Platzer v Commonwealth Bank of Australia
[1996] QCA 237
•19/07/1996
IN THE COURT OF APPEAL
[1996] QCA 237
SUPREME COURT OF QUEENSLAND
Appeal No. 137 of 1995
Brisbane
[Commonwealth Bank of Australia v. Platzer]
BETWEEN
COMMONWEALTH BANK OF AUSTRALIA Appellant
AND
MICHAEL PAUL PLATZER First Respondent
AND
MARIE-LOUISE RELF PLATZER Second Respondent Fitzgerald P.
Davies J.A.McPherson J.A.
Judgment delivered 19/07/96
Separate reasons for judgment by each member of the Court, all concurring as to the order.
APPEAL DISMISSED WITH COSTS.
| CATCHWORDS | TRUSTS - Resulting trusts - Muschinski v. Dodds (1985) 160 C.L.R. 583; Baumgartner v. Baumgartner (1987) 164 C.L.R. 137. |
| TORRENS SYSTEM - Mortgage - Caveat - Failure to lodge caveat -Person-to-Person Financial Services Pty. Ltd. [1984] 1 N.S.W.L.R. 745 | |
| EQUITY - Competing unregistered equitable estates or Interests - Priority in time - Latec Investments Ltd. v. Hotel Terrigal Pty Ltd. (1965) 113 C.L.R. 265; Heid v. Reliance Finance Corporation Pty. Ltd. (1983) 154 C.L.R. 326. | |
| EQUITY - Competing unregistered equitable estates or interests - notice - Lapin v. Abigail (1930) 44 C.L.R. 166; Abigail v. Lapin [1934] A.C. 491; Meth. v. C.B.C. (1977) A.C.L.C. ¶40-302 | |
| Counsel: | G.A. Thompson for the appellant |
| P.A. Keane Q.C. & P.W. Hackett for the first and second respondents | |
| Solicitors: | Gadens Ridgeway for the appellant |
| A.B. Douglas & Associates for the respondents | |
| Hearing Date: | 27 November 1995 |
IN THE COURT OF APPEAL
| SUPREME COURT OF QUEENSLAND | Appeal No. 137 of 1995 |
| Brisbane | |
| Before | Fitzgerald P. Davies J.A. McPherson J.A. |
[Commonwealth Bank v. Platzer & anor.]
BETWEEN:
COMMONWEALTH BANK OF AUSTRALIA
(Defendant) Appellant
AND:
MICHAEL PAUL PLATZER
(First Plaintiff) First Respondent
AND:
MARIE-LOUISE RELF PLATZER
(Second Plaintiff) Second Respondent
REASONS FOR JUDGMENT - FITZGERALD P.
Judgment delivered 19/07/1996
The circumstances giving rise to this appeal are substantially set out in the reasons for
judgment of McPherson J.A. As the judgments of the other members of this Court reveal,
the trial judge’s findings of fact almost entirely, if not wholly, favour Mr and Mrs Platzer.
Further, their Honours are of opinion that those findings must be accepted by this Court.
Despite the misgivings I have with respect to some important findings and the problems
which exist in relation to aspects of the relief granted by the trial judge, it is pointless for me
to approach this appeal on any basis other than by reference to the facts which his Honour
found. Once this position is reached, the appeal can quickly be seen to be without prospects. Mr Platzer is the registered proprietor of a house property at 27 Suvla Street, Balmoral, but
Mrs Platzer, who paid most of the purchase price and the cost of erection of a house on the
land, has always had a beneficial interest in the property and has been entitled to beneficial
ownership since prior to 14 April 1989. On that day, the appellant, Commonwealth Bank of
Australia (“CBA”), paid out a mortgage over the property which had been given to the
National Australia Bank (“NAB”) on 1 June 1988 by Mr Platzer with Mrs Platzer’s consent.
CBA’s payment to NAB on 14 April 1989 also procured the release of a security held by
NAB over a term deposit with NAB belonging to Mrs Platzer. The securities which Mr and
Mrs Platzer had given to NAB had been given in connection with the indebtedness to NAB of
a solicitor, Grenacs, who was practising under the name Ryan and Archer Coutts.
Throughout that period, Mr Platzer was working for Mr Grenacs, who has since become
bankrupt. Mr Platzer hoped to be admitted as a solicitor and to join Mr Grenacs as a partner
in his practice. As security for the money paid to NAB, CBA received a guarantee from Mr
Platzer and Mr Grenacs, plus a bill of mortgage over the Suvla Street property signed by Mr
Platzer, together with a release of the NAB mortgage and the certificate of title to the land.
Although Mr Platzer was the registered proprietor, CBA had notice that Mrs Platzer was
interested in the Suvla Street property, which the application for finance to CBA (in about
February1989) referred to as owned by Mr and Mrs Platzer. Further, at about that time, a
finance consultant who had been engaged by Mr Grenacs told the CBA officer who dealt with
the matter that Mrs Platzer was interested in the property, that there was possibly a trust, and
that Mrs Platzer had bought the land and was paying for the construction of a house. Despite
these references to the Suvla Street property, the trial judge appears to have considered that the CBA officer led Mr Platzer to believe that all that was required from him was a guarantee,
and that no reference was made to a mortgage over that property.
Discussions between the finance consultant and the CBA officer on the occasion referred to
above, and subsequently between the CBA officer and Mr Platzer and/or Mr Grenacs prior to
17 March 1989, indicated that Mr Platzer’s involvement was related to his aspiration to
become a solicitor and a partner in Mr Grenacs’ practice, and that, in the event that that did
not occur, his involvement in the transaction with CBA was to cease and Mr Grenacs’
mother’s house was to be substituted as security.
On 17 March 1989, the CBA officer was informed at a meeting with Mr Platzer and Mr
Grenacs that Mr Platzer’s application for admission as a solicitor had failed and he had
determined to return to his former employment as a Federal Police Officer. It was agreed
that the transaction would nonetheless proceed with a later exchange of documents when the
security over Mr Grenacs’ mother’s house became available; Mr Platzer was also to “get his
deed [to the Suvla Street property] back” from CBA at that time; it was not explained why
CBA would have possession of the title deed to the Suvla Street property if all that was
required of Mr Platzer was a guarantee.
The position is not made clearer by other findings by the trial judge. On the one hand,
speaking of Mr Platzer’s earlier involvement with Mr Grenacs’ financial consultant, his
Honour said:
“When Platzer was speaking with [the financial consultant] in relation to a
possible advance by the Commonwealth Bank, he understood that there would a registered Bill of Mortgage over the practice of Ryan and Archer Coutts and
there would be a guarantee from Grenacs’ wife Debra guaranteeing the debts
of the practice and there would be a Bill of Mortgage by Platzer and his wife limited to $70,000 if he gained admission as a solicitor. Prior to the execution by Platzer of the guarantee and the Bill of Mortgage ... no-one told
him those security arrangements had changed.”
However, in dealing with the occasion on which Mr Platzer signed the CBA documentation,
his Honour stated:
“On the morning of 14th April 1989, Grenacs telephoned [the CBA officer]
and asked her where the security documents were and she told him that they were on the way down to him. As soon as he received the documents, Grenacs approached Platzer who was working in the office of Ryan and Archer Coutts and told him that the Commonwealth Bank settlement was to happen that day and they both had to sign some documents which had to be returned to the bank urgently. Platzer asked why he had to sign anything. Grenacs replied that it was just a formality. Platzer had to sign so that [CBA]
could hold the deed until Grenacs’ mother’s securities were exchanged and at
then the deed to Platzer’s house would be returned. Platzer looked at the
document and saw it had his name and ‘solicitor’ written next to it. He said
he could not sign because it had him described as a solicitor. Grenacs became
agitated and said that that was the bank’s mistake, both of them had told the
bank that Platzer had not been admitted as a solicitor, and he said they had to sign the documents and get them back as the settlement was all set for that afternoon. He had told the National Australia Bank on the Wednesday he was closing his accounts. He said he had to settle today and he had to draw wages from the Commonwealth Bank that day. He said the National Australia Bank accounts were actually closed at that point and the documents had to be signed and the bank said that he could not just cross things out on the documents, they had to go back for re-drafting if altered and the settlement would not take place on that day, the Friday. Grenacs said that if the settlement did not take place on that day, the National Bank would not be paid out and they were likely to foreclose on the money. He said he and Platzer had to sign the documents and get them back but it would only be a short term because his
mother’s place was coming in as a security. Platzer agreed to sign on that
basis and they went next door to a credit union office where the manager witnessed their signatures on the documents. Platzer signed where indicated on the documents. There were no copies but Grenacs said he would make sure the Commonwealth Bank sent copies to Platzer. Platzer did not know exactly what he had signed. He can remember that he saw on the front
document the word ‘guarantee’. He was not aware that he signed a Bill of
Mortgage in favour of the Commonwealth Bank and it was not until 19th December 1989 that he became aware that he had signed a Bill of Mortgage on
14th April 1989.”
Later, his Honour added:
“Contrary to the bank guidelines, [the CBA officer] delivered the guarantee
and mortgage to Grenacs who was desperate to have the settlement take place
immediately for execution by Platzer. I find that Grenacs was [CBA’s] agent
for the purpose of securing the execution of the guarantee and mortgage.
Although he had passed the Solicitors’ Board examinations, Platzer had spent
most of his working life in the Federal Police Force. The practical experience he had gained there had been in the field of criminal law. Platzer was working in an unpaid capacity at Ryan and Archer Coutts so he could show the Northern Territory Supreme Court that he had gained some commercial experience. It seems likely Platzer would defer to Grenacs in matters involving commercial dealings and it is understandable that he would not seek independent legal advice. I formed the impression that throughout their relationship Grenacs dominated Platzer because he had the stronger personality and was qualified and owned the firm which Platzer wished to join as a partner.
[The CBA officer] knew up to and including the date of settlement on the 14th
April 1989 that Platzer was neither a solicitor nor a partner.It is more likely than not that Platzer would specify that his liability was conditional on his being admitted as a solicitor and then as a partner. It seems unlikely that he would assume responsibility for partnership debts until he
became a partner.”
The trial judge also accepted that CBA later refused Mr Grenacs’ attempt to substitute
security over his mother’s house for the mortgage over the Suvla Street property and Mr
Platzer’s guarantee.
CBA did not lodge its mortgage over the Suvla Street property for registration until 20
December 1989, and Mrs Platzer had lodged a caveat preventing registration of CBA’s
mortgage on the previous day, 19 December 1989.
Mr and Mrs Platzer issued a Supreme Court writ against CBA on 14 December 1990, and the
action was subsequently transferred to the District Court and conducted by reference to a
Further Amended Plaint dated 2 March, 1995, a Further Further Amended Defence and Counterclaim dated 24 April 1995, and an Amended Reply and Answer, which seems to have
antedated CBA’s final Defence and Counterclaim. The action was determined in favour of
Mr and Mrs Platzer on 16 June 1995 by a somewhat curious series of orders which declared
Mrs Platzer to be the beneficial owner of the Suvla Street property and that it was held on
trust for her by Mr Platzer, who was ordered to transfer the land to her; it was also declared
that Mrs Platzer’s equitable interest “has priority over the equitable interest in favour of”
CBA, and that CBA’s bill of mortgage over the Suvla Street property and its guarantee from
not only Mr Platzer but his co-surety, Mr Grenacs (who was not a party to the action) was
“void”.
By its notice of appeal, CBA sought against Mrs Platzer a declaration that its interest under its
unregistered bill of mortgage has priority over any interest which she has in the Suvla Street
property and an order that she remove her caveat to allow its bill of mortgage to be registered,
and against Mr Platzer the sum payable under his guarantee, apparently totalling, with
interest, $175,498.69 at 6 July 1995 when the notice of appeal was filed, plus continuing
interest at the rate allegedly agreed.
There can be no priority issue between CBA and Mrs Platzer if the mortgage and guarantee
from Mr Platzer to CBA were “void”, as the trial judge held. Under a heading “The First
Plaintiff’s Claim”, his Honour stated:
“I find that by the 17th March 1989 at the latest, [the CBA officer] was aware
that the condition upon which the Suvla Street property was offered as security to the bank by Michael Platzer had not been fulfilled and it was understood by Michael Platzer and [the CBA officer] that the Suvla Street property was not to be taken by the bank as security for the debts of Ryan and Archer Coutts or Grenacs or anyone else. Also contrary to bank guidelines [the CBA officer]
did not deliver an S.33 Notice to Platzer ... setting out the extent of Platzer’s
liability. If such a form had been delivered it would have stated a liability of
$150,000.In my view the manner in which in circumstances created by the Bank, Michael Platzer was induced to sign the guarantee and mortgage constitutes unconscionable conduct on the part of the bank sufficient to entitle Michael
Platzer to have the guarantee and mortgage set aside.”
The trial judge’s conclusion that CBA had acted unconscionably in its dealings with Mr
Platzer (with the consequence that his guarantee and the mortgage over the Suvla Street
property were voidable) was open to his Honour[1] on the findings which he had made,
especially in circumstances in which the liabilities accepted by Mr Platzer (and Mrs Platzer)
always related to the debts of a third party, Mr Grenacs, and, contrary to what had been
agreed, CBA refused to accept the alternative security which was offered in exchange for Mr
Platzer’s guarantee and the Suvla Street mortgage.
Accordingly, I agree that the appeal should be dismissed, with costs to be taxed.
REASONS FOR JUDGMENT - DAVIES J.A.
Judgment delivered the 19th day of July 1996
I have had the advantage of reading the reasons of McPherson J.A. I accept his
Honour's statement of the relevant facts and of the conclusions and reasoning of the learned
trial Judge. I agree with his Honour, for the reasons he gives, that, subject to any interest of
the appellant, the first respondent held the subject land in trust for the second respondent and
that the second respondent's equitable interest arose earlier in time than any interest of the
appellant. I also agree with what his Honour has said about the principle to be applied by
this Court in considering findings of fact by a trial Judge where those findings are based on
credibility.
Applying that principle I do not think that any sufficient case was advanced on appeal
for rejecting the trial Judge's findings of fact as to what Mr. Gummer told Ms. Gluer about the
second respondent's interest in the relevant land. Once that is accepted it must also be
accepted that the appellant had notice, before it acquired its interest, that the second
respondent had an equitable interest but nevertheless failed to ascertain the nature of that
interest. I therefore do not find it necessary to consider, as McPherson J.A. did, whether,
absent that finding, the appellant had such notice.
Generally, indeed almost universally, where the holder of an equity acquired it with
notice of a prior equity, its claim to priority must fail[2]. There are nonetheless exceptions to
[2] Lapin v. Abigail (1930) 44 C.L.R. 166 at 182.
this of which the most obvious are an agreement to postpone[3] or waiver of priority[4]. There
[3] As in ANZ Banking Group Ltd. v. National Mutual Life Nominees Ltd. (1977) 15
[4] As in Fung Ping Shan v. Tong Shun [1918] A.C. 403.
may also be other conduct on the part of the holder of the prior equity which may estop her
from asserting her priority. The only relevant conduct alleged in this case related to what
McPherson J.A. described as the extent of the second respondent's knowledge of or
acquiescence in the bill of mortgage executed on 14 April 1989. As I agree with what he has
said about that I would conclude that there was nothing in this case which would affect the
application of the general principle to which I have referred.
Consequently the appellant's claim against the second respondent must fail whether
that claim is based solely on its own mortgage or, in addition, on its right to be subrogated to
the mortgage to National Australia Bank. But I also agree with McPherson J.A. that any
claim by the appellant to be subrogated would have failed for the reasons which he gives.
I also agree with McPherson J.A. that neither respondent received the benefit of any
payment made by the appellant to National Australia Bank and that for that reason they were
not unjustly enriched by the payment.
I therefore agree with McPherson J.A. that the appeal against the orders made in
favour of the second respondent must fail.
As McPherson J.A. has implied, it is not immediately clear that the orders made in
favour of the first respondent were correct. Although I do not think that the principle in
Commercial Bank of Australia Limited v. Amadio (1983) 151 C.L.R. 447 should be confined
to facts of the kind which existed in that case, in the absence of the misrepresentation made
by Grenacs to the first respondent referred to in the reasons of McPherson J.A. I would have
doubted whether there was unconscionability of such a kind as to entitle the first respondent
to avoid the guarantee and mortgage which he made. However that misrepresentation,
inducing as it did the making of a disadvantageous transaction, in circumstances in which, as
the learned trial Judge found, the first respondent was dominated by Grenacs (a finding which
his Honour no doubt was assisted in making by his observations of the witnesses) was
sufficient to require the Court to intervene as it did to set aside that guarantee and mortgage.
I therefore agree that the appeal against the orders made in favour of the first
respondent should also fail.
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 137 of 1995
Brisbane
| Before | Fitzgerald P. Davies J.A. McPherson J.A. |
[Commonwealth Bank of Australia v. Platzer]
BETWEEN
COMMONWEALTH BANK OF AUSTRALIA Appellant
AND
MICHAEL PAUL PLATZER First Respondent
AND
MARIE-LOUISE RELF PLATZER Second Respondent
REASONS FOR JUDGMENT - McPHERSON J.A.
Judgment delivered the 19 day of July 1995
This appeal involves competing claims in respect of registered land, shortly described
as Lot 1 on registered plan no.186813, by the second respondent Mrs Marie-Louise Platzer as
beneficiary under a trust, and by the appellant Commonwealth Bank of Australia under an
unregistered bill of mortgage. The land is a suburban allotment at 27 Suvla Street in the
Brisbane suburb of Balmoral, on which a residential house has been built.
Sequence of events. Events leading to execution of the bill of mortgage can be
summarised as follows. The first respondent was a member of the Australian Federal Police
serving in their legal section. He completed the Solicitors Board examinations in 1988, but was not qualified for admission to practice until he had served articles of clerkship. At about
that time, Mr Grenacs, a partner in the firm of Ryan & Archer Coutts, solicitors, was looking
for another partner to take the place of a Mr Salmon, who was planning to leave the firm.
On 31 May 1988 Grenacs and Platzer executed a deed (ex 13) providing that, as soon as
Platzer was admitted to practice in Queensland, they would enter into partnership on the
terms contained in a draft agreement (cl.1). Pending his admission to practice, Platzer would
guarantee the liability of the firm to the extent of $70,000 (cl.2); but that, if he was unable to
be admitted, the deed would be at an end (cl.3), the guarantee would be revoked, and
Mr Grenacs would repay any moneys within a month of receiving notice that Platzer was
unable to be admitted (cl.4).
Between October 1988 and May 1989, Platzer took long service leave from the Police,
and worked at the firm to gain experience with a view to making an application to the
Solicitors Board for admission in "special circumstances" without serving articles. The firm
banked with National Australia Bank ("NAB"), which agreed that it would release Mr Salmon
and accept Platzer as a replacement, substituting securities provided by him instead of those
given by the outgoing partner. The securities were executed at a meeting at the NAB office
attended by Mr and Mrs Platzer on 1 June 1988. Mrs Platzer had a term deposit, which was
made the subject of a security agreement (ex 5) signed by both of them, and Mr Platzer
executed a bill of mortgage (ex 12) in favour of NAB over the land at Suvla Street. The case
at trial of Mr and Mrs Platzer was that NAB received the bill of mortgage on terms that it was
conditional on Mr Platzer being admitted as a solicitor and becoming a partner in the firm of
Ryan & Archer Coutts. In accepting this contention, the trial judge found that no guarantee
of the firm's indebtedness to the NAB was ever executed by Mr or Mrs Platzer. The
consideration in the bill of mortgage ex 12 was expressed to be "Loans, Advances and other Banking Accommodation"; subject to what follows, no such loans, advances or
accommodation were provided to Mr Platzer by the NAB. Mr Platzer was not admitted as a
solicitor and never became a partner in the firm of Ryan & Archer Coutts.
In time the overdraft of the firm increased to a level where the NAB was constantly
pressing for its reduction. In about January 1989, arrangements were initiated by Grenacs to
transfer the banking of the firm to the appellant Commonwealth Bank of Australia (the Bank).
The interest rate being charged to the firm was thought to be high, and Grenacs consulted
Mr Gummer, who was a financial consultant of Gummer Cannell & Co., for advice as to what
could be done about it. A meeting was held, attended by Mr Platzer, between Grenacs and
Gummer at which particulars were provided to enable Gummer to make an application for
finance to another bank. On the basis of those particulars Gummer prepared an application
(ex 26), which was dated 16 February 1989, for finance in the name of Ryan & Archer
Coutts, Grenacs and Platzer seeking a term loan of $150,000 and a working overdraft of
$30,000. The application contains a section entitled "Security offered", which refers to three
items: (1) a registered equitable mortgage (presumably what was meant was a bill of sale)
over the firm's practice; (2) a guarantee by Grenacs and Platzer; and also the following further
item:
"3. Both partners are prepared to provide additional real estate security over properties which they own. However, the ownership of these properties is somewhat complex and involves a number of third parties. Neither Grenacs or Platzer are prepared to offer third party security. If the Bank can negotiate some acceptable arrangements in relation to the property securities then well and good. It is to be remembered that the reason for making application to the Commonwealth Bank is due to the fact that the present Bank, the National, is holding Mr Grenacs' mother's house as security. He is not prepared to allow this position to continue."
The application was accompanied by separate statements of assets and liabilities of Platzer
and Grenacs. The statement relating to Platzer includes as assets the land at 27 Suvla Street and the house then being constructed there. At the top of the list of assets is a handwritten
notation "Joint with M/L". Mrs Platzer's first two names are Marie Louise. Mr Platzer is
throughout described as a solicitor, which was not true, although in his personal particulars
the date "27/2/89" is added. It was the date on which he expected to be admitted as a
solicitor.
The representative of the Bank who negotiated transfer of the firm's account to the
Bank was Miss Helen Gluer, who at that time held the position of Assistant Manager
Corporate Banking. It was to her that the application for finance (ex 26) prepared by
Gummer was given. After some discussions with him, she told him that the Bank did not
wish to deal with him as finance broker but would negotiate with the applicant firm directly.
There were discussions with Grenacs about application, and a lunch-time meeting on 17
March 1989 attended by Platzer, in the course of which Miss Gluer was told that Platzer had
not yet been admitted as solicitor. In an application for finance (ex 44) prepared by Miss
Gluer and dated 23 March 1989, Mr Michael Platzer is described as intending to join the firm
as partner "in the next few months". In ex 44 the application for finance is recorded as being
made by the firm Ryan & Archer Coutts for a loan of $150,000 (of which $120,00 was to pay
out the NAB overdraft) and by Grenacs for a personal loan of $80,000. With respect to the
loan application by the firm, the security is described as including a guarantee limited to
$70,000, by Mr and Mrs Platzer supported by a mortgage "by Michael Paul Platzer ... and
Marie Louise Platzer (his wife) over property being erected at 27 Suvla Street, Balmoral".
The application for finance ex 44 was approved by Miss Gluer's superior on the same
day, which was 23 March 1989. On 29 March 1989 she wrote a letter to Grenacs ex 30
communicating approval for the finance on terms contained in the accompanying "terms
sheet". As regards the loan of $150,000 to the firm, security "to the Bank's satisfaction" is described in the terms sheet as comprising a registered bill of mortgage over the firm's assets,
and also "registered first mortgage by Michael Platzer and Marie Platzer over property
situated at 27 Suvla Street". However, in the course of the telephone call to the office of the
firm at about this time, Miss Gluer asked someone at the office of the firm for details of the
ownership and real property description of the property. She received in response a facsimile
transmission ex 45 recording Mr Platzer as the proprietor. At her request the Bank then
conducted a search of the Register of Titles, which confirmed this information (ex 46).
Following this, the guarantee and bill of mortgage ex 15 were signed by Platzer and delivered
to the Bank. On 14 April 1989 at a meeting at the NAB attended by Grenacs, the Bank
delivered a cheque to the NAB and received in return an executed release of the NAB bill of
mortgage ex 12 and the certificate of title to the subject land.
After some demur from the Bank, Mr Grenacs also on that occasion succeeded in
obtaining from the Bank possession of the certificate of title to his mother's property which
the NAB had been holding as part of the security for his liabilities to it. An aspect of the
arrangement said to have been worked out with the Bank was that, in the event that Platzer
was not admitted as a solicitor and a partner in the firm, his mother's property would be
accepted by the Bank in substitution for the property at 27 Suvla Street. By about the end of
May 1989 it was clear that Mr Platzer would not succeed in becoming a solicitor and he
returned to the Federal Police. However, when Grenacs spoke to Miss Gluer about the
matter in July 1989, she said the Bank was not prepared to accept the mother's property as
security. The reason she gave was that it was contrary to Bank policy to do so because the
Bank "does not want to throw out little old ladies into the street if they have to foreclose".
Since the events recounted Mr Grenacs has become insolvent. The bill of mortgage in favour of the Bank executed by the first respondent Mr Platzer has never been registered. Curiously, the photocopy of the instrument (ex 15) in the appeal record bears indications of
an indorsement recording its entry in the Register of Titles on what appears to be 22
December 1989. However, the original ex 15 does not contain that indorsement at all. A
current title search (ex 61) dated 24 April 1995, which was tendered by the Bank at trial,
describes the bill of mortgage as an unregistered dealing lodged on 20 December 1989.
Before that, a caveat lodged by Mrs Platzer on 19 December 1989 had prevented registration
of that instrument. It is a possible explanation of the indorsement on the photocopy that the
Registrar or his officer was in the process of registering the bill of mortgage when Mrs
Platzer's caveat was discovered. In any event, the photocopy is not the document tendered
and admitted as ex 15 at the trial, and is therefore not evidence before us. Both the trial and
the appeal were conducted on the footing that the Bank's bill of mortgage had, because of the
lodgment of Mrs Platzer's caveat, not been registered. So much is expressly acknowledged
in para.1(d) of the Bank's outline of argument on this appeal.
Mrs Platzer's equity. The Bank claims to have been subrogated to the secured status
of the NAB. Subject to that contention, the issue which falls to be resolved is between the
competing unregistered equitable estates or interests, assuming each of them to be
established, of Mrs Platzer and of the Bank. The genesis of Mrs Platzer's claim can be traced
to an occasion on 8 February 1983 when she and Mr Platzer were entertaining a friend to
dinner at Mrs Platzer's home unit in Brisbane. They were not married until April of that
year, and her surname then was Howie. She had previously gone through an unhappy
marriage, to which there was some reference in the course of the conversation at dinner. The
friend, whose name was G.J. Lye and who, like Mr Platzer, is a member of the Australian
Federal Police, suggested that matrimonial disputes might be avoided if a pre-nuptial agreement was signed by the couple. An agreement was thereupon written out, and signed
by Mr Platzer and Ms Howie, as she then was. It was witnessed by Mr Lye.
The agreement is a two-page handwritten document, which was admitted at the trial as
ex 1. It records that Mr Platzer and another policeman named Jacobi had contracted to
purchase land at Balmoral, which the two of them had agreed with Council approval to
subdivide into two residential allotments on which they intended to build houses for resale.
By the terms of ex 1, Mr and Mrs Platzer agreed that Mr Platzer would withdraw from the
agreement with Jacobi; that Mrs Platzer would provide $20,000 to pay out his share of the
loan which he and Jacobi had raised to settle the contract for purchase of the land; that Platzer
would take title to the allotment at 27 Suvla Street, and Jacobi the other subdivided lot ; and
that Mrs Platzer would sell her home unit and use the proceeds to pay for construction of a
house at 27 Suvla Street, in which they would reside. The agreement concludes with the
following two paragraphs:
"Michael Platzer will consent to any transfer of the property at 27 Suvla Street, Balmoral to Marie Louise Howie that she may require including a transfer to her as sole registered proprietor provided:-
That if either Michael Platzer of [sic] Marie Louise Howie should die after their marriage leaving children of that marriage, the property at 27 Suvla Street will then be transferred to their children or held in trust for them."
In the years that followed, the primary terms of the agreement were carried into effect.
A building contract dated 29 March 1988 (ex 3) for an amount of $92,078 was entered into
between the Platzers and a builder named Burger, and the house, which became the
matrimonial home, was completed at some time in 1989. Apart from "a couple of hundred
dollars" contributed by Mr Platzer, it was, as the learned trial judge found, Mrs Platzer who
paid for the entire interest in the land, including the cost of the house. For this purpose she
borrowed $20,000 from her father; she applied $54,623.44 from the proceeds of sale of her home unit; $10,723 from a term deposit she held with Suncorp; and a further sum of $30,000
which she borrowed from her father. The costs of subdivision and transfer had evidently
been discharged by February 1985, which was when Mr Platzer obtained the certificate of
title to the land at Suvla Street. There had been some delays in locating the certificate of
title, and the land was not finally registered in his name until 20 May 1988.
The learned trial judge found there was a resulting trust in favour of Mrs Platzer
arising from the payments she had made for the land and the improvements on it, and he
declared that Mr Platzer held the land on trust for Mrs Platzer. Putting on one side any
interest the Bank may have, that declaration and the finding which led to it are plainly
correct. During the marriage she has been working and earning income and, although there
is evidence that some repayments to her father had their source in savings from housekeeping,
it is much too imprecise to enable them to be quantified. Mr Platzer therefore holds the legal
title on trust for Mrs Platzer in proportion to her contributions, which, apart from the couple
of hundred dollars that came from him, corresponds to the whole beneficial interest in the
property. See Muschinski v. Dodds (1985) 160 C.L.R. 583; Baumgartner v. Baumgartner
(1987) 164 C.L.R. 137.
Mrs Platzer's beneficial ownership of the land arose as and when she paid for its
purchase, which on the material before us she had done by about February 1985. On any
view her interest antedated by a comfortable margin any equitable interest which the Bank
might have acquired under or by virtue of the agreement for mortgage to which it may be
entitled. It was not until 14 April 1989 that the bill of mortgage ex 15 was executed by Mr
Platzer which, but for lodgement of the caveat on 19 December 1989, would have been
registered in favour of the Bank.
Priority in time. There is thus no doubt that Mrs Platzer's interest in the land was
earlier in time. As between equitable estate or interests created in succession in or in respect
of the same property, the rule is that, where the merits are equal, the first in time prevails.
See Latec Investments Ltd. v. Hotel Terrigal Pty. Ltd. (1965) 113 C.L.R. 265, 276, per
Kitto J.; Heid v. Reliance Finance Corporation Pty. Ltd. (1983) 154 C.L.R. 326, 333, 339.
Mrs Platzer's interest was no "mere" equity but the full beneficial ownership of the land. The
learned trial judge held that the Bank had express notice of Mrs Platzer's equitable interest.
His Honour's finding to that effect is challenged on appeal. While it stands it represents a
demerit that may in the end be fatal to any claim by the Bank; but Mrs Platzer's claim to the
prior and superior right in equity does not, at least in the first place, rest on proof that the
Bank had knowledge or even notice of her subsisting interest. The onus of displacing her
priority rests upon the holder of the later equitable interest. See General Finance Agency &
Guarantee Co. Ltd. v. Perpetual Executors & Trustees Association Ltd. (1902) 27 V.L.R.
739, 743.
Registration of the bill of mortgage would have extinguished Mrs Platzer's equitable
interest, or at any rate would have superimposed upon it the charge conferred by s.60 of the
Real Property Act 1861. If registered, the Bank would, by virtue of ss.44 and 109 of that
Act, have taken free of any prior equitable interest of which it had notice. In providing that
a transferee is not affected by notice of unregistered interests, s.109 speaks simply of a
"transferee" and not a registered transferee. Even if a mortgagee can be considered a
"transferee" within the meaning of that provision, it must, I consider, now be regarded as
settled that s.109 operates only upon and after registration: See Whalan, The Torrens System
in Australia, 270-272; Bourseguin v. Stannard Bros. Holdings Pty. Ltd. [1994] 1 Qd.R. 231,
238. It may be added that neither at the trial nor on appeal did the Bank rely on s.48 of the Real Property Act 1877, as entitling it, as a person intended to take under an instrument
constituted in this instance by the bill of mortgage, to a better or superior right than the
equitable estate of Mrs Platzer. It is consequently not necessary to consider the impact, if
any, that notice might have upon the unregistered interest of a person who claims the benefit
of that section. It may be noted in passing that the particulars recorded in the title search (ex
61) appear to regard the bill of mortgage ex 15 as not being in registrable form.
In assessing the competing equities, the starting point is the effect of the arrangement
with the NAB, followed by a consideration of the extent of Mrs Platzer's knowledge of what
happened when the Bank took over the firm's account; and, finally, the Bank's knowledge or
notice of her interest in the subject land. Many of the findings made by the primary judge
have been challenged on this appeal. It is desirable, therefore, in considering each of those
questions, to do so as far as possible by reference to facts which are not disputed or not
contradicted by other evidence, without adverting to the evidence and findings which are the
subject of appeal.
Arrangement with NAB. The contention advanced on behalf of Mr and Mrs Platzer
at the trial was that the bill of mortgage ex 12 in favour of the NAB was not intended to
secure the indebtedness of Ryan & Archer Coutts if Mr Platzer did not become a partner in
that firm. Mrs Platzer was present at the meeting with the NAB on 1 June 1988 when that
bill of mortgage was executed, but she said in evidence that she was "not sure" or "not really
aware" of what documents were signed apart from the agreement ex 5 giving the NAB
security over the term deposit, or of what documents were handed over by her husband.
However, she also said she knew the certificate of title to the land was handed over. Her
evidence was that at the meeting on 1 June 1988 she had explained she "wanted the land
changed to a family trust, seeing Michael was going to be in business with Bill [Grenacs] we assumed". After the meeting she received a letter dated 1 June 1988 (ex 6) from the NAB
confirming that it would consent to the transfer of the land to the Platzer Family Trust "when
incorporated", but also adding "Replacement mortgage and guarantee and indemnity will be
required at that time". In evidence Mrs Platzer said her understanding of the basis on which
the NAB was holding the certificate of title to the land was "if Michael (Platzer) were to
become a solicitor and he was admitted. If that were not so, then Deborah, who was Bill
Grenacs' wife, would then put in security if Michael were not admitted ..".
Mrs Platzer's evidence to that effect was supported by the evidence of Mr Platzer and
also to some extent by that of Mr Grenacs, who was present at the meeting with the NAB on
1 June 1988. According to Platzer, Grenacs told the NAB officer (a Mr Atkinson) that "if
Mick has any problem with his admission, we have got that ... agreement and Deb's properties
are on standby to come in instead of him". The agreement referred was ex 13 concerning
Platzer's admission to the partnership of Ryan & Archer Coutts. At the trial the evidence of
Grenacs on the subject was interrupted by an objection by counsel for the Bank to the effect
that it was hearsay, or that it offended the parole evidence rule. The objection, which it was
sought to maintain on appeal, is plainly unsustainable. Evidence is admissible to prove that
an instrument, which on its face is apparently absolute or unconditional, is subject to a
condition qualifying or limiting its operation until or upon the happening of a particular event.
The trial judge accepted the evidence to this effect. In his reasons for judgment he
made the following findings:
"In discussions with the National Australia Bank officers it was agreed that the National Australia Bank would accept security from Platzer to replace the security Salmon had taken out. Platzer would allay the bank's concerns by depositing fixed deposits with the bank which were held in an account for Marie Louise Platzer. The bank would accept that arrangement and also permit Michael Platzer to draw against the $54,623 in the account to build his home. It was understood that the house would be built and Platzer would put the house up as security, always conditional upon his becoming admitted as a solicitor and be capable of practising as a solicitor in the State of Queensland. This was also understood to be the position by Marie Louise Platzer who had an equitable interest in the property. The National Australia Bank was informed that if Platzer failed to be admitted as a solicitor for any reason then Grenacs would replace Platzer's security with properties owned by Grenacs' wife Debra which were to be on 'standby'."
These findings are among those challenged on appeal; however, the oral evidence on which
they are based, though slender, was uncontradicted. The obvious person to contradict the
Platzers' version of events was Mr Atkinson, who was the senior NAB officer present at the
discussions on 1 June 1988. He was the final witness called by the Bank at the trial.
Possibly because of the contention that evidence on the subject was inadmissible, he was not
asked and did not give evidence about the conditions, if any, on which the bill of mortgage
was executed or the certificate of title was left with the NAB. The oral evidence on the
subject therefore remained uncontradicted and his Honour was entitled to accept and act upon
it.
The documentary material from the NAB supports the conclusion that the bill of
mortgage was not intended to secure the overdraft of Ryan & Archer Coutts if Platzer did not
become a partner in that firm. On appeal there was some discussion about whether
Mr Platzer's admission as a solicitor and membership of the partnership was properly to be
considered a condition precedent or subsequent. The parties themselves probably never
turned their minds to the question, believing as they no doubt all then did that it was only a
matter of time before Platzer was admitted as a solicitor and became a partner; but, viewed
objectively, it appears correct to regard his becoming a solicitor as a condition precedent to
his liability under the bill of mortgage ex 12 for the firm's indebtedness to the NAB. It was
known to Mr Atkinson on 1 June 1988 that Platzer was not admitted, and repeated inquiries
by the NAB after that date disclosed that he was never admitted as a solicitor.
In addition there is a customer file note ex 69 from the NAB recording that the "firm
proprietorship" could change to Grenacs solely "pending inclusion of Mike Platzer when he is
admitted to practice"; and another file note ex 71 that "in due course fresh guarantee security,
signature cards etc will need to be taken when Mike does become a partner". The NAB
schedule of securities mentioned a guarantee from Mr & Mrs Platzer, which may have been
intended to guarantee the firm's overdraft with the bank; but no such instrument of guarantee
was produced at the trial, and the judge found as a fact that none had been provided by them
to the NAB. Without it, the bill of mortgage would not by its terms have operated to make
Mr Platzer liable for the firm's indebtedness to the NAB because the bill of mortgage ex 12
was expressed to secure only loans, advances and other accommodation to the mortgagor.
Apart from the assistance to the Platzers to build their house (which was paid off and is not in
issue), the only loans, advances or accommodation made or granted were those to the firm, of
which Mr Platzer never became a member. For this apart from any other reason, it is not
possible to conclude that the Platzers were unjustly enriched by the payment made by the
Bank, or that there is any basis on which they ought to be compelled to make restitution. It
was not they who received the benefit of any payment made by the Bank to the NAB.
The trial judge found that on 14 April 1995, the NAB mortgage ex 12 was not
operative against Platzer because it was conditional on his admission as a solicitor and his
becoming a party to the loan facilities. The finding to that effect is supported by
uncontradicted oral and documentary evidence and ought not to be disturbed. While it
stands it is difficult to see how the Bank's claim to be subrogated to the status of secured
creditor under the NAB bill of mortgage can succeed. Subrogation confers on a person
discharging a mortgage debt no more than a right to succeed to the securities held by the
erstwhile mortgagee. Traditionally the person who pays out a mortgage has been described as "stepping into the shoes" of the secured creditor who has been paid. See Lapin v. Abigail
(1930) 44 C.L.R. 166, 189. The payer's rights cannot be more extensive than those of its
predecessor. The effect of the arrangement with the NAB was to raise a "personal" equity
against it, enforceable under s.51 of the Real Property Act 1877, even though the bill of
mortgage ex 12 in favour of the NAB was registered: cf. Bahr v. Nicolay (No. 2) (1988) 164
C.L.R. 604, 615- 616. Acquiring by subrogation an equitable claim to the security interest
under that bill of mortgage would not obliterate that equity, which came into existence earlier
than the Bank's equitable right to be subrogated. In any event, the Bank's right to be
subrogated is, like the equitable interest it acquired under its own bill of mortgage ex 15,
liable to be defeated if it was acquired after notice of Mrs Platzer's prior interest as beneficial
owner of the land. The claim to be subrogated therefore adds no additional force to the
Bank's equitable interest.
Mrs Platzer's knowledge of the mortgage ex 15. Subject to what follows,
Mrs Platzer is therefore entitled to retain the judgment in her favour, which treats her
beneficial ownership as having priority to and so prevailing over the interest of the Bank. It
is liable to be displaced by proof of disentitling conduct on her part. As to her demerits, the
most prominent consideration is the extent of her knowledge of or acquiescence in the bill of
mortgage ex 15 executed on 14 April 1989. The trust instrument ex 1 conferred on
Mr Platzer no power to mortgage the trust property. Apart from any express power in the
trust instrument, the power of a trustee to give a mortgage over trust property is extremely
limited. Practically speaking, the only relevant power to mortgage is that conferred by s.45
of the Trusts Act 1973. Where a trustee is authorised by the Act to expend, pay, or apply
capital money subject to the trust for any purpose, the trustee also has under s.45 power to
raise the money by mortgage. The purposes are primarily those specified in s.33(1), which include repair and improvement of the trust property including its subdivision; and s.62,
which is concerned with the maintenance and advancement of a beneficiary.
Neither of these provisions of the Trust Act was invoked by the Bank. No doubt that
was because, in executing the bill of mortgage on 14 April 1989, Mr Platzer never claimed to
be acting as a trustee. In evidence he said that he discovered he had executed a bill of
mortgage in favour of the Bank only on 19 December 1989, which was also the day on
which the caveat was lodged. The learned judge accepted his evidence to that effect. That
being so, it would not have been possible to maintain that he was acting, or purporting to act,
as trustee when he executed the bill of mortgage ex 15 on 14 April 1989. For similar
reasons, the Bank would not have been able to rely on s.46 of the Trusts Act. It has never
sought to do so.
The Bank's case at trial and on appeal was not that Mr Platzer had acted within his
powers as trustee, but that the effect of Mrs Platzer's conduct was such as to postpone her
equitable interest in the property to that of the Bank. In the course of giving particulars of
that conduct, para.8(b)(vi) of the amended defence and counterclaim alleged that she
knowingly permitted her husband to grant the bill of mortgage to the Bank without taking
steps to prevent him from doing so or putting the Bank on notice of her beneficial interest.
The allegation amounts to saying that on or before 14 April 1989 she knew he intended to
give the Bank a bill of mortgage over the land, and did nothing to stop him. If that were
established it would be tantamount to her having given her approval in advance to the bill of
mortgage executed in favour of the Bank on 14 April 1989. As she is of full age and solely
entitled, the result would be to defeat her claim outright rather than simply to postpone it to
that of the Bank. It should perhaps be added that under the last two paragraphs of ex 1, the
infant children of Mr and Mrs Platzer might also have a present or contingent interest in the trust property which probably could not be validly overridden by either or both of their
parents; but nothing has been made of this circumstance, and the temptation to pursue it must
therefore be resisted.
In evidence at the trial Mrs Platzer said in cross-examination that she learned that her
husband had given some security to the Bank only in December 1989, which was when he
told her he thought the document he had signed had been "to the Commonwealth Bank";
before that, she did not understand he had given any securities to that Bank. Having denied
that in about January or February 1989 the Bank had requested that security be given over
the property at Suvla Street to pay out the NAB, Mrs Platzer nevertheless agreed that she had
sworn an answer to interrogatory (ex 7) saying that the date it first came to her knowledge
that a request had been made to Mr Platzer to grant a bill of mortgage over the land in favour
of the appellant Bank was in late January or February 1989.
The trial judge made no finding about the extent of Mrs Platzer's knowledge of the
fact that her husband had given the bill of mortgage ex 15 or any other security in favour of
the Bank over the trust property. However, the undisputed fact is that she had no
communication at all with the Bank, and so could not have found out about it, at least from
that source, any earlier than December 1989. Her evidence about what her husband told her
was not contradicted. The answer she gave in cross-examination is not inconsistent with her
answer in ex 7. Both referred to her having first become aware in January or February 1989
of a request from the Bank for security over the land. What she denied in evidence was that
she knew that the purpose of the security requested was to pay out the NAB. All she knew,
she said, was that "it was being changed from one bank to another". She was not asked and
did not say if she knew whether the request had ever been acted upon.
On the evidence so far recounted, the only conclusion is that the Bank failed to prove
that Mrs Platzer knew that her husband intended to give it a bill of mortgage over the trust
property; or that, at any time before December 1989, she became aware that he had signed
ex 15. Without proving some such knowledge on her part, Mrs Platzer cannot be shown to
have authorised, approved, or even acquiesced, in the giving of the bill of mortgage ex 15
over the land at 27 Suvla Street.
Failure to lodge caveat. The allegation in para.8(b)(vi) of the Bank's amended
defence and counterclaim therefore fails. The other matters relied on by the Bank as reasons
for postponing Mrs Platzer's prior equitable interest are those alleged in para.8(b)(i) to (v) of
the amended defence. Essentially they may be reduced to saying that Mrs Platzer allowed
Mr Platzer to retain possession of the certificate of title to the land and that, until 19
December 1989, she failed to lodge a caveat to protect her equitable interest. It is difficult to
see that, considered by itself, her action in permitting Mr Platzer to retain the certificate of
title is capable of being regarded as a reason for postponing her equitable interest in the land
to that of the Bank. Generally speaking, it is the duty of a trustee to retain possession of the
title deeds to trust property. See Shropshire Union Railways & Canal Co. v. The Queen
(1875) L.R. 7 H.L. 496, 512. Section 49 of the Trusts Act now permits a trustee to deposit
title deeds with a bank for safe custody. However, when Mr Platzer left the certificate of title
with the NAB on 1 June 1988, he was not depositing it for safekeeping but, at least in part,
as some form of security, even if only a contingent or future security, for the liabilities of
Ryan & Archer Coutts.
Mrs Platzer knew that the certificate of title to the land was in her husband's
possession, and that it had passed into the custody of the NAB on 1 June 1988. Given the
condition under which it was held by the NAB, she had, objectively speaking, no reason to be concerned about it, even if it also meant that she was aware that it was subject to some form
of security, if only contingently so, in favour of the NAB. The question is, however, whether
she was justified in remaining inactive once she knew that the account of Ryan & Archer
Coutts was being transferred to the Bank.
In cross-examination Mrs Platzer said or affirmed that her understanding of how the
certificate of title ("the deed") came to be in the possession of the Bank in 1989 was that it
"had been changed from the NAB and held in security for if and when Michael should
become a solicitor"; and that "the deed was being held by the Commonwealth Bank as
security subject to the contingency ... referred to". Her evidence in re-examination (part of
which has already been referred to) was that the basis on which she understood the NAB was
holding the deed was if Michael were to become a solicitor; if that did not happen, then
Deborah, who was Bill Grenacs' wife, would put in security if Michael were not admitted;
"but in the Commonwealth Bank it was different .... in as much as Bill's mother's house as
security would be in place of ours if Michael were not admitted". This shows that she knew
not only that custody of the deed had been changed but also that the terms on which it was
being held were being altered.
What is not clear is precisely when it was that Mrs Platzer acquired the knowledge
referred to in that evidence. If it was on or before 14 April 1989, when settlement took
place, she knew both that the firm's bank account was being transferred from the NAB to the
Bank and that the condition governing the holding of the deed as security was being varied in
the manner she described. On that footing it might have been incumbent on her to take
positive steps to confirm that the Bank was aware of that condition or contingency and of the
variation to it. Failure to do so might in those circumstances amount to a demerit on her part
having the consequence of postponing her own beneficial interest. However, the questions to which her evidence was given in answer do not identify with any precision the time when
she acquired the relevant knowledge. It could have been any time either before or after 14
April 1989; or perhaps even as late as December 1989, when, according to her evidence, she
first became aware that some security had been given to the Bank. There was, however,
evidence in chief from Mrs Platzer that "after the end of February 1989" (which was when
she became aware that her husband was not being admitted as a solicitor) she asked him what
had happened to the deed. He told her that it was being held in safe deposit and that Mrs
Grenacs' house was to be substituted ("replaced") for theirs. After that she said she asked
him about the deed on many occasions. She said she knew that on one occasion he was told
by a Mr Chipland of the Bank that the deed would be ready for collection in the following
week; but Chipland never rang back, as he had promised, to say that the deed could be
collected from the Bank. Mr Platzer's own evidence on this aspect, which was to the same
effect as that of Mrs Platzer, was not directly challenged in cross-examination or questioned
on appeal.
As has been mentioned, the officer of the Bank who was negotiating the loan to
enable the firm's account to be transferred was Miss Helen Gluer, who was an assistant
manager with the Bank. At her request (ex 46) on 29 March 1989, the Bank made a search at
the Titles Office of the registered particulars of the land. The search elicited a copy of the
certificate of title (ex 47) showing Mr Platzer as the sole registered proprietor, and disclosing
nothing in the way of caveats, trusts, or other outstanding interests or encumbrances apart
from the registered mortgage ex 12 in favour of the NAB. Miss Gluer candidly
acknowledged that she did not know when she had first seen the certificate of title ex 47,
which went to the Bank's securities department. However, it is a compelling inference that if
it had disclosed anything unexpected, she would have been told about it by the securities department and she would then not have settled the transaction on 14 April 1989. She said
as much in evidence, and there is no reason to doubt her word on this point. On that footing,
it seems clear that the Bank acted on the faith of the particulars in the Register of Titles in
advancing its money to discharge the NAB mortgage ex 12 and in taking the security of the
bill of mortgage ex 15 when the firm's account was transferred to it.
The significance of failure to lodge a caveat has been considered in a number of
reported cases in recent times which are referred to in Person-to-Person Financial Services
Pty. Ltd. [1984] 1 N.S.W.L.R. 745. They include the decision of the Full Court of
Queensland in Clark v. Raymor (Brisbane) Pty. Ltd (No. 2) [1982] Qd.R. 790, affirming the
decision of Connolly J. in that case, which is reported at [1982] Qd.R. 479. It is a fair
summary of the effect of those decisions that, although after J. & H. Just (Holidays) Pty. Ltd.
v. Bank of New South Wales (1971) 125 C.L.R. 546 the failure to lodge a caveat does not
necessarily result in an earlier equitable interest being postponed, it is capable of having that
consequence when considered in conjunction with other particular circumstances. One such
circumstance that is ordinarily relevant is that the holder of the later equity searched the
register and then acted on the faith of the information it disclosed. See Person-to-Person
Financial Services Pty. Ltd. v. Sharari [1984] 1 N.S.W.L.R. 745, 748.
The difficulty in equating the present state of affairs with that in the reported cases is
that none of them concerned a beneficial owner under a trust in the full sense. In each, the
competing earlier equity consisted of some lesser interest such as an equity of redemption, an
interest as equitable mortgagee or purchaser, or the right to have a transaction set aside for
fraud or mistake, and so on. In cases like that it might readily be expected that a caveat
would be lodged to protect the interest pending completion of the transaction or the resolution of litigation to determine the rights of the parties. In Lapin v. Abigail (1930) 44 C.L.R. 166,
205, Sir Owen Dixon remarked that:
"The very nature of an equitable right requires that the legal ownership shall be elsewhere, and, to constitute a person legal owner does not per se imply any representation, or warrant any supposition, that his legal title is not subject to equities."
It is true that his Honour's observations were made in the course of giving reasons for
a judgment which was later reversed by the Privy Council; but what he said in Lapin v.
Abigail applies with greater force to the case of a full beneficial owner of registered land
under a completely constituted trust. Indeed, in distinguishing the decision in Shropshire
Union Railways & Canal Co. v. The Queen (1875) 1 L.R. 7 H.L. 496, Lord Wright in Abigail
v. Lapin [1934] A.C. 491, 505, was careful to say that the rule laid down in the Shropshire
case was:
"... one which has been applied to trusts, and not to equitable estates or interests, such as those of unpaid vendors and equitable mortgagees, or to equities like an equity to set aside a conveyance for fraud; it cannot be said that in regard to such equities there is any recognised system of trusts which ought to put parties on their inquiry in dealing with the party clothed with the legal estate."
His Lordship went on to say that it was not necessary to consider whether the same rule was
applicable under the Torrens system with its procedure for protection of equitable interests by
caveats.
The point left open by Lord Wright would fall to be answered here were it not for
some other considerations which favour postponing Mrs Platzer's interest in the land.
Among them I would not include delay on her part in lodging a caveat. In Clark v. Raymor
Brisbane Pty. Ltd. (No. 2) [1982] Qd.R. 790, 797, there is a statement that the search for
demerits or disentitling conduct ought not to be limited to events which have occurred up to
the time of acquisition of the later equitable right. In the present case, however, it is difficult to identify anything the Bank could have done to improve its position after settlement on 14
April 1989, or anything that it in fact did after that date which would not have been done if
the caveat had been lodged earlier than it was in December 1989. In fact the time taken by
the Bank to have the bill of mortgage ex 15 registered continued until after Mrs Platzer
lodged her caveat. If registration of ex 15 had not been delayed for so long the present state
of affairs would not have come to pass. In terms of the time taken to protect their respective
interests after settlement had taken place, the demerits of Mrs Platzer and the Bank are
indistinguishable.
What counts against Mrs Platzer is the combination of the matters already discussed.
She not only left the certificate of title with Mr Platzer, but she allowed it to be deposited as
some form of security, whether contingent or future, for the indebtedness to the NAB of Ryan
& Archer Coutts. Knowing that the firm's account was being transferred from the NAB to
the Bank, she failed to ensure that the certificate of title to the land was returned to her or to
the trustee Mr Platzer. Believing that the terms on which the certificate of title was being
held by the Bank also involved some form of contingent security in its favour, she omitted to
ensure that the Bank was precisely informed of the conditions on which she understood it to
be held. She did not acquaint the Bank with her beneficial interest in the land, and she
omitted to lodge a caveat before settlement took place on 14 April 1989.
In the meantime, the Bank acted on the faith of the registered particulars showing
Mr Platzer as sole proprietor, and on the circumstance that he had previously given an
apparently unconditional bill of mortgage ex 12 to the NAB supported by possession of the
certificate of title. Miss Gluer was induced by this to believe that it was safe to proceed.
The holder of a prior equity is not to be postponed unless the act or omission proved against
him or her or it is "something tangible and distinct, something which can have the grave and strong effect to accomplish the purpose for which it is said to have been produced". See
Lapin v. Abigail (1930) 44 C.L.R. 166, 204, citing Lord Cairns L.C. in Shropshire Union
Railways & Canal Co. v. The Queen (1875) L.R. 7 H.L. 496, 507. The act or omission must
have "conduced or contributed to a belief on the part of the holder of the subsequent equity, at
the time when he acquired it, that the prior equity was not in existence": Abigail v. Lapin
[1934] A.C. 491, 498-499. If there was a limitation on the power of Mr Platzer to deal with
the land in the manner in which he had previously dealt with it in the case of the NAB, it was
incumbent on Mrs Platzer to ensure that it was clearly communicated to the Bank. See
Brocklesby v. Temperance Building Society [1895] A.C. 173, applied in Meth v. C.B.C.
(1977) A.C.L.C. 29, 204, at 29, 233. On the evidence, it was her failure to see to this that
conduced or contributed to a belief on the part of the Bank that Mr Platzer was entitled to
give the bill of mortgage ex 15 in its favour.
Notice to the Bank. What has been said on this subject assumes that Mrs Platzer
knew on or before 14 April 1989 that the firm's account was being transferred from the NAB
to the Bank and that the certificate of title to the land would be accompanying it. The
evidence in support of that assumption is, as I have already said, not at all precise. It may in
fact not have been until after that date that Mrs Platzer found out from her husband what had
happened to the certificate of title. Assuming, however, that the assumption is correct, the
result would, I consider, be that, subject only to the Bank's notice of her interest, her equity
ought probably to be postponed to that of the Bank.
The primary judge appears to have adopted such a view of the matter, remarking as he
did in his reasons that Mrs Platzer's conduct "could" result in her losing the temporal priority
she had. However, he went on to hold that her equity should be preferred because Miss
Gluer had express notice of Mrs Platzer's prior interest in the property and she took no steps to ascertain the nature of that prior interest. In arriving at this conclusion his Honour
specifically identified two matters as affording notice. They were: (1) the notation on the list
of assets in the loan application ex 29 "joint with M/L."; and (2) that a house was under
construction on the land.
His Honour's finding that the Bank was fixed with notice was influenced by his
finding that Gummer had told Miss Gluer that the notation "joint with M/L" in ex 26 meant
that the assets were held jointly by Mr and Mrs Platzer. Miss Gluer said in evidence that she
had no recollection of being told this. His Honour also found that Gummer had told Miss
Gluer that Mrs Platzer had paid for construction of the house and she should discuss security
arrangements over the property with both of them. If these findings stand, there can be no
doubt that Miss Gluer and, through her, the Bank in fact knew of Mrs Platzer's interest in the
land, which may be why his Honour used the phrase "express notice". Even, however,
without relying on Gummer's evidence in that respect, it is, in my opinion, clear that the Bank
had notice of Mrs Platzer's interest.
Miss Gluer's evidence was that her first impression was that the land was owned by
both Mr and Mrs Platzer. In cross-examination she said that it was the notation "joint with
M/L" at the top of the list of assets in ex 26 that led her to believe it was jointly owned by
Mrs Platzer. It was only later when she made the inquiry which elicited ex 45 and the title
search ex 46 that she discovered the land was registered in the name of Mr Platzer alone.
She said she had not cared whether the land was in one name or two: if it was in two names,
"we would simply have taken the authority of two. And if it was in one, we would have
taken the authority in one. It made no difference whether it was in one name or two but, of
course, we did the search to make sure the documents were right." If registration had taken
place, her attitude of indifference would have been well founded.
What Miss Gluer said overlooked the possibility of a subsisting equitable interest in
the land in favour of someone other than the registered proprietor. Item 3 in the finance
application ex 26 specifically mentioned that the ownership of the real estate security which
the "partners" were prepared to provide to the Bank was "somewhat complex and involves a
number of third parties". This ought to have alerted Miss Gluer to the possibility of
outstanding interests in persons other than those directly interested in the application for
finance. The reason why it did not is plain enough. At that time she "didn't know about
equitable interests in the land"; in 1989, she said, "I could not have talked to you with any
resemblance of sense as to what an equitable interest meant". That is why the words "joint
with M/L" did not serve as a warning to her.
Miss Gluer is not the only person to know nothing of equity's predilection for
inhabiting property apparently belonging to others. For the purposes with which we are
concerned here, however, she represented the Bank, which is not, and cannot afford to be,
immune to such considerations. Under prevailing social conditions, the subsistence of
equitable interests in land is a phenomenon now so widespread that it cannot be safely
ignored. Trusts, whether express, resulting or constructive, are nowadays a common feature
of matrimonial and other such relationships. Miss Gluer knew that Mr and Mrs Platzer were
married and living together, and from the valuation she was aware that a house was being
constructed on the subject land. If she had made such inquiries as, in the words of s.256(1)
of the Property Law Act 1974, "ought reasonably to have been made" by the Bank, she would
quickly have discovered the existence of Mrs Platzer's beneficial interest. There were
various avenues available, but the most obvious course would have been to ask Mrs Platzer
herself. In the case of properties being offered as security by Grenacs, inquiries were in fact
made of persons who might have an interest in those properties. But, despite her initial assumption based on ex 26, no such inquiries were made by Miss Gluer in relation to the
subject land.
Surprisingly, there appears to be no Australian decision in which the question has
been raised whether any and what inquiries ought reasonably to be made to discover
comparable unregistered interests in land. That suggests that ordinarily the Torrens system
and provisions like s.109 of the Real Property Act have been functioning to eliminate the
need for such inquiries, always assuming that registration takes place in due course. Before
registration, the position is different, and resembles that considered in England on a number
of occasions in recent times. In Williams & Glyn's Bank v. Boland [1979] Ch. 312, 334
(which was affirmed on this point at [1981] A.C. 487) Ormrod L.J. said:
"There is no doubt that the social changes which have taken place since the property legislation of 1925 was passed have made and are making this problem increasingly acute. The great increase in the number of owner-occupiers, and in the number of married women who earn their living before marriage, or continue to be employed after marriage, and so contribute financially to the purchase of their homes, many of which continue to be conveyed into the name of the husband alone, has enlarged the class of equitable tenants in common to an extent which could not have been contemplated in 1925. 'We are saving for a mortgage' has become a commonplace. In my judgment this change is one which must be borne in mind and taken into account whenever it is permissible to do so."
The English decisions, of which there is now a considerable number, stress the wife's
occupation of the land as the factor giving rise to notice and imposing the need to make
inquiries; but that is because, under s.70(1)(g) of the Land Registration Act 1925, it is in this
context only the rights of "a person in actual occupation of the land or in receipt of the rents
and profits thereof" that override the land register. What is capable of constituting
occupation may, as appears from the decision in Kingsnorth Finance Co. Ltd. v. Tizard
[1986] 1 W.L.R. 783, be somewhat attenuated. Occupation does not have the same degree of
relevance in Australia because of the differing statutory regime. In any event, it was, on and before 14 April 1989, apparent to the Bank that the land was in the joint possession of Mr and
Mrs Platzer. They were, as Miss Gluer knew or correctly assumed, living together, and they
were building a house on the land. Even if it was in the actual occupation of the builder, it
was sufficient, taken with other indications of possessory and proprietary interest on
Mrs Platzer's part, to fix the Bank with notice of matters which would have been revealed to
it by inquiries which ought reasonably to have been made. See, generally, also Bradbrook
MacCallum & Moore, Australian Real Property Law §§3.23-3.38.
Notice is fatal to the Bank's claim to elevate its later equity above that of Mrs Platzer's
earlier equitable interest in the land. So much appears to have been accepted on all sides in
Lapin v. Abigail (1930) 44 C.L.R. 166 and Abigail v. Lapin [1934] A.C. 491; see also Meth v.
C.B.C. (1977) A.C.L.C. ¶40-302 at 29, 238-39 and 29, 246 and the authorities cited in the
judgment of Sheppard J. in that case. I therefore agree, although for slightly different
reasons, with this aspect of the trial judge's decision, and with the declarations and orders
which his Honour made in respect of Mrs Platzer's claims against the Bank. The conclusion
reached is capable of being supported without resorting to the evidence of Gummer about
what he told Miss Gluer concerning the interest of Mrs Platzer in the land.
Mr Platzer's liability. Declarations were also made to the effect that the guarantee
and the bill of mortgage ex 15 between the Bank and the first respondent Michael Platzer
were voidable and void. In making these declarations, his Honour said that the manner in
which, in circumstances created by the Bank, Platzer was induced to sign the guarantee and
mortgage constituted unconscionable conduct on the part of the Bank sufficient to entitle him
to have those instruments set aside.
The relevant facts found by the trial judge, are set out in his reasons as follows: "On the morning of 14th April 1989, Grenacs telephoned Miss Gluer and asked her where the security documents were and she told him that they were on the way down to him. As soon as he received the documents, Grenacs approached Platzer who was working in the office of Ryan and Archer Coutts and told him that the Commonwealth Bank settlement was to happen that day and they both had to sign some documents which had to be returned to the bank urgently. Platzer asked why he had to sign anything. Grenacs replied that it was just a formality. Platzer had to sign so that Miss Gluer could hold the deed until Grenacs' mother's securities were exchanged and that then the deed to Platzer's house would be returned. Platzer looked at the document and saw it had his name and "solicitor" written next to it. He said he could not sign because it had him described as a solicitor. Grenacs became agitated and said that that was the bank's mistake, both of them had told the bank that Platzer had not been admitted as a solicitor, and he said they had to sign the documents and get them back as the settlement was all set for that afternoon. He had told the National Australia Bank on the Wednesday he was closing his accounts. He said he had to settle today and he had to draw wages from the Commonwealth Bank that day. He said the National Australia Bank accounts were actually closed at that point and the documents had to be signed and the bank said that he could not just cross things out on the documents, they had to go back for re-drafting if altered and the settlement would not take place on that day, the Friday. Grenacs said that if the settlement did not take place on that day, the National Bank would not be paid out and they were likely to foreclose on the money. He said he and Platzer had to sign the documents and get them back but it would only be a short term because his mother's place was coming in as a security. Platzer agreed to sign on that basis and they went next door to a credit union officer where the manager witnessed their signatures on the documents. Platzer signed where indicated on the documents. There were no copies but Grenacs said he would make sure the Commonwealth Bank sent copies to Platzer. Platzer did not know exactly what he had signed. He can remember that he saw on the front document the word 'guarantee'. He was not aware that he signed a Bill of Mortgage in favour of the Commonwealth Bank and it was not until 19th December 1989 that he became aware that he had signed a Bill of Mortgage on 14th April 1989."
It was on the basis of these findings and the impression formed by the learned judge
concerning the relationship between Grenacs and Platzer, that his Honour held that the Bank's
conduct was unconscionable. Although not expressly mentioned in the reasons for
judgment, it seems clear that in arriving at that conclusion the trial judge was applying the
decision in Commercial Bank of Australia Limited v. Amadio (1983) 151 C.L.R. 447. The
considerations he identified as attracting that decision were (1) that Grenacs was the Bank's agent for the purpose of securing execution of the guarantee and mortgage ex 15; (2) that,
although Platzer had passed the Solicitors' Board examination, he had spent most of his
working life in the police force, where his experience had been in the field of criminal law;
(3) that it was likely that Platzer would defer to Grenacs in matters involving commercial
dealings, and understandable that he would not seek independent legal advice; and (4) the
impression which the judge said he had formed that "throughout their relationship Grenacs
dominated Platzer because he had the stronger personality and was qualified and owned the
firm which Platzer wished to join as a partner".
Even accepting these findings, it nevertheless appears difficult to compare the facts of
the present case to the circumstances disclosed in Amadio. In that instance the defendants,
who were induced to execute a guarantee and mortgage in favour of the bank, were old, and
their command of English was not good. Advantage was taken of them by their own son, on
whom they naturally relied for advice, and who was described as the dominant member of the
family. The bank there knew that the transaction was an improvident one and that the
defendants had received no independent advice, and that the only advice they had was from
their son, who was the person interested in their giving the guarantee.
The present case presents few, if any, of these features. There was no difficulty with
Mr Platzer's understanding of English. Although he had no independent advice, his
knowledge of the law must have been considerably more extensive than that of most laymen.
Having passed the Solicitors' Board examinations, he can scarcely have been ignorant of the
legal significance of signing written documents without reading them. Far from diminishing
its impact, his experience in the field of criminal law with the police can only have served to
alert him to the dangers and risks of what he was doing. The Bank had no more reason than he to suspect that Grenacs would take advantage of him. His position cannot in my opinion
be equated with that of the two elderly immigrant parents in the Amadio case.
If matters had stood there, I would have been disposed to question the judge's decision
holding the guarantee and bill of mortgage ex 15 to be voidable and void. However, it also
seems clear that there was an element of active misrepresentation which caused Platzer to
execute ex 15. Grenacs told him that execution of those documents was "just a formality",
which was needed in order to enable Miss Gluer to hold the certificate of title until Grenacs'
mother's securities were exchanged. That could scarcely have been the intention of Grenacs
at that time. From what followed it is clear that Grenacs had it firmly in mind to obtain from
the Bank possession of the certificate of title to his mother's property, which is precisely what
he succeeded in doing at the settlement shortly afterwards on the same day. If the Bank was
willing to accept the security of the mother's property in place of the certificate of title to the
Platzers' land at Suvla Street, there would have been no occasion for Grenacs to retrieve his
mother's deed from the Bank.
The execution by Platzer of the bill of mortgage ex 15 could, in the circumstances
then prevailing, not have been "just a formality" as Grenacs represented it to be. His
statement to that effect was a misrepresentation which operated as an inducement to Platzer to
act as he did in executing ex 15, and which entitles him now to have ex 15 set aside on
discovering its falsity. The conclusion that the Bank is responsible for misrepresentations
employed by Grenacs in order to obtain Platzer's signature to ex 15 appears to be amply
justified on the authority of the decision in Alderton v. Prudential Assurance Co. Ltd. (1993)
41 F.C.R. 435, 444-446, and the authorities referred to there by Heerey J. The Bank left it to
Grenacs to obtain Platzer's signature. If and in so far as it is necessary to discover a special
relationship between the parties on that occasion, it is that Platzer and Grenacs were, in their character as inchoate partners, in a fiduciary relationship to each other. To that extent at
least, the conduct of Grenacs in securing execution of ex 15 in the circumstances prevailing at
the time without disclosing to Platzer the true state of the firm's financial affairs can fairly be
described as "unconscionable" conduct on his part, for which the Bank is responsible. The
trial judge's decision that the guarantee and bill of mortgage ex 15 were voidable by Platzer,
and the declarations that they were void, should therefore not be set aside.
Challenge to findings. As has been mentioned, the Bank on appeal challenged many
of the findings on which the trial judge based his reasoning and decision in favour of Mr and
Mrs Platzer. For reasons that have been given, it is in my opinion possible to justify the
relief granted to Mrs Platzer on material, oral and documentary, which was either not
contradicted or not disputed, without resorting to evidence that was challenged at the trial. If
that view of the matter is incorrect, then it becomes necessary to say something about the
findings that were made below, including findings as to credibility, and the form in which
they appear in the judge's reasons.
It is well settled that the power of an appellate tribunal to interfere with findings of
fact is greatly circumscribed in cases where such findings depend wholly or partly on
impressions of credibility. In R. v. Free [1983] 2 Qd.R. 183, 191, I referred to decisions in
which such questions had been considered, and where matters were identified which might
result in such findings being reviewed or set aside. They include, for example, instances in
which the oral evidence accepted at trial is "overborne" by documentary evidence; or
"falsified by indisputable facts"; or where there has been a "specific misunderstanding or
disregard of a material fact". Since then, there have been several reported decisions of the
High Court which have elucidated the attitude to be adopted by appellate courts in reviewing findings founded on credibility arrived at by a judge sitting alone as the primary tribunal of
fact.
In Devries v. Australian National Railways Commission (1993) 177 C.L.R. 472, 479,
Brennan, Gaudron and McHugh JJ. said that a finding of fact by a trial judge, based on
credibility of a witness, is not to be set aside merely because an appellate court thinks that
"the probabilities of the case are against - even strongly against - that finding of fact". Such a
finding must stand if it depends "to any substantial degree" on the credibility of the witness,
unless it is demonstrated that the trial judge has failed to use, or has palpably misused, his
advantage, or has acted on evidence which was inconsistent with facts incontrovertibly
established by the evidence, or which was "glaringly improbable". By "his advantage" in this
context, it is clear that their Honours were referring to the advantage enjoyed by the trial
judge, but not by an appeal court, of seeing and hearing the witnesses giving their evidence.
Misunderstanding a document and failing to act on a presumption are other examples which
have been recognised: Dawson v. Westpac Banking Corporation (1991) 66 A.L.J.R. 94.
What was said in Devries v. A.N.R.C. also confirmed the approach laid down in
Abalos v. Australian Postal Commission (1988) 171 C.L.R. 472, 479, by McHugh J. with
whom the other learned Justices agreed. It is that, where a trial judge has made a finding of
fact contrary to the evidence of a witness but has made no reference to that evidence, an
appellate court cannot act on that evidence to reverse the finding unless it is satisfied that the
advantages enjoyed by the trial judge by reason of having seen and heard the witnesses could
not be sufficient to explain or justify the trial judge's conclusion. In so stating the law,
McHugh J. referred to an observation of Lord Summer that the whole substance of the
judgment must be looked at, and, if the trial judge's estimate of a witness forms any substantial part of the reasons for judgment, conclusions of fact should be "let alone",
whether or not the witness has in terms been pronounced to be unworthy of credit.
In the present case it was a leading complaint of the appellant Bank that the trial judge
failed to make any finding of credibility in relation to any of the witnesses. In his reasons for
judgment the facts are recounted in a narrative form without saying specifically either "I find
that ...", or that the evidence of a particular witness or witnesses is being accepted or rejected.
It is, however, clear from what was said by Lord Summer in the passage approved in Abalos
that it is not incumbent on the trial judge to make express declarations about the
creditworthiness of witnesses, or to give detailed reasons for making particular findings of
fact raised by their evidence at the trial.
What is laid down by those decisions is a general rule. There are cases in which a
finding on the crucial matter in issue merits careful exposition, or where an explanation for
rejecting apparently plausible evidence is plainly called for. See, for example, Mifsud v.
Campbell (1992) 21 N.S.W.L.R. 725, 728. Here, however, so many distinct but subsidiary
questions of fact were raised at the trial that it would have been impracticable to make
specific findings about each one of them. In the circumstances it was legitimate for the trial
judge, having formed an overall impression of credibility, to state his conclusion in narrative
form without identifying specifically which of the witnesses, or what parts of their evidence,
he accepted, and without giving reasons for preferring one or more of them to another or
others. The lengthy recitation of facts in the reasons for judgment shows plainly enough
what evidence was accepted and, by inference, which of the witnesses were regarded as
credible in relation to each of those matters. As appears from Abalos, the trial judge was not
bound to refer to the evidence of Miss Gluer in order to reject it. Once this is accepted, as it
must be, it follows that it is not a basis for disturbing the findings in this case that they were expressed in narrative form without referring in detail to the conflicting evidence or even to
the witnesses who gave it.
A further complaint on appeal was that some of the findings were glaringly
improbable, or were inconsistent with contemporaneous documentary evidence. As to this, it
must be acknowledged that some of what was said by Gummer and Grenacs at the trial looks
as if it had improved with time or even perhaps been adapted to meet the exigencies of the
occasion. But it is simply not possible with any confidence to form such a view on appeal,
or even to suggest that their evidence should have been rejected as unworthy of credit. Some
of what they said may be inconsistent with contemporary documents; but so to some extent is
the evidence of all of the principal witnesses at the trial, with the possible exception of
Mrs Platzer, whose testimony, although crucial to the outcome, was more limited than that of
those others. The case was one in which the witnesses were giving their recollections of
events which had taken place some six or more years before the trial. At most, only a
general impression could have been formed of their reliability; but, when formed, it was
likely to have been a decisive element in the fact-finding process. In the case of Mr Platzer
the judge recorded his specific impression that he was "dominated" by Grenacs, "because he
had the stronger personality". That is a matter which, depending as it does on demeanour,
we would not now be able to form a contrary impression on appeal even if we were minded to
do so.
As to probabilities, while at one time it might have been thought improbable that a
bank would lend on the faith, at least in part, of a security depending on a contingency, the
competitive atmosphere prevailing in 1989 is an element that should not be overlooked. The
Bank, as Miss Gluer said more than once, "was keen to get more legal practices on its books".
Given the confidence with which everyone seems to have assumed Mr Platzer would soon
be admitted as a solicitor, the risk of matters going awry may at the time have appeared slight.
In circumstances like those, security in the form of a certificate of title and bill of mortgage
may have seemed attractive without giving undue attention to the condition on which it was
being offered, which it was firmly believed would be fulfilled. The arrangement said to have
been reached was not so improbable as to call for its outright rejection by the judge. The
probability or improbability of what was alleged was a factor to be considered by his Honour
in the course of assessing the credibility of the witnesses and in deciding whether or not the
plaintiffs had discharged the onus of proof. There is no basis for supporting that it was a
matter which he overlooked in arriving at his conclusion.
The appeal should be dismissed with costs.
See Commonwealth Bank of Australia Ltd v. Amadio & anor. (1983) 151 C.L.R. 447; Louth v. Diprose (1992) 175 C.L.R. 621.
A.L.R. 287.
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