POETHKE v NICOLAS No. SCGRG-95-216 Judgment No. S6645
[1998] SASC 6645
•4 May 1998
POETHKE v NICOLAS
Civil
LANDER J
This is a most unfortunate case and it is most regrettable that the matter ever came to trial.
The plaintiff is the brother of the defendant and they are the only children of Karl Heinz Poethke and Ursula Poethke.
The plaintiff’s claim is for a declaration that the defendant holds one half of the land situated at 32 Brookside Avenue, Tranmere as trustee for the benefit of the plaintiff and for an order that the defendant transfer to the plaintiff a 50 per cent legal share in the land to enable the plaintiff to be registered on the Certificate of Title as tenant in common with the defendant.
For an understanding of the plaintiff’s case and the defendant’s defence it is necessary to trace the history of the family.
History to 1971
Karl and Ursula Poethke were both born in Germany. Karl served in the German Army in the Second World War, was captured by the Russians and did not return to Germany until 1950. Karl and Ursula married in 1952. Karl was employed in Germany working in central heating. The defendant was born in 1953 and the plaintiff was born in 1957. The family came to Australia in July 1959.
Initially they lived in a hostel at Gepps Cross for about a year. They then moved into a house at 32 Heythsebury Street, Elizabeth where they remained until April 1977 when Karl, Ursula and the plaintiff moved to property the subject of the dispute at 32 Brookside Avenue, Tranmere.
Karl Poethke obtained employment at Horsell, Jarmyn & Sons Pty Ltd. Ursula remained at home. She has never been employed but later, and I will refer to this in more detail, she worked in a business which was conducted by the plaintiff and defendant.
Karl Poethke left Horsell, Jarmyn & Sons to become self employed working as a contractor erecting verandahs and similar structures.
Whilst self employed he suffered an injury to his arm which disabled him and he was unable to continue his work. He had trouble paying his bills and became bankrupt sometime in the 1960’s. Thereafter, Mr Poethke worked outside South Australia. He regularly travelled to Western Australia from where he sent money to his wife and family.
Although the evidence is not clear, it is probable that he was discharged from bankruptcy in 1971.
When Karl and Ursula Poethke left Germany they left behind their parents. In December 1971 Karl Poethke travelled to Germany to see his parents. I am not sure on the evidence whether Mrs Poethke went at the same time. The evidence in relation to their travels to Europe is confused and confusing.
It appears that Mrs Poethke returned to Germany on one occasion with Mr Poethke and Mr Poethke went on three occasions by himself. I think the best evidence in relation to this topic is contained in the passports. From a reading of the passports I find that Karl Poethke went in 1971, 1972, 1976 and 1978.
Mr and Mrs Poethke senior
I interrupt the history to say something of the evidence of Karl and Ursula Poethke. Both Karl and Ursula Poethke gave evidence. At the time that Karl Poethke gave evidence he was suffering from terminal lung cancer. He was suffering also from heart trouble. The lung cancer made it difficult for him to speak. He was receiving radiotherapy treatment at the time he gave his evidence. He also had a separate disability in relation to his hearing. There was no doubt that at the time he gave his evidence he did so in circumstances where he was seriously disadvantaged.
He completed his evidence in chief. During cross examination, however, he became quite unwell and he was unable to continue. The matter was adjourned and his cross examination was resumed but again he became quite unwell and could not continue. The matter was further adjourned and during the adjournment he died.
Considerable allowance must be given in the assessment of Mr Poethke’s evidence for the very difficult circumstances under which he gave his evidence. However, I cannot overlook the fact that cross examination could not be completed, and therefore not all of his evidence was tested.
I formed the opinion that Mr Poethke was basically an honest witness but at the same time I did not find him particularly helpful. That was because, no doubt due to his illnesses, he did not listen carefully to questions or perhaps could not hear them and did not answer them directly. I do not think he meant to be evasive. He simply gave answers which were not necessarily responsive to the questions.
There is no doubt that his evidence in cross examination was even more difficult to follow. I generally accept him as a witness but do so subject to the qualifications to which I have referred.
Mrs Poethke gave evidence after her husband’s death. She was a much better witness than her husband. She was much more forthright and direct than her husband and her evidence was much easier to follow.
I accept Mrs Poethke’s evidence and for reasons to which I will refer in more detail where it conflicts with the evidence of her son, the plaintiff, I prefer her evidence. So also where Mr Poethke’s evidence is consistent with Mrs Poethke’s evidence I prefer his evidence to that of his son. Where there is any inconsistency between her husband’s evidence and Mrs Poethke’s evidence I prefer her evidence to his.
History 1971-1976
At about the same time as Karl was discharged from bankruptcy he resumed work at Horsell, Jarmyn & Sons. He worked there from 3 August 1971 until 1975.
In 1969 the defendant left school. She was then sixteen years old and she began her employment at the Hotel Australia where she worked for about six months, working about three or four days per week.
During the time that she was employed at that hotel she met a man called Ward Smith, who regularly ate lunch at the hotel.
She left that employment and went to work in a boutique in Melbourne Street for a few months and thereafter obtained a job at John Martins working in the office. She worked there for about a year or a year and a half leaving John Martins in October of 1972. She then went to work at Ernsmiths. Ernsmiths was owned by Mr Ward Smith. It was Mr Ward Smith who recommended the defendant to his office manager and as a result of Mr Ward Smith’s recommendation the defendant obtained employment at Ernsmiths. Initially she worked in the office doing general office work but after about six months she was promoted to the position of Ward Smith’s secretary in which she remained until she left Ernsmiths’ employment, after fourteen and a half years, in 1986.
On 9 September 1972 Karl Poethke suffered a back injury at his employment and thereafter was paid workers compensation payments until January 1976 when he received the sum of $15,000 in redemption of, his employer’s liability for weekly and other payments of compensation arising out of that back injury. At the time of the settlement of his claim for workers compensation he also resigned from Horsell, Jarmyn & Sons Pty Ltd and was never thereafter employed.
During the 1970’s Mrs Poethke’s parents died. Mrs Poethke said that she received 20,000 Deutschmarks (about $8,000) from her father’s estate after his death in 1975. She received a much smaller amount after her mother’s death, about 500 Deutschmarks.
Mr Poethke also received money on his mother’s death. His evidence was that he received $50,000 between 1970 and 1976 whilst his wife’s evidence was that he received about 20,000 Deutschmarks (about $8,000). She said that he also brought back sums of money from Germany in the order of about $7,000.
An aunt died in 1976. Mrs Poethke said that her aunt prior to her death had been sending them in the order of 100 to 200 Deutschmarks per month for about ten years. She sent a lump sum of $3,000 before her death.
Mr Poethke’s evidence was that he received, as I say, in the order of $50,000 in respect of his mother’s estate and his wife received $20,000 in respect of her father’s estate. Mrs Poethke’s evidence was of significantly lesser sums received.
I prefer her evidence to that of Mr Poethke.
I find that during the 1970’s Mr and Mrs Poethke received probably in the order of about $26,000 all together with monthly payments from Mrs Poethke’s aunt. That sum was in addition to the $15,000 that Mr Poethke received by way of lump sum in settlement of his workers compensation case.
Both Mr and Mrs Poethke said that they had a safe at their house at Elizabeth West in which they put these various sums of money. That evidence was vigorously contested in cross examination. Mr Britton, who appeared for the plaintiff, suggested to both Mr and Mrs Poethke that that evidence was untrue and that they had never owned a safe prior to moving to Tranmere.
I accept the evidence of Mr and Mrs Poethke that they did have a safe at Elizabeth West.
I also accept that they placed in that safe relatively substantial sums of money including the sums of money which they inherited from their respective parents.
I am satisfied that two events would have motivated Mr Poethke to keep his money in a safe. The first was his bankruptcy in the 1960’s and the second his back injury in the 1970’s. The first, I think, motivated him to structure his affairs so that if he was ever likely to get into financial trouble again none of the assets used for the benefit of the family would be lost. The second event gave rise to his eligibility to the lump sum payment to which I have referred and also in due course to Social Security benefits for which he became eligible because of his inability to work. He started to receive Social Security benefits very shortly after receipt of the lump sum in 1976 and remained on social security benefits of one kind or another until his death.
I believe he structured his affairs so that any sums of money that came into his possession were not brought to the notice of the Department of Social Security so as not to endanger his Social Security benefits.
I think, therefore, it is probable that a safe was acquired in which to keep money and that it was used for that purpose.
The defendant left home in about 1974 shortly after her twenty-first birthday. Thereafter she lived in a flat at Martindale Avenue, Toorak Gardens.
She resumed living with her parents when her parents moved into the house at 32 Brookside Avenue, Tranmere in April 1977. She therefore lived apart from her parents for about three years.
The plaintiff lived with his parents at Elizabeth West until April 1977 and moved with them to Brookside Avenue, Tranmere.
The Acquisition Of Brookside Avenue, Tranmere
On 21 January 1977, the plaintiff and defendant registered, at the Land Titles Office, a transfer, which had been executed on 20 January 1977, from Vera Eveyln Nissan to them as joint tenants of the whole of the land comprised in the Certificate Of Title Registered Book Volume 1515 Folio 28. The witness to the signatures of the transferees was Mr Ward Smith.
The consideration disclosed in the transfer is $33,000 which is said to have been paid by the plaintiff and defendant who are both described as of 32 Brookside Avenue, Tranmere.
The plaintiff and the defendant remained the registered proprietors as joint tenants until 2 May 1989 when the plaintiff transferred his estate and interest in the property to his sister, the defendant.
She has remained the sole proprietor of the land since that time.
The Plaintiff’s Case
The plaintiff claims that at the time the property was transferred to his sister, she agreed that she would hold his interest in the land on behalf of him and would transfer his interest in the land back to him upon either her marrying or their parents dying or if the plaintiff requested her so to do.
He said it was upon that basis that he agreed to transfer his interest in the property to his sister.
His case is that subsequently in July 1992 the defendant became engaged to be married to her husband and married him in 1994.
The plaintiff asserts that he has called upon the defendant to reconvey the land to him but she has refused. He therefore claims to be entitled to the relief to which I have already referred.
Of course the circumstances whereby the land was conveyed by the plaintiff to the defendant are important for a determination of the plaintiff’s claim.
The Defendant’s Case
Notwithstanding the circumstances of the transfer of the plaintiff’s interest, equally as important and perhaps even more so are the circumstances giving rise to the acquisition of the property at Brookside Avenue, Tranmere. That is because it is the defendant’s case that the property at Brookside Avenue, Tranmere was purchased for and on behalf of Karl and Ursula Poethke and that whilst the land was placed in the names of the plaintiff and the defendant, the property was to remain for the benefit of Karl and Ursula.
The defendant’s case is that she and her brother were simply trustees of the property, the beneficial interest belonging to her parents.
The Plaintiff’s Case in Reply
The plaintiff’s account of the acquisition of Brookside Avenue, Tranmere is quite different to that of the defendant. He claims that the Brookside Avenue property was purchased from moneys provided by Mr Ward Smith for the benefit of his sister and himself. His case is that his parents contributed nothing to the purchase of the property and that the property was transferred to his sister and himself at the direction of Mr Ward Smith who provided all of the funds for the purchase.
It can be seen therefore that the circumstances giving rise to the purchase of the property are important. If the plaintiff is accepted then he was entitled to the legal and beneficial interest in the property up until the time that he transferred his estate and interest in the property to his sister. If the defendant’s account is to be preferred then the plaintiff was a trustee of the property and Karl and Ursula Poethke were entitled to the beneficial interest in the property.
The Parties
In determining where the truth lies, some assessment has to be made of the credibility and reliability of the two parties.
The plaintiff was a poor witness. His evidence was vague, in many respects general and often incredible. His evidence was even less satisfactory in cross examination. He was evasive and in many respects not responsive.
The whole tenor of the plaintiff’s evidence left the impression with me that he was self centred and selfish and had a capacity to see events only in terms of his own interests.
The defendant was a better witness but not a good one. I think in most respects she told the truth but on some topics I was left with the impression that her evidence could not be relied upon. I will identify those topics when I deal with them. In some respects she also left me with the impression that she was somewhat self centred although it has to be said on her behalf she did not claim to have any interest in this house except as trustee.
I do not accept the plaintiff’s evidence except where it is corroborated by some other evidence either in writing or from one of the witnesses. I am not sure if much of his evidence was deliberately false or whether it represents his belief as to events rather than reality. It does not matter in the end result because I do not find the evidence credible and nor do I accept it.
The Plaintiff’s Evidence on the Acquisition of Brookside Avenue
The plaintiff’s evidence in chief was to the effect that his sister had a close platonic relationship with Mr Ward Smith. His evidence was of frequent contact out of working hours between his sister and Mr Smith. By virtue of his sister’s relationship he said that he had a good deal of contact with Mr Ward Smith prior to 1977. He attended gatherings at Mr Smith’s house with Mr Smith, his children and other young persons. His relationship was such that Mr Smith would allow him to drive his car when he was away. He said Mr Ward Smith gifted a motor vehicle to his sister and later also gave him one.
The plaintiff left school after completing year 12 at Elizabeth West High School and obtained an apprenticeship with Canberra TV. He said that Ward Smith found out that he had been successful in obtaining an apprenticeship with Canberra TV and contacted him and told him there was no way he would let him work there and that he should work for Ernsmiths. He was offered a job as an apprentice at Ernsmiths and commenced in about 1976.
He said that his father did not have a good relationship with Mr Smith. He said that Mr Smith was not fond of his father. He did say however in evidence-in-chief that Mr Smith was fond of his mother. Moreover he said that Mr Smith regularly gave money to his parents by directing the money through his sister. Anything up to $100 a fortnight was given by Mr Smith to his sister for the benefit of his parents. He said that sort of money was given with that sort of frequency for about one to two years prior to the acquisition of Brookside Avenue.
He said that prior to the acquisition of Brookside Avenue his parents never looked at houses which were for sale. Particularly they did not ever travel to the Tranmere area.
He said that he first heard of the acquisition of Brookside Avenue when the defendant rang him at work and told him that “Ward had purchased a property, had bought us a property”. She told him that she had already looked at the property and she requested him to meet her after work so that he might view the property. He met the defendant after work and saw a very run down house which needed a lot of work on it. He spoke to the defendant about that but the defendant said that it already had been purchased.
He returned home and told his parents that “Ward had bought us a property”. His mother told him that the defendant had already “phoned them and told them of the purchase”. Her mother was very excited and his father was very happy.
He next saw the house on the following week-end when he attended with his parents. His evidence was that that was the first time that his parents had ever seen the property.
Between the first viewing, which was apparently on the day that the house was purchased, and the week-end the plaintiff did not speak to Mr Ward Smith. I must say that that strikes me as rather extraordinary. The plaintiff’s case is that he believed that Mr Ward Smith had bought this house for his sister and himself. He believed it was a gift. Notwithstanding the obvious generosity contained in the making of a gift of that kind, the plaintiff said that he did not ring Mr Ward Smith during that week to thank him and express his gratitude for the gift. In fact the first time he spoke to Mr Ward Smith after the purchase of the property was the following week when he went with his sister to Mr Smith’s place at St Peters.
I have already said I believe that the plaintiff is self centred and selfish. That may be a reason to explain why he did not immediately thank Mr Ward Smith for his generosity and why he did not respond with the enthusiasm that one would expect for someone who has just been given a house.
The other explanation may be in fact the plaintiff and defendant were not given the house by Mr Ward Smith and the plaintiff did not at that time believe that he and his sister had been given the house. That would explain his lack of enthusiasm and the failure to show gratitude at the time.
The plaintiff is correct when he said that the house required a good deal of work upon it. In January 1977 architects Stapledon and McMichael Pty Ltd prepared plans for alterations and extensions to the property. The alterations were mainly to the bathrooms, laundry and sleepout. The extension was for a room adjacent to the sleepout. At about the same time plans were also prepared for refurbishment of the kitchen.
Settlement of the property occurred on 21 January 1977. On 20 January 1977 the plaintiff and defendant accepted a transfer from the then proprietor in consideration of the payment of the sum of $33,000. Their signatures were witnessed by Mr Ward Smith.
On 21 January 1977 they were registered as joint proprietors of the land free of any encumbrances. The land is, of course, under the Real Property Act 1886 and accordingly s74 of the Act applies and they are deemed to be joint tenants: Scapinello v Scapinello [1968] SASR 316.
There is no doubt that Mr Ward Smith played a part in the acquisition of the property. The real estate agent, Mrs. Duffield, who acted for the vendor, had a recollection of the sale of the property. More importantly she still had her diary for that year. That shows that she met with Mr Ward Smith on Wednesday 5 January 1977. He was with a younger woman, who was about thirty years of age. She said she also met him on Monday 10 January 1977 and sometime between those two dates she received a deposit of $2,275. She has no recollection of how the deposit was paid but it would not have been paid in cash. Her diary indicated that the contract for the sale and purchase of the property was between the vendor and Mr Smith and/or nominee.
Mrs Duffield’s evidence, which of course I accept, shows Mr Ward Smith played a part in the acquisition of Brookside Avenue.
His part cannot be said to be insignificant. He was apparently named in the contract as purchaser with provision for a nomination. To that extent he made himself personally liable in the event of default.
The plaintiff’s evidence was that he did not know how much had been paid for the house. Nor did he know what the cost of the renovations was to be. He said in cross examination that he believed that he and his sister would have to pay for the cost of the renovations but he did not ask what the cost of those renovations would be and was therefore not able to know whether he could afford the renovations or not.
The plaintiff claimed his parents contributed nothing towards the purchase price nor in fact did he. The claim was that Mr Ward Smith paid the whole of the purchase price. He also said that he assumed that Mr Ward Smith paid for the renovations as well because he arranged for the renovations to take place.
The plaintiff said that before the transfer was signed on 20 January 1997 he had told his parents that they could live in the house at Tranmere. At that stage there was no discussion as to how long his parents would be entitled to live in the house. Nor, I infer, were there any discussions about the terms of his parents’ tenancy.
In summary, therefore, the plaintiff’s evidence was that without any previous discussion or indeed warning Mr Ward Smith bought a house for the plaintiff and defendant. He did so at a time when the plaintiff was living with his parents at Elizabeth and his sister, the defendant, was living at Toorak Gardens. He did not consult with the plaintiff or apparently the defendant as to whether either of them wished to own property, or indeed the particular property, or whether they wished to jointly own property and live in that property. He did not consult with either of them as to the type of house they would wish to live in or the area in which they would wish to reside. He simply expended $33,000 for their benefit without any warning.
$33,000 is not an insignificant sum in 1998. It was a significant sum in 1977. It was significant enough to purchase freehold a property at Tranmere. Certainly the house which was bought required improvements and alterations, but it is still the case that the sum of $33,000 was a large enough sum to buy a house in the eastern suburbs of Adelaide.
The defendant was the Personal Assistant of Mr Ward Smith at this time. The plaintiff was her brother and was employed by Ernsmiths. However, by this time he had only met Mr Ward Smith on a few occasions. It might be conceivable that Mr Ward Smith, if he was a particularly generous and wealthy man, might have bought a house for the defendant. It is inconceivable, in my opinion, that Mr Ward Smith, who had met the plaintiff on only a few occasions, would have purchased a house for him and his sister. Further, no evidence was adduced indicating that Mr Ward Smith had purchased a house for others as a gift, or even that he had done so for his own children.
In my opinion the plaintiff’s account is incredible. It gained no credibility in its telling for the reasons I have already mentioned.
I reject the plaintiff’s account of the purchase of Brookside Avenue.
In support of his account the plaintiff contended in his evidence that his parents were always poor and without means. Thus, he said, his parents were never in a position to purchase a house for themselves. He was driven to that evidence of course because the defendant’s case is that the house was bought in 1977 with funds advanced by the plaintiff and defendant’s parents, but placed in the names of the plaintiff and defendant. It was on the defendant’s account always held beneficially for the parties’ parents.
But the plaintiff said that not only did his parents not contribute to the cost of the house because of their impecuniosity, they also did not contribute to the cost of the renovations.
He said that the family moved in in November 1977 when most of the renovations had been done. There is no doubt that he is wrong about that. The whole of the evidence was that Mr and Mrs Poethke and the plaintiff took up residence in Easter of 1977.
He said in late 1977 a mortgage was taken to finance further renovations. It is true that further renovations were done and it is also true that a mortgage was taken to finance those renovations, but not in late 1977.
A mortgage was entered into on 27 January 1978 between the plaintiff and defendant as mortgagors and the Bank of Adelaide as mortgagee in respect of an undisclosed amount. That mortgage was registered on 9 February 1978 and the mortgage was, in turn, discharged on 24 March 1982.
In any event, the plaintiff’s case is that the mortgage payments were met by Mr Ward Smith. I am satisfied that the plaintiff is wrong when he says that the mortgage payments in respect of the mortgage to the Bank of Adelaide were met by Mr Ward Smith. I am satisfied that, in fact, the mortgage was paid from moneys provided by the plaintiff’s parents.
A number of applications were made to the Council for approval for the various renovations and additions during 1977 and 1978. The alterations and extensions prepared by Stapledon and McMichael Pty Ltd were prepared for Mr K H Poethke, the plaintiff’s father. The plans for the alterations to the kitchen were prepared by the Kitchen Centre for Mrs Poethke, the plaintiff’s mother. The application for approval of building work submitted to the Campbelltown Council was made in the name of Mr Poethke, the plaintiff’s father. An application for permission to erect a carport was also made in the name of Mr Poethke, Senior. An application for an extension of the carport in July 1979 was again made by Mr Poethke, Senior.
Mr Ward Smith died on 15 December 1988.
No attempt was made to lead any evidence from anyone connected with Mr Ward Smith such as his widow or any other person to support the plaintiff’s assertion that Mr Ward Smith was his benefactor. The plaintiff’s account of Mr Ward Smith’s generosity depended almost entirely on his own evidence. There was no objective evidence supporting his claim. The only matter consistent with his claim that the house had been given to him and his sister was the fact that the house was registered in their names. However even the registration is equivocal. It is surprising if the house was bought for the plaintiff and defendant beneficially that they held the land as joint tenants. One would have thought if they were beneficial owners they would hold as tenants in common.
It appeared clear in cross examination that the plaintiff’s relationship with Mr Ward Smith was reasonably distant and only existed by reason of his sister’s relationship with her employer. Clearly he was not close to Mr Ward Smith. Whilst he visited Mr Ward Smith twice while Mr Ward Smith was very ill in hospital, he did not attend Mr Ward Smith’s funeral nor send flowers or any card.
In cross examination the plaintiff claimed, in the first instance, that his parents were impecunious; that they had very little money. He was unaware that his father received a lump sum payout from an injury at work. It follows, of course, that he was unaware that his father received, shortly after 19 January 1976, the sum of $15,000. That was not an insignificant sum in 1976.
It was put to the plaintiff that his father and mother had received money from their respective parents’ estates. He said he was unaware of that, although he was aware after his father’s mother died that his father bought a lot of gifts and things for the family.
In fairness to the plaintiff he did not deny that his parents had received those sums. He simply had no awareness of these matters. He was prepared to accept that their position had improved by 1977 but not so as to allow them, on his evidence, to purchase this property.
It must be remembered that the plaintiff was only 20 years of age when this house was bought. He was between the ages of 14 and 20 when his parents received sums of money from their parents. He was probably about 18 when his father undoubtedly received $15,000 by way of a workers compensation payment.
It may be that the plaintiff was simply unaware, as he said in his evidence, that his parents had received these sums of money. The impression that I had after cross examination of the plaintiff in relation to these matters was that he was either completely uninformed of his parents’ financial position or refused to accept that his parents were not, by 1977, impecunious.
The difficulty for the plaintiff is that there is no doubt that Mr Poethke did receive the sum of $15,000 by way of workers compensation payment. That is proved beyond doubt in my opinion by the Minutes of Order in the Industrial Court of 19 January 1976.
There is also no doubt in my mind on Mrs Poethke’s evidence (which I accept) that his parents received from their parents the sums to which I have referred.
In all those circumstances by 1977 Mr and Mrs Poethke could afford to buy a house of the price paid. They would have had, if they had been content to save the lump sum payment and the sums from their parents’ estates, sufficient moneys to pay $33,000 for a house in 1977.
The premise, therefore, upon which the plaintiff’s case is based, that is, that his parents were so impecunious that they could not themselves have bought the house, cannot be sustained.
I find that, by 1977, Mr and Mrs Poethke had accumulated sufficient funds to purchase a property for a sum in the order of $33,000.
The Parents’ Evidence on the Acquisition of Brookside Avenue
The evidence of Mr and Mrs Poethke was that in fact the house was bought by themselves. That was also the evidence of the defendant.
Mr Karl Poethke said that he had met Mr Ward Smith for the first time many years before the purchase of Brookside Avenue. The first occasion that he met Mr Ward Smith was when he purchased a television from Ernsmiths. Thereafter Mr Ward Smith visited he and his wife at their house at Elizabeth West and on occasions they visited him at his house at St Peters
He said he spoke to Mr Ward Smith about purchasing a house and he was advised by Mr Smith that he ought not to purchase in the Elizabeth area. Mr Ward Smith’s advice was that they purchase in Magill, Norwood or even in St Peters.
He spoke to his children about purchasing a house. He and his wife were accompanied by Mr Ward Smith on inspections of various houses in the areas to which I have referred.
He said that he left it to Mr Ward Smith to sign a contract because he had experience in that sort of thing.
He said that he provided the deposit from money which was in the safe at the house at Elizabeth West. At that stage he said there was something like $45,000 in the safe.
He said his son would not have known that he had that amount of money because he did not discuss that with him.
He inspected Brookside Avenue on two occasions before he gave Mr Ward Smith the deposit.
His son did not accompany him and his wife on either of those occasions. He first inspected the property after he had been advised by Mr and Mrs Poethke senior that the property had been purchased.
Mr Poethke’s evidence was that he provided the rest of the purchase money from money which he had accumulated and which was in the safe. He said that both in respect of the deposit and the final payment he provided the money to Mr Ward Smith who completed the payment.
The house did require renovation and alteration. The cost of those renovations and alterations was in the vicinity of $18,000 to $20,000. That money was also provided by Mr Poethke from the money which was in the safe.
He was asked about the placing of the house in his children’s name. He said:
“A.... I ask Mr Smith, I said, ‘I think myself I am not old enough to go on pension, I have got to do something, and I think I got to start some kind of business’. I was very interested at that time in fish business and things like that. Anyway, when he said to me and I never will forget that, ‘If you going bad in the business you will lose the house, or at least part of it’. And I said, ‘What if I put it in my wife’s name?’, and he said, ‘There will be not much difference’. I said, ‘All right, what if we put it - if I give it to my children to keep it for me and my wife?’, and then he said, “Yes, that you can do’, and that’s what we did. We made it clear when one of them get married that the house goes back on us.”
At the time he had this conversation with Mr Ward Smith, and at the time the house was purchased, Mr Poethke did intend to go into business. Indeed, as soon as they moved into Brookside Avenue he did go into business of the type which he mentioned in that answer.
Mr Poethke said that he accepted Mr Ward Smith’s advice and told his children that the house would be placed in their names because he planned to go into business and he did not want to lose everything in the event that the business was unsuccessful.
In cross examination Mr Poethke admitted that Mr Ward Smith had made a contribution towards renovations. Mr Ward Smith lent him money to complete the renovations. He said he repaid that money over four years. He borrowed some money and paid the rest from his own resources.
In fact on 27 January 1978 a mortgage was given over the property to the Bank of Adelaide. The moneys borrowed from the Bank of Adelaide were paid off over a period of time between 1978 and 1981.
There are four matters consistent with Mr Poethke’s evidence. The first is that he had previously experienced bankruptcy and understood that in the event of a business failure he was liable to lose nearly all of his assets. Secondly, he did go into business very shortly after the purchase of Brookside Avenue, and into a business of the kind he described in the answer to which I have referred. It would be consistent with his undertaking a business venture for him to place the property out of the reach of potential creditors. At that time, he was also in receipt of Social Service benefits consequent upon the termination of his employment after receiving his lump sum for Workers’ Compensation. I think he would not have wanted to disclose to the Department of Social Security that he had a significant amount of cash in his safe. He did borrow moneys in January 1978 which he did repay, between 1978 and 1981. That is consistent with his repaying Mr Ward Smith a sum which Mr Ward Smith advanced to him to complete the renovations.
Mrs Poethke confirmed her husband’s evidence in a number of respects. First, she said that they had accumulated a significant amount of cash which was kept in the safe at Elizabeth West. Secondly, she said that she and her husband visited houses in the Norwood area looking for a house in late 1976. She said they looked at about six houses altogether, sometimes in company with Mr Ward Smith.
She said that they first saw the Brookside Avenue property in late 1976 when she was accompanied by her husband and Mr Ward Smith.
She said that her children were aware that she and her husband were contemplating a purchase in a property. There was a particular conversation when her husband told the children that they were buying Brookside Avenue.
She said her husband had told her:
“‘I’m going to buy the house but it will be in the children’s name’ so it was signed in the children’s name but he said ‘But the house is ours’. And nobody said anything. That’s normal”.
She was asked whether her husband gave a reason as to why it would be in the children’s name, and she said:
“Yes, he said he wanted to start a business and as he had been bankrupted once he wanted to put it in the children’s names. That’s the reason really. Never mention it any more, never mentioned this”.
She said that the deposit was paid in cash but the rest of the money was provided by cheque. She said that Mr Ward Smith did that on their behalf.
She also confirmed her husband’s evidence in that she said moneys were borrowed from Mr Ward Smith to carry out the renovations. She said $10,000 was borrowed which was repaid.
I have already said that I prefer the evidence of Mrs Poethke to the evidence of any other witness. I accept her evidence that the house was purchased with moneys provided by her husband and herself. I also accept her evidence, and consequently of course accept her husband’s evidence that moneys were borrowed from Mr Ward Smith to carry out renovations, and that those moneys were repaid.
I therefore find that Brookside Avenue was purchased by Mr and Mrs Poethke out of their own funds for $33,000. It was placed in the children’s names in case Mr Poethke failed in the business venture which he was about to undertake.
It follows, as I have already said, that I reject the evidence of the plaintiff that this house was bought for his sister and himself by Mr Ward Smith.
It was always intended by all of the parties, and I so find that the beneficial interest in the property be with Mr and Mrs Poethke senior. The plaintiff and defendant, in my opinion, held the property on trust for their parents.
The defendant’s case is that the purchase moneys for the Brookside Avenue property were provided by Mr and Mrs Poethke Senior and the children were nominated as the registered proprietors on the Certificate of Title. I have already indicated a finding on the evidence that Karl and Ursula Poethke had the money available to buy the Brookside Avenue property and the purchase moneys were in fact provided by them.
When a purchaser provides purchase moneys to buy a property and causes the legal title to vest in another person, and where that other person provides no consideration for the legal title, presumptions arise. Where property is purchased and the legal title is vested in someone other than the person who provides the purchase moneys a resulting trust will be presumed in favour of the purchaser: Calverly v Green (1984) 155 CLR 242. Equity presumes that the legal owner holds the property on trust for the person who has provided all of the purchase moneys.
However, the presumption of a resulting trust does not arise in every case. It is subject to the presumption of advancement. A presumption of advancement operates where the purchaser of the property is the husband or father, or stands in loco parentis, to the person who has the legal title conferred upon them. In Nelson v Nelson (1995) 184 CLR 538 Dawson, Toohey and McHugh JJ suggested that the presumption of advancement extends to the relationship between a mother and an adult child. Therefore, in certain circumstances equity will raise the presumption that because of the relationship, the provider of purchase moneys caused the property to be registered in the name of another so as to confer a gift. Deane J said in Calverly v Green:
“... there are certain relationships in which equity infers that any benefit which was provided for one party at the cost of the other has been so provided by way of “advancement” with the result that the prima facie position remains that the equitable interest is presumed to follow the legal estate and to be at home with the legal title or, in the words of Dixon CJ, McTeirnan, Fullager and Windeyer JJ in Martin v Martin (1959) 110 CLR 297 at 30, that there is an “absence of any reason for assuming that a trust arose”.”
Of course it is no part of the plaintiff’s case that a presumption of advancement arises. That is because he denies that his parents were the purchasers. His case is that the purchaser was Mr Ward Smith and he and his sister took both the legal title and the beneficial ownership. If Mr Ward Smith was the purchaser then no presumption of advancement arises because there is no relationship between him and the plaintiff and defendant which would raise such a presumption. If Mr Ward Smith was the purchaser and provided all of the purchaser moneys it would ordinarily be presumed that the property was held on a resulting trust for Mr Ward Smith. But because I have found that the purchasers were the plaintiff and defendant’s parents that problem does not arise. Because I have found that the purchasers were the plaintiff and defendant’s parents and because of the relationship between parents and children the presumption of advancement does arise in favour of both the plaintiff and defendant.
Of course, the presumption of advancement may be rebutted by evidence to the contrary. The evidence might support a finding that the provision of the purchase price was made for a purpose other than advancement. If the evidence supports a finding that the purchasers intended a resulting trust then the presumption of advancement will be rebutted. Where this presumption is rebutted the legal owners hold by reason of a resulting trust, not an express trust.
In my opinion the presumption of advancement has been rebutted in the present case. The evidence in my opinion requires a finding that it was always the intention of Mr and Mrs Poethke Senior that the children would hold the property on trust for their parents. It was the evidence of Karl and Ursula Poethke that the children were named as registered proprietors because Karl Poethke had previously been declared a bankrupt. He wanted to start a new business and did not want the family property to be at risk if he became bankrupt a second time. Further, if the Department of Social Security became aware of Karl Poethke’s ability to purchase a property this would endanger his receipt of Social Security benefits. For these reasons the property was placed in the children’s names. It was not the intention of the purchasers to vest the legal and equitable title in the plaintiff and the defendant. In my opinion the presumption of advancement has been rebutted. It follows that the children, the plaintiff and the defendant, held the property on a resulting trust for their parents. Since the death of Mr Poethke the defendant has held the property on a resulting trust for the estate of her father and for her mother.
The finding that the plaintiff has never enjoyed the beneficial ownership of the property at Brookside Avenue is in a sense a complete answer to the plaintiff’s claim. Upon that finding the plaintiff is only entitled, at the very best, to an order that he be reinstated as the joint tenant of the defendant for the purpose of holding the property on trust for his mother and the estate of his father. In those circumstances the plaintiff would achieve but a pyrrhic victory.
However, I shall address the subject matter of the complaint in the pleadings.
The Plaintiff’s Claim
The plaintiff’s claim is that in February 1989, at the request of the defendant and because of claims by the defendant, that the interests of the parties in the land could be jeopardised in the event of the plaintiff’s marriage failing and because the parties’ parents lived on the land their security of tenure could be also in jeopardy, he transferred his interest in the land to the defendant.
He further claims that at that same time it was agreed between the parties that the defendant would thereafter hold the plaintiff’s interest in the land on behalf of the plaintiff as trustee and that the defendant would transfer the plaintiff’s interest in the land back to the plaintiff upon the defendant marrying, or the parents of the parties dying, or the plaintiff requesting the defendant to do so.
He claims that after July 1992 when his sister became engaged to her now husband, that he demanded the defendant transfer to him the interest which he had transferred to her.
Of course the finding that I have already made in a sense answers the whole of the plaintiff’s case. There could not have been an agreement in 1989, or any other time, that the defendant would hold the plaintiff’s interest on the land in trust for him. Indeed on the finding which I have already made, he himself was a trustee and he had no beneficial interest in the land. In those circumstances his sister could not have held any interest, in which he had a beneficial interest, on trust for him.
History 1977 to 1989
Between 1977 and 1981 Mr Poethke conducted a business called Acquatechnic from Brookside Avenue. In 1981 the business failed. In 1981 it was necessary to borrow monies from the Commercial Banking Company of Sydney to pay the creditors of the business. That was done by the granting of a mortgage over Brookside Avenue.
During the whole of this time the defendant continued in her employment with Ernsmiths. The plaintiff completed his apprenticeship at Ernsmiths, worked there for a couple of years and left in about 1979 or 1980.
At some stage, and it is not entirely clear, the plaintiff commenced a business at Firle which he conducted until 1986.
After the failure of Acquatechnic a company was incorporated for the purpose of carrying on the business previously carried on by that company. Imperial Pet Supplies Pty Ltd commenced business in about November 1982 and purchased some of the assets of the failed business, Acquatechnic. The plaintiff worked in the business. Mr Poethke Senior worked in the business, but for no wage.
In 1986 the plaintiff’s now wife commenced to work in the business.
At about the same time the defendant left her job with Mr Ward Smith and also commenced to work in the business of Imperial Pet Supplies.
In the first instance the plaintiff’s now wife Vicky, and the defendant, had a good relationship. However that relationship deteriorated and after eighteen months Mrs Poethke junior left the business. She returned within a short time, but her relationship with the defendant was never very good after that time.
The Conveyance On 15 February 1989
The plaintiff and his wife married on 11 February 1989.
On 15 February 1989 the plaintiff executed a Memorandum of Transfer of his interest in the property to his sister. The stated consideration was love and affection. The value of the land was declared to be $88,000.
That document was prepared by Mr Robert Potter, a licensed Land Broker. On 20 March 1989 he forwarded an account to the defendant for $250 for the cost of preparation of the transfer and opinion for the Commissioner of Stamps. That account shows Stamp Duty was assessed on a value on the property of $95,000 and half was payable by the defendant as the recipient of her brother’s interest. She was liable for $1,005 Stamp Duty.
A receipt annexed to that account shows that the defendant paid that account on 3 April 1989.
The defendant was in a position to pay that account because on 23 February 1989 the defendant received from Ernsmiths, at the request of the late Mr Ward Smith, $5000 payable out of his superannuation fund. Mr Ward Smith had died on 15 December 1988.
Subsequently the Memorandum of Transfer was registered and the defendant became the sole registered proprietor of the land which she has remained since that time.
Of course, having regard to my earlier finding, whilst she is the legal owner of the property she has no beneficial interest in the property. The beneficial interest in the property is held by her mother and the estate of her father.
The circumstances leading up to the transfer and the circumstances giving rise to the transfer were the subject of minute examination in this trial.
It is enough to say in relation to those circumstances leading up to the transfer to repeat that by late 1988 and early 1989 it is clear that the defendant and the plaintiff’s fiancee did not enjoy a good relationship. It does not matter whose fault that is. I rather think probably the fault lies on both sides although the defendant said that she herself was blameless. The fact of the matter is that they did not enjoy a good relationship. As a result of that, the defendant’s relationship with her brother was not as good as it had been.
The plaintiff said there were a number of conversations leading up to the execution of the transfer. His parents were present at some of the conversations, but not all. His sister told him that she was concerned that should the marriage go ahead and fail it could very well affect the property which was then used as security for the business. He said that his sister told him he should transfer his half share for her to hold for him and if the marriage worked out, say in twelve months, and there were no problems, then he could have his share back. He said that she expressly used the expression that she would hold it on trust for him.
In relation to the payment of the Stamp Duty he said that he had been told by his mother that Mr Ward Smith had given the defendant some money in 1988 and out of that money the plaintiff was to get $1,000 or $2,000. He said that she never received it. He said that when he confronted her about that she said she used his share to pay the Stamp Duty, and that when she transferred the interest back to him she would repay it.
I must say I find that story most unlikely.
I can think of no reason why the plaintiff’s mother would have told the plaintiff that Mr Ward Smith had given Marlissa some money in 1988, part of which was to be given to him.
The fact of the matter is that the defendant was no longer working for Mr Ward Smith. There is no reason to think that Mr Ward Smith would, shortly before his death, pay a sum to his former personal assistant for the purpose of her passing on that amount to her brother. It must be remembered by this stage that the plaintiff had little to do with Mr Ward Smith at all. As I have already remarked he did not even go to his funeral when Mr Ward Smith died in December 1988. I do not believe that the plaintiff’s mother ever told him that Marlissa had received some money from Mr Ward Smith, some of which was for him.
The defendant’s evidence was that she paid for the cost of preparation of the transfer and her father paid the stamp duty. Her father’s evidence was that he paid nothing because he had no money. This is one of these matters when I doubt the defendant’s evidence. It suited her to say that her father had paid the stamp duty. It makes it seem more likely that he and her mother are the beneficial owners. However I accept her father’s evidence on this. I do not believe that he contributed to the payment of stamp duty. The stamp duty was paid by the defendant.
I think the more likely explanation as to how the defendant was in a position to pay the Stamp Duty is that to which I have already referred. On 23 February 1989 she received the sum of $5000 for herself out of Mr Ward Smith’s superannuation fund. I expect that she was aware, prior to 23 February 1989, that she was to receive a sum of money and I expect that that was, together with the plaintiff’s marriage, a catalyst in bringing this transfer to a head.
I reject the plaintiff’s claim that he was entitled to some amount of money out of a sum paid to his sister in mid 1988. It follows that I reject his account that his sister used that money to pay the Stamp Duty and said that she would repay the money when the property was re-transferred.
The plaintiff denied in cross examination that there had been any conversation with his parents before his marriage and where his father put to him that they did not know his future wife very well and where his father said:
“I think you had better transfer your share in the house to your sister, as the house is really mine and your mother’s, and I don’t want to jeopardise that”.
He also denied that he said at that time: “That’s not a problem with me, I’m happy to do it, the house does not belong to me as far as I’m concerned”.
Specifically it was put to him that the conversation occurred at Brookside Avenue on a Saturday afternoon.
The plaintiff’s account is not consistent with his pleadings. Paragraphs 3 and 4 of the More Explicit Statement of Claim provide:
“3..... Subsequent to the matters referred to in paragraph 2 above the defendant continually and on numerous occasions between late 1988 and 15 February 1989 at 154 Frederick Street Welland in the State of South Australia; and, during the course of a journey between 154 Frederick Street Welland and 151a The Parade Norwood on 15 February 1989, orally advised the plaintiff:-
3.1..... That the interests of the parties in the Land could be jeopardised in the event of the plaintiff’s marriage failing and the plaintiff’s proposed wife making a claim for property settlement against the plaintiff; and
3.2..... That as the parties’ parents lived on the Land, their security of tenure could also be in jeopardy in the event of the plaintiff’s marriage failing.
4.The plaintiff and the defendant orally agreed at the time and places referred to in paragraph 3 herein that upon the plaintiff transferring his interest in the Land to the defendant:-
4.1The defendant would thereafter hold the plaintiff’s interest in the Land on behalf of the plaintiff as trustee;
4.2........ The defendant would transfer the plaintiff’s interest in the Land back to the plaintiff upon:-
............. 4.2.1. The defendant marrying; or
............. 4.2.2. The parents of the parties dying; or
............. 4.2.3. The plaintiff requesting the defendant to do so
(hereinafter referred to as the “Agreement”).”
The plaintiff said nothing in his evidence of the possibility of a claim for property settlement or the question of the security of his parents’ tenure. Nor did he say that the defendant agreed to reconvey the property upon any of the events mentioned in par 4.2.
The plaintiff’s wife gave some evidence in relation to this topic.
I was not unimpressed by Mrs Poethke Junior. I thought she gave her evidence in a straightforward manner. There is no doubt that the present unfortunate disagreements between her husband and her family are matters of concern to her. She, no doubt, is called upon to give support to her husband in respect of those difficult matters.
However, I thought she was a witness who gave her evidence frankly and without favour to her husband’s cause.
She said before the marriage there were a number of conversations between the plaintiff and defendant which related to the house and the defendant expressed a number of fears in relation to losing the house.
When she and her husband decided to marry the first person they told was the defendant. She said that the defendant’s reaction was such to shock her. The defendant said, “How dare you do that without asking me”. The defendant became very angry and began yelling.
On the other hand, she said the plaintiff’s parents were pleased by the announcement of their marriage.
She said that her observations of the plaintiff and the defendant were that they were very close prior to this time and she was careful to include the defendant in their activities as much as possible. The announcement of the marriage ended that close relationship.
She did not become aware of the execution of the transfer until August 1989. She only became aware of the execution of that document because she overheard an argument between the plaintiff and the defendant.
At that time the plaintiff had applied for an advance from the National Australia Bank.
Included in the application was disclosure of the half share of a house. That application has been amended to delete that asset.
The witness heard her husband and the defendant argue about the bank’s knowledge in relation to the transfer to his sister. She heard the defendant saying that the bank had been advised of the reasons. She heard her husband tell the defendant that she had better fix it with the bank and fix it quickly.
Mr Karl Poethke said that he was pleased when he heard the plaintiff and Vicky were to be married although he did tell the plaintiff that it would be better to wait for a while.
When he heard, for the first time, that the plaintiff was to marry, he told the plaintiff that when he married “he would have to sign back to us what he had agreed”. He said by that he was making reference to the conversation he had at the time that the house was put in the children’s names that whenever either of the children got married the house had to go back into the name of his wife and himself.
He said that when he said that to his son, his son said “No worries”. This topic was not addressed in cross examination due to Mr Poethke’s ill health overtaking the events.
Mrs Poethke Senior gave evidence of a conversation in the kitchen at Brookside Avenue. She said that her husband and her two children were present and her husband said to the plaintiff that the best thing would be if he was to write the house over to Marlissa. He told the plaintiff that he was worried about the marriage and that the plaintiff’s future wife might make a future claim afterwards. She said that her son responded by saying “No worries Mama”, and then patted her on the shoulder.
She said that she went with her daughter when her daughter signed the Memorandum of Transfer accepting the transfer. She said there was conversation about the cost of the transfer and who would be responsible. She said that her son said that he did not have any money. She said in due course she and her daughter paid for the cost of the transfer.
She said there was nothing said about there being a reconveyance of the property.
She said that her son went to see Mr Potter alone, and when he returned to the warehouse where his mother was working, he patted her shoulder and said “Everything is OK. Are you happy now Mum. It’s your house, I don’t want it”.
She was extensively cross examined about the conversation at Brookside Avenue and the plaintiff’s conduct and statement when he returned from Mr Potter’s office.
She did not qualify her evidence in any way, nor did she resile from any of that evidence. I accept her evidence, and for the reasons I have already expressed, I prefer it to that of her son.
The defendant’s evidence was that she was always happy for her brother to marry his wife. She said so to her parents and her brother. This is another matter on which I do not accept the defendant. I prefer the evidence of the plaintiff’s wife. I believe that the defendant did become quite cross when she heard that her brother and Vicky were to marry. I accept that thereafter her attitude to her brother and his wife changed. I have no doubt that the defendant’s attitude and behaviour has contributed to the matters which followed. She is deluding herself in saying that she is completely blameless. There is no doubt that she did become apprehensive about aspects of the marriage because of her future sister-in-law’s behaviour at Imperial Pet Supplies Pty Ltd. I will not go into those issues which are not relevant.
There is one particular matter that requires examination. The defendant met Vicky’s mother at dinner at her parent’s place and recounted a conversation that her mother had about her daughter. As a result of that conversation she spoke to her parents at the end of the evening about the impending marriage.
The next day her brother rang her parents and asked to come to their place and explain what had happened the previous night. She said that her brother, his now wife, her parents and she sat in the rumpus room. She said that her brother told them that Vicky was very upset, that her mother had given the wrong impression about her and she could not understand why her mother had said what she had said. Vicky was crying while this was being said. Her brother and Vicky left and she had a further conversation with her parents about her apprehensions relating to the marriage.
As a result of that conversation her brother came to Brookside Avenue again and her father spoke to him in the presence of Mrs Poethke and the defendant.
She said that her father said, “I think the house should be transferred into your sister’s name. You’re getting married. We don’t know how things are going to work out”. She said her father went on to say, “I’m concerned that in the event that things didn’t turn out, that your wife may have a claim on your mother’s and my house. The bank already has a claim on it at the moment with the security, and I would feel better if that was done”.
She said that her brother responded in these terms, “Well, it’s not my house anyway. It doesn’t worry me. You do what you want to do”. She said that she then said, “It has to be transferred. It has to be done properly”. Her evidence was that her brother then said, “Well, I’ll leave it up to you, Marlissa, but don’t look at me for any money because I haven’t got any, and I’m getting married”.
The defendant was not surprised that her father had said what he did. She expected him to say something to that effect because she had had previous discussions with him about that matter.
Her evidence was that following upon that conversation she attended to instructing Mr Potter to arrange for the transfer from the joint names of herself and her brother into her name.
She said that she advised her brother of the land broker who had been instructed and where he ought to go to sign the documents. He signed the transfer before she signed the transfer accepting the conveyance.
She said that she did not use the money from the Ernsmith Superannuation Fund for the purpose of paying the stamp duty but that her father provided her with $1,000 to pay the stamp duty. Her evidence was that she believes that she paid the cost of the preparation of the transfer out of her own moneys.
The defendant’s evidence is consistent with the evidence of her mother and her father. I accept the evidence of the defendant, her mother and her father that the plaintiff was asked to transfer his interest in the property to his sister in the circumstances mentioned. I also accept and I find that there was no representation that the property would be reconveyed in any of the circumstances mentioned in the statement of claim or in the plaintiff’s evidence.
I find that the plaintiff readily agreed to transfer his interest to the defendant for no consideration as expressed in the transfer. I believe he was disposed to do that because as I have previously found he had no beneficial interest in the property in any event. In those circumstances he was giving away nothing.
I therefore reject the plaintiff’s claim that the defendant received the property as trustee for the plaintiff. I believe that the property was conveyed to her so that she would hold the property as sole trustee for her parents.
In those circumstances there was no obligation upon her when she was thereafter requested so to do to reconvey the property to herself and her brother as joint tenants.
In those circumstances the plaintiff’s claim has to fail for those further reasons.
The relationships within the family continued to deteriorate after 1989 concluding in 1993 with a complete separation of the parties’ interests in Imperial Pet Supplies Pty Ltd. Mr Poethke resigned from the firm in July 1992. The defendant sold her shares to the plaintiff on 7 September 1993. On 9 September 1993 Mr Poethke brought proceedings against the company for a failure to pay his wages and provide him with a car for a lengthy period prior to his resignation. Other proceedings were taken by other members of the family against each other and it is clear now that the plaintiff does not enjoy any type of relationship with his mother and his sister.
It is also not necessary to go into a number of matters relating to credit which were explored on the evidence. The plaintiff in cross examination of his father claimed that his father’s evidence as to the beneficial ownership of the property was inconsistent with representations that he and his mother had made to the Department of Social Securities over a number of years. He claimed that his parents had obtained benefits to which they would not otherwise have been entitled by reason of those representations. I specifically make no findings in relation to those matters. They were only relevant to credit. Even if Mr and Mrs Poethke Senior made representations in the Department inconsistent with their evidence, which I do not decide, that would not affect my view of their credit and credibility.
So also particular representations made to Banks by both the plaintiff and defendant have not been material in assessing the credit of the witnesses. That is because I think all of the parties have, from time to time, made representations to third parties about this house and other assets which may not be strictly accurate. The question for me to decide was how they treated the property between themselves.
Moreover it is not necessary for the purpose of the determination of these proceedings to go into the many matters relating to the behaviour of the parties subsequent to 1989 (i.e. after the plaintiff transferred his share in the legal title to the defendant) which were explored in the evidence. Those matters would only be relevant, of course, if I concluded the property was beneficially owned by the plaintiff and the defendant and at the time the plaintiff conveyed his interest to the defendant there was an agreement to reconvey the property. In those circumstances I would need to examine whether or not there had been a breach of that agreement.
However I have concluded that the land was not beneficially owned by the plaintiff and the defendant and there was no such agreement. In those circumstances the plaintiff’s claim fails in its premises.
In my opinion the action must be dismissed.
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