IN DE BRAEKT -v- POWELL [2007] WASCA 55 (14 March 2007)

IN DE BRAEKT -v- POWELL [2007] WASCA 55 (14 March 2007) - WASCA 2007 case summary — Zoe

[13]

(a) Listed her Lathlain Park property for sale.

(b) At the request of the Defendant, reduced the asking price for her Lathlain Park property.

(c) At the request of the Defendant changed real estate agents handling the sale of her Lathlain Park property.

(d) Decided not to invest any part of the proceeds of the sale of her Lathlain Park property in the purchase of another block of land.

(e) Provided financial assistance to the Defendant at a level much more generous than she would otherwise have done but for the promise made to her by the Defendant.

(f) Was more generous to the Defendant than she otherwise would have been and would have set aside money for future purchase of land or made future provision for her own security.

(g) Made numerous and regular gifts to the Defendant in the way of purchase of household goods, groceries, apparel, mobile phone, hardware items, gardening and pool products, and provision of spending money, more expensive birthday, Easter, Mother's Day and Christmas gifts, and entertainment, estimated at not less than $50.00 per week.

(h) Paid to the Plaintiff's father and the Defendant until 22 July 1989 and thereafter to the Defendant varying amounts by way of contribution to the costs of the Victoria Park property and in lieu of the monies which the Plaintiff would otherwise have been paying by way of mortgage and by way of contribution for child minding and cleaning services provided by the Defendant to the Plaintiff at the Plaintiff's request.

(i) Paid fortnightly amounts to the Plaintiff's father and the Defendant, and to the Defendant after July 1989, for childcare, household and other services provided to the Plaintiff by the Defendant and by way of contribution to the costs of the Victoria Park property in the amount of [$154,483.33] ...

of which the Plaintiff estimates that the value of child minding and cleaning and other support services provided by the Defendant to the Plaintiff was $86,908.33 and $67,575.00 by way of contribution to the costs of the Victoria Park property.

(j) The Plaintiff would not have continued to pay to the Defendant the sums of money referred to in sub-paragraph (i) which sums included payments by the Plaintiff to the Defendant for child minding and house cleaning services.

(k) Expended in excess of $8,000.00 updating the fixtures and fittings in the upstairs area of the Victoria Park property between December 1984 and mid 1985 ...

(l) Expended in excess of $10,000.00 from mid 1985 until February 2004 on further improvements of the Victoria Park property ...

(m) Paid approximately $6,881.00 for half of the land and water rates for the Victoria Park property from 1985 until February 2004.

(n) Paid approximately $3,128.00 on RAC building insurance for the Victoria Park property for the period from May 1995 to May 2003.

(o) Paid for the monitoring (in excess of $2,376.00) and operation of both the upstairs and downstairs alarm systems at the Victoria Park property from August 1999 to March 2004 (excludes downstairs for last year of period).

(p) The Plaintiff and the Defendant jointly purchased a motor vehicle in March 1996. Thereafter the Plaintiff spent in excess of $13,000.00 on maintenance, repairs and running costs on the vehicle, whereas the Defendant spent less than $3,000.00.

(q) Occupied the upstairs portion of the Victoria Park property which afforded the Plaintiff very little privacy for a period of over 19 years.

(r) Provided services to the Defendant including clerical and administrative assistance, financial, emotional and physical support and security.

(s) Was readily available to assist the Defendant as and when required by her.

[25]

The basis of the plaintiff's relief against the defendant is in the form of a declaration or equitable compensation on the basis that she is a beneficiary of an express trust or a constructive trust.
If the basis for relief is that the plaintiff is a beneficiary of an express trust has that been abandoned by the filing of the amended statement of claim? It is accepted that an express trust is referred to in the endorsement of the claim but it is submitted it is not referred to in the statement of claim.
If the only claim is for relief by way of a constructive trust then the claim is statute barred and consequently will be dismissed under O 16 r 1 or struck out pursuant to O 20 r 19.
If the claim is that the plaintiff is the beneficiary of either an express or constructive trust then the claim is defeated by the doctrine of laches.
As to the issue of the express trust the defendant makes the following submissions:
1. The plaintiff has abandoned her claim.
2. Alternatively, even if the claim has not been abandoned it cannot be maintained by virtue of s 34 of the Property Law Act which has not been complied with, and
3. The nature of the relief sought can only relate to a constructive trust and not an express trust.
As to the first point counsel for the defendant concedes that the writ of summons refers to an express trust as is evident when one examines the document. It is submitted when one goes to the statement of claim it does not plead sufficient facts to identify that [sic] creation of a trust and then the subsequent breach of the trust. Further, when you look at the prayer for relief it is said that although it refers to a trust the statement of claim does not refer to an express trust.
In support of his argument counsel for the defendant referred to Renowden v McMullin & Ors [1970] HCA 24; (1970) 123 CLR 584 ...
... It is true the statement of claim makes no reference to an express trust nor does it mention a constructive trust. It simply refers to a trust.
Whilst I accept the statement of claim does not specifically refer to an express trust that is not the same thing as omitting all mention of a cause of action or a claim for relief of that nature. Having said that, if such a claim for relief is intended to exist under the current pleading it is not particularly clear.
The second point put forward by the defendant is that pursuant to s 34 of the Property Law Act 1969 any express trust should be evidenced in writing and there is no plea to this effect.
Thirdly, it is submitted by the defendant that on the facts pleaded it would not be open to a court to find that an express trust exists. I consider this argument has some force. It is further submitted that the facts could only support a constructive trust which the defendant submits is statute barred. Counsel for the defendant accepts that if the trust were an express trust the Limitation Act 1935 would not apply by virtue of s 25(2) of the Supreme Court Act 1935. With that I would agree. He then argues that s 25(2) of the Supreme Court Act 1935 does not affect the operation of limitation periods with respect to constructive trusts and therefore s 47(1) of the Limitation Act 1935 would apply and that any exceptions contained in that section do not apply in this case.
Whether or not a limitation period would be relevant would depend on the period from when it would run. The plaintiff argues any time would run from the alleged breach of the promise by the defendant. But the defendant argues that the cause of action does not rely upon any breach but rather relies upon the creation of an equity based upon alleged promises, alleged detriment and alleged reliance and as a consequence the equity arose in 1984 and not in March 2003 as is alleged by the plaintiff. The plaintiff submits the reliance and the detriment are continuing and that is the way the case is pleaded. This, in my view, is an issue which is not clear and not appropriate to be dealt with summarily.
The defendant further argues that a constructive trust claim may be commenced without there having been an alleged breach. As a general proposition I think such an argument is open but that is not necessarily an end to the matter. ...
It seems to me to be at least open to argument on the facts of this case that if the Court finds there is a constructive trust it can modify the prima facie date upon which the trust takes effect.
The defendant further argues that if s 47 of the Limitation Act 1935 does not apply then in a suit in equity it will be applied by analogy. ...
I do not consider the state of the law is as clear as counsel for the defendant would argue and in my view, it would not be appropriate to deal with the question of the application of any limitation period to the pleaded facts in a summary way. ...
In these circumstances, I do not consider it just to enter judgment at this interlocutory stage nor to strike out the statement of claim. This is a case which requires the facts to be aired to enable the Court to do justice between the parties.
As to the question of [the] doctrine of laches I do not think it is appropriate to deal with this at this interlocutory stage. One of the issues to be considered will no doubt be the question of when the cause of action arose. For the reasons I have already expressed I do not consider that question is clear and [it] ought not be determined at this stage. It follows that the question of the doctrine of laches should also await the trial of the action when all the relevant facts can be considered and justly disposed of."

[52]

I am a 79 year old widowed, aged pensioner.
My only asset is my home of 46 years (located at 21 King George Street, Victoria Park), which my late husband and I built together. I have no savings or other sources of income, other than my aged pension in the amount of $515.00 per fortnight.
My home and only asset is the subject of the proceedings taken against me (CIV 1661 of 2004) by the Plaintiff - my estranged daughter.
In late 2004 my previous solicitors, - Fiocco Lawyers, at my and my Attorney's instruction, lodged a Chambers Summons for summary dismissal of the Respondent's alleged claim against me, on the basis that the cause of action had expired under section 47 of the Limitation Act 1935.
On 13 January 2005 the abovementioned Chambers Summons came before Master Chapman for hearing, and the hearing went for about 2 hours.
The Master reserved his decision.
On 15 February 2005 Master Chapman delivered his decision, which was a dismissal of the application. No costs were awarded.
I was very disappointed by this and discussed the matter with my Attorney and then solicitors - Fiocco Lawyers, about 10 days after Master Chapman delivered his decision. I would have discussed it sooner but my solicitors were absent on interstate business.
I was advised that Master Chapman had made an error of law in his reasons for decision, which if he had not made, would have resulted in the Respondent's claim against me being dismissed due to its expiration under section 47 of the Limitation Act 1935. I then immediately instructed my previous solicitors to lodge an appeal against Master Chapman's decision. I repeated my instructions to my previous solicitors, to appeal Master Chapman's decision, on at least 2 further occasions during the period between 10 and 20 days after the delivery of Master Chapman's decision.
In early March 2005 I spoke with my previous solicitors again, and was very disappointed to learn that they had decided not to appeal Master Chapman's decision because very few appeals on summary dismissal applications were successful, the appeal period had now anyway, expired, and because we could run the time limit argument again at trial.
I was very unhappy about an appeal not being lodged, but felt powerless as I did not want to have a falling out with my solicitors.
I had instructed and explained to my solicitors to take an appeal because it was in my best interest to have the time limit issue dealt with as soon as possible, rather than have to go through the whole litigation process (which I simply cannot afford and which is having a very detrimental effect on my health and quality of life) and then have the Court decide that the Respondent's claim had expired more than 14 years ago. I am 79 years old, and I am simply not able to spend years of my life under the constant stress and trauma of litigation, especially when I may not have very many years left. Therefore even if there was only a small chance of success, it was worth it in my case.
If I could read and write English well (it is my second language), and had a decent education, I would have lodged the appeal myself, but I had no hope of being able to do that.
In late August 2006, $30,000.00 I had obtained through a personal loan had long run out, and I owed Fiocco Lawyers at least another $30,000.00 in legal fees. Because the Respondent has an absolute caveat over my only asset (my home) I cannot raise any more funds for my defence, and I have no savings. The only way I can raise funds is to obtain a reverse mortgage over my home, but I cannot do this with the absolute caveat over my property. I had also repeatedly instructed Fiocco Lawyers, from when I first engaged them in August 2004, to take urgent action to have the caveat removed from my property, however this was not done. I was powerless.
In late August 2006, I engaged my Attorney (Ms Megan in de Braekt) to be my solicitor in these proceedings. Soon after this, I spoke with my newly appointed solicitor about an appeal of Master Chapman's decision. I was advised that it is possible to lodge an appeal after the appeal period had expired. I was also advised that my ground of appeal had a strong prospect of success.
In mid-September 2006 I accordingly instructed my newly appointed solicitor to lodge an appeal against Master Chapman's decision, which she has duly and promptly done.

[62]

"Early statutes of limitations were restricted to actions at law, but equity developed a doctrine of analogy, according to which it would apply the common law limitation period to an analogous proceeding in equity in order to prevent plaintiffs at law from avoiding the statute by disguising their claims as equitable (Smith v Clay [1767] EngR 55; (1767) 3 Bro CC 646n; 21 ER 895. See H A J Ford and W A Lee, Principles of the Law of Trusts (1983), p 790ff). The application of the statute to equitable claims was qualified by several rules, including the rule that time would not run against a defendant unless his interest was vested in possession. In applying this doctrine of analogy to trusts, Chancery distinguished between express and constructive trustees. In proceedings brought by a beneficiary against an express trustee, the trustee could not rely on the application of the statute by analogy, because his possession of the trust property was possession on behalf of rather than against his beneficiaries (Life Association of Scotland v Siddal (1861) 3 De GF and J 58; [1861] EngR 300; 45 ER 800; Soar v Ashwell [1893] 2 QB 390; Taylor v Davies [1920] AC 636 at 650 - 651 (PC)). In contrast, a constructive trustee was treated as similar to a tortfeasor, and time was allowed to run in his favour (Soar v Ashwell [1893] 2 QB 390, and cases there cited). The Trustee Act of 1888 (Eng) altered the law by extending the statutory protection to an express trustee other than a trustee who had committed or was privy to fraud or had retained or converted trust property. The Legislature's attempt in the same Act to place constructive trustees on the same footing as express trustees was unsuccessful (Taylor v Davies [1920] AC 636; Clarkson v Davies [1923] AC 100; Queensland Mines Ltd v Hudson (1976) ACLR 176), though a degree of prevarication was introduced over the use of the labels 'express' and 'constructive' (See esp. Soar v Ashwell [1893] 2 QB 390 at 393 per Lord Esher MR, at 396ff per Bowen LJ, at 405 per Kay LJ; Cohen v Cohen [1929] HCA 15; (1929) 42 CLR 91 at 100 per Dixon J).

It was obviously necessary for Chancery, both before and after the 1888 Act, to develop a distinction between those express trusts which were not protected by the limitation period, and those constructive trusts which were. Unfortunately, no coherent test emerged. ..."

[67]

"13.28 It has been seen that the pre-1888 law made several distinctions between express and other kinds of trustees. It is not altogether clear to what extent the English Trustee Act 1888 applied to express trustees. The provisions of the English Judicature Acts of 1873-75 expressing the general rule that equity prevails over the common law had provided that no claim of a cestui que trust against his trustee for any property held on an express trust, or in respect of any breach of such trust, should be held to be barred by any statute of limitations ((UK) Supreme Court of Judicature Act 1873 s 25(2)). However the 1888 Act defined 'trustee' to include an executor or administrator and a trustee whose trust arose by construction and implication of law as well as an express trustee ((UK) Trustee Act 1888 s 1(3)). The Wright Committee Report in 1936 suggested that the 1888 Act probably intended to do away with the distinction between express and other trustees, but that the problem remained that the exceptions apparently did not apply to a constructive trustee, such as an executor or administrator, so allowing such trustees to plead the statute even though they had retained the property or converted it to their own use (Wright Committee Report (1936) para 11). In the years after 1888, the courts sought to modify the effect of this rule by giving a wide meaning to 'express trust', so as to bring most cases of fiduciary relationship within the exception (See eg Soar v Ashwell [1893] 2 QB 390, Bowen LJ at 395 and 398, and authorities there cited; Re Eyre-Williams [1923] 2 Ch 533). It appears that the position was the same in Western Australia: the Judicature Act provision was copied in the Supreme Court Act 1880 (s 8(2)), and the Trustee Act provision in the Trustees Act 1900 (s 13. The definition of 'trustee' was incorporated in s 3).

13.29 The more recent history of these provisions in Western Australia is somewhat unfortunate. In 1935 the present Supreme Court Act replaced the 1880 Act. The Judicature Act provision was reproduced, prefaced by the words 'Except as provided by the Trustee [sic] Act, 1900 (s 25(2))'. It was proclaimed to commence on 1 May 1936. However, the Limitation Act 1935, which was presumably being drafted at the same time, reproduced the trusts provisions of section 8 of the English Trustee Act 1888 in section 47. The Limitation Act was proclaimed to commence on 9 April 1936 and did not repeal the provision in the Trustees Act 1900. Thus, between 1 May 1936 and 1 January 1963, when the Trustees Act 1900 was replaced by the Trustees Act 1962, there were two sets of limitation provisions for trusts, in different Acts. Until the most recent reprint, the Judicature Act provision in the Supreme Court Act 1935 read 'Except as provided by the Trustees Act 1962', but unfortunately there are no limitation provisions in that Act (Following correspondence between the Commission and Parliamentary Counsel, the reprint of 23 November 1995 reinstated the reference to the Trustees Act 1900)."

[74]

"Insofar as the appellant's claim can now be seen to be founded in the breach of the express trust constituted by s10 of the Guardianship of Children Act, the rule in Taylor v Davies has no operation, so that the claim is within the exception mentioned to s 47(1). Hence it is not statute barred. Even if it were precluded by s 47(1), the claim might nevertheless be pursued and relief granted by virtue of s 25(2) of the Supreme Court Act 1935. The Limitation Act, including s 47(1), was enacted by Act No 35 of 1935 which received Assent on 7 January 1936 and came into force on its proclamation on 14 April 1936. The Supreme Court Act was enacted by Act No 36 of 1935, received Assent on 3 April 1936 and came into operation on 1 May 1936. Notwithstanding what had just been enacted by s 47(1) of the Limitation Act, s 25(2) of the Supreme Court Act provided:

'Except as provided by the Trustees Act 1900, no claim of a cestui que trust against his trustee for any property held on an express trust, or in respect of any breach of such trust, shall be held to be barred by any statute of limitations.'

The exception is not relevant for these purposes (although an interesting issue was raised whether today the reference to the Trustees Act should be to the 1900 or the 1962 Act). The Supreme Court Act is clearly the later enactment and the subject matter of s 47(1) and s 25(2) is clearly in part the same. The consequence is that the operation of s 47(1) is necessarily modified or suspended where a case is also within s 25(2); and see Western Australian Trustee Executor and Agency Co Ltd v Tate (1949) 51 WALR 46 at 55 - 6. The present appears to be such a case. Section 25(2) has been recognised as generally reflecting and preserving the general rule of equity which was, statutory provisions aside, that as between beneficiaries and express trustees lapse of time was not a bar: see Beckford v Wade [1805] EngR 116; (1805) 17 Ves 87 at 97[1805] EngR 116; , 34 ER 34 at 38. Before s 47(1) and the statutes elsewhere on which it was based, express trusts were not within the Statutes of Limitation.

In this context it has been held that an express trust means a trust expressed by writing or by word of mouth but does not include a trust arising from act of the parties or operation of law: see Sands v Thompson, Jacobs', par 2225. It appears that it extends also to a trustee whom equity has come to regard as standing in the same position as an express trustee: see Soar v Ashwell [1893] 2 QB 390 cf 393 - 394 and 397 - 398; Cohen v Cohen [1929] HCA 15; (1929) 42 CLR 91 at 99 - 101 per Dixon J.

The trust arising from s 10 of the Guardianship of Children Act is accepted by the parties to be a trust expressed by writing for these purposes and therefore is within the reach of s 25(2). As this is a claim by a cestui que trust against the trustee 'in respect of any breach of' an express trust, it appears to be within the operation of s 25(2) so that it is not 'barred by any statute of limitations'.

While s 47(1) of the Limitation Act, which by s 47(3) applies to express as well as other trusts, was directed to modifying this position, the legislative history of s 47(1) and s 25(2) has denied to s 47(1) its full potential effect."

At a glance

Court

Decision date

Before

Source

Judgment (97 paragraphs)

The time within which an application for leave to appeal should have been made

Application for leave to appeal: applicable principles

Application for an extension of time to appeal: applicable principles

Legislation Cited (18)

Cases Cited (21)