Thorp v Hudson [No 3]
[2022] WASCA 87
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: THORP -v- HUDSON [No 3] [2022] WASCA 87
CORAM: MURPHY JA
MITCHELL JA
VAUGHAN JA
HEARD: 24 JUNE 2022
DELIVERED : 25 JULY 2022
FILE NO/S: CACV 5 of 2020
BETWEEN: DOUGLAS HENRY ALBERT THORP
Appellant
AND
PAUL DOUGLAS HUDSON
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram: MASTER SANDERSON
Citation: NATIONAL AUSTRALIA BANK LIMITED -v- THORP [2019] WASC 394
File Number : CIV 1515 of 2019
Catchwords:
Appeal - Equity - Constructive trust - Whether master erred in finding that appellant had not established an arguable case that respondent's interest in property was subject to a constructive trust in appellant's favour - Turns on own facts
Appeal - Partnership - Agency - Whether master erred in finding that evidence did not establish an arguable case of a partnership or agency relationship between appellant and respondent - Turns on own facts
Legislation:
Partnership Act 1895 (WA), s 8(1)
Result:
Appeal dismissed
Representation:
Counsel:
| Appellant | : | In person |
| Respondent | : | No appearance |
Solicitors:
| Appellant | : | In person |
| Respondent | : | No appearance |
Case(s) referred to in decision(s):
French v Styring (1857) 2 CB (NS) 357; (1857) 140 ER 455
Giacci v Giacci Holdings Pty Ltd [2010] WASC 349
International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co [1958] HCA 16; (1958) 100 CLR 644
Kennedy v De Trafford [1897] AC 180
JUDGMENT OF THE COURT:
Overview
The appellant, Mr Thorp, appeals against orders of Sanderson M in favour of the respondent, Mr Hudson, by which Mr Hudson established an entitlement to one-half of the surplus proceeds of sale of a Property as paid into court.
Mr Thorp relies on numerous grounds of appeal. In substance, however, it was necessary for Mr Thorp to establish that the master erred in finding that Mr Thorp had not established an arguable case that Mr Hudson's interest in the Property (and thus his interest in the funds paid into court) was subject to a constructive trust in favour of Mr Thorp. That, in turn, required Mr Thorp to establish error in findings by the master to the effect that the evidence did not establish an arguable case that there was a relevant relationship of partnership or agency as between Mr Thorp and Mr Hudson.
This appeal was heard at the same time as appeal CACV/90/2020. Appeal CACV/90/2020 also involves Mr Thorp and Mr Hudson. Both appeals concern action CIV/1515/2019. These reasons should be read together with the reasons disposing of appeal CACV/90/2020 which are to be published at the same time as these reasons.
For the reasons that follow the appeal must be dismissed.
The proceedings before the master
Mr Thorp and Mr Hudson are apparently uncle and nephew.
The master has described the proceedings below as having a tortured history.[1] Relevantly:
1.Mr Thorp and Mr Hudson were registered proprietors as tenants in common of a property in Alexandra Road, East Fremantle (Property). Each of Mr Thorp and Mr Hudson were registered as proprietors holding one undivided equal share as tenant in common in the fee simple estate of the Property.
2.The Property was tenanted (apparently to the mother/grandmother and step-father/step-grandfather of Mr Thorp and Mr Hudson respectively). The tenants were to pay a monthly rent and outgoings.
3.The Property was mortgaged to National Australia Bank Ltd (Bank).
4.The Bank sold the Property following a possession order after default under the mortgage.
5.The proceedings below were commenced by the Bank, by originating summons, to remove certain encumbrances lodged in respect of Mr Thorp's interest in the Property.
6.Eventually, following arrangements with certain of the encumbrancers and otherwise by order of the court, a surplus of $345,581.11 on settlement of the sale of the Property was paid into court.
[1] National Australia Bank Ltd v Thorp [2019] WASC 394 [1] (Primary reasons).
In the context of the hearing before the master, Mr Thorp contended that there was an agreement between him and Mr Hudson that the rent payable by the tenants would be collected by Mr Hudson. The master said that, for the purposes of the application, it could be assumed that such an agreement existed.[2]
[2] Primary reasons [2].
The particular application before the master concerned issues between Mr Thorp and Mr Hudson. Mr Hudson said that, as owner of a half interest in the Property, he was entitled to one-half of the fund paid into court as representing his net interest in the Property (none of the encumbrancers claiming against Mr Hudson's interest in the Property). Mr Hudson sought orders accordingly. Mr Thorp opposed that relief. Mr Thorp contended that he had, or might have, a proprietary interest in the money; and until the extent of the proprietary interest was determined the money should remain in court.
The master determined that one-half of the surplus was the sole property of Mr Hudson.[3]
[3] Primary reasons [19].
On 10 December 2019 the master made a declaration that one‑half of the proceeds of sale of the Property as paid into court was the sole property of Mr Hudson. At the same time the master made orders that Mr Hudson's share of the surplus be paid out of court to Mr Hudson. Mr Thorp was also ordered to pay Mr Hudson's costs of the proceedings up to and including 5 November 2019 together with various associated costs. These orders are the subject of the appeal.
The master's reasons for decision
The master characterised the question for determination as being whether Mr Thorp had a proprietary interest in the fund in court (ie Mr Hudson's notional share thereof) so as to justify the refusal of an order to pay the funds to Mr Hudson.[4] In practical terms, whether Mr Thorp had a proprietary interest in the funds depended on whether he had previously enjoyed some proprietary interest in Mr Hudson's ownership interest as holder of one undivided equal share as tenant in common in the fee simple estate of the Property.
[4] Primary reasons [7].
Insofar as Mr Hudson's position was that, even accepting a version of the facts most favourable to Mr Thorp, no such proprietary interest could be established, the master considered that the matter before him was, in effect, Mr Hudson's application to summarily dispose of Mr Thorp's claim to a proprietary interest.[5] The master approached the application on that basis. In particular, while the master accepted a submission that no remedial constructive trust founding a proprietary interest could exist unless and until the court ordered its imposition, the master said that he would not order the payment out of the fund to Mr Hudson if satisfied that a court might determine that a constructive trust ought to be imposed on the fund or part of it.[6]
[5] Primary reasons [7].
[6] Primary reasons [15].
The master identified the parties' competing claims:
1.Mr Hudson said that Mr Thorp's claim as articulated in submissions to the court was no more than that he (ie Mr Hudson) had received rent for which he had not accounted to Mr Thorp. That was, in Mr Hudson's submission, no more than a personal claim for the taking of an account which could not result in Mr Thorp having any proprietary interest in Mr Hudson's interest in the Property or his share of the fund in court.[7]
2.Mr Thorp accepted that if his claim was simply for an account based on a failure to collect or pay over rent the claim would be personal and would not sound in a proprietary interest in the fund.[8] However, Mr Thorp nevertheless contended that:
(a)Mr Hudson was not entitled to the money held in court because there had been no determination that Mr Hudson was so entitled.[9]
(b)In the alternative, there was a fiduciary relationship between him and Mr Hudson. It was said that this could give rise to a trust which would be imposed on the fund. The fiduciary relationship was said to arise because either: (1) there was a partnership between Mr Thorp and Mr Hudson; or (2) there was an agency relationship between Mr Thorp and Mr Hudson.[10]
3.Mr Hudson contended that the evidence did not support there being any fiduciary relationship between him and Mr Thorp.[11]
[7] Primary reasons [8] - [9].
[8] Primary reasons [10].
[9] Primary reasons [5].
[10] Primary reasons [10].
[11] Primary reasons [11].
In the latter respect, there was limited evidence before the master. The master referred to a statutory declaration sworn by Mr Thorp and four affidavits sworn by Mr Thorp,[12] portions of the affidavits having been struck-out as inadmissible.[13] It is not necessary to rehearse all that was said by Mr Thorp in his evidence. For present purposes it is enough to record that Mr Thorp gave evidence to the following effect:
1.Mr Thorp confirmed that he and Mr Hudson became registered proprietors as tenants in common in equal shares of the Property.[14]
2.Mr Thorp and Mr Hudson agreed that they would let the Property to Mr Thorp's mother and step-father (ie Mr Hudson's grandmother and step-grandfather) - that duly occurred pursuant to a written tenancy agreement prepared by Mr Hudson.[15]
3.The Property was 'solely managed' by Mr Hudson[16] who assumed 'complete control' of it.[17] For example, payment of insurance and rates and taxes was undertaken by Mr Hudson;[18] and Mr Thorp was never involved in the repairs and maintenance of the Property.[19] At no time was there a joint bank account for the Property.[20]
4.Mr Thorp did not receive his half share of the rent entitlement.[21]
5.Mr Thorp made requests of Mr Hudson to account as to funds received from the tenants and paid to the Bank - those requests were not responded to.[22]
6.Mr Thorp claimed against Mr Hudson for a failure to account so far as Mr Hudson was managing the Property at all times after 9 March 1999 and Mr Thorp was not involved in the management. Mr Thorp said that Mr Hudson had failed to: (a) receive all of the monthly rent; (b) make his share of the mortgage payments; and (c) pay all rates and taxes.[23]
[12] Primary reasons [11].
[13] Primary reasons [12] - [13].
[14] Affidavit of D H A Thorp sworn 23 July 2019 par 6 Combined GAB 22.
[15] Affidavit of D H A Thorp sworn 23 July 2019 par 7 Combined GAB 23.
[16] Affidavit of D H A Thorp sworn 12 August 2019 par 2 Combined GAB 38.
[17] Affidavit of D H A Thorp sworn 14 October 2019 par 5 Combined GAB 53.
[18] Affidavit of D H A Thorp sworn 12 August 2019 pars 4, 5 Combined GAB 38; Affidavit of D H A Thorp sworn 6 September 2019 par 7 Combined GAB 48.
[19] Affidavit of D H A Thorp sworn 6 September 2019 par 7 Combined GAB 48.
[20] Affidavit of D H A Thorp sworn 14 October 2019 par 4 Combined GAB 53.
[21] Affidavit of D H A Thorp sworn 12 August 2019 par 3 Combined GAB 38; Affidavit of D H A Thorp sworn 6 September 2019 par 7 Combined GAB 48.
[22] Affidavit of D H A Thorp sworn 23 July 2019 par 13 Combined GAB 24; Affidavit of D H A Thorp sworn 6 September 2019 pars 7, 12 Combined GAB 48, 49.
[23] Affidavit of D H A Thorp sworn 23 July 2019 par 29 Combined GAB 27.
Mr Hudson did not address the management and control allegation in his affidavit sworn 4 September 2019. Mr Hudson said that since April 2006 he had made the only payments towards servicing the borrowings from the Bank and meeting rates, taxes and other outgoings (including repairs and maintenance) in relation to the Property; before that time, particularly from about 1998, Mr Hudson said that he had paid a disproportionate share. However, Mr Hudson also deposed that he never received any rent from the tenants.[24]
[24] Affidavit of P D Hudson sworn 4 September 2019 pars 13 - 15 Combined GAB 44 - 45.
Returning to the master's determination of the issues presented by the parties, the master rejected Mr Thorp's first argument in peremptory terms. It was common ground that Mr Hudson held a half interest in the Property, an interest held as tenant in common. Accordingly, in the master's view, prima facie Mr Hudson was entitled to be paid the net proceeds relating to his half interest.[25] This conclusion is challenged by ground 1.
[25] Primary reasons [5].
As to Mr Thorp's alternative argument, given the master's approach due to the nature of the proceedings, the master considered whether on the facts Mr Thorp had an arguable case that either a partnership or an agency relationship existed.[26]
[26] Primary reasons [15].
The master found that nothing on the facts could give rise to a partnership.[27] That finding is challenged by ground 2. Nor, in the master's view, did the facts go so far as to establish that an agency relationship could arguably exist.[28] That finding is challenged by ground 3.
[27] Primary reasons [16].
[28] Primary reasons [18].
Accordingly, the master was not satisfied that it was arguable that there was a fiduciary relationship between Mr Thorp and Mr Hudson which could give rise to a right in Mr Thorp to have the court impose a constructive trust on the fund. There was thus no basis to refuse an order that the money be paid out of court to Mr Hudson.[29]
[29] Primary reasons [19].
Grounds of appeal and extension of time
The grounds of appeal are that:
1.The master erred in fact and law in finding that Mr Hudson was prima facie entitled to one-half of the money paid into court by failing to take into account various matters.
2.The master erred in law in relying on s 8(1) of the Partnership Act 1895 (WA) to find that there was no foundation for a partnership between Mr Thorp and Mr Hudson.
3.The master erred in fact in finding that there was no implied or express manifestation of an agency relationship between Mr Hudson and Mr Thorp.
4 & 5.The master erred in law in failing to hold that there was a constructive trust, namely, a trust in respect of the obligation to receive rent of which Mr Hudson was trustee - Mr Hudson holding the relevant property on trust for Mr Thorp and Mr Hudson as beneficiaries. (Mr Thorp observing that, if either an arguable partnership or agency relationship is established on appeal, the same would support a finding of an arguable fiduciary relationship and an arguable constructive trust.)
6.The master erred in law in applying Giacci v Giacci Holdings Pty Ltd.[30]
7.The master erred in law in exercising his discretion at [15] of the primary reasons in favour of Mr Hudson without taking into account or giving any weight to the conduct of Mr Hudson in failing to collect rent for 23 years, failing to communicate or provide accounts and failing to make mortgage payments and allowing the mortgage to fall into default.
8.The master erred in law in relying on s 26 of the Limitation Act 2005 (WA) in that he did not take into account the unconscionable conduct of Mr Hudson and the availability of s 38 of the Limitation Act.
[30] Giacci v Giacci Holdings Pty Ltd [2010] WASC 349.
The appeal notice should have been filed and served by 20 January 2020. Mr Thorp did not file his appeal notice until 21 January 2020. The one-day delay is inconsequential. In all the circumstances there should be an extension of time for Mr Thorp to file and serve his appeal notice so as to regularise the appeal.
The merits of the grounds of appeal
Grounds that are misconceived
A number of the grounds of appeal are misconceived and may be put aside at the outset.
First, grounds 6 and 8 incorrectly attribute submissions made by counsel for Mr Hudson to the master. In coming to his conclusions the master did not apply Giacci v Giacci Holdings Pty Ltd. Nor did the master rely on s 26 of the Limitation Act. Insofar as the complaints the subject of grounds 6 and 8 are concerned the master did no more than record the submissions that were made to him.[31] The master did not make the alleged errors the subject of ground 6 or ground 8.
[31] See primary reasons [8] - [9].
Second, ground 7 complained of the master's exercise of discretion at [15] of the primary reasons. At [15] the master accepted that, at present, no constructive trust existed. However, the master then went on to state:
But, given the nature of these proceedings, if I was satisfied that a court might in the exercise of its discretion determine a constructive trust ought be imposed on the fund, or part of it, then I would not order funds be paid out to [Mr Hudson]. In part, that reflects a cautious approach which, given the nature of these proceedings, I am satisfied is warranted. The question then is whether on the facts [Mr Thorp] has an arguable case there exists either a partnership or an agency relationship between these two defendants.
There was no exercise of discretion in finding that no constructive trust existed. The exercise of discretion the subject of ground 7 could only be the master's determination that he would withhold making an order in Mr Hudson's favour if satisfied that there was an arguable case of a partnership or an agency relationship between Mr Thorp and Mr Hudson. That was undoubtedly favourable to Mr Thorp. If the master was in error in this respect, the error could not ground a successful appeal on the part of Mr Thorp.
It remains necessary to address grounds 1 - 5. Grounds 4 and 5 may be considered together. While we will, for completeness, address all of grounds 1 - 5 it should be appreciated that Mr Thorp must succeed on grounds 4 and 5 if he is to succeed in the appeal. Mr Thorp had to establish an arguable claim to a proprietary interest in Mr Hudson's ownership interest as holder of one undivided equal share as tenant in common in the fee simple estate of the Property to prevent an order for payment out of a half share of the fund in court to Mr Hudson. The only basis on which Mr Thorp suggested he had such an interest was the alleged constructive trust as posited before the master.
Ground 1: The extent of Mr Hudson's entitlement
Ground 1 complained about the master's finding that, as holder of one undivided equal share as tenant in common in the fee simple estate of the Property, Mr Hudson was prima facie entitled to be paid the net proceeds relating to his half interest. Mr Thorp said that the master had erred in failing to take into account various matters. Mr Thorp referred to the Bank's unilateral allocation as being expressly qualified,[32] Mr Hudson's evidence that he did not have records to complete a reconciliation[33] and the absence of any evidence from Mr Hudson that he was entitled to a particular sum. Mr Thorp contended that there had been no finding that Mr Hudson had any entitlement to the funds paid into court.[34]
[32] See Affidavit of L N Giles sworn 22 March 2019 par 30 Combined GAB 11.
[33] Affidavit of P D Hudson sworn 4 September 2019 par 15 Combined GAB 45.
[34] Appellant's submissions par 1.2 WAB 14.
In this respect there has been some revision in Mr Thorp's position. In a 23 July 2019 minute of proposed orders Mr Thorp referred unambiguously to Mr Hudson's share in the surplus paid into court.[35] At that time, as between Mr Thorp and Mr Hudson, Mr Thorp simply sought an account with any sum found due by Mr Hudson to Mr Thorp to be paid from Mr Hudson's share in the surplus.[36]
[35] Mr Thorp's minute of proposed orders dated 23 July 2019 par 17 BAB 24.
[36] Mr Thorp's minute of proposed orders dated 23 July 2019 pars 14, 17 BAB 24.
The matters which Mr Thorp said the master failed to take into account are no more than irrelevant distractions. It is true that Mr Hudson did not say that he was entitled to a particular sum. But what Mr Hudson did contend was that he was entitled to one-half of the fund in court so far as he held one undivided equal share as tenant in common in the fee simple estate of the Property. Mr Hudson's ownership interest in the Property was proved[37] and in any event was common ground (see [14.1] above). No more was required for the master's finding. As tenant in common with one undivided equal share in the fee simple estate Mr Hudson held a proportionate interest in the Property and - on the Property's sale - in the net surplus from the proceeds of sale after meeting the amount payable to the Bank under its mortgage.
[37] Affidavit of L N Giles sworn 22 March 2019 attachment 'LNG-1' Combined GAB 14.
Ground 1 fails.
Ground 2: The alleged partnership
Mr Thorp contended that a partnership could be proved as s 8(1) of the Partnership Act and co-ownership do not preclude the existence of a partnership. He said that the relationship was more than one of co‑ownership as the parties were in the business of providing accommodation and premises.[38]
[38] Appellant's submissions pars 2.1 - 2.3 WAB 15.
We accept that s 8(1) of the Partnership Act does not mean that co-owners may never be in partnership. Section 8(1) states:
Joint tenancy, tenancy in common, joint property, common property or part ownership does not of itself create a partnership as to anything so held or owned, whether the tenants or owners do or do not share any profits made by the use thereof.
Accordingly, the mere fact that two registered proprietors hold land as tenants in common does not of itself mean that they are in partnership. There must be something more. There must be shown to be a relation between the co-owners as persons carrying on a business in common with a view to profit.[39] In deciding whether that is the position in the present case the court must have regard to the 'true contract and intention' of Mr Thorp and Mr Hudson as appearing from the whole facts of the case.[40]
[39] Partnership Act s 7(1).
[40] Partnership Act s 7(2).
The master recognised that mere co-ownership could not create a partnership.[41] However, he did not stop at that point. In rejecting the contention that there was an arguable partnership the master said:
There is simply nothing in the evidence which provides any possible foundation for the existence of a partnership. A partnership requires individuals to come together to carry on business with a view to profit. None of the material relied on by [Mr Thorp] in any way establishes that was the case here. Two individuals owned a property as tenants in common and, on [Mr Thorp's] version of the facts, [Mr Hudson] was to collect the rent. That was the extent of their relationship. Nothing on those facts can give rise to a partnership.[42]
[41] Primary reasons [16].
[42] Primary reasons [16].
On Mr Thorp's evidence the relevant activities went a little further than was acknowledged by the master. The alleged agreement was that Mr Hudson was to collect the rent from the tenants. But, as events transpired, on Mr Thorp's evidence the Property was solely managed by Mr Hudson to the exclusion of Mr Thorp. Mr Hudson paid various outgoings and attended to repairs and maintenance.
In the present case the nature of the activity undertaken by Mr Thorp and Mr Hudson and the context in which it arose is critical. The co-owners purchased a residential property (becoming registered proprietors on 25 January 1994) and immediately let the premises to their mother/grandmother and step-father/step-grandfather who proceeded to occupy the premises from 1994 to 2017 (over twenty years).[43] The tenancy only ceased when Mr Thorp's mother (Mr Hudson's grandmother) died on 3 August 2017.[44] Mr Hudson gave uncontradicted evidence that the Property was already occupied by the mother/grandmother and step-father/step-grandfather at the time he and Mr Thorp became the registered proprietors.[45] The motivation for Mr Thorp and Mr Hudson to become registered proprietors of the Property was to preserve the capacity of the mother/grandmother and step-father/step-grandfather to continue to reside in the Property.[46]
[43] Affidavit of D H A Thorp sworn 23 July 2019 pars 6, 7, 9, 11 GAB 22 - 24.
[44] Affidavit of D H A Thorp sworn 12 August 2019 par 6 GAB 39.
[45] Affidavit of P D Hudson sworn 4 September 2019 par 5 GAB 42 - 43.
[46] Affidavit of P D Hudson sworn 4 September 2019 par 7 GAB 43.
Accordingly, on the evidence, this was a family arrangement rather than a relation subsisting between persons carrying on a business. There is, in any case, no partnership where two tenants in common of a residential property agree that one of them should have the general management, and provide funds for necessary repairs, so as to render the property fit for habitation of a tenant, and that the net rent should be divided between them equally.[47] That is all the more so where, as here, what was contemplated by the co-owners was an indefinite tenancy so as to provide the means for near relatives to continue to reside at the Property.
[47] French v Styring (1857) 2 CB (NS) 357, 366; (1857) 140 ER 455, 458.
The master was correct to hold that the evidence did not establish an arguable case that the parties were in partnership with respect to the Property. Ground 2 fails.
Ground 3: The alleged agency relationship
In support of ground 3, Mr Thorp contended that Mr Hudson impliedly consented to act as his agent.[48] Mr Thorp relied on:[49]
1.The master's acceptance that, for the purpose of the application before him, it could be assumed that there was an agreement between Mr Thorp and Mr Hudson to the effect that the rent payable by the tenants would be collected by Mr Hudson.
2.His own uncontradicted evidence to the effect that the Property was solely managed by Mr Hudson who assumed complete control of it.
3.Mr Hudson's evidence that he attended to the payment of mortgage instalments, rates and taxes and other outgoings (including repairs and maintenance) in relation to the Property.
[48] Appellant's submissions par 3.1 WAB 15.
[49] Appellant's submissions pars 3.1 - 3.7 WAB 15 - 16.
The master held that there was no evidence of any express or implied manifestation of Mr Thorp's assent to Mr Hudson acting on his behalf - meaning that the facts did not go far enough to establish that a relationship of agency could arguably exist. The master said that there was a simple agreement to collect rent, nothing more.[50]
[50] Primary reasons [18].
In terms of the hearing before the master, and now on appeal, there is a degree of ambiguity about what was and is contended for by Mr Thorp as to the alleged relationship of agency. The scope of the alleged relationship of agency went undefined. That lack of precision is problematic.
It has been said that '[n]o word is more commonly and constantly abused than the word "agent'''.[51] In the present case the parties and the master approached the concept consistently with what was said by the High Court in International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co:
Agency is a word used in the law to connote an authority or capacity in one person to create legal relations between a person occupying the position of principal and third parties.[52]
[51] Kennedy v De Trafford [1897] AC 180, 188.
[52] International Harvester Co of Australia Pty Ltd v Carrigan's Hazeldene Pastoral Co [1958] HCA 16; (1958) 100 CLR 644, 652.
However, the subject-matter of the alleged relationship of agency went unspecified.
Plainly, however, the master understood the contention to be more than that Mr Hudson had been authorised by Mr Thorp to act on Mr Thorp's behalf as his agent to collect the rent from the tenants. A finding that there was an arguable case for such a limited relationship of agency was inevitable given the assumed agreement. It is implicit in the master's reasons that he was addressing some wider agency relationship. In describing the posited relationship of agency the master refers to 'finding tenants, the discretion to undertake repairs and so on'.[53] In context the master was rejecting the proposition that there was an arguable wider relationship of agency whereby Mr Hudson was Mr Thorp's agent in the management of the tenancy and the Property more generally, ie beyond the mere collection of rent from the tenants.
[53] Primary reasons [18].
When it is understood that the master was referring to such a wider relationship of agency, the master was undoubtedly correct in concluding that the evidence was insufficient to establish an arguable case. There was no evidence of Mr Thorp's agreement to Mr Hudson acting as his agent in relation to matters concerning the Property beyond the assumed agreement that Mr Hudson was to collect the rent from the tenants. The absence of such evidence - well within Mr Thorp's power to have adduced were there an agreement to that effect - is not overcome by the evidence that Mr Hudson in fact undertook activities in the management of the Property such as paying mortgage instalments, rates and taxes and other outgoings such as repairs and maintenance. Those activities were consistent with Mr Hudson's position as one of the registered proprietors of the Property holding an undivided equal share in the fee simple estate as tenant in common.
Ground 3 fails.
Grounds 4 and 5: The failure to hold that there was an arguable constructive trust
Grounds 4 and 5 are self-evidently dependent on grounds 2 and 3. That is made plain by the terms of ground 5 and Mr Thorp's written submissions.[54] Accordingly, Mr Thorp must establish one of grounds 2 or 3 if he is to succeed on grounds 4 and 5. Mr Thorp's failure on grounds 2 and 3 means that he must also fail on grounds 4 and 5.
[54] Appellant's submissions par 5.1 WAB 17.
Separately, ground 4 is misconceived insofar as it posits a constructive trust over the right to receive rent rather than the Property itself or the fund paid into court. It may be that this is the most that Mr Thorp could contend for given the limited respect in which the evidence supports Mr Thorp's case: the assumed agreement that Mr Hudson was to collect the rent payable by the tenants could, at best, arguably establish a relationship of agency in relation to that chose in action. But that cannot suffice for an arguable case that Mr Hudson's interest in the Property (and his resultant one-half share of the surplus sale proceeds as paid into court) is subject to a constructive trust in favour of Mr Thorp.
Grounds 4 and 5 fail.
Conclusion and orders
For these reasons Mr Thorp's appeal must be dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
MH
Research Associate To The Honourable Justice Vaughan
25 JULY 2022
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