Thomas v Thomas [2010] NSWCA 12 (16 February 2010)

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Thomas v Thomas [2010] NSWCA 12 (16 February 2010)

Last Updated: 17 February 2010

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Thomas v Thomas [2010] NSWCA 12


FILE NUMBER(S):
2009/00298184

HEARING DATE(S):
5 February 2010

JUDGMENT DATE:
16 February 2010

PARTIES:
Kenn Thomas (Appellant)
John Wayne Thomas, Jnr (Respondent)

JUDGMENT OF:
Campbell JA Macfarlan JA Young JA

LOWER COURT JURISDICTION:
Supreme Court - Equity Division

LOWER COURT FILE NUMBER(S):
SC 5835/07

LOWER COURT JUDICIAL OFFICER:
Rein J

LOWER COURT DATE OF DECISION:
27 November 2008


COUNSEL:
M S Willmott SC and R D Wilson (Appellant)
L J Ellison SC (Respondent)

SOLICITORS:
Brazel Moore Lawyers (Appellant)
Shaw Reynolds Bowen & Gerathy (Respondent)

CATCHWORDS:
EQUITY- father's estate claims land in son's name- father and son with very similar names- primary judge dismisses claim- decision on facts upheld- presumptions of resulting trust and advancement of little assistance.

LEGISLATION CITED:


CATEGORY:
Principal judgment

CASES CITED:


TEXTS CITED:


DECISION:
(1) The appeal is dismissed.
(2) The appellant personally to pay the respondent's costs of appeal.



JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 2009/00298184

CAMPBELL JA

MACFARLAN JA

YOUNG JA

Tuesday 16 February 2010

THOMAS v THOMAS

Judgment

1 CAMPBELL JA: I agree with Young JA.

2 MACFARLAN JA: I agree with Young JA:

3 YOUNG JA: This appeal concerns a dispute between the proprietor of real property, and the estate of his late father, as to whether interests in certain property are held by him on trust for the estate.

4 The proceedings were heard by Rein J who determined that there was no trust: the appellant, the administrator of the father’s estate has appealed to this court.

5 The appellant, Kenn Thomas, is the adopted son of the deceased, George Henry Thomas, who was also known as John Wayne Thomas (senior), who died on 3 June 2005 aged 78.

6 The respondent is John Wayne Thomas (junior) the son of the deceased and his then wife.

7 On the appeal, Mr M S Willmott SC and Mr R D Wilson appeared for the appellant and Mr L Ellison SC appeared for the respondent.

8 Originally, the appellant sought determination of a trust in respect of five properties. One of these was conceded, two of the claims were withdrawn, leaving for determination the beneficial ownership of a lock up shop at Kulnura (“the Shop”) and a property in Yorkey Waters Road, Kulnura (“Yorkey Waters”).

9 The case as pleaded was on the basis that there was a resulting trust in respect of the two properties. However, at the trial the further case was advanced that the properties had been acquired by the respondent as “nominee” for the deceased, or the deceased and the respondent as tenants in common.

10 Mr Willmott accepted that his client bore the onus of proof of establishing the deceased’s beneficial interest in each of the two properties.

11 The primary judge noted that, apart from the respondent himself (with whose evidence he did not have the same degree of confidence), he accepted that all the witnesses were honest and reliable, doing the best they could to recollect events that occurred many years ago.

12 The primary judge found that the Shop was purchased on 5 March 1986. The certificate of title records the registered proprietor as “John Wayne Thomas”.

13 The judge accepted evidence that Mr J B Gerathy, solicitor, acted for the purchaser of the Shop. Mr Gerathy was acting for the respondent and only the respondent. The funds for the purchase were supplied by the National Australia Bank by way of a loan of $189,000. The balance, about $20,000, came from the proceeds of an insurance claim made by the respondent over a fire at his property at Binnaway.

14 It would appear that the mortgage was paid out by Cadwell Pty Ltd.

15 There was no evidence of any financial contribution by the deceased to the acquisition of the Shop, nor that he ever paid any rates in respect of it.

16 Mr Willmott submitted that the evidence was “murky” with respect to who owned the Shop because of the dealings of the Shop and Cadwell Pty Ltd,and because of the way in which the respondent over a long period of time permitted the deceased, who was for a considerable period of time the manager of the business carried on in the Shop, to treat it as if it were his own.

17 Cadwell Pty Ltd was a company whose shares for most of its existence up until the respondent’s divorce were held by the respondent and his then wife equally. The deceased was its secretary. Cadwell operated the business at the Shop.

18 After the divorce, the respondent’s mother became the second shareholder and director.

19 Much later, it would appear on the instructions of the deceased to Cadwell’s accountant, the Shop, or its business, or both were removed from Cadwell’s books on the alleged basis that they had been included there by mistake. The respondent would have signed the relevant accounts showing this, but, whether he appreciated the “adjustment” is not established.

20 There is considerable doubt as to how far the conduct of the parties subsequent to the acquisition of the Shop is admissible, or even useful material to consider when considering the beneficial ownership.

21 The facts as found by the primary judge indicated to him that there was insufficient material to support a finding that the deceased had any interest in the Shop.

22 The appellant complains that the primary judge did not adequately consider the facts as to how the respondent allowed the deceased to treat the Shop and its business as if it were his own over a considerable period.

23 In 2003, that is some 17 years after acquisition, the deceased stopped managing the business and wished to lease the Shop to a Ms Karen Green. The deceased negotiated this deal and, indeed, even signed the lease. However, the respondent, on request of the deceased, provided the certificate of title to enable the lease to be registered. The evidence is that the respondent was a little cross that the deceased signed the lease, but did not do anything.

24 The deceased kept the rents from Ms Green up to his death.

25 The primary judge considered this matter, but did not consider that it outweighed the other material. I agree that an event so long after acquisition and which could be explained by family piety was properly treated by the primary judge.

26 I should note that Mr Willmott properly conceded that if his client was unsuccessful with respect to Yorkey Waters, some of his submissions with respect to the Shop would lose much of their force. As will appear, his client was unsuccessful on the Yorkey Waters issue.

27 As to Yorkey Waters, it was purchased in 1971 for $35,000. Yorkey Waters was a property of 100 acres which at all material times up to 1988 had been used as a citrus orchard.

28 The respondent was born on 12 November 1949 and was thus 21 at the time of purchase. The transferee was “John Wayne Thomas (Junior), farmer”. This is clearly the respondent. Although the deceased sometimes used the name “John Wayne Thomas”, the respondent says the deceased always described himself in formal documents as “orchardist” not “farmer”.

29 The background of the purchase was that the respondent had entered into a share farming agreement with the then proprietors of Yorkey Waters Road in 1968.

30 The share farming agreement gave the respondent an option to purchase which, when he realised that the then proprietor was anxious to sell it, he exercised.

31 The respondent concedes that the deceased assisted him with the purchase. The deceased, in support of the loan on mortgage of $31,000 which the respondent and the deceased obtained from a bank, gave a collateral mortgage over a property that the deceased had at Finns Road and also, in 1969, paid half the $3,500 deposit.

32 The mortgages were, in due course, discharged. However, the evidence did not disclose how or by whom they were discharged.

33 In 1971, an “Option to Purchase” agreement was drafted under which the respondent gave the deceased an option to purchase Yorkey Waters should the respondent be in breach of honouring his obligations to the bank. Both parties argued that this document and the fact that it was abandoned before execution favoured their case. I agree with Mr Ellison that it is absurd to give a person an option to buy what is already his beneficial property and that the incident does not reinforce the appellant’s case.

34 The parties found that three relocatable houses on land that was being resumed could be removed onto Yorkey Waters. According to the respondent they were merely “plonked” on Yorkey Waters without any council approval. This caused subsequent problems which I will refer to later. The deceased lived in one of these houses for many years prior to his death. He lived rent free but did not pay any rates.

35 The appellant says that this occupation reinforces the view that the deceased had a half interest in the property. The respondent says that he permitted the occupation as a matter of family piety. The primary judge noted that there was no cross-examination of the respondent on this claim. I agree with the primary judge that that lastmentioned fact means that the point does not have significance in the appellant’s favour.

36 A major matter relied on by the appellant was that the respondent in his divorce settlement with his former wife, did not list either the Shop or Yorkey Waters, as part of his property.

37 This so-called “admission” was much weakened by the fact that the respondent’s former wife gave evidence in the respondent’s case that she knew of these properties and accepted that they belonged to her husband. Although strongly pressed on this point in cross-examination, she reaffirmed that she knew that the respondent had always said he owned Yorkey Waters.

38 Thus, the primary judge was not satisfied that the appellant had established his case.

39 There is considerable discussion in the judgment of the principles of resulting trust and the presumption of advancement. However, on the meagre material presented by the appellant, it may be unnecessary to consider these. There was no evidence that the deceased had made any financial contribution to the acquisition of the Shop. What help he gave with the acquisition of Yorkey Waters was equally likely to be a result of him wishing to assist his 19-21 year old son as with any other possibility.

40 The primary judge seemed to consider that, were it not for the presumption of advancement, there would have been a resulting trust with respect to Yorkey Waters. The respondent has filed a notice of contention challenging this “finding”. I do not consider this was a finding in any formal sense. I agree that it is not a step that need be taken. The facts made it doubtful whether there was any need to apply any presumption: if it was necessary, it was only appropriate to consider the presumption of advancement.

41 The present case does not call for me to write yet another judicial essay on the presumptions of resulting trust and advancement and it would merely complicate matters to do so.

42 The appellant’s submissions alleged three major errors on the part of the primary judge, viz: (1) he allegedly failed adequately to consider the failure of the respondent to refer to the two properties in his family law settlement; (2) his Honour failed to consider the correspondence between the vendor of Yorkey Waters and the Messrs Thomas in 1969; and (3) he failed to give sufficient weight to the deceased’s long residence on Yorkey Waters and the way in which the deceased appeared to treat the properties as his own.

43 As to the first, which I have already considered, in my view the primary judge did consider the matter in sufficient depth.

44 As to the second matter, the primary judge did not refer to this correspondence. However, a trial judge does not have to refer to every pieces of the evidence. He adequately covered the circumstances of the acquisition of Yorkey Waters. In any event, the correspondence could not outweigh the other aspects of the transaction particularly the fact that ultimately title was taken in the respondent’s sole name.

45 As to the third matter, his Honour considered it and noted that there was no cross-examination of the respondent on his explanation that the deceased’s occupation was a matter of family piety.

46 An additional point on this third matter is that in 1984, the deceased made a development application to the local council in respect of removal of one of there locatable homes from Yorkey Waters. As I noted earlier, the homes hade been placed on Yorkey Waters without council permission. It would seem that the respondent and the deceased were seeking to retain two of the homes and remove one, all with the council’s approval, to remedy their problem.

47 The deceased signed the development application as owner. The respondent was well aware of what was happening, though does not appear to have appreciated that the deceased had signed papers as owner. In the circumstances, this happening is of little significance.

48 Apart from the signing of papers, the appellant also relies on the way in which the respondent gave evidence as to the running of Yorkey Waters how “we” made decisions and took actions. I do not consider that, with a father and son in circumstances such as the present, this is at all significant.

49 In all the circumstances, I cannot see any reason why the learned primary judge’s judgment should not stand.

50 Thus, in my view, the appeal should be dismissed with costs. As in the order made below, the costs should be paid personally by Kenn Thomas and not just out of the estate of the deceased.

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LAST UPDATED:
16 February 2010