Thomas v Thomas

[2000] WASC 10

THOMAS -v- THOMAS & ANOR [2000] WASC 10

Jurisdiction:	SUPREME COURT OF WESTERN AUSTRALIA	Citation No:	[2000] WASC 10
Case No:	CIV:2028/1999	Heard:	12 JANUARY 2000
Coram:	MASTER BREDMEYER	Delivered:	1/02/00
No of pages:	6	Judgment Part:	1 of 1
Result:	Application dismissed
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Parties:	DENNIS STEPHEN THOMAS STEPHEN JOHN THOMAS THE REGISTRAR OF TITLES
Catchwords:	Default judgment Whether plaintiff has a cause of action entitling him to judgment
Legislation:	Property Law Act 1969 (WA) s 34(1)(a), s 34(1)(b), s 36 Statute of Frauds s 4
Case References:	Regent v Millett (1976) 133 CLR 679 Bannister v Bannister [1948] 1 All ER 133 Chang v Registrar of Titles (1976) 137 CLR 177 Ninety Five Pty Ltd v Banque Nationale de Paris [1988] WAR 132 Soar v Foster (1858) 3 K & J 152; 70 ER 64 Walsh v Lonsdale (1882) 21 Ch D 9

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA CITATION : THOMAS -v- THOMAS & ANOR [2000] WASC 10 CORAM : MASTER BREDMEYER HEARD : 12 JANUARY 2000 DELIVERED : 1 FEBRUARY 2000 FILE NO/S : CIV 2028 of 1999 BETWEEN : DENNIS STEPHEN THOMAS

Plaintiff

AND

STEPHEN JOHN THOMAS
First Defendant

THE REGISTRAR OF TITLES
Second Defendant

Catchwords:

Default judgment - Whether plaintiff has a cause of action entitling him to judgment

Legislation:

Property Law Act 1969 (WA) s 34(1)(a), s 34(1)(b), s 36

Statute of Frauds s 4

Result:

Application dismissed

(Page 2)

Representation:

Counsel:

Plaintiff : Mr N D Paterson
First Defendant : No appearance
Second Defendant : No appearance

Solicitors:

Plaintiff : Birman & Ride
First Defendant : No appearance
Second Defendant : No appearance

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

Regent v Millett (1976) 133 CLR 679

Case(s) also cited:

Bannister v Bannister [1948] 1 All ER 133
Chang v Registrar of Titles (1976) 137 CLR 177
Ninety Five Pty Ltd v Banque Nationale de Paris [1988] WAR 132
Soar v Foster (1858) 3 K & J 152; 70 ER 64
Walsh v Lonsdale (1882) 21 Ch D 9

(Page 3)

1 MASTER BREDMEYER: The plaintiff seeks default judgment against the first defendant under O 22 r 7 of the Rules of the Supreme Court. No order is sought against the second defendant and, for convenience, I will refer to the first defendant as "the defendant". The defendant has defaulted in filing a defence. That default has been proved. Under O 22 r 7, I can only give "such judgment as the plaintiff appears entitled to on his statement of claim".

2 This case concerns a mother, Marjorie Ruth Thomas, a son, Dennis Stephen Thomas (the plaintiff) and his two sons, Raymond Paul Thomas and Stephen John Thomas (the defendant). The plaintiff's claim, as set out in the amended statement of claim, is as follows: Up until 6 August 1996, the mother, Marjorie, was the registered proprietor of 57 Waldeck Street, Dongara. In about 1989, the plaintiff and Marjorie made an oral agreement whereby the plaintiff would purchase the land from Marjorie for $60,000. Pursuant to the agreement, the plaintiff paid Marjorie an amount of $800 and thereafter an amount of $100 per week until May 1998. In 1996, the plaintiff made an oral agreement with his two sons, Raymond and the defendant, that the property would be registered in their names as tenants in common in equal shares and that they would hold it on trust for him for life, and that on his death it would vest in them absolutely as tenants in common in equal shares. The property was transferred from Marjorie to the two grandsons, as tenants in common, on 6 August 1996. The plaintiff continued to reside on the property and paid all rates and taxes and other outgoings in respect of the property and the plaintiff attended to the maintenance and repair of the property.

3 On 8 May 1997, without the plaintiff's knowledge, Raymond conveyed his half share in the property to the defendant and the defendant registered a mortgage over the property in favour of Priority One Finance Services Ltd. (Although not in the amended statement of claim, the defendant says, in an affidavit, that he paid Raymond $45,000 for his half share). On 12 June 1997, the defendant wrote a letter to the plaintiff instructing him to quit the property within seven days. In June 1998, the plaintiff lodged an absolute caveat, number G837392, over the property to protect his beneficial interest. He filed a statutory declaration in support of that caveat dated 23 June 1998.

4 Normally, I should examine the merits of the plaintiff's claim from the statement of claim solely, but, in this case, I consider it proper to refer to two affidavits from the plaintiff which are on the file and which, among other things, exhibit the certificate of title and the caveat, referred to in the pleadings. The plaintiff's counsel, in written submissions, has also

(Page 4)

referred me to these affidavits. From these affidavits, I learn that the mother, Marjorie, and her husband became the registered proprietors of the land as joint tenants in 1984. Her husband died in September 1988 and she became the sole registered proprietor by survivorship on 23 June 1989. In the plaintiff's first affidavit sworn 8 September 1998, he confirmed the correctness of his statements made in the statutory declaration made in support of his caveat.

5 In that statutory declaration, the plaintiff states that he built a house on the property and has resided on the property since at least 1988. In his second affidavit of 30 November 1998, he states that Raymond resided in the house from about August 1992 until November or December 1997 and during that time he was obliged to pay the plaintiff $100 a week rent. He says that Raymond often did not pay the rent and that caused an enormous amount of friction. In his statutory declaration, the plaintiff says that since 6 August 1996 he (the plaintiff) has continued to reside in the property and has paid all rates, taxes charges, maintenance and outgoings. This contrasts with the affidavit statement that Raymond was in the property between 1992 and 1997.

6 The general position is that an interest in land cannot be created or disposed of by an oral agreement: see s 34(1)(a) of the Property Law Act 1969 (WA) and s 4 of the Statute of Frauds. However, this is subject to the doctrine of part-performance: see s 36 Property Law Act. Going into possession pursuant to an oral contract of sale can be an act of part-performance: see Regent v Millett (1976) 133 CLR 679. The statement of claim pleads an oral contract of sale. Some moneys have been paid under it. There is no statement in the pleading that all of the purchase price has been paid. The plaintiff went into possession pursuant to the contract. He also built a house on the land and paid the rates and taxes for a number of years. Those are, arguably, acts of part-performance. I consider that the plaintiff on this pleading had an equitable interest in the land under the oral contract of sale which could be enforced.

7 In 1996, he made an oral agreement with his two sons that the land would be transferred to them on trust. In 1996, the land was transferred into the names of the two sons. The general rule is that a trust respecting any land cannot be created by an oral agreement. Section 34(1)(b) of the Property Law Act states:

(Page 5)

"A declaration of trust respecting any land or any interest therein shall be manifested and proved by writing signed by a person who is able to declare the trust or by his will."

Subsection (2) provides:

"This section does not affect the creation or operation of resulting, implied or constructive trusts."

8 The plaintiff has argued that the amended statement of claim supports a resulting trust. If A transfers, or arranges the transfer, of land to B and C and A provides all the purchase price, B and C hold the land on trust (a resulting trust) for B and C. But where B and C are sons, the plaintiff faces a contrary rule, namely, the presumption of advancement. That presumption states that, where a father transfers property into the names of his sons, and has provided the purchase money for that property, the law presumes that he has done so with a view to "advancing" the interests of his sons; in other words, that he has gifted the land to his sons. The presumption applies to adult children. That presumption may be rebutted by evidence of the circumstances surrounding the transfer and statements made by the parties. Evidence of acts and declarations of the parties before or at the time of purchase or so immediately after as to constitute a part of the transaction will be admissible. A subsequent declaration of a party will be admissible if it is against interest. Jacobs' Law of Trusts in Australia (6th ed) par 1210, par 1212, par 1213.

9 In this case, a resulting trust is not pleaded. The plea is of an express trust. Even if the resulting trust was pleaded, there is a problem with it. The plaintiff did not provide all the purchase moneys for the legal estate which the defendant now has. He paid $60,000 or thereabouts to his mother. I say "or thereabouts" because there is no plea of the total amount paid. But the defendant paid $45,000 to purchase Raymond's share in 1997. This evidence appears in the defendant's affidavit of 16 November 1998 filed in support of the defendant's summary judgment application which failed. Normally, on an application for default judgment, no evidence for the defendant is available. But here, where it is, I consider on natural justice grounds that I cannot ignore it. That suggests that the resulting trust in favour of the plaintiff is as to a half share in the property.

10 The presumption of advancement can be rebutted by evidence including oral evidence and here I consider that the oral trust agreement is admissible: see Jacobs' Law of Trusts ibid par 1215.

(Page 6)

11 The plaintiff has argued that the transfer by Raymond of his half interest to the defendant is a transfer of the trusteeship of half the property; so that now the defendant holds the full interest in the property on trust for life for his father. The plaintiff argues that the defendant was not a bona fide purchaser of the legal title without notice by reason of the common intention as pleaded. That common intention is said to be inferred from the oral trust agreement. That is a round about way of relying on that oral agreement.

12 I am not willing to make the declaration sought that the defendant holds the property on trust for the plaintiff for a life interest. To do so would be to enforce the oral agreement which falls foul of s 34(1)(b) of the Property Law Act. I am not willing to infer that the defendant's purchase from Raymond was not bona fide. That is not pleaded. Mala fides is one of those matters which need to be pleaded expressly. The statement of claim, as amplified by the affidavits, supports a finding of a resulting trust that the defendant holds the property on trust as to a half share for the plaintiff. That declaration is not sought in the pleading. Given that this is an application for a default judgment, I am not willing to allow an amendment of that nature without notice to the defendant.

13 I propose to dismiss the application. If the plaintiff wishes, I will give leave to amend the statement of claim to plead a resulting trust. That pleading should be served again on the defendant and, if no response, a fresh application for a default judgment can be made.