Singh v Singh [No 3] - [2010] WASC 64

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: SINGH -v- SINGH [No 3] [2010] WASC 64

CORAM: MAZZA J

HEARD: 24 MARCH 2010

DELIVERED : 26 MARCH 2010

FILE NO/S: CIV 1677 of 2004

BETWEEN: SARDUL SINGH
Plaintiff
AND
MAN MAHAN SINGH
Defendant

Catchwords:

Trusts and trustees - Was trust deed a forgery - Did trustee mortgage property for his own purposes - Trial in absence of defendant - Turns on own facts

Legislation:

Rules of the Supreme Court 1971 (WA), O 21 r 3

Result:

Declaration made in favour of plaintiff

Category: D

Representation:

Counsel:

Plaintiff: Mr E Carlose
Defendant: No appearance

Solicitors:

Plaintiff: Eapon Carlose
Defendant: In person

Case(s) referred to in judgment(s):

Aon Risk Services Ltd v Australian National University [2009] HCA 27
Singh v Singh [2006] WASC 182
Singh v Singh [No 2] [2010] WASC 12
Stone v Smith (1887) 35 Ch D 188

MAZZA J: The plaintiff and defendant are brothers.
This is the latest and what should be the last chapter in the long‑running litigation between these parties. The history of the case is set out in Singh v Singh [2006] WASC 182 and Singh v Singh [No 2] [2010] WASC 12.
The defendant is the registered proprietor of a property in Malaysia. This property has been described in sightly different ways in the statement of claim, some of the exhibits and the plaintiff's oral evidence. Nothing turns on these differences. A copy of the certificate of title was produced at the trial and marked exhibit 5. This document is headed 'Government of Perak' and is described 'Grant for Land' Register of Titles Perak Vol 85 Folio 48 District of Larut No 16458 (the property). I have no doubt that the property is the same property the subject of the trust deed to which I will now refer.
The plaintiff claims that, by virtue of a deed of trust dated 22 June 2001, the defendant holds the property on trust for him. The terms of the trust deed oblige the defendant, on request by the plaintiff, to transfer the property to the plaintiff, or such person or persons as the plaintiff directs.
The plaintiff's pleaded case is that, on 6 February 2002, he requested the defendant in writing to transfer the property to him. It is alleged that the defendant refused to comply with this request.
The plaintiff also alleges that between July and December 2001, the defendant, without his knowledge and consent, mortgaged the property to receive a loan made by a bank, to the defendant in the sum of 13,500 Malaysian Ringgit. The plaintiff says in his witness statement that this sum was used by the defendant for his own benefit. The statement of claim sought payment from the defendant of the Australian equivalent of 13,500 Malaysian Ringgit, but this claim has not been pursued by the plaintiff.
In 2004, the plaintiff commenced this action to compel the defendant to transfer the property encumbrance free to the plaintiff.
The plaintiff seeks a declaration that the defendant holds the property on trust for him and a consequential order that the defendant do all things and sign all documents necessary to transfer the property in an unencumbered state to the plaintiff.
The defendant's case, as pleaded in his defence dated 26 August 2004, is that the trust deed was not signed by him and is a forgery. It appears that the defendant claims that he is the legal and beneficial owner of the property. The defendant admits that he mortgaged the property, but pleads that he did so to pay for repairs to the property which cost 13,500 Malaysian Ringgit.
The defendant asserts in his defence that the plaintiff is not entitled to the declaratory relief sought. Although not pleaded as a counterclaim, he also seeks payment from the plaintiff of 13,500 Malaysian Ringgit.
The defendant has not pleaded any issue of foreign law.
I pause to note that the defendant filed a document on 3 March 2010 entitled 'Amended Statement of Defence pursuant to O 21 r 3 of the Rules of the Supreme Court1971 (WA)'. This rule allows amendment of a pleading without leave, but before pleadings have closed. In this case, pleadings closed years prior to the filing of this document. Accordingly, leave was required for this defence to stand as the defence at trial. No leave was sought by the defendant. Had leave been sought, it would have been refused, having regard to the principles set out in Aon Risk Services Ltd v Australian National University [2009] HCA 27.
In February 2006, Le Miere J made orders concerning the trial. Inter alia, these orders required the parties:
1.To file witness statements by 28 February 2006.
2.Deliver copies of documents that each party intended to rely upon at trial by 15 February 2006.
3.Advise each other in writing which documents may be tendered by consent and whether the authenticity of any document was in dispute by 22 February 2006.
Le Miere J also ordered that, without the leave of the trial judge, no oral evidence could be adduced from a witness who had not given a witness statement and no document could be produced which had not been delivered to the other party.
The defendant has not complied with any of these orders. No documents or witness statements have been provided to the court or the plaintiff by him. The defendant has not advised the plaintiff which documents may be tendered by consent, or whether the authenticity of any document is in dispute. The defendant has thus given the distinct impression that he intended to take no part in this trial.
Nevertheless, the defendant has, at times, shown interest in the proceedings. For example, on 25 January 2010, the plaintiff applied for, and was granted by Murphy J, an interlocutory injunction to restrain the defendant from selling, encumbering or otherwise disposing of the property. The defendant filed an affidavit opposing the injunction and appeared at the hearing.
The injunction was granted because, amongst other things, there was a risk that the defendant would attempt to dispose of, or deal with, the property prior to this trial: Singh v Singh ]No 2] at [29].
On 15 March 2010, the defendant sent a letter to the court seeking an adjournment of this trial alleging that he was medically unfit. On 23 March 2010, the defendant filed an affidavit. The affidavit annexed a very brief medical report from the defendant's general practitioner and a medical certificate, signed by the doctor, for Centrelink. The affidavit refers to a number of matters, other than his health, which reveal that he was not ready for trial, even though the matter was listed for trial in December 2009, and the action had been on foot since 2004. On 24 March 2010, on the listed trial date, the defendant failed to appear. However, his wife, Ms Bal, came to court. She informed me that her husband was unwell and could not attend court. She requested, on her husband's behalf, an adjournment of the trial for two months.
The plaintiff opposed any adjournment of the trial.
I formed the view that there was insufficient evidence to satisfy me that the defendant was medically unfit to attend court and, if he wanted, to participate in the trial. I am also strongly of the view that the defendant wished to unfairly engineer an adjournment of the trial. I delayed the start of the trial to give Ms Bal the opportunity to tell her husband that the trial was going to proceed and to give him a final chance to attend the hearing if he wished. I adjourned the court for approximately two hours for this purpose. Neither the defendant nor his wife returned by the deadline I imposed. Having heard nothing more from the defendant or Ms Bal, the trial commenced in the defendant's absence.
It does not follow that, because the defendant has failed to appear, the plaintiff's claim succeeds. The plaintiff must prove his claim by calling evidence and I must be satisfied on the balance of probabilities that the evidence establishes the claim and his entitlement to the relief sought, as well as any incidental relief: Stone v Smith (1887) 35 Ch D 188 per Kekewich J at 190.
The plaintiff's evidence, as contained in his witness statement (exhibit 3) is, most relevantly, as follows:
4My father, Kauda Singh s/o Genda Singh, had 6 residential properties in Malaysia. One of the properties is No 14 Jln Lim Swee Aun (the 'Trust Property') registered in Grant of Land No 16458 known as Lot No 1606 Mukim Tupai, District Larut, Perak and is the subject of the above proceedings.
5My father passed away in 1959. In 1965 or thereabouts, his properties vested in my mother, Gurbachan Kaur d/o Sher Singh, in her capacity as administratrix of his estate. In 1967, the Trust Property was transferred by my mother, in her capacity as administratrix, to me by way of inheritance.
6My other 5 brothers, including the Defendant, each received one of the other 5 properties, by way of inheritance. The Defendant received No 2 Jln Lim Swee Aun.
7The Trust Property was subsequently re-transferred from me to my mother in 1970 as I was then residing in Perth. It was then expressly agreed between my mother and I that the Trust Property would be transferred back to me at my request.
8In 1992 or thereabouts, my mother requested that the Trust Property be transferred back to me owing to her advancing age. I then asked the Defendant whether he had any objections to the Trust Property being transferred to him and that he hold it on trust for me. I told him that I will let him know when I needed it to be transferred to my name and he can then transfer it back to me. He said he had no objections and agreed to transfer it back to me when so requested by me.
9I then asked my mother to transfer the Trust Property to the Defendant and this was done in 1992.
10The extract at pages 4 of the Bundle shows the above transfers.
11Since 1992, the Defendant regularly kept me informed about matters relating to the Trust Property through, amongst other ways, correspondence received by me from his wife, Satwant Kaur ('Satwant'), when they were residing in Malaysia.
12In a letter dated 17 Nov 1994, Satwant acknowledged, in the first line of paragraph 3 at page 6 of the Bundle, that the Trust Property was mine. In her letter, she referred to No 14 Harrison St. Harrison St was subsequently renamed JIn Lim Swee Aun and 14 Harrison St, referred to in Satwant's letter, is the Trust Property. Her letter was signed Jas which is her nickname.
13On 22 June 2001, at my request, the Defendant to come up to the Office and signed the Trust Deed, at page 1 of the Bundle, in the presence of Timothy James Goddard ('Tim'). I saw the Defendant and Tim sign the Trust Deed in the presence of each other. Tim and the Defendant were personally known to each other.
14I then made a copy of the Trust Deed with the photocopying equipment I then had in the Office. It had been since 1998 or thereabouts and is still being used in the course of the business for photocopying purposes. I had the original stamped soon after.
15During the period July to September 2001, the Defendant, without my knowledge and consent, borrowed Malaysian Dollars 13,500, using the Trust Property as security. This amount was utilised for his own personal benefit and use and not towards the Trust Property. The Property is presently encumbered by a mortgage. Malayan Banking Berhad is the mortgagee and the Defendant is the mortgagor.
The trust deed dated 22 June 2001 (exhibit 2) purports to be signed by the defendant and witnessed by Timothy James Goddard. The deed is brief and is in the following terms. The defendant is named in the formal part of the deed as the proprietor:
WHEREAS
1. This declaration is supplemental to a transfer dated 14th February 1991 and whereby the freehold property known as Lot No 1606 Mukim of Tupai, District of Larut in the State of Perak: Daruk Ridzuan, registered under Grant of Land 16458 (hereinafter referred to as 'Property') was transferred to the Proprietor.
2. The Proprietor hereby acknowledges that the Property was transferred as aforesaid to him as trustee for Sardul Singh of 6 Binden Place, HAMERSLEY, W A 6022 (hereinafter referred to as 'Beneficiary').
3. The Proprietor further acknowledges that the Beneficiary was, and remained at all times, the beneficial owner of the whole of the Property.
NOW THIS DEED WITNESSETH that the Proprietor hereby declares that he holds the Property in trust for the Beneficiary and hereby agrees that he will at the request and cost of the Beneficiary transfer the Property absolutely to the Beneficiary or such person or persons at such time or times and in such manner or otherwise deal with the same as the Beneficiary shall direct or appoint and will make all applications to the appropriate land registry and execute all documents and do all acts and things as may be necessary to procure or effect the appropriate registration or entry in the register of the aforesaid title to give effect to any such transfer or dealing or if so required to enable the interest of the Beneficiary or nominated transferees to be protected.
Mr Goddard, in his witness statement (exhibit 1) states:
1In June 2001, I was a practising accountant. Sardul Singh, the Plaintiff, was my previous employer.
2In June 2001, Sardul Singh, was the proprietor of the firm S Singh & Associates, which had its office at 2nd Flr, 442 Murray St, Perth ('Office').
3 The Plaintiff's brother was, at the material time in June 2001, personally known to me. He ran a restaurant at the ground floor of the same building.
4On 22 June 2001, I was requested by the Plaintiff to witness the Defendant's signature on a Trust Deed. I subsequently affixed my signature to the Deed immediately after the Defendant signed the Deed in my presence. The execution of the Trust Deed took place at the Office.
5Under no circumstances, would I have affixed my signature to the Trust Deed if the Defendant had not signed it in my presence.
Having regard to this evidence and in the absence of any evidence to the contrary, I find that the defendant signed the trust deed on 22 June 2001, in the presence of the plaintiff and Mr Goddard. In my view, the accounts given by the plaintiff and Mr Goddard about the circumstances in which the trust deed was signed are plausible and consistent with each other. I can see no reason why either man would lie about the circumstances in which the deed was signed. In particular, I cannot see why Mr Goddard would have any reason to lie about witnessing the defendant's signature.
In my opinion, the terms of the trust deed are clear. I find that the defendant holds the property on trust for the plaintiff. Although the letter of request dated 6 February 2002 was not tendered, there is no issue on the pleadings that a request was made by the plaintiff, or on his behalf, to the defendant to transfer the property to the plaintiff and that he has refused to do so. In light of the provisions of the trust deed, the defendant had no legitimate right to refuse this request.
I am satisfied on the basis of the plaintiff's evidence and the admission in the defence and I find that the defendant mortgaged the property to receive a facility from which 13,500 Malaysian Ringgit was drawn. I accept the plaintiff's evidence and I find that he did not consent to the mortgage. I also find that the money was used for the defendant's own purposes. I find that the defendant breached his duties as trustee by mortgaging the property without the plaintiff's consent and using the money drawn from the facility for his own purposes.
In my opinion, the plaintiff is entitled to a declaration that the defendant holds the property on trust for the plaintiff and to an order requiring the defendant to do all things necessary to effect a transfer of the property in an unencumbered state to the plaintiff. I am prepared to extend the operation of the injunction granted by Murphy J to ensure that the property is not in any way dealt with by the defendant except in accordance with my orders. Further, the plaintiff is entitled to an order for costs, including all reserved costs and the defendant's attempt to adjourn this trial.
I will hear counsel as to the form of the orders that I will make.