Wu v Wu
[2022] ACTSC 360
•21 December 2022
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Wu v Wu |
Citation: | [2022] ACTSC 360 |
Hearing Dates: | 7-11 March, 10 May, 22 June 2022 |
DecisionDate: | 21 December 2022 |
Before: | Loukas-Karlsson J |
Decision: | See [259] |
Catchwords: | CIVIL LAW – CONTRACT – NEGLIGENCE – UNCONSCIONABLE CONDUCT – LIMITATION ACT – whether transfer of property in 2009 made for consideration – whether parties intended to enter legal relations – whether conduct of first defendant unconscionable – whether plaintiff exercised free will in transferring property to first defendant – where evidence establishes that plaintiff and his deceased wife transferred significant number of assets to first defendant – where plaintiff’s will in 2017 indicated intention to exclude other daughter – held no objective intention to enter legal relations – held claim statute barred – held laches would bar claim for equitable relief – whether lawyer involved in transfer was acting as plaintiff’s solicitor – whether lawyer breached any implied retainer, duty of care, or fiduciary duty – held no duty owed – held no breach in circumstances where plaintiff and wife intended transfer to be a gift – held claim statute barred |
Legislation Cited: | Conveyancing Act 1919 (NSW) s 44(1) |
Cases Cited: | Aboody v Ryan [2012] NSWCA 395; 17 BPR 32359 |
Parties: | Chin-Sheng Wu ( Plaintiff) Angela Chien-Kuang Wu ( First Defendant) Darryl Raymond Perkins ( Second Defendant) |
Representation: | Counsel D Moujalli ( Plaintiff) P Walker SC with M Hassall ( First Defendant) M Walsh SC with R Size ( Second Defendant) |
| Solicitors McInnes Wilson ( Plaintiff) KJB Law ( First Defendant) Moray & Agnew ( Second Defendant) | |
File Number: | SC 410 of 2020 |
LOUKAS-KARLSSON J
Introduction
This case is a lesson for elderly parents who transfer the bulk of their assets during their lifetime to one child and leave very little to be distributed after their death to their other children.
This case involves two daughters. One daughter who has a law degree, lives permanently in Tahiti and has received the vast bulk of her parents’ assets. The other daughter is a nurse who lives in Canberra and has taken care of her father since the death of her mother in 2018.
This litigation concerns a property transfer between family members that was signed in August 2009. The dealing relates to an O’Malley property which was transferred by Mr Wu (the plaintiff) and his wife, Mrs Wu, to their second daughter Ms Angela Wu who, as I have already stated, has a law degree (the first defendant). The second defendant, Mr Perkins, is the solicitor who is said to have been involved in the transaction. The precise role of the second defendant in relation to the transaction is contested as I will come to later. Although there were a number of property transfers to the first defendant, no other transfers were impugned.
In essence, Mr Wu claims that the transfer of the O’Malley property to the first defendant should be set aside by this Court or that, alternatively, he is entitled to be paid the amount of consideration recorded on the transfer document in the sum of $1,225,000 (along with interest on that amount). The first defendant, in essence, claims that the transfer was a gift to her such that no claim arises, and that, in any event, her father was aware of the effect of that transfer at the time it was made such that any claim would be barred by the operation of the Limitation Act1985 (ACT) (Limitation Act). The second defendant, in essence, claims that he did not owe the plaintiff any relevant duty at the time of the transfer and that, in any event, the claim is barred by the operation of the Limitation Act.
There is no claim brought by the plaintiff in relation to any of the other property transfers made by him and/or his wife to their second daughter, which will be discussed further below. The plaintiff accepts those transfers were made as gifts to Ms Angela Wu in recognition of their familial relationship.
This case is an example of one of the many cases whereby familial relationships have broken down over the years, in some cases irreparably, over disputes concerning the management of financial assets or caring arrangements.
Issues in Dispute
At my direction, the parties prepared a joint list of issues arising in the proceedings. The agreed list of issues is set out below:
Debt Claim (First Defendant only)
1. Whether, in 2009, the parties and Pi Shia Wu (Mother) entered into a legally enforceable agreement (Enforceable Agreement) for the First Defendant to pay consideration of $1,225,000 to the Plaintiff and her mother for the transfer of title to the O’Malley property to her including:
a. Whether the parties intended to enter into legal relations; and
b. Alternatively, whether it was the Plaintiff’s and the Mother’s intention to confer title to the Property upon the First Defendant as a gift.
2. If yes to (1), whether any action by the Plaintiff against the First Defendant in debt is barred by section 11 of the Limitation Act 1985 (ACT) (Act) including:
a. Whether the First Defendant was a party to the deliberate concealment from the Plaintiff of one or more of the facts referred to in paragraph 47A of the Amended Statement of Claim (Claim); within the terms of section 33(b) of the Act?
b. If yes to (a):
i.when did the Plaintiff became aware of the concealed fact or facts? and
ii.when could the Plaintiff through reasonable diligence have discovered the concealed fact or facts?
3. Whether the operation of section 11 of the Act in relation to the Plaintiff’s debt claim is excluded by the operation of section 5 of the Act to the extent that the Plaintiff claims an equitable charge over the O’Malley property in respect of the debt claim?
Unconscionable conduct and/or undue influence (First Defendant only)
4. If there was no Enforceable Agreement, whether the Plaintiff is entitled to have the 2009 transfer set aside, or alternatively to equitable damages against the First Defendant, on the basis of unconscionable conduct and/or undue influence engaged in by the First Defendant including:
a. whether or the extent to which the Plaintiff signed the transfer in the circumstances alleged in paragraph 35 of the Claim;
b. whether or the extent to which the First Defendant knew or ought to have known that the Plaintiff signed the transfer in the circumstances alleged in paragraph 35 of the Claim; and
c. subject to the answers to (a) and (b), whether the proven circumstances and the proven state of the First Defendant’s actual or imputed knowledge are sufficient to constitute unconscionable conduct and/or undue influence by the First Defendant.
5. Whether any claim for equitable damages is excluded by section 11 of the Limitation Act 1985, raising similar questions of concealment as outlined above.
6. Whether the operation of section 11 of the Act, in relation to the claim for unconscionable conduct and/or undue influence, is excluded by the operation of section 5 of the Act?
7. Whether the Plaintiff’s claim for unconscionable conduct and/or undue influence is subject to the defence of laches?
8. If yes to (7), whether the Plaintiff’s claim for unconscionable conduct and/or undue influence is barred by the defence of laches by virtue of the matters pleaded by the First Defendant at paragraph 29(b) of the First Defendant’s Amended Defence.
Right to Reside
9. Whether the Plaintiff has a right to reside at the O’Malley property for the remainder of his life (I interpolate to note that during the hearing, the first defendant consented to a declaration being made that the plaintiff had a right to reside in the property for life).
Claim against the Second Defendant
10. Implied retainer between Plaintiff and Second Defendant.
a. Was there an implied retainer between the Plaintiff and the Second Defendant with respect to the 2009 transfer?
b. If so, what was the scope of that implied retainer?
c. If so, did the Second Defendant breach the implied retainer?
11. Duty of care owed by Second Defendant to Plaintiff.
a. Did the Second Defendant owe the Plaintiff a duty of care with respect to the 2009 transfer?
b. If so, what was the scope of that duty?
c. If so, did the Second Defendant breach that duty?
12. Fiduciary duty owed by Second Defendant to Plaintiff:
a. Did the Second Defendant owe the Plaintiff a fiduciary duty with respect to the 2009 transfer?
b. If so, what was the scope of that duty?
c. If so, did the Second Defendant breach that duty?
13. Loss or damage.
a. If the Second Defendant breached any implied retainer, duty of care or fiduciary duty, did the Plaintiff suffer any loss or damage because of that breach?
b. If so, what is the quantum of damages or equitable compensation payable to the Plaintiff?
14. Limitation Act s 33:
a. Was a “fact” concealed from the Plaintiff?
b. If so, was that fact “relevant to a cause of action” pleaded by the Plaintiff?
c. If so, was the Second Defendant “answerable” for the concealment?
d. If so, when did the Plaintiff discover that the fact had been concealed?
e. Could the Plaintiff have discovered the concealment of the fact by reasonable diligence within the six years prior to the commencement of proceedings?
15. Is the Second Defendant entitled to rely upon the equitable doctrine of laches?
16. Apportionment:
a. Is the Plaintiff’s claim against the Second Defendant apportionable?
b. If so, to what extent is the Second Defendant responsible for the Plaintiff’s loss or damage?
Preliminary Matters
Approach to findings in the alternative
While ordinarily a judgment will only need to address the legal issues necessary to determine the claim, in the circumstances of this case, and at the urging of counsel for the plaintiff, I have addressed several issues in the alternative. This approach was expressly sought by counsel for the plaintiff. I infer that the submission was made to ensure that in the event the matter goes before an appellate court there are findings on the issues such that there is a reduced likelihood the matter will need to return to the Supreme Court. Given the age of the plaintiff, and the submission of counsel for the plaintiff, I have adopted a course of considering issues such as the application of the Limitation Act in the alternative to my primary findings on the claim against the first and second defendant.
Consideration of right to reside
As discussed above, in relation to issue 9, the counsel for the first defendant indicated during the hearing that the first defendant consented to a declaration being made by the Court which would “ensure that the Plaintiff has the right to reside in the property for the remainder of his life, or as long as he wishes to reside there”. This was made expressly on the basis that the first defendant did not concede any of the issues in the dispute.
No party submitted that this Court did not have the power to make such a declaration, or that there were any factors tending against the making such a declaration. Indeed, as noted above, the first defendant consented to the declaration being made.
As I will discuss later, in my view, in light of those matters, it is appropriate, in the circumstances of this particular case, for me to make a declaration in substantially similar terms.
Plaintiff’s Evidence
Mr Chin-Sheng Wu
Mr Wu, who was 98 years old at the time of the hearing, gave evidence over three days, the bulk of which was cross-examination. During his evidence, Mr Wu was ably assisted by an interpreter who interpreted the parties’ questions into Mandarin for Mr Wu and his answers to the Court in English. The Court expresses its gratitude to the interpreter as he was required to spend an additional day in Court due to the length of the cross-examination. The interpreter gave clear indications as to when a question or answer needed to be repeated or when he or Mr Wu did not understand what was being asked.
It was evident that the interpreter’s precise attention to issues of interpretation tended to ensure that any lack of clarity or understanding concerning questions were promptly addressed. Questions were clarified or repeated as sought by the interpreter or Mr Wu. That approach alleviated potential concerns regarding the general reliability of interpretation: see generally DVO16 v Minister for Immigration and Border Protection [2021] HCA 12; 388 ALR 389 at [52]-[54] (Edelman J).
Mr Wu’s evidence was that he was born in Taiwan and learnt Japanese during his schooling years which coincided with the Japanese rule during World War II. After the war, Mr Wu was imprisoned by the Kuomintang Party for ten years. After his release from prison Mr Wu married his late wife Mrs Pishia Wu and they entered business together.
The business was called “Pat’s Knitting Company Limited” and was jointly run by Mr Wu and Mrs Wu. The company was in the business of exporting hand-knitted swimwear from Taiwan to the United States.
Mr Wu’s evidence was that his late wife would read the business documents which were in English and that she worked closely with a number of agents for American companies who placed product orders. Mr Wu’s evidence was that his wife was able to speak to these agents in English and that the agents could also speak Chinese (in his evidence Mr Wu did not specify which dialect this was in).
Mr Wu’s evidence was that he could read and speak Hokkien and Mandarin and could read some parts of simple business documents in English, such as purchase orders. His evidence was that he could read these documents as they were simple and only contained things like “the name of the products, a quantity and the shipping method”. His later evidence in chief expanded that list to include the price of the relevant product.
Mr Wu and Mrs Wu had two children, Ms Karen Wu and Ms Angela Wu. Mr Wu and Mrs Wu moved to Australia approximately 40 years ago and resided in the Canberra region since that date. Ms Karen Wu is Mr and Mrs Wu’s adopted daughter. It was clear, however, from the evidence that Mr Wu regards Ms Karen Wu as his eldest daughter.
For convenience, in this judgment I will refer to the plaintiff as the plaintiff or Mr Wu and the first defendant as Ms Angela Wu.
In his evidence in chief Mr Wu gave evidence that after moving to Australia, he attended English classes for approximately three months. According to Mr Wu, in relation to his English ability he “could not read but speaking is so so”.
In cross-examination, Mr Wu acknowledged that in addition to the English classes he stated in his evidence-in-chief as attending for three months, he attended a different set of classes for a further three months. In his evidence in chief, Mr Wu appeared to say that the classes went for three hours whereas under cross-examination he accepted that he attended classes five days a week in each three-month period. In my view, nothing turns on determining the precise number of English classes Mr Wu attended or the length of those classes.
It was apparent from Mr Wu’s evidence that he could understand some spoken English and could recognise simple/short phrases that he was familiar with, such as parts of purchase orders as I referred to earlier. Mr Wu was clear in his evidence, however, that he could not read or understand complicated documents in English, such as legal documents.
There were also some occasions when Mr Wu appeared to respond to statements made in English by counsel for one of the defendants. In reaching my findings I have not found it necessary or desirable to consider that matter or what (if any) inferences could be drawn from those responses.
Mr Wu gave evidence regarding various property transfers that he and his wife made. According to his evidence, some of the properties that they purchased together were held in both their names jointly, and some in Mrs Wu’s name. As I will come to later, the documentary evidence also indicates that some properties were registered in other names, ie. Ms Angela Wu and Mrs Wu jointly. Mr Wu’s evidence was, however, that decisions concerning their property holdings were made by him and his wife jointly. It was apparent from Mr Wu’s evidence that he and his wife cared deeply for each other and shared a long and happy life together.
In August 2009, Mr Wu and his wife transferred the O’Malley property to their second daughter. Mr Wu was shown the transfer form during his examination in chief and taken to various parts of the document. Mr Wu’s evidence was that he recognised his signature and that of his wife on the document but could not read the whole of the document as it was in English. In his evidence in chief, Mr Wu indicated, however, that he could read how much money the transfer was for, and the location of the property.
Mr Wu gave evidence that he has never received any money from Ms Angela Wu for the property. As I have already mentioned, there is no contest between the parties concerning this matter. It is accepted, if the transfer was for consideration, that no consideration was paid by Ms Angela Wu.
In relation to the transfer form, Mr Wu gave various responses to questions to the effect that he could not recall signing the document, or the document being explained to him. For example, after being asked whether he recalled signing the document in 2009 he said “it seems to be so, I can’t recall”.
Mr Wu’s evidence was that he learnt about the transfer for the first time in 2018. This is set out at T125-126, lines 32-41, 5-8:
MR MOUJALI: Mr Wu, when did you first learn that you transferred the O'Malley property to your daughter Angela?---My wife did not tell me until the year when she died.
And what did your wife tell you about the O'Malley property in the year that she died?---She said the O'Malley property had been transferred to Angela.
Between 2009 and the year in which your wife died, had your wife mentioned anything to you about the O'Malley property being given to Angela?---No.
…
When did you first learn, Mr Wu, that you had signed a document giving the O'Malley property to Angela which stated a price for that property?---My wife did not tell me until she was ill.
Mr Wu’s evidence was that he was unaware of the purchase price recorded on the transfer form until his solicitor “got it [the transfer form] from the court and showed it to me”.
In cross-examination, Mr Wu was asked what words in English he could recognise on the forms he handled for Pat’s Knitting Company Limited. In particular, he was asked if he would recognise the word “buyer” and “seller” to which he said yes. He was asked further questions about whether he would recognise the word “transfer” if it was in English to which no clear answer was given. In my view, nothing turns on whether Mr Wu could recognise the word “transfer” if it was written in English.
During cross-examination, Mr Wu also indicated that he knew the meaning of the word “price” in English, and he could draw the symbol of the Australian dollar when asked to do so. That drawing was tendered during the course of the cross-examination and is in evidence.
Mr Wu was also cross-examined in relation to the success of his business and denied that the business had made a lot of money. In my view, this is a subjective question, and I do not place much weight on this response. Rather, in my view, what is clear from Mr Wu’s answers and the other documentary evidence, is that Mr and Mrs Wu used profits from their business to purchase a number of properties in Taiwan, China and Australia.
Mr Wu was cross-examined in relation to a series of property transactions. The first of which was the purchase of three properties in Sutton which were purchased according to his evidence using proceeds from the sale of some land owned by Mrs Wu in Taiwan.
Mr Wu was asked whether that property was put in the name of Mrs Wu and Ms Angela Wu and he said he did not know that. Property records tendered by the first defendant show that the properties were held in the name of Mrs Wu and Ms Angela Wu at the time they were purchased. There is no evidence before me that Ms Angela Wu paid Mrs Wu or Mr Wu any money towards the purchase of the Sutton properties.
Mr Wu was then asked about properties that he and his wife bought in China. Those properties were transferred to Ms Angela Wu in 2013. No money or other consideration was provided by Ms Angela Wu for that transfer according to Mr Wu, despite the transfer documents recording an amount of consideration being paid. Mr Wu’s evidence was that the forms were completed in that way to avoid the need to pay any “gifting tax” on the property.
Mr Wu was then asked about a property in Turner which was purchased by Mr and Mrs Wu in 1994. According to Mr Wu’s evidence, despite the transfer record indicating that consideration was paid, that property was similarly transferred to Angela Wu in 2000 without any payment of consideration being made to Mr or Mrs Wu. According to Mr Wu that was because “the gifting means a higher tax. So there was no payment”.
Precisely what Mr Wu meant by “the gifting means a higher tax” was not explored in his oral evidence. Mr Wu was, however, cross-examined in a different part of his evidence in relation to his receipt of the Age Pension.
MR WALKER: Mr Wu, you told us you received a pension from the government. Did you know that the amount of the pension you received might be affected by the value of the assets which you own? I'm talking back in 1988?---I don't understand what you are saying, can you repeat it?
…
MR WALKER: Did you know that your pension might be reduced if you did have a lot of money?---I knew.
After being asked about the Turner property, Mr Wu was shown the transfer form for the 2000 transfer which is in evidence before me. After seeing the form, Mr Wu made the following statement through the interpreter:
THE INTERPRETER: Yes, I’m going to translate. Mr Wu said – literally said, ‘So this is about transfers, purchase and the sale.’ And then he pointed at – to the words ‘Turner’ and said, ‘So this is Turner.’ And then he pointed at a price and said, ‘This is price, but there was no payment.’
Mr Wu then indicated towards a figure at the top of the document and referred to it as 9,375,000. On my own review of the transfer form, it is apparent that Mr Wu was pointing to a figure relating to the identification of the property, not the consideration recorded on the transfer form.
Mr Wu was then asked about property that he and his wife had purchased in China. Mr Wu’s evidence was that these properties had been transferred to Angela Wu. It is worth setting out his precise evidence as to the intention behind those transfers in full:
MR WALKER: Thank you. And I take it that you and Mrs Wu transferred this property to Angela because she was your daughter?
THE INTERPRETER: The gentleman said 'Mm'.
MR WALKER: Could you confirm that as yes, please?---Yes.
And that is because of the affection that you and Mrs Wu had for your daughter?---Right.
Mr Wu was then asked some questions about another property purchase made by his wife in Taiwan. That property was purchased in the name of Mrs Wu and Ms Karen Wu. Mr Wu’s evidence was that Ms Karen Wu did not provide any money towards the purchase price and that he had purchased it for her. He said that this was done because she was his daughter. Mr Wu was then asked about some court proceedings in Taiwan concerning the ownership of that property from 2013. A record of that court decision was in evidence before me as Exhibit 11.
There is no need to outline in full a summary of that decision. In my view, it is not necessary to consider those court proceedings, why they were instigated or their outcome beyond the fact that those court records indicate that Ms Karen Wu submitted to the Taiwanese Court that the property had been given to her as a gift by her parents despite the local transfer form indicating that consideration had been paid by her for the property.
Mr Wu was also asked in cross-examination about various disagreements between himself and Mrs Wu on the one hand and Ms Karen Wu on the other. In summary it appears that, as is not unknown as between family members, there were various periods of time where the relationship between Ms Karen Wu and her parents was strained due to personal events and circumstances. This included a longer period of time during which the transfer of the O’Malley property was made to Angela Wu and the court proceedings in Taiwan occurred. In my view it is neither necessary nor desirable to set out those incidents in detail. Although I accept the questions were relevant and were, accordingly, put to Mr Wu by counsel, given my findings below there is no need to traverse the evidence concerning the cause of the familial estrangement in detail.
Mr Wu was cross-examined by counsel for the first defendant about the 2009 transfer of the O’Malley property and, in particular, the motivation underpinning the transfer. This included the following exchange between counsel and Mr Wu:
MR WALKER: Mr Wu, do you think you may have been told in 2009 that the price of $1,225,000 was put on the transfer of the O'Malley property because an amount had to be shown for tax or stamp duty purposes?--- Possible. Or maybe
And do you remember yesterday telling the court that you had given – you and Mrs Wu had given property to both Angela and Karen because they were your daughters?---Yes.
…
MR WALKER: You gave that – those properties, I should say – those properties to your daughters because you wished to be good and kind to them?---Kind of, or sort of.
And is it possible, Mr Wu, that you and Mrs Wu transferred your O'Malley house to Angela because she was your daughter and you wished to be good and kind to her?---Karen was not living together. At that time we objected her marriage.
Counsel for the second defendant also cross-examined Mr Wu about his knowledge and intention at the time of signing the transfer document. Most of Mr Wu’s answers were that he could not read the document or could not recall specific details about the transaction. Importantly for present purposes, however, is the exchange set out below:
MR WALSH: Mr Chen, I'll repeat the question. In 2018 when you were talking with your wife, is it possible that you had forgotten the gift of the O'Malley property to Angela in 2009. Would you agree?---(No translated reply)
THE INTERPRETER: The gentleman said I would have agreed – or I would agree at that time. But now I wouldn't agree. It's too cruel to me. She is trying to place me in a nursing home and only bought a single trip, a flight ticket, you know? The double trip only cost 1,000 – more than – a little bit over 1,100. The single ticket from Taiwan to Australia is - - -
MR WALSH: Thank you.
THE INTERPRETER: I haven't finished response.
MR WALSH: Please.
THE INTERPRETER: Is a bit more than 3,700, which can be converted into about $1,800 Australian.
…
MR WALSH: Mr Chen, could you ask Mr Wu please - - - Mr Wu, when you say you would have agreed at the time, you mean that you would have agreed in 2009, but later events caused you to change your mind?---Yes.
…
MR WALSH: Your wife would never deceive you. That is correct, isn't it?---No. No, he wouldn't.
…
While the answer above recorded a “he” in response to Mr Walsh’s question, it is clear in context and I therefore infer that the intended reference was to Mr Wu’s wife so that the answer would read: No, she wouldn’t. In that regard, I note that the interpreter had indicated that her and him were the same word in mandarin (see T.114).
There are two further aspects of Mr Wu’s evidence that are worth noting. First was Mr Wu’s response in cross-examination to a question regarding what he had said to Ms Angela Wu about a change he had made to his will and an enduring power of attorney in 2018:
Mr Walker: The words are, ‘I don’t know what Karen got me to sign”? – The document Karen asked me to sign was my Will about not giving to Angela because Angela made application about my dementia and when she took the ash of my wife, yes the remains – yes, of my wife back to Taiwan she was trying to place me in a aged care home in a place called … (inaudible) … So that’s why I decided not to give to her.
Second, Mr Wu gave evidence that Ms Angela Wu has a law degree and, at one stage, worked for the second defendant.
Ms Karen Wu
Ms Karen Wu gave oral evidence at the hearing and was cross-examined by counsel for the first defendant.
Ms Karen Wu gave evidence that since her mother’s death she has helped care for her father and has taken him to his medical appointments. Her evidence was that she sees her father at least five time a week.
Ms Karen Wu also gave evidence that she took Mr Wu to meet with a firm of solicitors on 23 August 2018. That meeting is also recorded in her diary an extract of which was tendered and is in evidence. I do not understand the defendants to challenge the fact that a meeting occurred on that date or that Mr Wu met with a firm of solicitors. The defendants do, however, challenge any inference being drawn from this information that Mr Wu was unaware of the effect of the transfer form at the date it was signed or that he only became aware of the legal effect of the transfer, or the fact that the form recorded any consideration at that meeting.
Following that meeting Ms Karen Wu received an email from one of the lawyers on 30 October 2018 concerning the transfer of the O’Malley property.
In relation to the email, the following exchange occurred between counsel for the plaintiff and Ms Karen Wu:
All right. And what did you do when you received this email?---I do, and then I have a read of it first and then until the page of the transfer I have show my father.
And what else did you do in relation to your father with the transfer?---So, I did ask – I did explain to him what is this paper for and then I ask him about – he decided and I explained to him this property, O'Malley property is given to Angela already. Is in Angela's name. And my father got very shocked and the facial expression, so straight away I explained to him, but this also have a sell price, and I tell him how much and then straight away he tell me he haven't ---
Counsel for the first defendant and the second defendant both objected to the receipt of this evidence primarily on the ground of hearsay. I allowed the evidence on the voir dire. It was put forward on a limited basis under s 136 of the Evidence Act 2011 (ACT).
Ms Karen Wu also gave evidence that she spoke to her father in Hokkien and Mandarin only and helped translate emails and documents for him relating to this case.
Ms Karen Wu gave further evidence concerning the plaintiff’s current assets, which comprise two bank accounts in Australia and one in Taiwan. Bank records were also tendered by counsel for the plaintiff. While I have had regard to those records generally, as was the case with many of the documents tendered, they were not relevant to the central questions of the case, which concerned the conduct of the plaintiff when signing the transfer form and his knowledge at that time.
The first and second defendants did not call any witnesses, however the defendants did tender various documents. Relevant documents will be discussed below.
Documentary Evidence
There was a substantial amount of documentary evidence tendered by the parties at the hearing. I have had regard to those documents, however, as will become apparent later, given my findings it is not necessary to summarise all of those documents in detail. I will, however, briefly summarise some of the key documents below.
Exhibit 1 is a copy of the transfer form recording the transfer of the O’Malley residence from Mr Wu and Mrs Wu to Ms Angela Wu. The transfer form includes the following details:
(a)The full names of Mr and Mrs Wu as the transferors;
(b)The full name of Ms Angela Wu as the transferee;
(c)The signatures of Mr and Mrs Wu as the transferors;
(d)The signature of Darryl Perkins as the “transferee’s solicitor”;
(e)The Lodging party is recorded as “S & T Lawyers” with an email address and phone number provided.
(f)An amount of $1,225,000.00 recorded in the box labelled “consideration”;
(g)The date “31 July 2009” in the box “Agreement / Contract for Sale Date”;
(h)The date “14 August 2009” in the box “Settlement Date”; and
(i)Contained in the “Schedule of Notes” the note “Provide the consideration (sale price, deed, court order or love and affection)”.
Exhibit 9A and 9B is a copy of a document titled “Contract for Sale”. Exhibit 9B is an enlarged version of the document. The document includes a notation that it is “Page 1 of 13 pages”. The remaining pages of the document were not in evidence. Mr Wu placed a red x next to his signature on the document during his evidence. The document includes the following details:
(a)Details for “Seller” included the full name or Mr and Mrs Wu and the O’Malley address;
(b)The “Seller Solicitor” was recorded as “S & T Lawyers for Darryl Perkins Solicitors”;
(c)Contact information for the Seller Solicitor was included with the name of Mark Tiirikainen;
(d)The “Stakeholder” was recorded as the S & T Lawyers trust account;
(e)The “Buyer” was recorded as Ms Angela Wu;
(f)The “Buyer Solicitor” was recorded as “S & T Lawyers for Darryl Perkins Solicitors” with the same contact information for Mark Tiirikainen; and
(g)The document was not dated and there was no details included in the price section of the document.
Exhibit 22 is a document titled “last will and testament of Chin Sheng Wu” and was dated 25 July 2017. The Will included the following details:
(a)Ms Angela Wu was appointed as the executor of the will, with the following notation: “I appoint as my executor my daughter, Angela Chien-Kuang Wu, of [O’Malley address]";
(b)A “Declaration” at the second clause “1” (I note that the document had two separate clauses numbered “1”: In making this will I have taken into account competing interests on my estate … No provision has been included for Karen Wu as I have previously given property located in Taiwan to her for her use and benefit. I do not wish for Karen Wu or her relatives, friends, descendants, and all parties related to her to receive any further benefit …
(c)Under clause 6(1) the will records that “my executors hold my estate on trust to give my estate to my daughter, Angela Chien-Kuang Wu, of [O’Malley address]".
In relation to the will, Mr Wu gave evidence that he recognised his signature on the document, but that he was not aware he had a will leaving all of his property to Ms Angela Wu. In particular, Mr Wu gave the following evidence:
Mr Walker: Until 2017 did you have a will leaving all your property to Angela? – As for myself the answer is no. Whether it has been written down, I don’t even know about it.
[document was shown to witness]
…
Mr Walker: Mr Wu, could you have a look at this document and see if you can identify your signature on this document? – I can’t read this document but as for the signature, that is my signature.
…
I signed it but I can’t – I can’t or I couldn’t read it.
Exhibit 23 was a bundle of letters between lawyers acting for Mr Wu and Mr Perkins. I will discuss some of those documents in more detail later in these reasons.
Exhibit 30 was a bundle of documents tendered by the plaintiff. It included an email from Ms Angela Wu to Mr Perkins which I will discuss later in these reasons. It also contained various transfer forms relating to property that had been disposed of by Mrs Wu and Ms Angela Wu.
Approach to Oral Evidence
Before addressing the parties’ submissions and outlining my findings it is necessary to outline the approach I have adopted in relation to the oral evidence of the plaintiff.
In this case, much of the evidence was in the form of witness testimony regarding the contents of conversations occurring many years ago. In the case of the discussions at the time the transfer was effected, the relevant conversations are over a decade old.
It is a fact of ordinary human experience that memories in that context can be distorted. In that regard, I adopt the helpful summary of McLelland CJ in Eq in Watson v Foxman (1995) 49 NSWLR 315 at 319:
… human memory of what was said in a conversation is fallible for a variety of reasons, and ordinarily the degree of fallibility increases with the passage of time, particularly where disputes or litigation intervene, and the processes of memory are overlaid, often subconsciously, by perceptions or self-interest as well as conscious consideration of what should have been said or could have been said. All too often what is actually remembered is little more than an impression from which plausible details are then, again often subconsciously, constructed. All this is a matter of ordinary human experience.
In the context of the delay from the key events to the dates the 98-year-old plaintiff gave evidence, it is important to note that the contemporaneous documents and the surrounding circumstances may assist in determining the overall probable events.
In that regard, I note the comments at [30]-[31] of Fox v Percy [2003] HCA 22; 214 CLR 118.
In this case it is not necessary discuss credibility. It is sufficient to underline that I do not understand the defendants to seek to impugn any witness’ credibility. Rather, the defendants submit that due to the passage of time the recollection of conversations may not be completely reliable, and this may explain some of Mr Wu’s answers, in particular, that he cannot recall what was said to him at particular times. I accept this submission.
While the second defendant has urged me to make a finding that Mr Wu suffered a deterioration in memory from, at the latest, 2015, there is, in my view, no need to consider that issue, nor to consider whether there is sufficient evidence to support such a finding. Rather, the fallibility of human memory in the 98-year-old plaintiff is sufficient to find that it is likely that Mr Wu’s recall as to conversations over a decade old is affected as discussed above.
Jones v Dunkel
The plaintiff submitted that “bold” inferences could be drawn from the fact that the first and second defendants did not give evidence in the case. In particular, the plaintiff referred to Chong v CC Containers Pty Ltd [2015] VSCA 137; 49 VR 402 (Chong) where the Court noted at [212] that: “where a party elects not to give evidence ‘the court is entitled to be bold’”.
The plaintiff noted that such considerations applied with more force in relation to the equitable claims given the onus that defendants to such claims bear.
Counsel for the first defendant submitted that care should be taken in drawing such bold inferences as the plaintiff submitted for, noting that a Jones v Dunkel inference cannot bridge a gap in the evidence. In that regard, counsel referred to the case of McMillan v Warner (Trustee) [2022] FCAFC 20 where the Full Court of the Federal Court noted at [218] that:
We accept, given the 18 years that have passed since the Property Transfer, that contemporaneous documents and the objective logic of events are more likely to assist in making factual findings from which inferences relevant to main purpose can be drawn. Further, the evidentiary issues identified by the primary judge in this context, unlike the position with respect to Mr McMillan’s alleged stated purpose, appear to be more in the nature of matters that might further illuminate objective circumstances rather than matters necessary to put a true complexion on the facts relied upon.
The Court had earlier outlined at [195] that:
An inference that the main purpose of a bankrupt in making a transfer of property was to defeat his or her creditors must be a reasonable and definite inference, not merely one of a number of conflicting inferences with equal degree of probability: Cummins at [34].
I have already noted above the approach I have adopted in relation to the oral evidence generally and I will address specific matters in more detail below.
It is, of course, accepted that a Jones v Dunkel inference cannot “fill gaps in the evidence or to convert conjecture and suspicion into inference”: Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; 243 CLR 361 (Kuhl) at [64].
I also note that there is some documentary evidence outlining the views of the first and second defendants expressed at particular times. I have outlined that material above. While it is true that this evidence was not given under oath in Court, the explanation advanced by the second defendant, namely that he cannot remember the meeting and can find no record in his surviving trust accounts of Mr and Mrs Wu being his clients, goes someway to explain why he did not give evidence.
Counsel for the second defendant noted in written submissions that the test operates only where the “uncalled witness appears to be in a position to cast light on whether the inference should be drawn”: Chong at [212].
In relation to the second defendant, in light of the test outlined above, it is in my view not appropriate to draw a Jones v Dunkel inference. This is because I am satisfied that there is a clear explanation as to why the second defendant was not called. Namely, that he cannot recall specific details about the transfer as the transfer occurred some time ago and that, on review of his trust accounts he cannot find a record of the plaintiff. In the result, I am satisfied that the evidence provides a sufficient explanation as to why the second defendant was not called to give evidence.
I note that the contents of the letters to the plaintiff’s lawyers will be discussed in more detail below in relation to the claim against the second defendant.
Were I wrong in reaching that conclusion, I would still not have been satisfied that a reasonable and definite inference could be drawn in the manner advanced by the plaintiff. That is because, given the significant time period and the sheer number of property transfers the second defendant would have participated in it is “equally likely” that he simply cannot recall many details regarding the specific meeting and what (if anything) was specifically said to Mr Wu and Mrs Wu in relation to the transfer (in accordance with the answer in the email in Exhibit 23).
The same consideration does not apply in relation to the first defendant. This is because the first defendant could have, but did not, give evidence in relation to what, if any, discussions she has had with her parents about the property both before and since the transfer and evidence about her interactions with them generally. This is evidence that she could have been expected to give and I am not satisfied that there is a similar explanation as to why the first defendant did not give evidence.
Nevertheless, a Jones v Dunkel inference cannot fill gaps in the evidence in this case: Kuhl.
The second defendant also submitted that Jones v Dunkel inferences could be drawn against Mr Wu. In my view, there is no need to draw such an inference. As I will come to later, even without drawing that inference I am not satisfied to the requisite standard that the plaintiff has made out its case against either the first or second defendant.
Consideration: Claim against the first defendant
It is convenient to address the claim against the first defendant in terms of the debt claim and claim in equity separately.
Debt claim
The parties agreed there are three issues to consider in relation to the debt claim. The first relates to whether the transfer was made for consideration with an intention to enter legal relations. The second relates to the Limitation Act defence and the third relates to whether the Limitation Act defence is excluded by operation of s 5 of the Act.
Did the plaintiff and the first defendant enter a legally binding contract?
The central issue in relation to this question, is whether the parties objectively intended to enter legal relations. In short, counsel for the first defendant and counsel for the second defendant submit that the objective intention was that Mr Wu and Mrs Wu were gifting the O’Malley property to Angela. In contrast, the plaintiff submits that the evidence establishes an objective intention to enter legal relations, with the transfer being for consideration.
Before turning to that issue, it is worth briefly noting the potential application of two presumptions. First, the presumption of a resulting trust arising where a property is transferred to an individual for no consideration. Second, the presumption that a transfer from a parent (or parents) to a child is intended as a gift (presumption of advancement).
The application of those presumptions and, in particular, their interaction with each other was recently considered by the High Court in Bosanac v Commissioner of Taxation [2022] HCA 34; 96 ALJR 976. It is worth noting the comments of Kiefel CJ and Gleeson J at [12]-[15]
A trust of a legal estate in property taken in the name of another is taken to “result” to the person who advances the purchase money. The categories of resulting trust include trusts arising from A’s payment for the conveyance of rights to B; the voluntary transfer of rights inter vivos from A to B; and the transfer of rights on a failed declared trust. The term “resulting trust” states a legal response to proved facts …
The p”esumption can be rebutted by evidence from which it may be inferred that there was no intention on the part of the person providing the purchase money to have an interest in land (or other property) held on trust for him or her. The presumption cannot prevail over the actual intention of the party paying the purchase price as established by the overall evidence, and where more than one person pays the purchase price, as here, regard is necessarily had to evidence of each of their intentions.
The presumption of advancement allows an inference as to intention to be drawn from the fact of certain relationships. It applies to transfers of property from husband to wife and father to child, but in Nelson v Nelson this Court accepted that there is no longer any basis for maintaining a distinction between a father and mother so far as concerns transfers of property to a child. Originally the relationships were considered by themselves sufficient to afford “good consideration” for the conveyance, but a rationale for the presumption has come to be found in the prima facie likelihood that a beneficial interest is intended in situations to which the presumption has been applied.
On one view, the presumption of advancement is not strictly a presumption at all. It may be better understood as providing “the absence of any reason for assuming that a trust arose”. At an evidentiary level, it is no more than a circumstance which may rebut the presumption of a resulting trust or prevent it from arising. It too may be rebutted by evidence of actual intention.
This case involves an inter vivos transfer of real property to Ms Angela Wu originating from her parents for no consideration. It is clear that the presumption of advancement therefore applies to the transfer, as the transfer was from parent to child. Counsel for the first defendant noted the operation of the presumption, submitting that there was no evidence that would rebut the presumption and it was clear that the transfer was intended as a gift. In the result, the first defendant submitted that no resulting trust arises and there was no contract.
As is apparent from the above extract from Bosanac, the clear focus of the enquiry must be on the intention of the parties to the transaction at the relevant time, with evidence of intention (including the relevant surrounding circumstances) clearly capable of rebutting both the presumption of advancement and the presumption of a resulting trust.
In this case, counsel for the plaintiff submitted that the evidence as to the existence of a contract would rebut the presumption of advancement. I accept that submission, in that it is clear that if I accept that the parties entered into a contract for the sale of the O’Malley property for consideration, the presumption would be rebutted as there would be clear evidence of intention that the transfer was not a gift. The clear focus is therefore on the existence of the contract.
The key issue, in turn, is whether at the time the transfer form was signed the parties had an objective intention to enter legal relations. A concise statement of the rule was referred to by counsel for the plaintiff from Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; 209 CLR 95 at [25]:
Because the search for the "intention to create contractual relations" requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word "intention" is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties.
(Emphasis added)
The question the Court must determine is what the parties by “words and conduct would have led a reasonable person in the position of the other party to believe”: Toll v Alphapharm (2004) 219 CLR 165 at [40].
The plaintiff submitted, in reliance on these principles, that the central question was what was objectively conveyed by the parties signing the transfer form. Counsel for the plaintiff noted that the transfer form was signed by Mr Perkins on Ms Angela Wu’s behalf and the form contained an amount for the consideration. Counsel submitted that there was no evidence that displaced the clear finding from the document that the parties intended to enter legal relations. Counsel also referred to other circumstances that supported a finding that the parties intended to enter legal relations, including the existence of a contract for sale. I will discuss that document in more detail below.
Counsel for the plaintiff noted that the transfer form could have included something other than monetary consideration such as “love and affection” (a matter, as highlighted above, expressly noted on the transfer form as something that could have been noted in the consideration box). Counsel for the plaintiff further submitted that the first defendant’s pleading “that she was told by Mrs Wu that the O’Malley property was to be transferred to her” does not assist the first defendant. That was said to be so, as it was not a clear statement that the property was to be gifted only that it was transferred.
In relation to the prior conduct of Mr and Mrs Wu in transferring other properties to their children as gifts, counsel for the plaintiff submitted that the O’Malley property could be distinguished from the other transfers as the O’Malley property was their main residence and Mr Wu was not a joint owner of the other properties. I do not accept that submission. For reasons I will explain, in my view this attempt to distinguish the principal place of residence from other types of property is ill-placed. The clear pattern from the overall series of transfers shows that the parties generally included monetary consideration on transfer forms in circumstances where objectively there was no intention to enter contractual relations and there was a clear and shared understanding that the consideration recorded on the forms would never be paid, rather it was included for gifting tax or other tax purposes (from the evidence of Mr Wu).
In my view, from the evidence currently available to the Court, the only available finding is that when transferring the O’Malley property there was no intention for the parties to enter legal relations, rather the clear objective intention was that the transfer was to be as a gift and must have been communicated as such. That follows from the following matters.
First, Mr Wu’s evidence, which I accept, was that Mr Wu and Mrs Wu made joint decisions regarding their property. While there were some aspects of Mr Wu’s evidence that tended against this position (including some portions where Mr Wu indicated that he would have signed documents if his wife had told him to), overall, I am satisfied that the tenor of Mr Wu’s evidence was that he and his wife made joint decisions regarding significant financial matters such as their business or property. That finding is also consistent with Mr Wu’s description around how they ran their business and would explain why various properties were held in one or both of their names while still being their “joint” property. That finding is also consistent with Mr Wu’s evidence that Mrs Wu would not have deceived him and would have discussed matters with him.
Second, Mr Wu’s evidence in relation to the conversation he had with Mrs Wu shortly before she died was that she had said they had transferred the property to Angela. That Mrs Wu was involved in the process is consistent with the other evidence, which establishes that in early 2009, Mrs Wu took steps necessary in order to transfer the O’Malley property, including obtaining a stamp duty valuation amount.
Third, that Mr and Mrs Wu intended to gift the O’Malley property is consistent with the other property transfers that occurred before and after the O’Malley transfer, which Mr Wu accepts were intended as gifts and were communicated as such. In my view, the property transfers demonstrated a clear intention from Mr and Mrs Wu to gift their property while they were alive to their children. Certainly, in my view there is no documentary evidence (or any evidence as to conversations between the parties) that would suggest there was anything different about the O’Malley transfer vis a vis the other transfers.
Fourth, the finding that the transfer was intended as a gift is supported by the evidence as to Mr Wu’s testamentary intention as recorded in his 2017 will, whereby he intended to exclude Ms Karen Wu from his will and noted that she had been given property in Taiwan and should not receive any other property or assets on Mr Wu’s death. While Mr Wu gave evidence that he did not know about the document, in my view while that evidence may establish that he has now forgotten the will, it cannot sustain a finding that the will was fraudulently signed or signed by Mr Wu without his knowledge. Such a finding would carry with it a significant finding that the lawyer recorded as one of the witnesses and the law firm who assisted in the preparation of the will were engaged in significant misconduct. There is no evidence before me that would sustain such a finding. In my view, the evidence from Mr Wu can only establish that he has now forgotten the will he had signed in 2017. That, again, can be explained by the passage of time as well as Mr Wu’s general age.
Fifth, while the O’Malley transfer form records an amount for consideration, that is similar to the other properties that Mr and Mrs Wu transferred to their children. For example, Mr Wu’s evidence was that consideration had been included on the transfer form in Exhibit 10 relating to a property in China so as to avoid paying a particular tax. Similarly, it is clear that a consideration figure may have been included on the O’Malley transfer form for other reasons, namely, as the first defendant submitted, for stamp duty calculation purposes. In circumstances where other transfer forms between the parties had included a consideration figure which was clearly and patently understood by Mr and Mrs Wu and Ms Angela Wu (or Ms Karen Wu in respect of the property in Taiwan) as never to be paid (with the transfers being gifts), in my view, the presence of a consideration amount on the transfer form does not assist the plaintiff.
In relation to the “incomplete” contract (here by incomplete I refer to there being no figure in the consideration section) which is in evidence before me, both the plaintiff and first defendant submitted that the document assisted their respective cases. The document was in evidence before me, with an enlarged version also included.
The document, as described above, is a low-quality scan of a Contract for Sale and it is titled: “The Law Society of the Australian Capital Territory Contract for Sale”. The document is signed by Mr and Mrs Wu for the seller”. It records as both the seller and buyer solicitor “S & T Lawyers for Darryl Perkins Solicitors” with contact information included for Mark Tiirikainen.
The plaintiff submitted that the fact there was a contract of sale was not consistent with a finding that there was an intention to transfer the property as a gift and, further, that the Court could not be satisfied that this was a final contract. The first defendant submitted, conversely, that the fact the contract did not include an amount in the consideration, indicated that the document supported the implication that the property was a gift, with the “contract” recording the nil consideration.
Sixth, on balance, in my view, the existence of there being either an incomplete contract with no consideration recorded or a document showing the transfer was for nothing (with the consideration blank) does not assist the plaintiff in displacing the presumption of advancement or in establishing that there was an objective intention to enter legal relations. This is because it is at least equally likely, in my view, that the signed contract containing no amount of consideration was indicative of a gift, rather than an intention to enter contractual relations.
While much was made by counsel for the plaintiff that the contract was one of 13 pages, I note that the plaintiff is the party with the burden on this particular issue. There is no cause to draw an inference as to what may (or may not) have been included in the remaining pages of the document. The critical information from the document, in my view, is that there is no amount recorded in the consideration section of the contract. Whether the document is viewed as a draft agreement which had not been finalised or had been finalised but with no consideration does not assist the plaintiff in rebutting the presumption of advancement. In either case, it is not evidence that establishes that there was a shared objective intention to enter legal relations, or a shared objective intention for the first defendant to pay an amount of consideration for the property.
In relation to the plaintiff’s submissions concerning what Mr Wu was (or was not told) in relation to the transfer at the time, I do not accept those submissions. In my view, while Mr Wu’s evidence was that he generally could not remember the events, that can be readily explained by the significant delay in commencing the proceeding. Having regard to the overall circumstances it is clear, in my view, that there was an intention to transfer the property as a gift inter vivos to Ms Angela Wu.
In summary I am not satisfied that there was an objective intention to enter legal relations and accordingly, I am not satisfied that the presumption of advancement has been displaced. To the contrary, I am satisfied that the overall position of the evidence is that the intention of Mr and Mrs Wu was to gift the O’Malley property to Ms Angela Wu. In the result, the plaintiff’s debt claim must fail.
I note that my findings in relation to the existence of the contract are consistent with the plaintiff’s evidence in cross-examination that he “would have” gifted the property to Ms Angela Wu in 2009 but that later events would have caused him to change his mind.
Those events, on Mr Wu’s evidence, appear to include Ms Angela Wu attempting to place Mr Wu into a nursing home and dealing with Mrs Wu’s ashes in a manner contrary to Mr Wu’s wishes. That evidence further supports my finding above that Mr and Mrs Wu intended, at the relevant time, to gift the property to Ms Angela Wu.
Limitation Act Defence
The plaintiff accepts that s 11(1) of the Limitation Act 1985 (ACT) provides for a 6-year limitation period for a contract claim. The relevant date in this proceeding was the settlement date of the transfer form, namely August 2009. Accordingly, absent any matter to the contrary, the limitation period would have expired in August 2015. That date predates the commencement of these proceedings.
Counsel for the plaintiff submitted, however, that s 33 of the Limitation Act operates to postpone the relevant limitation period.
Section 33 provides:
33 Fraud and concealment
(1) Subject to this section, if—
(a) there is a cause of action based on fraud or deceit; or
(b) a fact relevant to a cause of action or the identity of a person against whom a cause of action lies is deliberately concealed;
the time that elapses after a limitation period fixed by or under this Act for the cause of action begins to run and before the date when a person having (either solely or with other persons) the cause of action first discovers, or may with reasonable diligence discover, the fraud, deceit or concealment, as the case may be, does not count in the reckoning of the limitation period for an action on the cause of action by him or her or by a person claiming through him or her against a person answerable for the fraud, deceit or concealment.
…
Counsel for the plaintiff accepts that the plaintiff bears the onus to establish the following matters:
(d)Establish that a fact or facts was/were deliberately concealed;
(e)Establish that Ms Angela Wu was a party to the concealment; and
(f)Demonstrate when the fact(s) were discovered or may have been discovered with reasonable diligence.
Before turning to consideration of s 33 of the Limitation Act, I note that counsel for the plaintiff has expressly disavowed any suggestion of a conspiracy between Mrs Wu, Ms Angela Wu and Mr Perkins (see reply submissions at [14.4]). Indeed, there is no positive claim that Mrs Wu concealed matters from Mr Wu intentionally, but rather that there were various explanations as to why Mrs Wu may have felt that she did not need to tell Mr Wu (reply submissions at [19.2]). As I will come to, that matter is important in circumstances where I have found above that Mr and Mrs Wu made joint decisions regarding their property.
Counsel for the plaintiff pleaded (following leave being granted at the hearing) that the following two facts were the relevant facts that were concealed:
(a)That in approximately August 2009, Mr Wu signed the transfer document which had the effect of transferring his interest in the O’Malley property to Angela; and
(b)The transfer that Mr Wu signed provided for the payment of monetary consideration in the sum of $1,225,000.
Counsel for the plaintiff submitted that Mr Wu discovered these facts in or around 2018 when he spoke with Mrs Wu and made enquiries of his lawyers and viewed the transfer form. It follows, in counsel for the plaintiff’s submission, that the limitation period would not have expired when the action was commenced.
Counsel for the first defendant submitted that the second “fact” was not really a fact at all, and was, instead, a legal conclusion. Counsel for the first defendant submitted that at its highest Mr Wu may have been unaware that he had an argument for a legal claim.
There is no need for me to decide that issue, or whether s 33 of the Limitation Act could (or could not) extend to an argument that an individual had a legal claim. That is because, for reasons I will come to, I am not satisfied that either “fact” was concealed from the plaintiff. Nor am I satisfied that if a fact was concealed, Ms Angela Wu was a party to that concealment. Finally, even were I wrong on either conclusion, I am satisfied that the plaintiff could have, with reasonable diligence discovered both facts at the time the transfer form was signed. In the result, s 33 does not operate to bar the Limitation Act defence.
Counsel for the plaintiff focused on the plaintiff’s evidence that he first learnt about the transfer in a conversation with his wife in 2018 and that he was not aware that the transfer form recorded consideration until his lawyer got it for him and showed it to him. I have extracted that part of Mr Wu’s evidence above at [24].
One key challenge to the plaintiff’s submission is that, in my view, it is clear that both facts pleaded to have been concealed are evident from the transfer form itself. Mr Wu was taken to the transfer form and while much of his evidence was that he could not now recall signing the form, he must have signed it as his signature was on the form. So much was conceded by Mr Wu in his evidence.
It was also clear from Mr Wu’s evidence that he could understand sufficient English to have been able to interpret at least the critical parts of the transfer form when he signed it. In particular, Mr Wu said he could recognise the name of the property and the dollar amount. Also in evidence was a drawing of Mr Wu of the symbol for the Australian dollar. I infer that Mr Wu could also have read the names of himself, Mrs Wu and Ms Angela Wu on the form.
In my view, having signed the transfer form, Mr Wu must have been aware at the relevant time that he was signing a transfer form for the O’Malley property and the form recorded an amount of money as consideration. That finding accords with Mr Wu’s evidence about what he could understand in English.
In making that finding it is important to note that the evidence demonstrates that Mr Wu was involved in several property transfers over the years. This was not the first time that Mr Wu would have seen a transfer form, and that matter along with his evidence as to what he can recognise from documents in English, strengthens my finding that at the time he signed the documents Mr Wu must have been aware of the two facts outlined above at [126].
I note that the form is, by the standards of legal documents, relatively simple. In broad terms, the form records the property, the parties involved and an amount in a consideration box. I have already explained why I am not satisfied that the parties objectively intended to enter legal relations for the stated amount, however, were I wrong on that conclusion, I would still have concluded that all relevant information was clear from the face of the document.
That finding also accords with my earlier findings in relation to the contract claim, namely, that Mr and Mrs Wu would have made a joint decision concerning the property. If I were wrong to conclude that the relevant facts are apparent from the document itself, I would still have found that s 33 of the Limitation Act did not apply as, on the balance of probabilities, I have accepted that Mrs Wu and Mr Wu would have spoken about the transfer and Mr Wu must have been aware of those matters (at least in a general sense) prior to or at the time he signed the transfer form. In the result, there was, on the balance of probabilities, no concealment from Mr Wu.
While I accept that that finding appears to conflict with various aspects of Mr Wu’s evidence, for example, that he cannot recall being told about the document or he cannot recall any discussions with Mrs Wu prior to 2018 regarding the transfer, in my view, it is clear that Mr Wu does not now recall all of the details from the 2009 transfer. So much is explained by the passage of time involved as I have already discussed. That does not, however, in my view, rise to the level of a finding that details were concealed from him at the relevant time. Rather, the far more likely explanation and the only one open on the balance of probabilities, is that Mr Wu has simply forgotten some aspects of the transfer and related conversations due to the passage of time.
Further, and in the alternative to the finding that no matters were concealed from Mr Wu, I am not satisfied that the evidence can establish that Ms Angela Wu was a party to any concealment. That is the case for the following reasons:
(a)First, Ms Angela Wu was not present when the form was signed and, accordingly, could not have been aware about what was or was not said in the room. While, of course, Ms Angela Wu could have been involved in some conspiracy between herself, Mrs Wu and Mr Perkins (and any other lawyer in the room when the form was signed) that scenario is implausible and may be discarded. I am not satisfied to the requisite standard (noting that a deliberate fraud of the kind described attracts the operation of s 140 of the Evidence Act and the principle in Briginshaw) that there was such a conspiracy to conceal the matter from Mr Wu.
(b)Second, to the extent that the plaintiff submits that Mrs Wu assisted in maintaining a deception and hid the transfer from her husband, I do not accept that submission. It is clear from Mr Wu’s evidence that he loved and trusted his wife and that they discussed and communicated in relation to major decisions.
(c)Third, Ms Angela Wu received mail with her name on it to the O’Malley residence including bills. That behaviour is not consistent with an attempt to deceive Mr Wu or Mrs Wu. I also note that Mr Wu’s 2017 will records Ms Angela Wu’s address as the O’Malley property.
(d)Fourth, while the plaintiff has pointed to a series of events counsel submit establish a deception, including, for example, that Ms Angela Wu did not thank her father for the gift, I do not think Mr Wu’s recollection of all conversations is accurate enough to sustain a finding to that effect to the required standard. Further, I am not prepared to make a finding of an elaborate and sustained deception on the basis of a lack of gratitude shown by an adult daughter.
(e)Fifth, the evidence of Mr Wu’s discussion with Mrs Wu in 2018 does not speak to there being any concealment. Rather, Mr Wu’s response in cross-examination as extracted at [42] above, outlined in broad terms that he may have given her the property in 2009 but now the situation is different. So much may be accepted, but that evidence is in stark contrast to an ongoing concealment of the relevant matters. Mr Wu’s general evidence also supports this finding, including that he discussed property matters with Mrs Wu and that she would not have deceived him.
(f)Sixth, I am not satisfied that there was a need for any such concealment. As the evidence indicates, Mr and Mrs Wu were very generous with their relatives, especially their daughters and transferred a significant number of properties to their children, in particular Ms Angela Wu. This reduces the likelihood that anyone would have seen the need to conceal a matter from Mr Wu. Rather, the more likely position, in my view, is that Mr and Mrs Wu, at the relevant time, intended to gift the property to Ms Angela Wu and that Mr Wu now does not recall that interaction due to his age and the passage of time.
Further, and in the alternative, if I were wrong in reaching that conclusion, I would have nevertheless found that with reasonable diligence Mr Wu could have discovered the two pleaded facts at or around the time of the transfer form. In particular:
(a)Mr Wu could have asked Mrs Wu about the document;
(b)Mr Wu could have asked anyone else present about the document;
(c)Mr Wu could have asked for the document to be translated to the extent that he did not understand any details on it;
(d)Mr Wu could have asked Ms Angela Wu about the document.
Overall, I am not satisfied to the required standard that Mr Wu was deceived, that Ms Angela Wu was a party to any deception and, in any event, I am satisfied that Mr Wu could have, with reasonable diligence, discovered both pleaded matters at or around the time of the transfer.
In the result, the plaintiff has not satisfied me that s 33 of the Limitation Act operates to bar the general effect of s 11. That is not, however, the end of the query. Counsel for the plaintiff has further submitted that s 5 of the Limitation Act applies to the debt claim.
Is the Limitation Act defence not available to the first defendant?
For the following reasons, I am also not satisfied that s 5 applies to limit the operation of s 11 of the Limitation Act. In the result, and for the reasons outlined above, even if I were wrong to conclude that the plaintiff cannot establish the debt claim, the claim would be barred by the operation of the Limitation Act.
Overall, the plaintiff broadly submits that the claim (if established) is not barred by the operation of the Limitation Act as it relates to an equitable interest in property. As such, the plaintiff submits that s 5 of the Limitation Act would operate to defeat the limitation defence.
I do not accept that submission.
The precise basis or formulation of the equitable interest was not always clear from counsel for the plaintiff’s submissions. Counsel for the plaintiff appeared to submit at different times that the equitable interest in the property arises from either a resulting or constructive trust over the O’Malley residence or that the plaintiff could claim an equitable charge over the property. As such, counsel submitted that the plain language of s 5 operate to prevent the first defendant from arguing a Limitation Act defence. I will deal with each matter separately, as I do not understand the plaintiff to have withdrawn any of those arguments.
It is clear that where a party can claim a resulting or constructive trust over a property s 5 would operate in the manner advanced by counsel for the plaintiff. So much is apparent from Moromilov v Vojinovic [2013] ACTCA 6 (Moromilov) at [23].
I do not accept, however, that if I were wrong in relation to the debt claim, the plaintiff could claim either a resulting or constructive trust over the residence. That is the case for the following reasons.
In relation to the resulting trust argument, it is clear that a resulting trust can arise where there is a voluntary transfer of property. In particular, it appears that there is nothing in the ACT statute that would prevent such a trust from arising: cf Conveyancing Act 1919 (NSW) s 44(1). Here, however, in the event that I am incorrect in relation to my conclusion on the existence of a contract, the challenge for the plaintiff is that the transfer would not have been a voluntary transfer for no consideration.
The general rule was outlined in Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 at 708 where Lord Browne-Wilkinson outlined two circumstances where a resulting trust can arise:
Where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B, there is a presumption that A did not intend to make a gift to B: the money or property is held on trust for A …
Here, if I were wrong in my conclusion on the debt claim, it is clear that Mr Wu would not have made a voluntary payment or a voluntary transfer. Rather, the transfer would have been for consideration. In my view, it is not apt to describe that scenario as one where a resulting trust emerges. Rather, as the first defendant submitted, the claim would be a debt claim arising from the unpaid contractual liability. That is because, were I wrong and there was no intention to gift the property, there would clearly be an intention to displace the presumption of a resulting trust, namely the property was to be transferred for consideration. The beneficial and legal ownership in that scenario would have been intended to pass to Ms Angela Wu for consideration, displacing any presumption of a resulting trust.
The fact the consideration was not paid would lead, in that scenario, to a claim in contract law. But would not, in my view, mean the transfer reverts to one of a resulting trust over the property in the event that the debt claim is statute barred.
Similarly, counsel for the plaintiff appeared to submit that, alternatively, there would be an equitable interest arising as either a constructive trust or an equitable charge over the property. The basis for the submission was not fully explained by counsel. In relation to the constructive trust argument, while courts have imposed constructive trusts where legal ownership does not reflect beneficial ownership and it would be unconscionable to deny an individual beneficial ownership: Baumgartner v Baumgartner (1987) 164 CLR 137, similar issues emerge to the above analysis. In my view, there would be again no clear argument that Mr Wu would have retained a beneficial interest in the property where there was a contract for consideration.
This can be shown by contrasting the scenario with the circumstances in Moromilov where the plaintiff had detrimentally relied on an agreement she had entered with the deceased that “he would look after her for the rest of her life, including by providing her with a house for the rest of her life, and that she would not suffer any detriment from doing so” if she moved to Australia: [10]. The Court went on to state at [23]:
His Honour referred to the default limitation period of six years under s 11 of the Limitation Act 1985 (ACT). He did not refer to s 5(a) of that Act. That section provided that nothing in the Act applied to a cause of action to recover land or an estate or interest in land or to enforce an equitable estate or interest in land. It was clearly arguable that the appellant sought relief in the counter-claim to enforce an equitable estate or interest by claiming that the respondent held the land on constructive trust for her by reason of the deceased’s promises to her inducing her to join him in Australia.
In my view there is no similar argument here. If there was an agreement between the plaintiff and first defendant for the payment of consideration for the property, that was a debt that was enforceable by the plaintiff up to the date the claim became statute barred. Having found that there was no concealment of any material fact, it seems to me that first, the plaintiff has no beneficial interest he can now assert over the property and, second, to the extent he does it would not be unconscionable to deny him that claim in circumstances where he has not sought to enforce the debt within the limitation period.
In the result, I am satisfied, in the alternative, that the debt claim would be barred by the operation of s 11 of the Limitation Act.
Claim in Equity
In the alternative to the debt claim, the plaintiff submits that he is entitled to equitable relief arising from either unconscionable conduct or undue influence on the part of Ms Angela Wu. In effect, the plaintiff submits, that if, as I have found above, the transfer was not an enforceable contract, the transfer was the result of undue influence or unconscionable conduct on the part of the first defendant.
A not insignificant number of the defendants’ submissions were directed to whether this claim was consistent with the plaintiff’s arguments in relation to the debt claim. There is no need to address that issue. For reasons I will come to I am not satisfied that the transfer was affected by either undue influence or unconscionable conduct on the part of the first defendant.
A contractual relationship of solicitor and client will … be presumed if it is proved that the relationship of a solicitor and client existed de facto between a solicitor and another person … the de facto relationship … has to be a necessary and clear inference from the proved facts before a retainer will be presumed.
Absent an implied retainer, a retainer must be proven under general contractual law principles. In this case, there is no direct evidence of an actual contract between the plaintiff and the second defendant. Indeed, as outlined in the summary of the letter of the second defendant, there is evidence that the second defendant has no record of the plaintiff or Mrs Wu in his trust accounting records. Accordingly, the test to apply is whether on the facts of the case there is a necessary and clear inference that there was a de facto solicitor and client relationship between the plaintiff and the second defendant.
Factors relevant to whether there is an implied retainer were helpfully summarised by Ward J (as her Honour then was) in at [80]:
Mr Gyles submits that whether a retainer exists for the provision of legal or other professional services is to be judged objectively from the state of affairs between the parties, referring to the statement by Giles JA in Hendriks v McGeoch [2008] NSWCA 53 at [11] to the effect that the status of the parties, the relationship between them and the nature of the putative contract will bear upon whether a contract should be inferred to have been made. It is noted that factors which have been recognised as indicative of the existence of a retainer include the following:
acceptance by the solicitor of responsibility to prepare documents or do professional work without any indication that he cannot fully discharge his professional duties to the client (Pegrum v Fatharly (1996) 14 WAR 92 at 102, where it was said that in such a case there is a strong bias towards finding that the solicitor tacitly agrees to act and to undertake the usual professional responsibilities);
consultation by the alleged client with the solicitor or evidence of reliance by the alleged client on the solicitor (Pegrum at 102);
the fact that the solicitor has acted for the alleged clients on previous occasions (Hendriks at [12]);
the giving by the solicitor of the impression of acting in the alleged clients' interests (Hendriks at [12]);
payment of legal fees by the alleged clients (Pegrum at 6);
the undertaking by the solicitor of work which appears to be in the alleged clients' interests (IGA Distribution Pty Ltd v King & Taylor Pty Ltd and Anor [2002] VSC 440 at [234]), and/or which appears to be legal in nature and goes "beyond the provision of casual assistance" (Fleeton v Fitzgerald unreported, NSW Court of Appeal, 18 December 1998 per Beazley JA at 11);
the fact that the solicitor does not make clear that he or she is not acting for the alleged clients (Hendriks at [12]);
knowledge of the solicitor that the alleged clients are not represented by another solicitor (IGA at [234]);
knowledge of the solicitor that the alleged clients would be at risk of loss if their interests were not looked after (IGA at [234]);
the unlikelihood, given the alleged clients' inexperience or inability, that they "would undertake and complete the proposed transaction without the benefit of legal assistance" (Jeandin v Tzovaras [2011] NSWSC 1254 at [62]-[65]).
I adopt that summary of relevant matters, although, of course, the question of an implied retainer must be assessed on the particular circumstances before the Court.
In this case there is little evidence as to the discussions (if any) between Mr Wu and Mrs Wu and Mr Perkins at or before the signing of the transfer form.
In short, the evidence that may be relevant to the assessment of the above factors includes the following:
(a)Oral evidence from Mr Wu that he could remember going to Mr Perkins office in relation to the transfer.
(b)Mr Wu could not recall the details of any conversations that took place at the office.
(c)In the contract the statement “S & T Lawyers for Darryl Perkins Solicitors” appears in the firm section in the boxes “Seller Solicitor” and “Buyer Solicitor”.
(d)The “S & T Lawyers Trust Account” is recorded in the “Stakeholder” box and details for an individual in the name “Mark Tiirikainen” are recorded as the refence name for the Seller Solicitor and Buyer Solicitor.
(e)On the transfer form “S & T Lawyers” are recorded as the lodging party and the form is signed by Mr Perkins in the box labelled “signed by transferee/s or transferee’s solicitor”.
Also in evidence is an email from Ms Angela Wu to Mr Perkins which includes the following:
Hello, darryl
Somehow Karen got Wilson Lawyer …. They questioned the transfer of the property dated July 2009. Karen claimed that my father was not aware of what he was doing. You did the transfer, supposed it was all done properly and stamp duties were paid. My parents went to your office to sign the title transfer and you faxed it to me for signature. Right?
[word cut off] I obliged to show documents of the transfer? Copies of all relevant documents are with the ACT Title’s office. What else do I need to show?
I don’t want Griffin to handle this case, it is separate from the Estate. My mother’s estate had only AUD30,000 or so.
What time can I call you tomorrow?
Thanks,
Angela
…
The copy of the email in evidence contains what appear to be some handwritten annotations that appear to clarify the names contained in the email. The above extract is from the original email itself. In my view, the annotations do not alter the meaning of the relevant aspect of the email and I have not had regard to them in circumstances where it is not clear on the evidence who made the additions.
In addition to this evidence, there was also a letter sent by Mr Perkins to McInnes Wilson Lawyers dated 3 January 2019. The letter is in the following terms:
McGuiness [sic] Wilson Lawyers
GPO 819
CANBERRA ACT 2601
Dear Colleagues
WILL AND EPA MATTERS – WU
I refer to and thank you for your letter to me dated 18 December 2018.
I answer the questions you pose … as follows:
1. To my knowledge, Mr Wu has never contacted me. I have met him on two or three occasions over a period of about 16 years.
2. Angela Wu had made it very clear to me that her father new [sic] the contents of the document in question, and that he was content with signing it.
3. I did not witness him signing it. He told me to just leave the letter with him and leave (or words to that effect) – which I did.
4. I am unaware if a translator was present when the document was signed.
…
Also in evidence was a later letter dated 13 May 2019 and addressed to a lawyer at McGuiness [sic] Wilson Lawyers. That letter included the following:
…
I will now address the questions you pose in your letter dated 23 April 2019. In doing so- I have been unable to locate the files you seek in this matter. I can only assume that it/they are either shredded or lost in the flooding to my office occurring some years ago …
1. Whether you witnessed Mr Wu sign the transfer.
I cannot say; my file records cannot be located. I assume that they are destroyed and disposed of or lost in the office flooding referred to above. Please note the letter attached- signed off by my landlord at the time, confirming the occurrence and impact of the flooding. I have no recollection of myself personally witnessing Mr Wu signing anything. I note that the occurrence you speak of was nine or so years ago.
2. Whether you acted for Mr Wu …
As per my answer for 1 above.
3. Whether S & T Lawyers acted for Mr Wu …
As per my answer for 1 above. I note that S & T Lawyers no longer exist, and ceased trading, as far as I am aware, some years ago.
4. Whether Mr Wu was, or was to be, paid the consideration …
As per my answer for 1 above. Fortunately, my trust accounting records were not damaged too badly in the office flooding … I cannot find any client account for any member of the Wu family, let alone your client.
5. Whether a translator was present …
As per my answer for 1 above.
6. How you ascertained that Mr Wu was aware …
As per my answer for 1 above.
7. Whether you have any advice to Mr Wu in terms that he should not give Angela the signed transfer …
As per my answer for 1 above.
8. Whether you have any advice to Mr Wu in terms that he should ensure his occupation …’
As per my answer for 1 above.
9. Whether you have any advice to Mr Wu in terms that disposing …
As per my answer for 1 above.
On the state of the evidence above there is not sufficient evidence to make the existence of a de facto solicitor client relationship a necessary and clear inference. In particular, the evidence establishes that Mr Perkins was involved in the transfer in relation to his role signing on behalf of Ms Angela Wu. There is not sufficient evidence to conclude that he acted for Ms Angela Wu more broadly at the time in relation to advising on the transfer generally, nor is there any evidence that he advised Mr or Mrs Wu in relation to the transfer.
On that matter I note that the plaintiff bears the relevant onus and did not adduce from Mr Wu any clear evidence as to any discussions. In contrast, the email in evidence from Mr Perkins (again noting that it is not sworn evidence) is consistent with the position contained in Ms Angela Wu’s email ie that “[Mr Perkins] did the transfer, supposed it was all done properly and stamp duties were paid. My parents went to your office to sign the title transfer and you faxed it to me for signature”.
Nothing in that evidence suggests that Mr and Mrs Wu attended Mr Perkins’ office to obtain general advice in relation to the transfer, or that Mr Perkins advised them on the transfer. Rather, the evidence appears to suggest that at its highest Mr and Mrs Wu went to the office to sign the form (with Mr Perkins signing on behalf of Ms Angela Wu as she was overseas at the time).
That is supported by the indication from Mr Perkins that he has no record of a client account in the name of Mr Wu (or any member of the Wu family).
While much was made by the plaintiff of the fact that Darryl Perkins solicitors is noted in both the buyer and seller solicitor box on the “contract”, I do not think that evidence rises to a level to support a finding that a de facto client/solicitor relationship is a necessary and clear inference. In particular, it is not clear to me what S & T Lawyers on behalf of Darryl Perkins solicitors means or what Mr Tiirikainen intended to convey when he included that information. While there appears to be some evidence of the fact that S & T Lawyers had offices near Mr Perkins’ office (in the form of the report on water damage in the Reserve Bank building where Mr Perkins’ office was located) there is no evidence that they were related entities or law firms.
Absent evidence on that issue, the statement “S & T Lawyers on behalf of Darryl Perkins solicitors” could have a number of different meanings and it is not clear that Mr Perkins was providing advice in relation to the contract to Mr Wu. As a further point, it seems to me that a lawyer writing on a document that they were acting on behalf of a different lawyer is not sufficient to establish that the other lawyer was acting for any party. Here there was no clear evidence of Mr Perkins providing advice of any nature on any aspect of the transfer to Mr Wu.
In the result, I do not accept that the second defendant had an implied retainer with the plaintiff.
Claim in relation to duty of care
Generally the scope of a lawyer’s duty of care is determined by reference to the retainer the lawyer has with their client. In this case I have found that there was no implied retainer.
The law does, however, accept that there can be some cases where a lawyer will owe a duty of care absent a retainer. In particular, counsel for the plaintiff referred me to Watkins & 6 Ors T/as Watkins Tapsell v De Varda [2003] NSWCA 242 where Ipp JA stated at [140]-[143] (Sheller JA and Foster AJA agreeing):
The mere absence of a retainer does not mean that Watkins Tapsell could not have owed De Varda a duty of care. In Beach Petroleum NL v Kennedy (1999) 48 NSWLR 1 this Court, differently constituted (Spigelman CJ, Sheller JA and Stein JA), said at 78:
“In order to show that advice or the failure to give advice or warn amounted a breach of a duty of care owed by Abbott Tout, [solicitors to Beach Petroleum NL], for reasons which the High Court re-stated in Esanda Finance Corporation Limited v Peat Marwick Hungerfords (1997) 188 CLR 241, Beach had to establish that a relationship of proximity between the parties existed, that is to say had to identify a factor or factors of special significance in addition to the foreseeability of harm, when Abbott Tout acted or failed to act in the manner alleged. Foreseeability of harm alone was not enough to give rise to the necessary assumption of responsibility by Abbott Tout.
To do this, in the context of this case, Beach had to show that Abbott Tout gave advice or failed to give advice or warn in circumstances where Abbott Tout realised or ought to have realised that they were being trusted to give their advice as a basis for action on the part of Beach: Mutual Life and Citizens’ Assurance Company Limited v Evatt (1968) 122 CLR 556 at 572”.
Davies AJ held that Coates agreed that it was not necessary for De Varda to appoint another solicitor or impliedly approved of De Varda’s statement to that effect. His Honour held that De Varda was looking to Coates as a solicitor to protect his interests even if, formally, Coates acted only for Foch and, by continuing to deal with De Varda, Coates gave De Varda the impression that, while Foch was his client, he was nevertheless serving De Varda’s interests. Davies AJ held that De Varda relied on and trusted Coates and acted on the faith of the documents that Coates produced. His Honour held that De Varda relied on Coates to use his legal skill and ability in preparing whatever document was appropriate and it was on the faith of that document that De Varda paid over the purchase price to Foch.
His Honour held that, in the circumstances, Coates had a duty to De Varda to exercise skill and care in serving his interests. His Honour pointed out that a relationship of proximity, reasonable reliance and assumption of responsibility were present. Thus, he held, Coates and Watkins Tapsell owed a duty of care to De Varda that extended beyond the terms of the contractual duty they owed Foch.
Here the challenge for the plaintiff is that there is no evidence before the Court that Mr Perkins in his dealings with Mr Wu gave any impression that he was serving Mr Wu’s interests. For the reasons advanced in relation to issue 10, the plaintiff’s argument here must similarly fail.
Mr Wu’s evidence that he attended Mr Perkins’ office to sign the form cannot establish that Mr Perkins gave any impression to Mr Wu that he was acting for him or was guarding Mr Wu’s interests. Rather, the evidence is generally consistent with a finding that Mr Perkins’ involvement was limited to signing the form on behalf of Ms Angela Wu.
That finding is sufficient to dispose of the issue.
Breach of any duty under a retainer or under negligence
In the event I were wrong in making the findings above regarding the lack of any retainer or duty of care owed to Mr Wu, my earlier findings in relation to Mr and Mrs Wu’s intention at the time of the transfer would also dispose of any claim under the retainer or under negligence as against Mr Perkins.
That is because, in that scenario Mr and Mrs Wu would have attended Mr Perkins’ office intending to effect a transfer of property for no consideration (ie. as a gift). That is what I have found then occurred. In that scenario it seems that Mr Wu could not have suffered any harm through any negligence on behalf of the lawyer who was involved in effecting the transfer (if that were Mr Perkins’ role) nor could there have been any relevant breach of duty. In simple terms, Mr and Mrs Wu would have achieved the exact scenario they had intended when attending the office.
The plaintiff’s written submissions addressing the purported breach in this scenario were set out at [10.12]:
In the event that the Court finds that there was not a legally enforceable agreement for the payment of consideration by Angela for the transfer of the O’Malley property to her, Mr Perkins failed to discharge his duty to Mr Wu by failing to explain to Mr Wu that this would be the legal consequence of Mr Wu signing the 2009 O’Malley Transfer and its subsequent registration. He failed to ascertain whether Mr Wu could read and understand the 2009 O’Malley transfer and, in particular, that it stated a false position, ie, that Angela would pay consideration when she did not intend to do so. He failed to advise Mr Wu to seek independent legal advice. Mr Perkins failed to obtain specific instructions from Mr Wu for the transfer to be registered. He failed to advise Mr Wu that after [the] registration of the transfer, Mr Wu’s ongoing right of residence in the Property would be legally uncertain.
I do not accept that even if there was any duty, the breaches claimed by the plaintiff would have occurred. In particular, if the intention of Mr and Mrs Wu was to gift the property, that is exactly what occurred through the registration of the transfer form. That finding also brings with it a rejection of Mr Wu’s evidence that he was not told or was not aware of the effect of the transfer. Rather, it encompasses a finding that Mr and Mrs Wu discussed the decision, made the decision jointly and effected the decision jointly (in the same way they transferred their other shared property assets).
In the result, I do not accept that Mr Perkins would have breached a duty by not explaining the transfer form, rather, Mr Wu was aware of at least the substantive details. Further, the transfer form did not in this scenario record a false proposition. The consideration was, in this scenario, included for stamp duty purposes (for reasons I have explained earlier).
Similar points arise in relation to claims that Mr Perkins failed to advise Mr Wu to obtain independent legal advice, the transfer was at its core a simple registration of a gift of real property as Mr and Mrs Wu had previously done.
Finally, in relation to the suggestion that Mr Wu’s right of residence would remain uncertain, that is now a matter that will be corrected by Court order, even had there been a breach there would be no damage in circumstances where that is now remedied (and where no steps have been taken to evict Mr Wu).
Fiduciary Duty
For the same reasons given in relation to the implied retainer issue and the duty of care issue, Mr Perkins could not be in a fiduciary relationship with Mr Wu.
In any event, where Mr Perkins’ duty to Ms Angela Wu was limited to signing the form on her behalf there seems that there could not have been any conflict with any duty he owed to Mr Wu.
Loss and Damage
There is no need to address this issue given my findings above.
Application of s 33 of the Limitation Act
Section 11 applies to all causes of action pleaded against the second defendant and I accept the second defendant’s submission that the causes of action would have accrued from 24 August 2009 (the date that Ms Angela Wu became the sole proprietor of the O’Malley residence).
Counsel for the plaintiff had submitted that I should find that the commencement date for the limitation period was as follows:
(a)If I accepted the contract claim, August 2015 (assuming Mr Wu’s claim against the first defendant was statute-barred at this point); or
(b)October 2018 as that it when Mr Wu became aware of the relevant facts on which his claim was founded which had been deliberately concealed from him.
I have already outlined above why I do not accept that there was a contract between Mr Wu and Ms Angela Wu. In the result, the relevant submission is that Mr Wu was not aware of the details of the claim until October 2018.
I do not accept that submission. For the reasons I have already outlined, I am satisfied that Mr Wu must have known of the relevant details (at least in broad terms) at the time of the transfer. In the result, any cause of action against the second defendant must have accrued from August 2009.
The plaintiff further argued that the limitation period is suspended by the operation of s 33 as Mr Perkins was a party to a deliberate concealment of the same facts discussed above.
I have already outlined my reasons for finding that those matters were not concealed from Mr Wu at the relevant time and that they are matters that Mr Wu could have, with reasonable diligence, discovered at or around that time.
In the result, s 11 operates to bar the plaintiff’s claim against the second defendant.
Further, and in the alternative, for the following reasons even if I were wrong and matters were concealed from Mr Wu I am not satisfied that Mr Perkins was a party to any concealment.
Counsel for the second defendant referred to the case of D’Arcy v Caltex Australia Petroleum Pty Ltd [2016] ACTSC 270; 353 FLR 237 at [48] where the test was outlined as, in broad terms, the party must know of or intend to cooperate in the concealment.
Counsel for the second defendant noted that the consequences for the second defendant if he participated in a deliberate concealment would be significant and that, in circumstances where Mr Perkins obtained no benefit from any concealment the Court would be unlikely to conclude he was a party to any concealment.
Counsel for the second defendant further submitted that absent any evidence as to what was or was not said to Mr Wu at the time of the transfer, there was no evidence to support a finding that Mr Perkins would have been involved in any concealment at the relevant time.
I accept those submissions. Without any evidence as to what was (or was not) said at the time of the transfer there is not enough evidence to support a finding that Mr Perkins would have been involved in any concealment.
Accordingly, in my view, the claim against the second defendant is barred by the operation of s 11 of the Limitation Act.
Laches and Apportionment
Given my findings above, there is no need to consider the issues of apportionment or laches. To do so in relation to apportionment without clear findings of fact in relation to loss (and cause of loss) is a hypothetical exercise that would stretch the bounds of the possible.
I note that the second defendant submitted that any damages could be apportioned between Mrs Wu, Ms Angela Wu, Mr Tiirikainen and Mr Perkins and that Mr Perkins was the least responsible (if responsibility had been established).
In relation to laches, counsel for the second defendant submitted that the equitable claims against the second defendant would be barred by the operation of laches. Given my findings above in relation to the Limitation Act, there is no need to consider the issue further.
Summary of findings in relation to claim against the second defendant
In conclusion I am satisfied, in relation to the claims brought against the second defendant, that:
(a)The plaintiff has not established that the second defendant was in a solicitor/client relationship.
(b)The plaintiff has not established that the second defendant owed the plaintiff a duty of care.
(c)The plaintiff has not established the second defendant was in a fiduciary relationship.
(d)In any event, even were there any duties, I am not satisfied there was any breach by the second defendant.
(e)I am further not satisfied, given my findings in relation to the first defendant, that the plaintiff suffered any damage.
(f)I am not satisfied that any facts were concealed from the plaintiff.
(g)In the alternative, I am not satisfied the second defendant was party to any concealment.
(h)As such, the claim against the second defendant would be, in any event, barred by the operation of s 11 of the Limitation Act.
Overall summary
Overall, as is clear from my findings above, I am satisfied that Mr and Mrs Wu made joint decisions regarding their property. In making those decisions, they made a deliberate choice to direct their assets in favour of Ms Angela Wu. That is the only finding that is consistent with the overall pattern of property transactions and the testamentary intention of Mr Wu. That finding is also consistent with Mr Wu’s evidence that he “would have” made the gift at the relevant time but has now changed his mind due to subsequent conduct of Ms Angela Wu. While, on one view, the divestment of assets wholly in the favour of one daughter is unfair, that is not a matter relevant to the legal tests the Court can apply to this case. The law provides no remedy for regret.
Overall conclusion and orders
I will make a declaration in the following terms: The Court declares that the plaintiff has a right to reside at the property at the O’Malley residence for the remainder of his life, or until he no longer desires.
Otherwise, the plaintiff’s claim against the first and second defendant will be dismissed.
The usual order for costs is that costs follow the event. The parties would usually have 14 days from the date of reasons to indicate if they seek a different order as to costs. I will also permit the parties to provide a short written submission if they seek any orders consequential to the declaration I have made regarding the plaintiff’s right to reside in the O’Malley residence.
Given the date of these reasons for judgment, I will make orders in the following terms:
(a)The Court declares that the plaintiff has a right to reside at the O’Malley property for the remainder of his life, or until he no longer desires.
(b)The plaintiff’s amended statement of claim against the first and second defendant be otherwise dismissed.
(c)The parties are to indicate by email to my chambers by 4.00pm on 16 January 2022 if they seek any order other than the usual order as to costs.
(d)Any such email may include a short written submission limited to two pages in length addressing the issue of costs and any consequential orders that party seeks following the declaration made regarding the plaintiff’s right to reside at the O’Malley property.
(e)If any submissions are received seeking a different order as to costs, any party may provide written submissions limited to two pages in length in reply. Any such submission is to be emailed to my chambers by 4.00pm on 23 January 2022.
(f)If no email is received seeking a different costs order, the plaintiff is to pay the first and second defendants’ costs of and incidental to the proceeding on the usual basis.
(g)Subject to any further order or direction, any outstanding issues are to be decided on the papers.
| I certify that the preceding two-hundred and fifty-nine [259] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Justice Loukas-Karlsson. Associate: Andrew Ray Date: 21 December 2022 |
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