THE COURSE OF THE EVIDENCE
85In the course of the hearing of the proceedings evidence was given by:
(a)each of the first plaintiff, the second plaintiff and the first defendant;
(b)Paul Pentsa, an Elder of the Church (and a member of a related Brisbane congregation) with spiritual oversight over the Church;
(c)John Allanson, the solicitor for the plaintiffs, who also acted on the purchase of the land in 1978;
(d)two members of the congregation who support the plaintiffs; and
(e)Allan Beresford James (the first defendant's accountant, in 2004 an employee of the first defendant), who deposes to having witnessed some documents (of a nature not now recalled by the witness) signed by the first plaintiff, at the business premises of the first defendant, in or about May 2004.
86Neither of the first defendant's sons (the second and third defendants) has given evidence. Their absence from the witness box is unexplained, although it is common ground that they are not members of the Church. In reality, any case advanced on their behalf rises no higher than that of their father.
87It is common ground that any interest they acquired in the land was acquired by them as volunteers.
88Given the nature of the land (upon which a church building is and has been at all material times erected); their residence with their parents, and their involvement in their family's business enterprises, at the time the land was acquired; their father's close connection with worship and other church activities on the land; their lack of any personal connection with either the land or church activities on it; and their father's evidence that he put them on the title to help "protect" the Church, they cannot but have been aware that the land was dedicated to charitable purposes of the Church. I infer that they were, in fact, so aware, from (at least) the time of their acquisition of an interest in the land.
89That inference is the more readily available for their unexplained absence from the witness box; they could have contradicted it, by giving evidence, but they chose not to do so: Jones v Dunkel (1959) 101 CLR 298 at 308, 312 and 320-321.
90There is no suggestion that they acquired their respective interests in the land otherwise than as nominees of their father. On the contrary, in final submissions their counsel described them as "ready emanations" of their father. If he acquired title to the land in his own name in breach of, or subject to obligations as a trustee, they too can comfortably be said to have acquired their interest in the land on the same terms.
91Their counsel invites the Court to find that, if they have any liability (otherwise than as guarantors of the Credit Union mortgage) it must be a liability no more extensive than as volunteers in receipt of trust property according to the principles enunciated in Heperu Pty Limited v Bell (2009) 76 NSWLR 230 at 267-268 [163] rather than by reference to Barnes v Addy (1874) LR 9 Ch App 244 at 251-252.
92It is not necessary, I apprehend, to explore this territory. It is, for present purposes, sufficient to record that, as I have found, the sons were aware that the land was dedicated to charitable purposes of the Church from at least the time of their acquisition of an interest in the land. They granted a mortgage to the Credit Union, to secure a debt they personally owe to the Credit Union, at a time when they must be found to have held the land on a constructive trust for the Church.
93Controversy attaches to the circumstances in which the land was transferred to the first defendant and his sons in 2004. There is a direct conflict in the evidence between each of the plaintiffs (on the one hand) and the first defendant (on the other hand) about how the plaintiffs came to place their respective signatures on:
(a)each of two printed pages in the form of statutory declarations, which currently bear the date 21 May 2004, and together form an annexure to the Notice of Death registered on the title to the land as dealing number AA695222; and
(b)a single printed page headed "Annexure 'A'", itself undated, currently reproduced as "Annexure A" to the Memorandum of Transfer dated 4 June 2004 registered as dealing number AA695223.
94Each of the three signed pages bears the signature of the first plaintiff, the second plaintiff and the first defendant.
95Each signature purports to have been witnessed by Kevin John Perram, purportedly a Justice of the Peace.
96Mr Perram's address is recorded as having been the same address as the first defendant's place of business, at Liverpool, in the western suburbs of Sydney.
97In his affidavit evidence the first defendant deposed to Mr Perram's conduct of a separate business "next door" to his own place of business.
98In his affidavit evidence he also deposed to Mr Perram having died between the time of witnessing the disputed documents and the time of the final hearing. However, in cross examination he conceded that that evidence was incorrect. Mr Perram had not died.
99Nevertheless, Mr Perram was not called to give evidence at the final hearing. Nor did the defendants explain his absence from the witness box beyond noting his vulnerability to criticism for false attestation of signatures as a justice of the peace.
100The first defendant, belatedly, did faintly suggest that Mr Perram suffers from dementia; but that suggestion appears to have emerged only as an expedient, off-the-cuff rationalisation (by way of an excuse) for not calling him as a witness, inconsistent with the first defendant's evidence that Mr Perram told him that, having received a letter about the case from the plaintiffs' solicitor, he was calling the first defendant (by telephone) to ask what the case was about.
101The first defendant's failure, in his evidence in chief, to correct the statement in his affidavit to the effect that Mr Perram was dead, and his account, in cross examination, of his conversation with Mr Perram do not relieve the first defendant and his sons from the burden of a Jones v Dunkel inference arising from the absence of Mr Perram's evidence.
102Each of the plaintiffs denies knowing Mr Perram, or ever having met him, at all.
103There is nothing in the evidence to contradict those denials but for: (a) the form of the disputed documentation, recording Mr Perram as having witnessed the plaintiffs' respective signatures; and (b) evidence of the first defendant's accountant (Mr James) to the effect that, in or about May 2004, at a time when he was employed in the first defendant's business, he saw the first plaintiff sign a number of documents in the presence of Mr Perram, who appeared to sign the same documents.
104The first defendant does not swear that he, himself, saw the first plaintiff sign the documentation in the presence of Mr Perram. He says that he was nearby, but preoccupied by other business, and he left Mr Perram to superintend the first plaintiff's execution of the documentation.
105Mr James' evidence is too thin a reed to be relied upon as a basis for rejection, or even qualification, of the evidence of the first plaintiff. He says that he did not know the nature of the documents that he saw signed by the first plaintiff in the presence of Mr Perram, and it was not any part of his concern to know what was being signed. He was at the first defendant's business premises, as an employee, transacting other business. He is uncertain of the date.
106He had, apparently before this unspecified date "in or about May 2004", met the first plaintiff on a number of occasions at the first defendant's business premises.
107His evidence is altogether too imprecise to be of utility. I do not find him to have been a dishonest witness; but, in the circumstances of these proceedings, I do find his evidence to be unreliable.
108He was predisposed to support the first defendant's case, as he perceived it to be.
109Despite familiarity with the financial circumstances of the first defendant, his family and their business entities, he was quite prepared, in 2004, to accept that, apparently out of nowhere and for no offsetting liability, the first defendant and his sons had fortuitously acquired the Church land as an asset, available to secure their business borrowings, at a time when he was aware that their prospective lender (Community First Credit Union Limited) required an injection of additional security as a condition of approving a financial package to enable them to purchase a new business.
110Conformably with Jones v Dunkel, the first defendant and his sons must bear the burden of an inference that Mr Perram's evidence could not have assisted the case they seek to make.
111The form of the disputed Memorandum of Transfer is consistent with its having been signed by the plaintiffs without knowledge that the signature page, purportedly recording their signatures as transferors of the Church's land, was to be annexed to the, or any, Memorandum of Transfer.
112Following a concession made by the first defendant in cross examination, it is common ground that Mr Perram did not, in fact, witness the second plaintiff's signature. Mr Perram's signature, purporting to be that of a witness to the signature of the second plaintiff, was added to the disputed documentation on a separate occasion, at a later date, in the absence of the second plaintiff.
113The second plaintiff's evidence, and that the first defendant himself, uncontradicted by any other evidence, is to the effect that the second plaintiff signed the disputed documentation, at the request of the first defendant, in Melbourne, absent Mr Perram.
114The form of the disputed documentation, viewed in the context of this evidence, casts substantial doubt on the credibility of the whole of the first defendant's evidence. With apologies to AP Herbert (Uncommon Law (2nd ed, 1969), chapter 5, "Rex v Haddock : Is it a Free Country"), it is like the 13th chime of the clock: not only itself discredited, but casting doubt over all other assertions by the first defendant.
115Independently of that doubt, I prefer the evidence of the plaintiffs as witnesses of truth.
116The first plaintiff's evidence is that he was approached by the first defendant, personally, on two occasions in 2004 which, in retrospect, are material to these proceedings.
117He says that, on the first occasion, the first defendant approached him, personally and unaccompanied, to sign three pages of documentation (now identified as the statutory declarations attached to the Notice of Death recording the deaths of two of the original trustees for the Church, and Annexure "A" to the disputed Memorandum of Transfer) to record on the title to the land notice of the deaths of the deceased trustees. None of those three pages refer to the word "Transfer". None was attached to a Memorandum of Transfer form. Trusting the first defendant, the first plaintiff signed each of the three pages and allowed the first defendant to take them away with him.
118He says that, on the second occasion, the first defendant approached him, personally, to ask whether he (the first defendant) would be able to pay the Church's bills directly instead of making regular contributions to "church dues" (which I take to refer to free-will offerings or, by another name, regular donations, rather than any form of compulsory levy) and its charity fund. He (the first plaintiff) was amenable to that request, which he caused to be put to a meeting of the Church's congregation for approval, and it was approved. These events were, as recounted by the first plaintiff, wholly unconnected with his earlier execution of the disputed Memorandum of Transfer.
119The first plaintiff says, and I accept, that he never intended to sign away the Church's land, or to resign as a trustee for the Church. In his estimation, he remains a trustee.
120His evidence accords with that of the second plaintiff.
121The second plaintiff's evidence is that, in 2004, the first defendant visited him, personally and unaccompanied, at his home in Melbourne, asking him to sign documentation to record the deaths of the two deceased trustees and suggesting to him that he should resign as a trustee of the Church property because he was no longer a member of the Sydney congregation. Trusting the first defendant, he, in the presence of his wife and the first defendant, signed the documentation (the same three pages subsequently presented to the first plaintiff for signature) and returned them to the first defendant.
122He says that, had he known that the first defendant was intending to "remove" the first plaintiff as a Church trustee and as a registered proprietor of the Church's land, he would not have agreed to "resign" as a trustee.
123He says that, his "resignation" as a trustee having been obtained by a misrepresentation made to him by the first defendant, he believes that it was of no effect and, accordingly, that he remains a trustee of the land for the Church. He is, he says, prepared to be confirmed as a co-trustee should the Court so determine.
124On my reading of the evidence, he did not, in fact, resign as a church trustee, but was tricked by the first defendant into signing documents the effect of which was to transfer title to the Church's land out of the names of the surviving, original trustees and, particularly, out of the names of the first plaintiff and himself.
125The first defendant's evidence casts him in the role of a benefactor, and protector, of the Church. He says that, believing that the congregation had difficulty in paying outgoings, he had a conversation with the first plaintiff to the effect that, if the land was transferred into his name, he would pay all the bills for it. He says that that proposal was approved by the first plaintiff, and subsequently brought to fruition through the execution of the disputed documents. He denies having any conversation with the first plaintiff about paying Church bills instead of making contributions to the Church's charity fund, or making other voluntary contributions, however described.
126He says that he has no recollection of ever having attended a meeting of the Church's congregation in relation to any approval for him to pay the Church's bills.
127He says that, after the property had been transferred into the names of his sons and himself, he had a conversation with the first plaintiff, after service on a Sunday, in which, he says, the first plaintiff informed him that he (the first plaintiff) had spoken to members of the Church and they had agreed to transfer of the land to him and his sons.
128The first defendant explains his attendance on the second plaintiff, to procure the second plaintiff's signature on the disputed documentation, by saying that he asked the second plaintiff to sign the property over to him so that it could not be taken over by anybody else (he having in mind the Melbourne congregation or Mr Paul Pentsa, an Elder of the church based in Queensland); he says that he told the second plaintiff that he would "put the property on security so nobody can touch it".
129The second plaintiff denies this conversation, but says that after the property transactions of 2004 came to light in 2010, he did have a conversation with the first defendant in which the first defendant sought to justify the transactions on the basis that "Paul Pentsa our Elder Brother tried to sell the church[;] I have put it into my name and my [sons' names] to save the Church".
130No explanation has been given for the absence of the second plaintiff's wife from the witness box. Conformably with Jones v Dunkel, I assume that her evidence could be of no assistance to the plaintiffs' case.
131Whatever view one takes of the evidence, there is no suggestion, on either side of the record, that, before the Church land was transferred out of the names of the plaintiffs and the first defendant as the surviving original trustees, there was disclosure to the plaintiffs of an intention on the part of the first defendant to transfer an interest in the land to his sons as well as himself. Plainly, there was no such disclosure.
132As previously noticed, at one point in his evidence the first defendant appeared to suggest that the land was transferred into the names of his sons, as well as into his name, in aid of a plan by him plan to "save the church". If anything were to happen to him, they could and would carry on with that plan.
133That suggestion lends comfort to a finding that the sons' rights and obligations vis-á-vis "the Church" are coincident with those of the first defendant, and that the sons have no entitlement to protection as a bona fide purchaser for value without notice.
134The principal reason for their involvement in the transaction appears, in reality, to have been that the first defendant procured a transfer of the church land into his, and their, joint names, not to "save the church", but because he, urgently, needed that land as security for prospective borrowings from the Credit Union, for which his sons were to be liable as co-guarantors.
135I do not exclude the possibility that all three men rationalised their use of church property on the basis that they could, and would, preserve the land, in fact, for the use of the Church. The road they chose to travel was paved with good intentions.
136However, their primary motivation was grounded in self-interest, untainted by altruism or religious scruple.
137They wilfully disregarded the risk that, by pledging it as security for their personal indebtedness to the Credit Union, the land could be lost to the Church if, through misadventure, they were unable to service the debt, exposing the land to a mortgagee sale.
138That risk is not remote from recent experience. It is too close for comfort. Their business activities having taken a turn for the worst, the first defendant and his sons were evidently unable, at any time before the time of the hearing of these proceedings, to repay the Credit Union debt charged against the Church land, although able to continue servicing the debt.
139This may not be a case of deliberately wicked men consciously embarking on a scheme designed to deprive the Church, permanently, of a temporal home. However, it is, at least, a case of a well-intentioned, but seriously misguided, over-proud man (the first defendant) who, blinded by avarice, "borrowed" the title to the Church's land to allow his family interests to borrow money (for personal, secular purposes), only to find, to his own surprise, that he is experiencing difficulty in making due restitution to the Church if called upon to do so.
140A flaw in this characterisation - one that renders it too generous to the first defendant and his sons - is the absence of any unequivocal undertaking by those defendants, or any of them, to make restitution to the Church, coupled with the absence of any expression of intention in 2004 to return legal title of the land to trustees for the Church, and the persistence in these contested proceedings of a denial of the plaintiffs' claim that church property should be returned to the Church.
141Ostensibly, a dilemma for the first, second and third defendants (which emerged in re-examination of the first defendant and in the final submissions made by their counsel and which, on one view, they seek to force on the Church) is that, they say, they do not presently have an ability, immediately, to discharge the Credit Union mortgage if ordered to do so.
142Two exchanges in the course of oral submissions illustrate the point: