & Ors (1988) 164 CLR 539
Hughes v Gales (1995) 14 WAR 434
Case(s) also cited:
Australia and New Zealand Banking Group Limited v Westpac Banking Corporation (1988) 164 CLR 662
Clarke & Anor v The Union Bank of Australia Limited (1917) 23 CLR 5
Evans Deakin & Co Pty Ltd v Kaiser Engineers and Constructors Inc & Anor [1968] Qd R 379
Fancourt & Anor v Mercantile Credits Limited (1983) 154 CLR 87
Mercedes-Benz (NSW) Pty Ltd v National Mutual Royal Savings Bank Ltd, unreported; SCt of NSW, BC9600979; 1 April 1996
Moscow Narodny Bank Ltd v Mosbert Finance (Aust) Pty Ltd & Ors [1976] WAR 109 per Brinsden J at 110
Port of Brisbane Corp v ANZ Securities Ltd [2002] QCA 158
State Bank of New South Wales Ltd v Swiss Bank Corporation (1995) 39 NSWLR 350
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1 DEPUTY REGISTRAR HEWITT: Before me for determination is the plaintiff's application for summary judgment which was filed on 21 October 2002. Leave to bring that application was granted when an earlier summary judgment application was dismissed by virtue of the fact that the necessary pre-requisites concerning the service of the statement of claim had not been met. As well as granting leave to bring the further application, the plaintiff was granted leave to rely on the earlier materials filed, which it did, together with some supplementary materials which were filed.
2 The plaintiff is an incorporated body and is the trustee of the will of Alexander McKay McLean who died in August 1932. Edith Janet Clarke was a beneficiary under the terms of the will and entitled to an income from the residue of the estate. 3 During the lifetime of the beneficiary the income was deposited to an account in her name at the Westpac Banking Corporation Limited. The defendant had a power of attorney which was granted to her by the beneficiary and as I understand it was a co-signatory to the relevant account. 4 The beneficiary died on 28 October 1987 however the plaintiff was unaware of that fact and continued to forward cheques to what it supposed to be the address of the beneficiary until 2001 when it realised the beneficiary had died some 15 years previously. 5 It is common ground that the defendant received the cheques, deposited them into the account in the name of the deceased beneficiary and subsequently withdrew the monies and applied them to her own benefit. 6 The defendant offers as an explanation for that behaviour the fact that the deceased beneficiary had told her that when she died all her money was hers to keep. The deceased beneficiary also had a will under the terms of which the defendant was the residuary beneficiary. 7 The defendant states that by virtue of those facts she believed that the money which was deposited to the account was hers. She says that the money was withdrawn from the account and spent in the honest belief that the defendant was entitled to do so. All of the money which was deposited, some $115,000, was deducted and spent save for a small amount of $11.
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8 At an earlier stage, after the plaintiff discovered its error, the defendant repaid a sum of $30,000 but other than to reduce the sum owing I am unable to perceive any relevance to that transaction.
9 The thing that concerns me about the version of events, which is given by the defendant, is that she does not depose to her belief as to the source of the funds. She says that she did not know that the payments were being made because the deceased was a beneficiary of the will. It seems to me beyond belief that a person would be receiving and appropriating reasonably significant amounts of money without giving any thought to the source of that money and her entitlement to it. 10 The defendant offers the following issues as a defence to the plaintiff's claim: The first proposition is that the statute of limitation restricts the plaintiff's claim to six years. 11 As I understand the law, the statute of limitations will not come to the assistance of a party who commits an equitable or legal fraud. For that to happen it would be for the statute to further the fraud. 12 In the present case the receipt of the monies and their deposit to an account in the name of the deceased beneficiary seems to me, if not an intentional act to deceive the plaintiff into believing the beneficiary was still alive, at the least an equitable fraud. In that regard I rely on the decision of Master Bredmeyer in Hughes v Gales (1995) 14 WAR 434 where the Master, referring to various English authorities, concluded that in cases of equitable fraud time does not run until the discovery of the fraud. That proposition is supported by the following passage from the judgment of Deane J in Hawkins v Clayton & Ors (1988) 164 CLR 539 at 590: "It is arguable that the notion of unconscionable reliance upon the provisions of a Statute of Limitations which provides the foundation of the long-established equitable jurisdiction to grant relief in a case of concealment of a cause of action until after the limitation period has expired (cf. s.55(1) of the Limitation Act) should, by analogy, be extended to cover cases such as these where the wrongful act at the one time inflicts the injury and, while its effect remains, precludes the bringing of an action for damages. It seems to me, however, that the preferable approach is to recognize that it could not have been the legislative intent that the effect of provisions such as s.14(1) of the Limitation Act should be that a cause of action for a
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wrongful act should be barred by lapse of time during a period in which the wrongful act itself effectively precluded the bringing of proceedings. On that approach, the reference in s.14(1) of the Act to the cause of action first accruing should be construed as excluding any period during which the wrongful act itself effectively precluded the institution of proceedings." 13 In the present case the wrongful act is the conversion of the monies through an account operated in the name of the deceased beneficiary, creating the impression that the monies came to the hands of the intended recipient. 14 In the present circumstances it seems to me that the behaviour of the defendant must have had, at the least, constituted an equitable fraud and as a consequence she is not entitled to rely on the statute of limitations as a defence. 15 The next defence relied upon is the fact that the defendant testifies that she honestly believed that the money was hers because Clarke gave it to her and she was the beneficiary of Clarke's will. This is a very similar proposition that was raised elsewhere in the affidavit in the following terms: "I honestly believed that in any event I would be the holder of the funds sent to Edith Janet Clarke because Edith Janet Clarke told me the money was mine and further that I was the beneficiary of her will." 16 It is difficult to understand how Edith Janet Clarke could possibly have told the defendant that money received after the death of Clarke would be the property of the defendant. In any event, honesty is not a defence to a claim for money had and received. If a party receiving such money alters his or her position as a consequence of a bona fide belief in an entitlement to the funds, then that can be a defence. To expend the money on normal household expenses is not, as a matter of law, regarded as a sufficient alteration of position to amount to a defence. 17 The next proposition is that if the plaintiff had made due enquiry of the births and deaths register then it would not have put the defendant in the position in which she now finds herself. 18 I do not consider it incumbent upon a party in the position of this plaintiff to constantly be reviewing the register of births and deaths to see if any person who is a beneficiary of the will has died. That would
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require full searches on a weekly basis. The reason the plaintiff was not aware that the beneficiary had died was because the defendant acted in the way to which it was either calculated to, or had the effect of, concealing that fact. 19 I have not touched upon certain letters which passed between the plaintiff and the second defendant which appeared to me to suggest that the defendant's behaviour was more sinister than merely misinformed and might well have been criminal behaviour. It is not necessary for me to reach conclusions on that aspect of the matter because in my view the conduct of the second defendant in receiving the monies and depositing them to an account in the name of the deceased, which she had no right to operate following the death of the deceased, was an equitable fraud and the means by which the death of the deceased was concealed from the plaintiff. I am therefore of the view that the plaintiff should have a judgment against the second defendant in the amount of its claim. 20 I mention in passing that the second defendant appears to be of the view that the $30,000, which she previously paid to the plaintiff, might be recoverable from it. Since that $30,000 does not form part of the present judgment, I make it clear that in my view there is no basis whatsoever for the recovery of that sum and my judgment is limited to the balance of the monies had and received for that reason. 21 There remains some controversy concerning the amount of interest which might be payable on the monies which have been paid and perhaps that needs further argument. In my view it is clear that some level of interest should be paid. The plaintiff suggests that an appropriate rate is the rate payable on judgments of the Supreme Court from time to time over the period of 15 years or thereabouts when the second defendant received the monies. I am not inclined to accept that view. The true test should be to determine the amount which would have gone to the ultimate residual beneficiary had the monies been retained by the plaintiff pending distribution to that beneficiary. That would involve an assessment of the rate of return on funds held by the plaintiff company and again that is unlikely to be an easy task. I think it notorious that interest rates have fluctuated during the period with which we are concerned from levels approaching 20 per cent to levels below 3 per cent. In the circumstances, I think a fixed rate for the entire period would be appropriate and I am inclined to think that the figure of 8 per cent per annum would properly reflect the plaintiff's entitlement to interest, but I am prepared to hear further argument on that issue.
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