Perpetual Executors & Trustees Association of Australia Ltd v Wright [1917] HCA 27; - HCA 1917 case summary — Zoe

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Perpetual Executors & Trustees Association of Australia Ltd v Wright [1917] HCA 27;

[1917] HCA 27

High Court of Australia|1917-06-13|Before: Rich JJ

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Source facts

Court

High Court of Australia

Decision date

1917-06-13

Before

Rich JJ

Source

Original judgment source is linked above.

Judgment (32 paragraphs)

[1]

Perpetual Executors & Trustees Association of Australia Ltd v Wright [1917] HCA 27; (1917) 23 CLR 185 (13 June 1917)

[2]

The Perpetual Executors and Trustees Association of Australia Limited Defendants, Appellants; and Wright Plaintiff, Respondent.

[3]

The plaintiff (now respondent) seeks a declaration that he is beneficially and absolutely entitled to a house and premises in Lord Street, Richmond, and to certain moneys in the Savings Bank. He also seeks an order directing the defendant company (now appellant) to transfer to him the house and premises and to pay him the moneys. The appellant company is administrator cum testamento annexo of the estate of the respondent's deceased wife, in whose name both the land with the house thereon and the Savings Bank moneys stood at the time of her death in June 1915. Their defence rests on Mrs. Wright's will, dated 28th February 1914, by which she purported to give her three children all the money in the Bank and, subject to a life estate to her husband, the respondent, all the Lord Street property, or rather its proceeds after sale. The respondent alleges in his claim that the house and land were not a gift to his wife, but that the title was placed in her name, with her consent, for the purpose of securing a home for himself and his family, free from danger at the hands of possible creditors in the event of his failing in his business, and that the Savings Bank account was opened in the wife's name, and the respondent's money and savings paid into it, for convenience and not as a gift to her. In short, he claims that his wife was a trustee for him in respect of both species of property. There is no evidence that the respondent had any creditors at the time of the arrangement with his wife, or afterwards during her life. He sets up a writing bearing the alleged signature of his wife and dated two or three days before her death, by which she purported to declare herself a trustee for the respondent of the Lord Street property and the moneys in the Savings Bank. On the same day, by a document which consisted partly of a printed will form, signed by her but not witnessed as a will, she purported to devise the one and bequeath the other to him.

[6]

It is not my purpose to enter into a detailed analysis of the evidence. The facts have been dealt with by the learned trial Judge in a manner which impresses me as to its fulness and caution. It has been urged that his Honor's analysis was not complete. I am of opinion that it was quite adequate. There was a quantity of documentary evidence, but the case rested in the main upon the credibility of the respondent, whose evidence was controverted in some particulars, but not, in his Honor's view, successfully. Where oral evidence has been fully subjected to the ordinary tests of its credibility before a Judge who has had opportunities of observing the conduct and demeanour of the witnesses as well as of hearing their words, it is a most unusual thing for a Court of appeal which has neither heard nor seen the witnesses to disturb the findings of fact to which the Judge's better opportunities have assisted him, for it remembers that it is without much of the material which as a whole led the Court below to its decision. It has nothing but the print before it. It has heard no witness, nor has it scrutinized the conduct of any. He has had the persons before him and has seen their demeanour. For instance, it is not only occasional, but very common, that the notes of a Judge or of a shorthand-writer must fail to convey to an appeal Court all that the process itself has conveyed to the Court below. True, it sometimes happens that oral evidence which has convinced a Judge has been seen on appeal to be overborne by documentary evidence. In such a case the Court of appeal does not hesitate to review the decision. But in proportion to the extent to which a case rests upon the credibility of oral evidence is the reluctance of the appellate Court to interfere with the findings. For myself, I confess that I am not in a position to say how I should have decided on the facts in this case had I seen and heard the witnesses. His Honor has evidently devoted close attention to his task and has fully used his great experience and powers of observation. The Court has not here such assistance from the documents as would impel, or even incline it, to differ from his Honor's conclusion.

[12]

Now, the respondent is by no means attempting to set up this understanding as any foundation for his claim to relief, nor has anything been done under it or attempted to be done under it. The respondent says: - "I bought this property and paid for it. It was put in my wife's name and she was a trustee for me all along." Had there been creditors to hoodwink or, at any rate, had there been any attempt at such an act, the case would probably have been different. But, so far as we know, there were no creditors to hoodwink, and the whole thing rested on what might happen but never did happen. That such a state of things, carried no further, is not a bar to the respondent's claim to what is beneficially his own is to me apparent, and I need only mention three cases, namely, Symes v. Hughes[3], Taylor v. Bowers[4] and Payne v. McDonald[5]. In the first-named of these cases[6] the matter was put very clearly by Lord Romilly M.R. in the following terms: - "Where the purpose for which the assignment was given is not carried into execution, and nothing is done under it, the mere intention to effect an illegal object when the assignment was executed does not deprive the assignor of his right to recover the property from the assignee who has given no consideration for it. It is clear in the present case that no harm has been done to any creditor..." This view has been followed in subsequent cases, and in his judgment in Payne v. McDonald[7] the learned Chief Justice of this Court said: "I doubt, indeed, very much whether the doctrine ex turpi causâ non oritur actio applies at all to a case where the only illegality or impropriety alleged is an intent, not effectuated, to defeat creditors." The learned Chief Justice had just previously said: "I apprehend the principle is that the Court will not assist a party to carry out an illegal transaction - that, if, in the course of the plaintiff's story, the relevant facts show an illegal transaction, the Court will not assist him." I should mention that in that case there were actually creditors at the time of the creation of the trust. To use the words of James L.J. in Taylor v. Bowers[8], "if it was merely a question for the first time to be determined upon principle, without authority, I should have no doubt in saying that the plaintiff was not obliged to rely upon the fraud for the purpose of recovering back the goods." Here, the fact that the wife was all along the husband's trustee is evidenced by her declaration of that fact, which àBeckett J. has pronounced to be a genuine document.

[21]

Cases have been cited by both sides, including Payne v. McDonald[10]. That case is a decision of this Court, and is obviously right. The Privy Council in the same year, 1908, dealt with the point in the case of Petherpermal Chetty v. Muniandi Servai[11]. That was a case in which one question was whether the plaintiff, despite his participation in the fraudulent attempt to defeat a creditor by putting property in the defendant's name, was entitled to recover possession of the lands purported to be conveyed. As the report is not always conveniently accessible, and as with paramount authority it concerns a wide class of cases, a somewhat extended quotation from the judgment of Lord Atkinson, speaking for the Judicial Committee, may be useful. His Lordship says: - "The plaintiff, in suing to recover possession of his property, is not carrying out the illegal transaction, but is seeking to put everyone, as far as possible, in the same position as they were in before that transaction was determined upon. It is the defendant who is relying upon the fraud and is seeking to make title to the lands through and by means of it; and, despite his anxiety to effect great moral ends, he cannot be permitted to do this. And, further, the purpose of the fraud having not only not been effected, but absolutely defeated, there is nothing to prevent the plaintiff from repudiating the entire transaction, revoking all authority of his confederate to carry out the fraudulent scheme, and recovering possession of his property. The decision of the Court of Appeal in Taylor v. Bowers3L.R. 1 Q.B.D., 291. and the authorities upon which that decision is based clearly establish this. Symes v. Hughes4L.R. 9 Eq., 475, at p. 479. and In re Great Berlin Steamboat Co.5L.R. 26 Ch. D., 616. are to the same effect. And the authority of these decisions, as applied to a case like the present, is not, in their Lordships' opinion, shaken by the observations of Fry L.J. in Kearley v. Thomson6L.R. 24 Q.B.D., 742.. Mr. Upjohn contended that where there is a fraudulent arrangement to defeat creditors, such as was entered into in this case, if anything be done or any step be taken to carry out the arrangement, such as, on the trial of an indictment for conspiracy, would amount to a good overt act of the conspiracy, any property transferred by the debtor to his co-conspirator cannot be recovered back. This, however, is obviously not the law. In conspiracy the concert or agreement of the two minds is the offence, the overt act is but the outward and visible evidence of it. Very often the overt act is but one of the many steps necessary to the accomplishment of the illegal purpose, and may, in itself, be comparatively insignificant and harmless; but to enable a fraudulent confederate to retain property transferred to him in order to effect a fraud the contemplated fraud must, according to the authorities, be effected. Then, and then alone, does the fraudulent grantor, or giver, lose the right to claim the aid of the law to recover the property he has parted with."