SHIRLEY ELIZABETH WILLIAMS as administrator of the estate of MARGARET JANE CONGDON and GWENNETH MARGARET FLEMING as administrator of the estate of MARGARET JANE CONGDON -v- ROSS GREGORY CONGDON as administrator of the estate of WALTER EDWIN CONGDON [2018] WASC 289 (17 September 2018)

1. Margaret Jane Congdon (the deceased) died 3 March 2014. She was aged 97. At the time of death, the deceased was residing at the Murray River Nursing Home, Mandurah. She married Walter Edwin Congdon (Walter) on 30 June 1966 and remained married to him at the time of her death. She had three children, being the two plaintiffs and a son (deceased).
2. On 20 April 2005, Walter was appointed the deceased's plenary administrator by the State Administrative Tribunal (SAT). In or about early 2006, the deceased commenced residing at the Mandurah nursing home. Shirley, for the deceased, made application to review the 2005 order and on 12 September 2006 the SAT ordered Walter remain the appointed plenary administrator of the deceased. On 1 May 2013, Walter was removed as the administrator.
3. Walter was the subject of an order made 13 May 2013 by the SAT and the defendant and Mark Christopher Congdon were appointed his joint plenary administrators (Walter's joint plenary administrators).
4. The plaintiffs were, on 30 January 2015, granted letters of administration of the estate of the deceased. Walter died 20 June 2017. On 21 June 2018, I made an order that Ross Gregory Congdon, as administrator of the estate of Walter Edwin Congdon, be substituted as the defendant in these proceedings.

1. The deceased was the registered proprietor of the property in Mandurah. On 20 December 2002, the deceased executed a transfer of that property. The transfer was lodged on 17 January 2003. At the time of execution of the transfer, the deceased was 86 years of age. The consideration for the transfer was $60,000. The transfer appears to have been registered on 3 February 2003. It is the plaintiffs' position that there is no evidence that Walter paid the deceased the $60,000. In the proceedings before the SAT in 2005 there was a remark by Walter, in unsworn evidence that he had '... set up a term deposit for her'.[1] No such deposit has been located.
2. The deceased's death certificate reflects the primary cause of death as dementia with an onset date of 2002. In other words, the transfer of the Mandurah property took place after the onset of the deceased's dementia. Of course, the date of the onset of the dementia does not mean that in some periods the deceased was not lucid but, understandably, it gives rise to a suspicion on behalf of the plaintiffs that the deceased at the time she signed the transfer, may not have been fully aware of what she was doing.
3. The Mandurah property was sold by Walter's joint plenary administrators for $215,000 under Offer and Acceptance contract dated 7 April 2016.

1. The plaintiffs commenced proceedings by writ filed 30 January 2015. The plaintiffs have identified correctly, in my view, four issues in the proceedings. First, whether Walter acted unconscientiously in procuring the execution of the transfer by the deceased. Second, whether Walter paid the deceased the sum of $60,000 the nominated consideration. Third, whether the plaintiffs' claims are statute barred. Finally, whether the plaintiffs' claims are subject to a defence of laches. Although the proceedings were issued in 2015, they have not progressed since mid2016.
2. In written submissions filed 27 August 2018, counsel for the plaintiffs examined in some detail the issues which arise in the action between the plaintiffs and the defendants. What follows is largely taken from those submissions.
3. The plaintiffs allege that Walter did not actually pay the deceased the consideration for the transfer of the property. The onus to establish that payment was made is on the party who allegedly made the payment: see Young v Queensland Trustees Ltd [1956] HCA 51; (1956) 99 CLR 560, 569 570. The plaintiffs claim that, as there is no real evidence to establish payment, the Mandurah property was held by Walter on a constructive trust for the deceased.
4. In adopting this position, the plaintiffs are relying on the socalled exception to indefeasibility of title of a registered proprietor in the form of a right in personam. If the conduct on the part of the registered proprietor is unconscionable or unconscientious, it may be the registered proprietor will hold the property on trust: see White City Tennis Club Ltd v John Alexander's Clubs Pty Ltd [2009] NSWCA 114 [102].
5. Such a claim may have as its terminal point an order binding the registered proprietor to divest him or herself wholly or partly of the estate or interest being vested in him by registration and endorsement of the Certificate of Title. In other words, the claim in personam may have the effect of being an action to recover the relevant real property. To establish there has been unconscientious conduct, a party must establish the registered proprietor took unfair advantage of the transferor.
6. In this case, the Mandurah property has been sold and there is no question of it being retransferred to the plaintiffs. But it may be the defendant holds the proceeds of the Mandurah property on trust for the plaintiffs. There is no evidence as to whether or not the proceeds of sale have been distributed. I will have more to say about this point below. But for the present, it is enough to note that if the proceeds had been distributed, the defendant may potentially be liable to the plaintiffs for a breach of trust. The upshot of that is, one way or another the defendant would be obliged to make payment to the plaintiffs of an amount equal to the sale price of the property.
7. One of the obvious difficulties with this case is the fact that the two parties to the transaction, the deceased and Walter, are no longer alive. There is no doubt about the fact the property was transferred. The two questions are first, whether payment was made for the transfer and second, whether the deceased had the mental capacity to understand what she was doing. These events occurred over 15 years ago. Whether financial records exist and if they do how reliable they might be is open to question. The difficulties of establishing the deceased's mental condition so long ago are also obvious. It is clear this would not be an easy claim to maintain.
8. Turning then to the limitation question, the Limitation Act 1935 (WA) (the Act) applies. Section 24 of that Act provides that a person claiming land in equity must commence the action during the period when an action might be brought to recover land at law. The word 'land' is defined in s 3 of the Act to include any share, estate or legal or equitable interest in land 'whether freehold or held according to any other tenure'.
9. An action to recover land is not confined to an action claiming possession but includes any action to obtain any land by judgment of a court. This will include a claim pursuant to a constructive trust: see Wright Prospecting v Hancock Prospecting Pty Ltd [2010] WASC 44 [583].
10. On that basis s 4 of the act will apply to such claims to provide a limitation period of 12 years from the time when the right of action 'shall have first accrued'.
11. Section 25(2) of the Supreme Court Act 1935 (WA), provides that actions by a beneficiary against a trustee in respect of property held on an express trust or in respect of a breach of an express trust are excluded. As to a constructive trust, s 47(1) of the Act is in the following terms:
    1. Trustees may plead Statute of Limitations in certain cases

(1) In any action or other proceeding against a trustee or any person claiming through him, or in reference to any trust, except where the claim is founded upon any fraud or fraudulent breach of trust to which the trustee was a party or privy, or is to recover trust property or the proceeds thereof still retained by the trustee or previously received by the trustee and converted to his own use, the following provisions shall apply:

...

(b) If the action or other proceeding is brought to recover money or other property and is one to which no existing statute of limitations applies, the trustee or person claiming through him shall be entitled to the benefit and be at liberty to plead the lapse of time as a bar to such action or other proceeding in the like manner and to the like extent as if the claim had been against him (otherwise than as a trustee or person claiming through a trustee) in an action of debt for money had and received; but so nevertheless that the statute or bar by lapse of time shall not begin to run against any beneficiary until the interest of such beneficiary is an interest in possession.

1. The exclusion of the statute has been construed to apply to some constructive trustees but not to others. Time does not begin to run against a beneficiary with a future interest until the interest becomes vested in possession. In de Braekt v Powell [2007] WASCA 55, the relevant interest was subject to a life interest of the defendant. The interest was therefore an interest in possession and became such only on the death of the defendant. If the claim relates to a vested interest in possession, time commences to run from the date of the transaction in question. This is where the constructive trust arises only by reason of the occurrence of that transaction and not before.
2. This can be put another way. The vested interest in possession arises when a constructive trust cause of action arises. As Murray J said in Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [2010] WASC 44 [589], an interest may only vest in possession, for example, upon a defendant discharging its duty as trustee to do all reasonably within its power to assist the plaintiff to obtain necessary consents and to participate in the transfer of the interest to the plaintiff. At some point during the course of that process, the interest would cease to be contingent and become vested in possession.
3. A constructive trust and the right to sue under it arises when a defendant asserts full beneficial ownership of the property or denies the plaintiff's beneficial interest in it. See Payne v Rowe [2012] NSWSC 685 [99]. The cause of action arises at a time when the necessary facts exist. In Baumgartner v Baumgartner [1987] HCA 59; (1987) 164 CLR 137, 147, the court recognised that the refusal to acknowledge an equitable interest amounts to unconscionable conduct. The trust is imposed as a remedy to circumvent that conduct. The cause of action arises when the unconscionability arises.
4. Turning then to the question of delay and laches. From April 2005 until May 2013, Walter was the plenary administrator of the estate of the deceased. It is unclear whether he maintained appropriate records as to the management of the deceased's assets and if he did whether those records still exist. Either way, they have not been provided to the plaintiffs. It is worthy of note that as at 20 April 2005, Walter was on notice that the issue of repayment of the moneys and his conduct in relation to the transfer were matters of concern.
5. The plaintiffs were granted letters of administration on 30 January 2015 and began these proceedings expeditiously. They say that any delay to date has been a result of the need to investigate the claim. There is much in that submission. Nonetheless it remains the fact that the proceedings have not progressed since 2016 and they relate to events dating back to 2003.
6. The reason for my outlining the nature of the plaintiffs' claim is to highlight the difficulties with the cause of action. There are problems with the evidence and the legal principles involved are quite complex. Counsel for the plaintiffs maintains that the action is in all respects ready to proceed and that it could be accommodated in a two day hearing. With some hesitation I would accept that is the case. There would be a heavy onus on counsel for the plaintiffs to detail all of the evidence and to present the legal arguments in the most comprehensive fashion. That said, counsel's submissions on this application are detailed and comprehensive and would doubtless provide the foundation for any submissions made at trial of the action.
7. On balance, I am not satisfied I should direct the plaintiffs are justified in continuing these proceedings. I have reached that conclusion for two main reasons. First, the value of the estate is relatively modest. Counsel in his submissions suggested that proceeding to trial would cost no more than $15,000. With respect, that seems to me to be optimistic. A two day trial where equitable principles were at issue is, generally speaking, an expensive exercise. But even if the plaintiffs' costs were limited to $15,000 there is always the prospect that the action might be lost. A loss would not mean an award of costs against the estate but only an allowance for the defendant's expenses. A trial of this action has the potential to substantially diminish the overall value of the deceased's estate.
8. The second point relates to the prospect of success. Counsel for the plaintiffs in his submissions has presented a detailed case and, at least by implication, has concluded the plaintiffs will be successful. Without any detailed examination of the merits of the action, it seems to me that the case is by no means clear cut. There are significant evidentiary and legal impediments to the relief being sought by the plaintiffs. The evenly balanced merits is, in my view, a reason for not making the order as sought.
9. Two further points need to be made. In the Blatchford decision, Vaughan J discusses whether or not an opinion of counsel should be provided when judicial advice is sought. No such opinion was provided in this case. Given the modest value of the estate, that was entirely appropriate. To have obtained an opinion would have been an expense not warranted in the circumstances. So the failure to provide such an opinion has not influenced my decision one way or the other.
10. The second point to note is that my declining to issue the advice sought does not prevent the plaintiffs from pursuing their action. What it does do is expose them to an order for costs against them personally were the action to fail. In the end, it remains a question for the administrators as to whether or not they wish to proceed but if they do they will not have the protections offered by s 92 of the Trustees Act 1962 (WA).
11. The costs of this application ought be taxed and paid out of the estate.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Affidavit of Shirley Elizabeth Williams sworn 23 January 2017, attachment 'SEW11' at page 49.