Serkowski v Serkowski

The Claim 13It is not easy to understand precisely how Rodney puts his claim. However, it seems to be put in two ways. First, he says that at the time No 15 was bought, Grace and Jozef made an oral declaration that they held it and No 19 on trust for Rodney and Jacqueline. A similar declaration is said to have been made by both of them at the time No 21 was bought. Second, Rodney says that he did work on the properties and other investment properties owned by his parents on the faith of representations made by Jozef and Grace that Nos 15, 19 and 21 would be his and Jacqueline's and that as a result they hold on interest in those properties on trust for him.

The evidence 14In support of his claims, Rodney relies on affidavit evidence from Jozef and a number of family friends. There are difficulties with the form of much of that evidence. However, in circumstances where Rodney was self-represented, I admitted a substantial amount of that evidence, although I excluded a number of paragraphs that were clearly hearsay. The fact that Rodney was self-represented cannot alter the fact that he bears the onus of satisfying the court of the facts that form the basis of his claim. 15It is not necessary to set out all the evidence on which Rodney relies. It is, however, helpful to refer to some of that evidence which is indicative of the type of evidence on which he relies. For example, Jozef gave the following evidence: 5. Prior to the purchase of [No 15] I discussed the purchase with Grace, and we agreed that this was a good idea, and that the two properties were to be held in trust for the children. I wanted the children to live nearby, and comfortably. She agreed, and we proceeded with that arrangement. ... 7. In about 1998 we purchased [No 21]. I was happy because each child would be able to one day build their own houses so close together. 8. We told the children the property will never be sold to anyone else, they will decide later how the property will be developed or used, as long as these properties stayed in the family. 16Mr Zebrowski, who has known Jozef and Grace for many years, gave evidence in these terms: 4. The conversation [with Jozef and Grace] often led to statements by Jozef or Grace in words to the effect that "These three properties are for the children. The children will build here, not us. They are promised to them, and they have to look after them. 17Similarly, Mr Dolata, who is a friend of both Jozef and Grace, gave evidence in these terms: 4. In previous conversations, prior to the purchase of the property, both Jozef and Grace had told us of their plans to buy the property next door [No 15] for their children, and that the two properties together would be then held on trust for them, and that they would not be sold or otherwise disposed of, unless it was to the children.

Consideration 18In my opinion, there are two insuperable difficulties with the first way in which Rodney puts his case. 19First, the terms of the oral declaration of trust on which he relies are too vague to be enforceable. The way the case is pleaded and some of the relief claimed by Rodney suggest that Grace and Jozef made a simple declaration of trust in favour of their children in respect of the three properties. So, for example, paragraph 2 of the statement of claim pleads: The defendant, in about 1997, became the sole proprietor of [No 19] following an express oral agreement between the defendant, her husband Jozef Serkowski and the plaintiff that the ... properties were to be held on trust for the plaintiff. Similarly, paragraph 4 of the relief claimed in the statement of claim seeks and order: That the properties [No 21] and [No 19] are conveyed to the plaintiff. 20Although paragraph 2 of the statement of claim speaks of an agreement, it is difficult to see how there could have been an agreement. Rodney was 14 at the time. No apparent consideration was given for the transfer. Rodney accepts that whatever happened, Jacqueline, who was 11 at the time, was a party to the arrangement; and the evidence given by the witnesses is more consistent with a declaration of a trust. Even so, why Grace and Jozef would have decided to make a declaration of trust of No 15 and No 19 at the time No 15 was bought when Rodney was aged 14 and Jacqueline was aged 11 and then have done nothing to give effect to that declaration was never explained. 21In any event, it is clear from the evidence given by Rodney that he does not claim that the properties are held solely on trust for him and Jacqueline. He accepts that Grace and Jozef have a right to live on the properties for as long as they choose. He even appears to accept that they have a right to sell the properties, although his submission appeared to be that the sale would have to occur to him (or possibly to him and Jacqueline) and that the sale price would have to take into account the equitable interest he (and presumably Jacqueline) holds. What that equitable interest is remains unclear. Having regard to these matters, it is not possible to identify with any certainty the terms on which the properties are said to be held on trust. 22Second, s 23C of the Conveyancing Act 1919 (NSW) provides: Instruments required to be in writing: (1) Subject to the provisions of this Act with respect to the creation of interests in land by parol: (a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person's agent thereunto lawfully authorised in writing, or by will, or by operation of law, (b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person's will, (c) a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same or by the person's will, or by the person's agent thereunto lawfully authorised in writing. (2) This section does not affect the creation or operation of resulting, implied, or constructive trusts. 23In the present case, there is no writing signed by Grace evidencing the declaration of trust. That, in my opinion, is fatal to the first way in which Rodney puts his claim. 24Rodney relies on the decision of the High Court in Guimelli v Guimelli [1999] HCA 10; (1999) 196 CLR 101 for the second way in which he puts his case. He says that he was promised a half interest in Nos 15, 19 and 21 if he did work on them and on the other investment properties owned by his parents. He did that work and in those circumstances he says it would be unconscionable for his parents to deny him the interest he claims. Consequently, Rodney submits that his parents hold Nos 15, 19 and 21 on a constructive trust for him and Jacqueline. 25There are two reasons why this way in which Rodney puts his case must fail. 26First, I do not accept that a representation was made in the terms alleged by Rodney. Rodney appears to accept that whatever representation was made to him was made to Jacqueline, since he accepts that Jacqueline is entitled to the same interest as him in the properties. There is no suggestion, however, that Jacqueline did or was expected to do any work on the properties or the other investment properties owned by Grace and Jozef. Jacqueline denies that any representation was made to her concerning the properties, and I accept that evidence. Although Jacqueline has sided with her mother following the breakdown in the relationship of her parents, the evidence she gave was against her own interest; and she came across as a frank and honest witness in the witness box. 27I have referred earlier to evidence given by Jozef to the effect that he and Grace made statements to the effect that the properties would be Rodney's and Jacqueline's and to the evidence of Mr Zebrowski and Mr Dolata and other friends that statements to that effect were made to them. However, in my opinion, little weight can be placed on that evidence. I say that for several reasons. 28First, the evidence is expressed at such a level of generality that I think it carries little weight. 29Second, the evidence must be seen in context. There has clearly been a breakdown in the family relationship. Rodney has sided with his father and concedes that his relationship with his mother has effectively broken down. It is apparent that neither Rodney nor his father wish to see what were the family homes sold, at least outside of the family. Nonetheless, they appreciate that that is a possible outcome of the Federal Circuit Court proceeding. Both Rodney and Jozef have strong motives for tailoring their evidence in this proceeding in order to avoid that result. The other witnesses who gave evidence for Rodney were all close friends of his father. It appears their affidavits were drafted for them by Rodney. Those factors further undermine the weight to be given to the evidence given in Rodney's case. 30Third, Grace denies that she ever made representations concerning the properties to her children. She gave frank and clear answers in the witness box and, in my opinion, her evidence was plausible. 31Fourth, even assuming that Grace or Jozef said words to the effect of those attributed to them, in my opinion, what they said went no further than what many parents might say to their children - namely, that they hoped and expected that the assets accumulated by the parents would pass to the children. Statements to that effect were entirely consistent with the fact that, by her current will, Grace has left her estate to be divided equally between her two children. 32The second reason why Rodney's claim based on a constructive trust must fail is that I do not accept that he acted to his detriment on the faith of any representations made to him concerning the properties. 33Rodney gives evidence that he did substantial work on Nos 15, 19 and 21 as well as other investment properties owned by his parents. Again, however, the evidence given by him is expressed at a level of generality and in terms which are so vague that it is difficult to place much weight on it. 34More significantly, however, it is necessary to consider the surrounding circumstances. Jozef has a number of skills in the building trade and has made a living, at least in part, renovating houses. Rodney has assisted him in that business; and, indeed, that is his only source of employment. Rodney rendered a number of invoices to his parents for the work that he did on family properties. He denies that those invoices were paid. However, I do not accept that evidence. Grace has produced a number of internet banking receipts showing the transfer of sums to Rodney's bank account. In my opinion, the only reasonable inference is that the amounts were transferred in payment of the accounts that Rodney had rendered. 35It may well be the case that Rodney did not render invoices for all the work that he did. But, even accepting that that is the case, the work he did must be looked at in context. He had been supported by his parents throughout his school years and while he attended university for a number of years. His parents paid his university fees so he did not need to take out a HECS loan. Up until recently at least, he lived at home rent free. His parents effectively gave him a valuable house which he rents out. It would be natural in those circumstances for Rodney to have helped his father work on properties that his parents owned. I do not accept that he did so on the faith of some vague representation that he would acquire some sort of interest in Nos 15, 19 and 21 which would prevent those properties from being sold. What he did was something any child in similar circumstances might do for his or her parents having regard to the close relationship they enjoyed and the generosity with which they had been treated.

Orders 36For those reasons, the proceedings should be dismissed. The orders extending the operation of caveats AH41340R and AH41344H should be revoked. The plaintiff should pay the defendant's costs of the proceeding.

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