The Plaintiff said: 'I will take care of you. I promise. The land will no longer be a problem.'
32 A few days later, the defendant withdrew the complaint against Mr Busuttil made to the Royal Australian Navy. The plaintiff on being asked about this conversation said that he did not recall it.
33 After the bushfire the defendant built a second home on the property, which is said to have been "destroyed by a burglary." After that event he built a third home on the property, which was a cave dug with an excavator. He still lives in this cave.
34 There was a mediation between the brothers in 1997 at the Community Justice Centre in Newcastle at which an agreement was apparently reached. However, that agreement has never been carried into effect. From 1997 the relationship between the brothers has deteriorated and they are on bad terms. The plaintiff and his family no longer go to or use the property.
35 About 2005, Timothy Kent Matsen, a son of the defendant, had a telephone conversation with the plaintiff in which he offered to pay the plaintiff for his share of the property for his father, but added, "I'll only put in what you paid for it." The plaintiff indicated that he wanted $100,000 and would not sell for the amount offered.
THE PLEADINGS
36 The plaintiff by his amended statement of claim seeks a declaration that there is a resulting trust under which the plaintiff and the defendant hold the legal estate in the property in trust for themselves as tenants in common in shares proportionate to their contributions to the purchase price; alternatively he seeks a declaration of a constructive trust in the same terms; and, in the further alternative he seeks a declaration, that the plaintiff lent the defendant $17,250 at interest for the purchase of the property. The plaintiff also seeks an order for the appointment of a trustee for sale under s 66G of the CA and ancillary orders as to the contributions by the parties to the purchase and the upkeep of the property. The plaintiff pleads that it "was the common intention of the parties that they would contribute equally to the purchase of the Property and therefore own it equally, but that if it did not happen, the ultimate beneficial ownership of the Property would reflect their actual contributions". In particulars appended to paragraph 4 it was alleged that by an oral agreement made on or about 5 June 1993 and on the land partnership agreement dated June 1993 the plaintiff and the defendant agreed the basis on which they would purchase the property, including the following relevant terms:
"(a) The Defendant could build his house/lab on the highest point of the Property.
(b) The Plaintiff could build his house on any other part of the Property.
(c) Each party could use up to one acre for their respective house and surrounds.
(d) The Defendant would repay to the Plaintiff in a reasonable time the amount paid by the Plaintiff towards the purchase price on his behalf.
(e) Each party would pay one half of the outgoings, but if any improvements by one party resulted in an increase of the outgoings, that party would pay the increase."
37 The plaintiff in paragraph 6 asserts that he is entitled to a 93.4 per cent share of the property; alternatively, he claims that the plaintiff is entitled to the same beneficial interest under a constructive trust; alternatively he asks for the declaration of a loan as outlined above.
38 The defendant filed an amended defence to the amended statement of claim. He also relies on an amended statement of cross claim that pleads his substantive case. This is put on a number of alternative bases. In the first instance he makes a claim, whether in contract, founded on a constructive trust or founded on estoppel, based on an agreement or representations, said to have been made in the 1990s, under which he was to be the sole owner of the property and other terms of the agreement or representations are set out.
39 In the second instance, he bases his claim on a set of terms or representations, which are alleged to constitute a contract or to found a constructive trust or an estoppel. These terms or representations are said to have been agreed or made "in or around 1993" and are as follows:
"(a) The land was to be purchased by the Plaintiff and the Defendant with equal contributions to be made to the purchase price;
(b) The timber on the land was to be logged and sold by the Plaintiff and the Defendant;
(c) The Defendant's share of the purchase price was to be repaid by the selling of timber on the land;
(d) The Plaintiff was to pay the balance of the purchase price that was not paid by the Defendant inclusive in that, the Plaintiff's own half share of the purchase price of the land;
(e) The Plaintiff's share of the purchase price including what was paid as part of the Defendant's share of the purchase price was to be repaid by the selling of the timber on the land;
(f) The selling of the timber on the land was also to go the payment of the outgoings of the land;
(g) Any income derived from the sale of the logged timber from the land, in excess of the repayment of the Plaintiff's contribution to the purchase price of the land and the outgoings of the land would be divided equally between the Plaintiff and the Defendant;
(h) The Defendant was to use 101 acres, the top portion of the land;
(i) The Plaintiff was to have the use of 90 acres, the lower portion of the land;
(j) The Plaintiff and the Defendant were to have unlimited access to the creek on the land;
(k) The Plaintiff and the Defendant would do all work necessary to maintain their allotted acres of the land; and
(l) That if the Plaintiff wanted to sell his interest in the land, it could only be sold to the Defendant and only for the amount of his contribution to the purchase price taking out any moneys already paid to him from the proceeds of the sale of the timber on the land."
40 The defendant alternatively claims that in 1995 there was an oral agreement between the plaintiff and the defendant that the plaintiff would transfer his interest in the property to the defendant if the defendant withdrew the complaint that he had made to Royal Australian Navy against Mr Busuttil and the defendant did withdraw that complaint. It is alleged that there were terms of the agreement that the plaintiff would maintain his right to use his 90 acres of the land and the plaintiff and the defendant were both to have unlimited access to the creek, the plaintiff's access to be for life. The defendant also alleges that the plaintiff is estopped from denying such an agreement.
41 As a further alternative, the defendant alleges that the plaintiff lent him $31,000 to buy the land. The loan was alleged to be interest free and repayable when the timber on the property was logged and sold. Again, it is alleged in the alternative that the plaintiff was estopped from denying such an agreement.
42 The plaintiff filed a defence to the amended statement of cross claim traversing virtually all the allegations. He also filed a reply to the defendant's defence in which he asserts that, if there was an agreement never to sell the property, it would be void as a restraint on alienation. Sections 23C and 54A of the CA were not raised in the pleadings.
CREDIT OF WITNESSES
43 The only witness who gave oral evidence for the plaintiff was the plaintiff himself. The following witnesses gave oral evidence for the defendant: the defendant himself, Lynette Ford, Ferenc Godny, Kevin Lynch, Andrew Matsen, Timothy Matsen and Robert McMaster.
44 I have observed in [1] that the relationship of the parties has been complicated and difficult over most of their adult lives. On the one hand, they have both evinced a regard for the importance of family relationships. On the other hand, there have been many hostilities over the years on subject matters including the motor car accidents, the fact that the fortunes in life of the plaintiff were better than those of the defendant, the bushfire and the problems with Mr Busuttil, as well as a variety of disagreements over the property. They both have deeply rooted views concerning these matters that, together with the defendant's lack of legal representation in the early stages of the trial, have led to there being in evidence much material that is of remote relevance to the real issues in this matter. The fixity of their views also brings into play the tendency of the human mind to believe what it is advantageous or necessary for a person to believe in a particular situation. For these reasons, I approach the evidence of both brothers with great caution. I am not inclined to make positive findings on the evidence of either of them if it is uncorroborated.
45 Among the defendant's witnesses I regard Mr Lynch as a witness of particular importance, because of both the content of his evidence and the manner in which he gave it. Mr Rowe, of counsel for the plaintiff, made submissions attacking Mr Lynch's credit. However, in general terms, I do not accede to these. The evidence of Mr Lynch, as of all other witnesses in this case, must be scrutinised with care, because of the distance of time between the events and the recounting. However, I found Mr Lynch a witness who took care to distinguish between what he could remember and what he could not remember concerning past events. I did not think his evidence was substantially compromised by cross examination. In accepting, in general terms, his evidence I have taken into account his demeanour, as well as the considerations already mentioned.
46 Mrs Ford had a much less clear recollection than Mr Lynch of the events of the early 1990s. Despite this, she appeared to me to be attempting to give the Court a careful and accurate account of what she could recall. The defendant's sons Andrew and Timothy were only very shortly cross examined. They appeared to me straightforward witnesses and there appeared to me no reason not to accept the limited evidence that they gave. The evidence of Mr Godny was not really controversial and there is no reason why it should not be accepted at face value.
47 Robert McMaster was a witness whose evidence was seriously compromised in cross examination. This was by reason of the fact that he expressed equal certainty that the conversation he recounted as set out in [20] above had occurred before settlement of the purchase of the property (as, indeed, it must have from its content) and that the mediation at the Newcastle Community Justice Centre took place prior to that conversation, which on all the evidence in the case it did not. Although his evidence of the conversation cannot be totally discarded, little weight can be given to it because of this inconsistency.
FINDINGS OF FACT
48 I find that there was no agreement between the parties at the time of the contract for the purchase of the property that the title should be taken in the defendant's name alone. There is little doubt, from the letter quoted in [4], that there was such a proposal in the mid 1980s. However, a lot of water flowed under the bridge between that time and the time of the agreement in 1993. The bulk of the evidence clearly indicates that the proposal in 1993 was that title should be taken by the parties as tenants in common in equal shares. Particularly important in this regard is the evidence relating to the instructions of Joan Pierpoint, solicitor, from which it is to be clearly inferred that the instructions that she held from both parties was that title was to be taken in their names as tenants in common in equal shares. For this reason I reject the defendant's claim based on an agreement "made in the 1990s" under which he was to be the sole owner of the property.
49 I find that it is not established that the $5,000 cheque given by the plaintiff to the defendant as alleged in [6] was a loan to be used by the defendant to pay a deposit on land and to be repaid by the defendant in due course. The fact that there was no particular piece of land, the purchase of which was under contemplation at the time, reduces the likelihood of the plaintiff's version. The only evidence given that it was a loan was the plaintiff's uncorroborated evidence. Most importantly, the plaintiff did not, in his letter of 14 May 1993 referred to in [23] above, allege that the deposit on the property had been paid with funds lent by him. Instead, against "deposit" there appears "$4,000 (Ken)". In these circumstances I do not regard the plaintiff's allegation of a loan of $5,000 as established.
50 The next question is whether the agreement alleged by the defendant as set out in [39] above ("the 1993 agreement") is established. The conclusion that I have come to is that all the terms set out in that paragraph are established. In particular, I find that the plaintiff and the defendant were to make equal contributions to the purchase price; that the plaintiff was to contribute to that price the $31,500 that he was to borrow; that, in so far as that constituted an advance to the defendant, that advance was to be repaid out of the sale of timber cut on the property; that the defendant was to have the use of 101 acres on the top portion of the land and the plaintiff to have the use of 90 acres on the lower portion of the land; and that the expenses of the land were to be borne by the plaintiff and the defendant equally, save that, if the activities of one of them caused an increase of rates, that party alone was to bear the burden of that increase. These findings are based on the evidence of the witnesses, the correspondence and the surrounding circumstances that I have set out above.
51 I should add that in the plaintiff's written submissions it was stated that only the term discussed in the next paragraph is relevant to these proceedings.
52 The term about which there was most controversy was the alleged term that, if the plaintiff wanted to sell his interest in the property, it could only be sold to the defendant and only for the amount of the plaintiff's contribution to the purchase price. This was hotly denied by the plaintiff. However, there is evidence supporting its existence from Mrs Ford, Andrew Matsen, Mr McMaster and, most importantly, Mr Lynch. Mr Lynch's evidence is important because he was present at the discussions between the plaintiff and the defendant on the day the three were at the property together. He was also present at their discussions at Mr Lynch's house that evening. He actually participated in the discussions, because his advice concerning various matters was being sought. He had a particular interest in the negotiations since, if they did not lead to agreement between the brothers, he was to participate in the purchase with the defendant. Mr Lynch's attention is likely to have been closely focussed on what was being said. I have indicated that I place little weight on Mr McMaster's evidence, although I do not discard it entirely. I am aware that the other witnesses all had some relationship with the defendant, Mrs Ford as his then girlfriend, Andrew Matsen as his son and Mr Lynch as a friend and, at least informally, a yoga pupil. However, that fact does not deter me from accepting their evidence, as I have indicated that I am inclined to do. There is no evidence that supports the plaintiff's denial of this term. He conceded an interest in the property being kept for his sons. I do not think the absence of mention of the term from any written record is of particular significance, bearing in mind that there is no document that purports to contain the entirety of the arrangement between the parties. The term, as I find it, is that, if a party to the agreement wished to sell his interest in the property, it could only be sold to the other party and only for the amount of that party's contribution to the purchase price.
53 A submission was put that there was no consideration moving from the defendant to support the plaintiff's promise contained in the term, discussed in the last preceding paragraph. It is clear to me that the consideration given by each of the parties in relation to that term and to the whole of the 1993 agreement was the entry of that party into the agreement. A submission was also put that there was no intention to enter into legal relations in respect of the 1993 agreement but bearing in mind the whole of the circumstances shown in the evidence I am of the view that the parties had such an intention.
54 I find that the 1993 agreement as alleged by the defendant, but incorporating the term as to sale of a party's interest in the property as I have found it in [52], is established.
55 The defendant alleges an oral contract for the transfer of the plaintiff's interest in the property to him made shortly before the withdrawal of the complaint to the Royal Australian Navy against Mr Busuttil. The only evidence of this is the defendant's uncorroborated account of a conversation, which the plaintiff deposed that he did not recall. I am not prepared to find on the basis of the defendant's uncorroborated version that such a conversation took place or that any such contract was made. I find that such a contract is not established.
RELEVANT LAW
56 The first question is the extent of the Court's discretion to appoint trustees for sale under s 66G(1) of the CA. That subsection provides as follows:
"(1) Where any property (other than chattels) is held in co-ownership the court may, on the application of any one or more of the co-owners, appoint trustees of the property and vest the same in such trustees, subject to incumbrances affecting the entirety, but free from incumbrances affecting any undivided shares, to be held by them on the statutory trust for sale or on the statutory trust for partition."
57 The use of the word "may" in the subsection is indicative of a discretion. However, in Re Fettell (1952) 52 SR(NSW) 221, McLelland J held that no discretion existed to refuse an application under s 66G(1) made by a person with a right to make such an application. But Myers J refused to follow Re Fettell in Stephens v Debney (1959) 60 SR(NSW) 468 and Re McNamara and the Conveyancing Act (1961) 78 WN(NSW) 1068. In Ngatoa v Ford (1990) 19 NSWLR 72 Needham J said at 75:
"Myers J, in Stephens v Debney , declined to follow Re Fettell . He doubted whether McLelland J intended to decide that an order must be made in favour of a co-owner regardless of the circumstances. He instanced the case of two trustees, whose power of sale was defined in the trust instrument; he declined to accede to the proposition that, regardless of the terms of the trust instrument, one trustee could force a sale at any time.