Whitfeld v Browne - [2002] WASC 141

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: WHITFELD & ORS -v- BROWNE & ORS [2002] WASC 141

CORAM: MASTER BREDMEYER

HEARD: 17 & 20 MAY 2002

DELIVERED : 31 MAY 2002

FILE NO/S: CIV 1533 of 2001

BETWEEN: FRANCIS HUBERT WHITFELD
FREDA ELIZABETH IDA RAETHEL
JOHN MILES WHITFELD
KATHLEEN DULCE McGLEW
First Plaintiffs
OCTAVIA WINIFRED BROWNE
Second Plaintiff
PATRICIA WHITNEY
SUSAN MAY WALLACE
Third Plaintiffs
AND
HUGH MICHAEL BROWNE
ALLAN MARTIN BROWNE
HELEN MARY JENOUR
Defendants

Catchwords:

Pleading - Statement of claim - Appointment of replacement trustees - Joinder of parties

Legislation:

Trustee Act 1962 (WA) s 7(1)

Result:

Application allowed in part

Category: B

Representation:

Counsel:

First Plaintiffs  :     Mr D F Beere
Second Plaintiff                  :     Mr D F Beere
Third Plaintiffs                   :     Mr D F Beere
First-named Defendant       :     Mr G A Rabe
Second-named Defendant    :     Mr S V Forbes
Third-named Defendant      :     Mr G A Rabe

Solicitors:

First Plaintiffs  :     Joe Scurria & Associates
Second Plaintiff                  :     Joe Scurria & Associates
Third Plaintiffs                   :     Joe Scurria & Associates
First-named Defendant     :     Shaddicks
Second-named Defendant    :     Paiker & Overmeire
Third-named Defendant      :     Hammond Worthington

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

Nil

Case(s) also cited:

Downs v Civil Aviation Authority & Ors (1992) 57 SASR 303
Muschinski v Dodds (1985) 160 CLR 583
Whitfeld & Ors v Browne & Ors [2001] WASC 355

MASTER BREDMEYER: This is an application by all three plaintiffs dated 2 May 2002 for leave to further amend their statement of claim and for other orders. It is the third such application. The first was dated 13 November 2001, and the second, dated 13 March 2002. No rulings were given on those earlier applications. I need not go into the reasons for that. I will consider this application in terms of the plaintiffs' minute of further amended statement of claim of 4 December 2001. The actual statement of claim before the Court is dated 1 August 2001 and is the amended statement of claim which was amended without leave pursuant to O 21 r 3(1).
The application is opposed by the defendants. Leave to amend a pleading should not be granted if the proposed amendment is in a form which is likely to be struck out as not disclosing a reasonable cause of action or if it is embarrassing, vexatious or an abuse of process etc.
I will consider the submissions of the first and third defendants first. They were represented by Mr Rabe of counsel. Mr Rabe handed me a table of descendants which I have found most helpful.
Hugh Martin Browne died on 13 June 1942 leaving behind five children whose names are set out in the table. By his will he devised his property at Bunkers Bay as follows:
"I devise and bequeath my property comprising about half an acre of land with a cottage thereon on the coast unto my trustees in trust for all my children equally between them."
He appointed two of his sons as executors and a third man, John Werton Brett, whom I think was an accountant, and who died in 1961. In April 1981 the land was transferred by the two surviving trustees to the three defendants who are three of the grandchildren from three of the five branches of the family. At that time four of the children of the deceased were alive. The one who had died at that time was Agnes (Ella) Elizabeth Whitfeld who died on 19 December 1971. She died intestate in Western Australia and was survived by her husband Francis Russell Whitfeld who died on 17 February 1975. By his will his entire residuary estate, including his one‑fifth share of the Lot was left to such of his children as survived him and attained the age of 21 years and if more than one as tenants in common. He was survived by four children who have now all attained 21 years.
At the present time all five children of the deceased are dead and they, in turn, are survived by a total of 17 grandchildren. In addition, the widow of one of the original five children, namely Robert Maslin Browne, is alive. Her name is Octavia Winifred Browne. The crux of this pleading is in par 11 to par 11.6 of the minute and in prayer "A" all of which I quote:
"11.1The Original Trustees became the registered proprietors of the Lot by transmission on the 13th June 1942.
11.2John Werton Brett died on the 6th day of April 1961 and the surviving Original Trustees (John Martin Browne and Robert Maslin Browne) transferred all their estate and interest as trustees in the Lot to the Defendants as replacement trustees on the 13th April 1981 ('the Transfer').
11.3Alternatively the surviving Original Trustees transferred the Lot to the Defendants without the authority or consent of the beneficiaries entitled and in breach of trust.
11.4The Transfer showed a consideration of $35,000 ('the Consideration') which amount was never paid by the Defendants.
11.5The Consideration was inserted in the Transfer by the surviving Original Trustees' solicitor A.J.B. Asplin ('Asplin') to ensure that the Department of Land Administration would accept the Transfer for registration as 'if the property is being sold for value'.
11.6None of the parties to the Transfer ever intended that the Consideration be paid by the Defendants to the Deceased's estate or at all.
…
A.A declaration that the Lot standing in the name of the Defendants is held by the Defendants on trust for the First Plaintiffs jointly as to one fifth thereof, the Second Plaintiff as to one fifth thereof, the Third Plaintiffs in conjunction with the thirdnamed Defendant as to one fifth thereof and on behalf of the other beneficiaries entitled thereto pursuant to the Will of the Deceased."
Paragraph 11.2 of the minute pleads that the two surviving Original Trustees transferred the land to the three defendants "as replacement trustees" on 13 April 1981. I consider that plea needs to be fleshed out by some material facts. The transfer does not recite that it was from the old trustees to the new trustees. It does not recite that the old trustees were desirous of resigning and desirous of appointing new trustees in their place. If the transfer was done under a power in the will which gave the trustees power to appoint replacement trustees, that needs to be pleaded. If, on the other hand, as I suspect likely, the transfer is sought to be justified under s 7(1) of the Trustees Act 1962 (WA), then that needs to be pleaded. Because the transferors did not use the right words in the transfer to indicate that they were transferring the land to replacement trustees, the pleader needs to plead the material facts which would justify the Judge finding that that was so. What are those material facts? From my understanding of the plaintiffs' case, they are the matters pleaded in pars 11.4, 11.5 and 11.6.
Paragraphs 11.3 to 11.6 of the minute, when read with prayer A, set up a plea that the defendants, as transferees without value, and without the consent of the beneficiaries, are, in effect, trustees for the deceased's estate. I do not understand why it is an "alternative" plea. It seems to me that that is the same plea as in par 11.2, that these defendants hold the land on the same trusts as the original trustees did. I consider that the material facts pleaded here should be supplementary and supportive of the plea in par 11.2 that the transfer from the two original trustees to the defendants was not of a beneficial interest in the land but rather a transfer from the old trustees to the new ones. If the word "alternatively" was struck out, I would allow the material facts pleaded in those paragraphs to stand. In effect, the plea is that, although the transfer looked like the sale of the property for proper consideration, in fact, the $35,000 consideration was never paid, it was not a transfer to all the beneficiaries entitled, all of the beneficiaries entitled had not consented to this transfer to three only of their number, and the consideration was only inserted in the transfer at the request of the original trustees' solicitor to ensure that the Department of Land Administration would accept the transfer for registration, as if the property was being sold for value. Moreover, none of the consideration was ever paid.
If the word "alternatively" is deleted, then I consider these paragraphs complement the plea in par 11.2 that the defendants hold as trustees, that is as express trustees under the original will. If, however, the plaintiffs insist on leaving the word "alternative" in, then I consider pars 11.3 to 11.6 plead a constructive trust and that that should be stated in the pleading. For example:
"By virtue of the matters pleaded in par 11.3 to par 11.6 the defendants hold the Lot on constructive trust for the beneficiaries originally entitled."
Mr Rabe objected to the words in par 11.3 "in breach of trust". His argument is that no relief is sought against those trustees, or against their personal representatives, so the allegation is irrelevant and should be struck out. I think it can stand. It is but a stepping stone to the plea, and to the finding the plaintiffs want, that the defendants took this transfer as trustees. There are two ideas behind par 11.3. The transfer was not to all of those beneficially entitled to the land under the will of Hugh Martin Browne. It was therefore in breach of trust. Such a breach could, however, be sanctioned if all the beneficiaries being sui juris consented to a transfer to three of them only. They did not all consent.
Objection was made to par 11.6 as seriously embarrassing. Provided it is linked in with par 11.4 and par 11.5, I do not consider it embarrassing. For example, the plea could be that "by virtue of the matters pleaded in par 11.4 and par 11.5 the plaintiffs will ask the Court to infer that the parties to the transfer never intended that the consideration be paid by the defendants to the deceased's estate or at all". Based on Mr Asplin's letter of 8 December 1980, which I have read, and which is the basis of the plea in par 11.5, it is arguable that the Court could infer that none of the parties to the transfer ever intended that the consideration be paid. According to the letter, putting a consideration of $35,000 in the transfer was a device to get the transfer stamped so that it could be registered.
Objection was also made to par 11.7, par 12.1, par 12.2 and par 12.3. The objection was that these paragraphs do nothing more than narrate facts in a vacuum, that is facts which are not linked to any arguable cause of action giving rise to the relief claimed. I think par 11.7 can stand. It is an indication that the defendants acted like trustees in that they allowed all of the beneficiaries to use the Lot for holidays from the date of the transfer in 1981 until the sale of the property in the year 2000.
I consider par 12.1, par 12.2 and par 12.3 are out of date and need to be replaced. Events have overtaken them. Initially the property was placed on the market for sale and the plaintiffs sought an injunction to prevent the sale. The sale has now occurred. I understand the price obtained was $2,000,000 or thereabouts. The plea should state that in a certain month the defendants sold the property for the price of $2,000,000. It could then state that despite demand from the plaintiffs (if that be the case) the defendants have not distributed the proceeds of the net proceeds of the sale to the first plaintiffs as to one‑fifth share, to the second plaintiff as a one‑fifth share and as to the third plaintiffs, in conjunction with the third‑named defendant, as to a one‑fifth share. It could also state that the money is now held in a trust account pending the determination of this action.
The same events have overcome the prayer "A" for relief and it to needs to be amended. The amendments proposed by Mr Beere are satisfactory. It could read like this:
"A declaration that the Lot previously standing in the name of the defendants was held, and the proceeds of that sale are held, by the defendants on trust for the first plaintiffs jointly as to one‑fifth thereof, the second plaintiff as to one‑fifth thereof, the third plaintiffs in conjunction with the third‑named defendant as to one‑fifth thereof, and on behalf of the other beneficiaries entitled thereto pursuant to the will of the deceased."
The plaintiffs only represent three branches of the five branches of the family and then not completely. If the plaintiffs succeed in this action, the findings could benefit, potentially, grandchildren not joined in the action. They need to be joined in some way in this action, so that this case does not become but the first of two or three similar actions. They could be joined as defendants. Mr Beere prefers an order that they be notified of the proceedings and leave it up to them whether they wish to join as parties or not. I prefer that the potentially interested persons be joined as second defendants. They are, firstly, Judith Wheatley, Eric Browne and Timothy Browne, who are three of the four children of John Martin Browne. The fourth child, Allan Martin Browne, is a defendant. Secondly, Noel Warren needs to be named as a second defendant. He is the widower and heir of Kathleen Muriel Warren. I do not consider that Michael Rhys‑Jones needs to be joined. He was not named as a beneficiary of this Lot in his mother's (Dorothy's) will. The children of Robert Maslin Browne do not need to be joined, although one of them, Hugh Michael Browne, is a defendant. The others need not be joined, because on their father's death his interest in the Lot passed to his wife, Octavia, who is still alive. Octavia is the second plaintiff.
Mr Rabe argued that the pleading is defective in that it does not plead who became entitled to the share of the land on the death of all of the five children. For example, the first born, John Martin Browne, died in 1985. It says in par 6 that he was survived by his widow, Marjorie, and four children who are named. It does not state who are the heirs of John Martin Browne. Did he die intestate? Did he leave a will, and if so, to whom did he leave his one‑fifth interest in this Lot? Mr Beere says that he does not act for these four grandchildren, one of whom, Allan Martin Browne, is a defendant. Mr Beere says that the statement of claim does not claim any relief on behalf of these grandchildren. I think those arguments are correct. I do not consider that their potential entitlement to an interest in the land, and to the proceeds of sale of that land, needs to be pleaded in this action. As previously stated, three of those children, Judy, Eric and Tim, need to be joined as second defendants.
A similar objection is made to par 9 which pleads:
"Kathleen was survived by her widower, Noel Warren."
It does not say whether Mr Warren inherited her interest in the Lot or not. The plaintiffs' counsel again says that he does not act for Mr Warren and seeks no orders on his behalf. In those circumstances, I consider that Mr Warren's possible entitlement to his wife's interest in the Lot does not need to be pleaded in this statement of claim. I have directed that Mr Warren be joined as a second defendant.
The pleas are in order as to who are the legal heirs of the other three children, Robert Maslin Browne, Dorothy Mary Rhys‑Jones and Agnes (Ella) Elizabeth Whitfeld.
I now turn to the second‑named defendant who is separately represented. Some of these objections have been conceded by counsel for the plaintiffs and some have been covered by my discussion of the objections of the first and third defendants. I will not repeat those points here.
Objection was made to par 11.5. I think the plea is clear enough. I take it as an allegation rather than a conclusion. It is based, I am told, on Mr Asplin's letter to Mr R M Browne of 8 December 1980, a copy of which is annexed to Helen Jenour's affidavit of 19 November 2001. The letter is probably evidence rather than a particular. I will not require any amendment of par 11.5.
I will give the plaintiffs leave to file a fresh minute of amended statement of claim within so many days. It is true that some of the objections raised by the defendants are to parts of the statement of claim which have not been amended. Nevertheless, in the interests of getting an adequately pleaded statement of claim on a matter of considerable importance, but not of exceptional difficulty, I have ruled on all the objections whether they relate to the objections or not. That is a concession to the defendants. In the same way, I have considered the plaintiffs' latest minute rather than any other. I will direct the plaintiffs to bring in a new minute to give effect to my reasons and also to points which the plaintiffs' counsel conceded in the course of argument and which have not been mentioned in my reasons. I will also give leave to the plaintiffs to amend the writ to join the persons mentioned whom I have said should be joined as second defendants.