EQUITY - presumption of advancement - mother causes property to be purchased jointly with son - evidence insufficient to rebut presumption
Cases Cited: Calverley v Green [1984] HCA 81
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Catchwords
EQUITY - presumption of advancement - mother causes property to be purchased jointly with son - evidence insufficient to rebut presumption
Cases Cited: Calverley v Green [1984] HCA 81
Judgment (9 paragraphs)
[1]
Solicitors:
Sydney Solicitors - for the first and second plaintiff
Phoenix Attorneys - for the defendant
File Number(s): 2017/191734
[2]
Introduction
The plaintiff and the defendant are sons of the late Mui Ly who died in October 2016. The dispute between them relates to the ownership of a property that their mother caused to be purchased in 1984 in the joint names of herself and the defendant. The title records them as being joint tenants.
The plaintiff is the sole beneficiary of the mother's will. The will provides that he should receive the mother's 'entire estate'. If the estate does not include the property, there will be almost nothing for the plaintiff. He contends that the presumption of advancement in favour of the defendant should be rebutted; that I should infer that the mother did not intend the defendant to have a beneficial interest in the property; that the defendant was a mere nominee; and that the defendant should not take the whole of the property in accordance with the right of survivorship following the mother's death.
The applicable legal principle in circumstances such as these is well-known and well understood: Calverley v Green [1984] HCA 81; (1984) 155 CLR 242. The principal witnesses were the four children of the mother - the plaintiff and the defendant (born in 1969 and 1965 respectively), their older brother, Cun Tac (born in 1956) and their younger sister Nikki (born in 1975). They were all born in Vietnam, of Chinese heritage and came to Australia as refugees.
I have treated the uncorroborated evidence of each of them with reserve. I was not convinced that any of them was entirely reliable on the essential questions. The plaintiff and the defendant each had a vested interest in the outcome and gave competing and irreconcilable accounts. Nikki clearly had an animosity toward the plaintiff and wished to help the defendant. While the eldest son, Cun Tac, wished to support the plaintiff.
In a case such as this, the more reliable evidence is the undisputed objective evidence of the events that occurred; the context and sequence in which they took place; and the inferences, having regard to the probabilities, that follow from those events. Only then is it useful to have regard to the contentious assertions of each of the children. Their evidence will be more or less probative depending on the extent to which it is consistent with the inferences to be drawn from the objective facts, their sequence and context and the overall probabilities: State Rail Authority of NSW v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; (1999) 73 ALJR 306; Papas v Co [2018] NSWSC 1404 at [56]-[61].
In addition, all of the principal witnesses gave evidence that the mother said certain things. Such evidence can sometimes be particularly unreliable. As I said in Wilcox v Wilcox [2012] NSWSC 1138 at [10]:
… the need for caution is even greater in relation to uncorroborated statements attributed to a deceased person where the deceased is, or would have been, the only person in the world capable of rebutting the accuracy of what is attributed to him or her. Here again, self-interest is an important factor reinforcing the need for caution and sometimes scepticism. A recent statement of this principle was made by Brereton J in Ashton v Pratt (No 2) [2012] NSWSC 3 at [18]:
In the case of a claim against a deceased estate founded on the oral utterances of the deceased, which only the deceased could have denied, the court scrutinises the claimant's evidence closely (Plunkett v Ball (1915) 19 CLR 544 at 548-549 (Isaacs J); Bovaird v Frost [2009] NSWSC 337, [45]; Varma v Varma [2010] NSWSC 786, [418]-[422]), and although there is no absolute legal requirement for it, ordinarily looks for some corroboration (Re Hodgson (1886) 31 Ch D 177; Weeks v Hrubala [2008] NSWSC 162, [20] (Young CJ in Eq)).
See also Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 at 789 (McLelland CJ in Eq).
[3]
The Purchase
Some facts are undisputed or capable of ready inference. The property was purchased in December 1984 for the price of $63,000. The transfer is dated 14 December. It describes the mother and the defendant as joint tenants. They had earlier jointly executed a mortgage in favour of NSW Building Society Limited to secure the sum of $30,000. The mother provided the balance of the purchase price.
She had accumulated savings of at least $30,000 to $35,000, which she kept in cash. Cun Tac's wife asserted that it was $40,000 (and that she had actually counted most of it when her mother-in-law was not looking). The savings came from the mother's wages, board paid by lodgers, board paid by those of her own children who were in paid employment and were living at home, a government allowance including a form of widow's pension following the death of her husband in March 1983 and from contributions by the defendant.
The mother and the defendant together consulted a solicitor in relation to the purchase. His name is Duc Wai Lee but he appears to have since died. It is reasonable to assume that the solicitor explained to the prospective purchasers the meaning and significance of a joint tenancy. That would be normal practice. There is no warrant for inferring otherwise. I have no rational basis for assuming that the solicitor was so incompetent that he did not do so. For what it is worth, the defendant says that he was present and witnessed a conversation between his mother and the solicitor. Given the terms of the documentation prepared by the solicitor, the conversation accords with the probabilities. It was to this effect:
Mother: I want you to write up the contract so that when I die the property goes to this son because he has given up his education to work for the family. My other children will have the benefit of an education that this son will miss out on.
Solicitor: What you want is joint tenancy, this means that if you die first the property goes to this son and if this son dies first the property goes to you.
Mother: 'That's right'.
[4]
The Defendant
The defendant was nineteen years of age at the time of the purchase. He had attended Newtown Boys High School but dropped out either in 1982 when his father became sick and could no longer work or in 1983 when his father died. He started working part-time in 1980, while he attended school. He gave his meagre earnings as a kitchen hand to his mother, as might be expected in the family's particular circumstances.
And he continued to give his mother most of what he earned as he worked more shifts in the Chinese restaurant where his mother was also employed. He says that when his father could no longer work, he was earning $230 per week while his mother earned $180 per week. Cun Tac, who is very experienced in the industry, suggested that the defendant had overstated the amount of his earnings and his correlative contributions to the household. That is quite possible but there is no way of being certain.
However, nothing turns on the precise quantification of the defendant's contributions to the household prior to the property purchase. Correctly characterised, the moneys were intended by the defendant to be a gift to his mother, reflecting filial loyalty, duty and gratitude in return for the provision by her of a roof over his head, food, clothing and emotional and material support. The proper conclusion is that the mother's savings by the time of the purchase of the property were her own - the product of her thrift and good husbandry, to which the defendant, among others, had contributed.
The mother sought to purchase the property in order to provide security for the family following her husband's recent death. The reason why she chose the defendant to be her co-owner is at the heart of the matter. It was to enable her to obtain a mortgage and raise the balance of the purchase price. No one else could help her. Further, she wanted the defendant to be her joint borrower and co-owner as a form of security to ensure that the loan could be paid off. She was getting older, she had lost her husband and her life had been hard. I accept the likelihood that she and the defendant had a conversation to this effect:
Mother: I will work as much as I can but you are younger and you will need to make sure that we make enough money to pay it off.
Defendant: I am able to work hard and I will make sure that I make enough money to pay off the loan.
As I said, no other child was in a position to assist the mother. The two youngest children were minors and Cun Tac and his wife were otherwise financially committed. As things turned out, mother and son both worked hard in the restaurant and the defendant continued to contribute as much as he could, knowing that the mother was regularly attending to the payment of the mortgage. By February 1989 she was proud to say that the mortgage had been paid off.
[5]
The Plaintiff
During most of the 1980s, while the mother and the defendant were working in the same Chinese restaurant and putting their wages (or a substantial amount of them) toward repayment of the mortgage, the plaintiff attended school at Homebush Boys High then Dulwich Hill High School. In 1988, he repeated the Higher School Certificate at TAFE and matriculated. He was the first and only child of the family to do so. And in 1989, he enrolled in a Bachelor of Arts degree at the University of Newcastle and moved out of home.
The mother was proud of the plaintiff and it seems likely that she provided some financial assistance to him while he was a student. The plaintiff remained in Newcastle until the end of 1994 but did not complete his degree. In 1995 he moved home, commenced work in the tourism industry and obtained a Certificate in Advanced Travel & Tourism Operations from the Sydney Business & Travel Academy. He describes his occupation as 'travel agent'. He has not married nor purchased property and remained with his mother until her death.
While the plaintiff was in Newcastle, the defendant and Nikki, the youngest child, lived at home with their mother. In 1992 Nikki left home. The defendant continued to live with his mother, became romantically attached to one of the boarders in the family home and married her. They had a son but continued to live with the mother until 1995, when they purchased their own property. After he returned from Newcastle, and for the next twenty years, the plaintiff and his mother lived together in the property, presumably with boarders from time to time. The other three children (Cun Tac, the defendant and Nikki) progressed independently in their respective lives.
[6]
The Will
In September 2011, when she was seventy-eight years of age and had ceased to work, the mother made a simple will, leaving her entire estate to the plaintiff if he survived her. Apart from some cash and jewellery, the only property in the estate was the home, which was unavailable for distribution to the plaintiff by reason of the joint tenancy.
It is possible that the passage of time had dimmed the mother's memory; that she had forgotten that the property was held in a joint tenancy; and did not remember the explanation and advice apparently given by the solicitor who acted for her on the purchase, Duc Wai Lee. However, two solicitors witnessed the will - Frank Ngo and May Ho. And a note from their file was in evidence. The note referred explicitly to the property by folio reference and address.
The natural inference is that in giving instructions for her will, the mother told the solicitor that she owned the property. If the solicitor had followed normal practice, he would have undertaken a search to confirm the title details of the property, the correct folio reference and the nature of the mother's ownership. Once again, there is no rational basis for inferring a failure to follow normal practice. The solicitor was not called, although available. He could not have failed to recognise that by reason of the joint tenancy the property would not be included in the mother's estate on her death.
From the plaintiff's perspective, he said that he did not know anything about his mother's will, or its content, at the time. In fact, his evidence was that in the last months of her life, his mother said to him from her hospital bed:
Tu Thanh and I have agreed that the house will be yours, Tuky, when I die.
This does not assist the plaintiff. Rather, it is consistent with the defendant's case. It implies a recognition by the mother of the defendant's interest in the property and the consequential necessity for her to obtain the defendant's agreement to the plaintiff receiving the property when she died. It suggests that, in the mother's mind, the defendant was not a mere nominee. It is further evidence supporting the inference that the mother's intention at the time of purchase in 1984 was that the joint tenancy should operate in accordance with its terms; and that the defendant was intended to be a beneficial owner of the property.
I should add however, that if the evidence of what the mother said to the plaintiff in hospital is correct, it is regrettable that the defendant has not seen fit to comply with his mother's wishes. But that is a moral issue, not a legal one.
[7]
Later Events
The evidence traversed some later events but they do not detract from the weight of the evidence favouring the defendant. In late 2015, the defendant became aware that his name was incorrectly recorded on the certificate of title. His evidence was that he told his mother; that they visited a solicitor name Kelvin Lo; that the solicitor corrected his name on the register; that a new certificate of title was issued; and that the mother told the defendant that 'I think you should hold it from now on'. These events clearly occurred although I cannot be confident about the asserted conversation with the mother. Kelvin Lo was not called.
However, nothing turns on this evidence. It merely demonstrates that the defendant, (and perhaps his son who first alerted him to the problem), was mindful of his legal rights. The same applies to events in June 2016, as the mother's health deteriorated. The defendant caused a caveat to be lodged on the title. It accurately described the claimed estate or interest as follows:
The Caveator has purchased this land as joint tenant with Ms A Mui Ly and became registered proprietor in or about 1983. The name was wrongly put as Du Thanh Duong on the Certificate of Title in 1983 and was corrected to be Tu Thanh Duong on 9 December 2015.
There is nothing sinister about the fact that the defendant went to a different solicitor to prepare the caveat. I accept his evidence that Kelvin Lo said that a caveat was not necessary in the circumstances - which was true. But the defendant was understandably concerned to do everything he could to ensure that he received the full benefit of the interest which his mother had originally intended that he receive.
Regrettably, what appears possible is that the defendant's motivation to lodge a caveat arose because he became aware that, in the last months of her life, his mother may have expressed a wish that the plaintiff should have the property - or that the plaintiff was seeking to persuade her of his entitlement. After all, the plaintiff was the youngest son, he was unmarried and owned no property; and he had lived with his mother since returning from Newcastle in 1995. The defendant, on the other hand, had made a success of his life, had a wife, two adult sons and owned several properties. I should emphasise however that the evidence is not conclusive that the mother changed her mind in 2016, but even if she did, it was of no legal consequence. The issue turns primarily on the mother's intention at the time of purchase of the property in 1984: Calverley v Green at 251-2 per Gibbs CJ; at 261-2 per Mason & BrennanJJ.
[8]
Conclusion
For the reasons that I have explained, I am quite satisfied that the mother's request to her son that he be her joint purchaser and borrower, and that they hold the title together as joint tenants, was not an 'empty formality'. I have concluded that at the time of purchase the mother intended that the defendant have a beneficial interest in the property. The evidence is not sufficient to suggest otherwise. The plaintiff has failed to rebut the presumption of advancement.
I have not overlooked Nikki's evidence of two conversations with her mother in which the mother purportedly referred to what Nikki contended was the Chinese concept of joint tenancy known as 'cheung meng kay'. However, without corroboration and formal translation, I do not regard this as a reliable foundation for reaching a conclusion. And it is not necessary to do so as the evidence as a whole was convincing without it.
[9]
Orders
I therefore make the following orders:
1. Summons dismissed.
2. Plaintiff to pay defendant's costs.
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Decision last updated: 16 November 2018