Whitfeld v Browne - [2001] WASC 355

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: WHITFELD & ORS -v- BROWNE & ORS [2001] WASC 355

CORAM: WHEELER J

HEARD: 13 DECEMBER 2001

DELIVERED : 20 DECEMBER 2001

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
First Defendants

Catchwords:

Practice and procedure - Pleadings - Strike out application - Summary judgment - Trusts - Transfer of land - Limitation periods - Turns on own facts

Legislation:

Nil

Result:

Application dismissed

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 G A Rabe
Third-named Defendant      :     Mr G A Rabe

Solicitors:

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

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

Dey v Victorian Railways Commissioners (1949) 78 CLR 62
Kimberley Down Pty Ltd v Western Australia (1986), unreported; Library No 6414; 25 August 1986
Taylor v Davies [1920] AC 636

Case(s) also cited:

Boothey v Boothey, unreported; FCt SCt of WA; Library No 970092; 13 March 1997
Burdick v Garrick [1870] AC 233
Clarkson v Davies [1923] AC 101
Clay v Clay & Ors [2001] HCA 9
Piwinski v Corporte Trustees of the Diocese of Armidale (1977) 1 NSWLR 266
Reid-Newfoundland Company v Anglo-American Telegraph Company Ltd [1912] AC 555
Rouchefoucauld v Boustead [1897] Ch D 196
Sharpe v Bennett (1892) 1 Ch D 154
Soar v Ashwell [1893] 2 QB 390

WHEELER J: This is an application on the part of the defendants for summary judgment pursuant to O 16, or alternatively for striking out of the writ and statement of claim and entry of judgment for the defendants pursuant to O 20 r 19 on the basis that the statement of claim discloses no reasonable cause of action. The only significant difference between the two bases of the applications is that in relation to the striking out application pursuant to O 20 all facts alleged in the statement of claim must be accepted as true, whilst pursuant to O 16 the defendants support the application by affidavit evidence. Otherwise, the principles governing the two applications are essentially the same. In either case, the case must be very clear to prevent the plaintiffs from having their case heard in the ordinary way, and the power to enter summary judgment is not to be exercised once it appears that there is a real question of fact or law upon which the rights of the parties appear to depend: Dey v Victorian Railways Commissioners (1949) 78 CLR 62 and Kimberley Down Pty Ltd v Western Australia (1986), unreported; Library No 6414; 25 August 1986 per Kennedy J. In this case, the application is based upon there being a clear defence pursuant to the Limitation Act 1935 (WA) and it is my view that the application cannot succeed. However, it is necessary to canvass the pleadings and a limited quantity of affidavit material in order to understand why this should be so.

Pleadings

The matter involves land once owned by a Mr Hugh Martin Browne ("the deceased"). The deceased died on 13 June 1942. Probate of his will was granted to three original trustees, including two of his sons, in October 1942. It contained a devise of half an acre of land and cottage located at Bunkers Bay in Western Australia ("the land") to the children of the deceased in equal shares. The deceased had five children, including the two sons referred to, all of whom survived him but have subsequently died. All but one of those children were survived by a number of children.
What happened to the land between the time when the three original trustees became the registered proprietors of it, and 1981, is not clear. However, it appears from the affidavit of the third named defendant, Helen Mary Jenour, that in 1980, Mr R M Browne, who was one of the original trustees, who was also a son of the deceased, engaged a solicitor to write to the other surviving children of the deceased and to those who appeared to be able to claim through the children who were then deceased, enquiring whether they would be prepared to surrender their respective interests in the land. Some were prepared to do so, it appears from the correspondence; others appeared willing to do so but wished to retain a right to visit the land; still others wished their own children to have some interest in the land.
One of the original trustees died in 1961, with the two brothers surviving him. On 13 April 1981 those two brothers transferred all their estate and interest in the land to the three named defendants. Of the defendants, Hugh Michael Browne is a child of one of the surviving trustees, while Allan Martin Browne is a child of the other, and Helen Mary Jenour is a daughter of one of their sisters. So far as one can tell from the correspondence annexed to Ms Jenour's affidavit, the defendants were chosen on the basis that each of their parents had expressed an interest in ensuring that those children had an interest in the land.
The statement of claim pleads that the transfer was to the defendants "as replacement trustees" or that alternatively the transfer was without the authority or consent of the beneficiaries entitled and was therefore a breach of trust. The transfer shows consideration of $35,000. The statement of claim pleads that that consideration was inserted in the transfer by the solicitor for the surviving original trustees in order to ensure that the Department of Land Administration would accept the transfer for registration, and further pleads that none of the parties to the transfer ever intended that the consideration be paid. It is common ground that no consideration was in fact paid. The statement of claim further pleads that the defendants managed the land for and on behalf of all the beneficiaries, many of whom used the land for holidays between the date of transfer and the year 2000.
In about December 2000 the defendants placed the land for sale. By letter dated 17 January 2001, the second plaintiff who is the widow of one of the original trustees and the mother of one of the defendants, made a formal claim in respect to one fifth interest in the land, as the sole residuary beneficiary of her husband's estate. By letter dated 22 February 2001, the solicitors for the first named defendant asserted that the second plaintiff had no interest in the land. Curiously, the statement of claim does not plead when and how the other plaintiffs became aware of any transactions or proposed transactions in relation to the land.
The defences dispute or add to certain of the facts pleaded in the statement of claim by, for example, asserting that those of the plaintiffs who have used the land for holidays have paid rental for it; admits that the consideration of $35,000 was not paid; and variously pleads estoppel, laches, acquiescence, and the Limitation Act as well as setting up indefeasibility of title pursuant to the Transfer of Land Act.

The Limitation Defence

So far as the defence is concerned, the pleading is simply that the relevant claims are "statute barred". No particular category of bar, or provision of the Limitation Act 1935, is referred to. However, the written submissions, filed on behalf of the defendants assert that "s 38(1)(c)(v),(vi) and (vii) when read with s 47(1) of the Limitation Act … prescribes that an action in respect of an innocent breach of trust must be brought within 6 years from the date on which the cause of action accrued". Those provisions of s 38 are not concerned with an innocent breach of trust but are concerned with, respectively, actions founded on a simple contract, actions founded on tort, and all other actions in the nature of actions on the case. It was conceded in argument before me by counsel for the defendants that it was difficult to see how the action in question here could fall within any of those categories. I did not understand the argument that s 38 applied, to be pressed. It may be, reading par 5 of the defendants' written submissions, that it is asserted that there was a conversion which would give rise to a limitation under s 38(1)(vi), but this contention was not expressly made.
However, in argument before me the defendants nominated s 4 and s 24 of the Limitation Act as being the relevant provisions. Section 4 relevantly provides:-
"No person shall … bring an action to recover any land … but within 12 years next after the time at which the right to … bring such action, shall have first accrued to some person through whom he claims; or … within 12 years next after the time at which the right … to bring such action, shall have first accrued to the person making or bringing the same."
Section 24 provides, relevantly that:-
"No person claiming any land … in equity shall bring any suit to recover the same but within the period during which, by virtue of the provisions herein before contained, he might have … brought an action to recover the same … if he had been entitled at law to such estate, interest, or right in or to the same as he claims therein in equity."
If this contention is correct, the plaintiffs' claim became time barred or will become time barred at a period of 12 years from the time at which the right to recover the land first accrued.
The written submissions filed on behalf of the defendants do not deal with the question of the time at which the right of action in this case would have accrued. This appears to me to be the critical weakness in the present application. An assumption about accrual of the cause of action is perhaps inherent in par 5 of those submissions which asserts that for the purposes of this action it must be accepted that the plaintiffs will prove at trial that the defendants have retained or converted trust property to their own use contrary to the terms of the trust created by the will of the deceased, and that that wrongful retention or conversion occurred when the surviving trustees of the deceased's estate conveyed the fee simple estate in the land to the defendants.
There are a number of difficulties with this contention. The first is that, as I have noted, one of the alternative claims in the statement of claim is that the conveyance to the defendants was to them as "replacement trustees". This is a pleading which may well require some particularisation. It is not clear, in particular, whether it is asserted that there was some express declaration of trust or whether a constructive trust of some kind arises from the circumstances of the transfer and, if the latter, what circumstances are relied upon. It is also to be noted that the pleading does not sit easily with a letter from the solicitors for one of the original trustees to him, dated 8 December 1980, which indicates that the solicitor at least took the view that what was being organised was a transfer to the defendants as sole legal and beneficial owners. However, there is nothing on the face of any of the pleadings or in the affidavit material which is before me to suggest that the claim cannot be made out. If it were the case that the defendants had accepted a transfer to themselves subject to a trust for some or all of the plaintiffs, then it appears that the right to bring an action to recover that interest did not accrue until the date at which they behaved in a manner inconsistent with the beneficial title asserted by the plaintiffs. The earliest date for that would appear to be at the time at which the defendants placed the land for sale without the consent, knowledge or authority of the plaintiffs, which date is said to have been December 2000. If the pleading as to the status of the defendants as "replacement trustees" can be made out, then, it seems that the limitation defence does not arise.
If it be assumed, however, that the transfer in 1981 was to the defendants as sole legal and beneficial owners, in breach of the trusts contained in the will of the deceased, there is then a different issue as to when the cause of action may have accrued. The issue arises more clearly from the reply, in which it is pleaded that at least one of the plaintiffs only became aware of the transfer after the defendants placed the land for sale. The issue then is whether cause of action accrued at a time which the breach of trust took place, even though that breach was not known to the beneficiary who sues, or whether the cause of action accrued only at the date at which the breach of trust became known to the beneficiary. Depending upon the circumstances of the transfer, s 27 of the Limitation Act may be applicable in this case. It provides that in a case of concealed fraud, the right of any person to bring a suit shall be deemed to have first accrued at and not before the time at which such fraud is, or with reasonable diligence might have been first known or discovered. There is an exception in respect of persons who are essentially bone fide purchasers for value; I will turn to this issue in a moment.
An alternative date at which the cause of action accrued may be found in s 25. The defendants relied upon this section, but I do not think that it assists them. It provides that:-
"When any land … is vested in a trustee upon any express trust, the right of the cestui que trust, or any person claiming through him, to bring the suit against the trustee, or any person claiming through him, to recover such land … shall be deemed to have first accrued … at and not before the time at which such land or rent has been conveyed to a purchaser for a valuable consideration."
The defendants assert that the effect of this section is that, the 1981 transfer being for valuable consideration, time began to run against the plaintiffs at the date of that transfer. However, the difficulty with this argument is that on the plaintiffs' pleadings, not only was the consideration not paid, but it was never intended to be paid. The statement of claim does not go so far as to assert that it was a sham consideration, inserted purely to assist the carrying out of a fraud upon the beneficiaries, but it seems to me that an assertion of that kind is implicit in the pleading that the sole reason for inserting a sum of $35,000 was to ensure that the Land Titles Office would accept the transfer "as if the property is being sold for value". It is arguable, notwithstanding the submissions of the defendants to the contrary, that it may be found at trial that the mere insertion of a sum of money in a transfer in those circumstances is not capable of amounting to "valuable consideration" within the meaning of s 25 of the Limitation Act. If that is so, and if, as the defendants assert, s 25 of the Act is applicable, then time had not commenced to run against the plaintiffs by the date of the issuing of the writ.
The submissions of the defendants and of the plaintiffs canvassed in some detail interesting and complex questions revolving around s 47 of the Limitation Act and the applicability or otherwise in the circumstances of this case of the case of Taylor v Davies [1920] AC 636. In my view, it is not necessary to canvass those issues.
For the reasons which I have given, I would dismiss the defendants' application for summary judgment.